EXHIBIT 1.1
4,000,000
PENNSYLVANIA REAL ESTATE INVESTMENT TRUST
Shares of Beneficial Interest
UNDERWRITING AGREEMENT
December 17, 1997
▇▇▇▇▇▇ BROTHERS INC.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, INCORPORATED
▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ & ▇▇▇▇▇ INCORPORATED
▇▇▇▇▇ ▇▇▇▇▇▇ INC.
WHEAT, FIRST SECURITIES, INC.,
As Representatives of the several
Underwriters named in Schedule 1,
c/▇ ▇▇▇▇▇▇ Brothers Inc.
Three World ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Dear Sirs:
Pennsylvania Real Estate Investment Trust, an unincorporated
association in business trust form created under Pennsylvania law pursuant to a
Trust Agreement (the "Trust"), proposes to sell 4,000,000 shares (the "Firm
Shares") of the Trust's Shares of Beneficial Interest, par value $1.00 per
share. In addition, the Trust proposes to grant to the Underwriters named in
Schedule 1 hereto (the "Underwriters") an option to purchase up to an additional
600,000 Shares of Beneficial Interest on the terms and for the purposes set
forth in Section 2 (the "Option Shares"). The Firm Shares and the Option Shares,
if purchased, are hereinafter collectively called the "Shares." This is to
confirm the agreement between the Trust, PREIT Associates, L.P. (the "Operating
Partnership") and the Underwriters named in Schedule 1 hereto (the
"Underwriters") concerning the purchase of the Shares from the Trust by the
Underwriters.
1. Representations, Warranties and Agreements of the Trust and the
Operating Partnership. The Trust and the Operating Partnership, jointly and
severally, represent, warrant and agree that:
(a) A registration statement on Form S-3 with respect to the
Shares has (i) been prepared by the Trust in conformity with the
requirements of the United States Securities Act of 1933 (the
"Securities Act") and the rules and regulations (the "Rule and
Regulations") of the United States Securities and Exchange Commission
(the "Commission") thereunder, (ii) been filed with the Commission
under the Securities Act and (iii) become effective under the
Securities Act.
Copies of such registration statement have been delivered by the Trust
to you as the representatives (the "Representatives") of the
Underwriters. As used in this Agreement, "Effective Time" means the
date and the time as of which such registration statement, or the most
recent post-effective amendment thereto, if any, was declared
effective by the Commission; "Effective Date" means the date of the
Effective Time; "Preliminary Prospectus" means each prospectus
included in such registration statement, before it became effective
under the Securities Act and any prospectus filed with the Commission
by the Trust with the consent of the Representatives pursuant to Rule
424(a) of the Rules and Regulations; "Registration Statement" means
such 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 in
accordance with Section 3 hereof and "Prospectus" means such final
prospectus, as first filed with the Commission pursuant to paragraph
(1) or (4) or (5) of Rule 424(b) of the Rules and Regulations.
Reference made herein to any Preliminary Prospectus or to the
Prospectus shall be deemed to refer to and include any documents
incorporated by reference therein pursuant to Item 12 of Form S-3
under the Securities Act, as of the date of such Preliminary
Prospectus or the Prospectus, as the case may be, and any reference to
any amendment or supplement to any Preliminary Prospectus or the
Prospectus shall be deemed to refer to and include any document filed
under the United States Securities Exchange Act of 1934 (the "Exchange
Act") after the date of such Preliminary Prospectus or the Prospectus,
as the case may be, and incorporated by reference in such Preliminary
Prospectus or the Prospectus, as the case may be; and any reference to
any amendment to the Registration Statement shall be deemed to include
any annual report of the Trust filed with the Commission pursuant to
Section 13(a) or 15(d) of the Exchange Act after the Effective Time
that is incorporated by reference in the Registration Statement. The
Commission has not issued any order preventing or suspending the use
of any Preliminary Prospectus.
(b) The Registration Statement conforms, 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 respects to the
requirements of the Securities Act and the Rules and Regulations and do
not and will not, as of the applicable effective date (as to the
Registration Statement and any amendment thereto) and as of the
applicable filing date (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; 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
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to the Trust through the Representatives by or on behalf of
any Underwriter specifically for inclusion therein .
(c) The documents incorporated by reference in the Prospectus,
when they became effective or were filed with the Commission, as the
case may be, as amended through the date hereof, conformed in all
material respects to the requirements of the Securities Act and the
rules and regulations of the Commission thereunder, and none of such
documents contained an untrue statement of a material fact or omitted
to state a material fact required to be stated therein or necessary to
make the statements therein not misleading; and any further documents
so filed and incorporated by reference in the Prospectus, when such
documents become effective or are filed with Commission, as the case
may be, will conform in all material respects to the requirements of
the Securities Act, or the Exchange Act, as applicable, and the rules
and regulations of the Commission thereunder and will not contain an
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading.
(d) The Trust, the Operating Partnership and each of their
subsidiaries (as defined in Section 15) have been duly formed and are
validly existing as unincorporated business associations, limited
partnerships or corporations, as the case may be, in good standing
under the laws of their respective jurisdictions of formation, are duly
qualified to do business and are in good standing as foreign
unincorporated business associations, limited partnerships or
corporations, as the case may be, in each jurisdiction in which their
respective ownership or lease of property or the conduct of their
respective businesses requires such qualification, and have all power
and authority necessary to own or hold their respective properties and
to conduct the businesses in which they are engaged; and none of the
subsidiaries of the Trust (other than the Operating Partnership) is a
"significant subsidiary," as such term is defined in Rule 405 of the
Rules and Regulations.
(e) The Trust has an authorized capitalization as set forth in
the Prospectus, and all of the issued shares of beneficial interest of
the Trust have been duly and validly authorized and issued, are fully
paid and non-assessable and conform to the description thereof
contained in the Prospectus;
(f) All of the issued shares of beneficial interest,
partnership interests and shares of capital stock, as the case may be,
of each subsidiary of the Trust have been duly and validly authorized
and issued and are fully paid and non-assessable and (except for
directors' qualifying shares and except as set forth in the Prospectus)
are owned directly or indirectly by the Trust, free and clear of all
liens, encumbrances, equities or claims.
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(g) The unissued Shares to be issued and sold by the Trust to
the Underwriters hereunder have been duly and validly authorized and,
when issued and delivered against payment therefor as provided herein,
will be duly and validly issued, fully paid and non-assessable; and the
Shares will conform to the description thereof contained in the
Prospectus.
(h) This Agreement has been duly authorized, executed and
delivered by the Trust and the Operating Partnership.
(i) The execution, delivery and performance of this Agreement
by the Trust and the Operating Partnership and the consummation of the
transactions contemplated hereby will not conflict with or result in a
breach or violation of any of the terms or provisions of, or constitute
a default under, any indenture, mortgage, deed of trust, loan agreement
or other agreement or instrument to which the Trust, the Operating
Partnership or any of their subsidiaries is a party or by which the
Trust, the Operating Partnership or any of their subsidiaries is bound
or to which any of the property or assets of the Trust, the Operating
Partnership or any of their subsidiaries is subject, nor will such
actions result in any violation of the provisions of the trust
agreement, charter, bylaws or limited partnership agreement of the
Trust, the Operating Partnership or any of their subsidiaries or any
statute or any order, rule or regulation of any court or governmental
agency or body having jurisdiction over the Trust, the Operating
Partnership or any of their subsidiaries or any of their properties or
assets; and except for the registration of the Shares under the
Securities Act and such consents, approvals, authorizations,
registrations or qualifications as may be required under the Exchange
Act and applicable state securities laws in connection with the
purchase and distribution of the Shares by the Underwriters, no
consent, approval, authorization or order of, or filing or registration
with, any such court or governmental agency or body is required for the
execution, delivery and performance of this Agreement by the Trust and
the Operating Partnership and the consummation of the transactions
contemplated hereby.
(j) Except as disclosed in the Prospectus, there are no
contracts, agreements or understandings between the Trust and any
person granting such person the right, other than rights which have
been waived or satisfied, to require the Trust to file a registration
statement under the Securities Act with respect to any securities of
the Trust owned or to be owned by such person or to require the Trust
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 Trust under the
Securities Act.
(k) Except as described in the Prospectus, the Trust has not
sold or issued any Shares during the six-month period preceding the
date of the Prospectus,
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including any sales pursuant to Rule 144A under, or Regulations D or S
of, the Securities Act, other than shares issued pursuant to employee
benefit plans, qualified or non-qualified share options plans for
officers, employees, or trustees or other employee compensation plans
or pursuant to outstanding options, rights or warrants.
(l) Neither the Trust, the Operating Partnership nor any of
their subsidiaries has sustained, since the date of the latest audited
financial statements included or incorporated by reference in the
Prospectus, any material loss or interference with its business from
fire, explosion, flood or other calamity, whether or not covered by
insurance, or from any labor dispute or court or governmental action,
order or decree, otherwise than as set forth or contemplated in the
Prospectus; and, since such date, there has not been any change in the
equity or long-term debt of the Trust, the Operating Partnership or any
of their subsidiaries or any material adverse change, or any
development involving a prospective material adverse change, in or
affecting the general affairs, management, financial position,
shareholders' equity or results of operations of the Trust, the
Operating Partnership and their subsidiaries, otherwise than as set
forth or contemplated in the Prospectus.
(m) The financial statements and pro forma financial
information (including all necessary pro forma adjustments and
including the related notes and supporting schedules) filed as part of
the Registration Statement or included or incorporated by reference in
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, and all adjustments necessary
for a fair presentation of results for such periods have been made. The
pro forma financial statements and related information included in the
Prospectus have been prepared in accordance with the applicable
requirements of Rules 11-01 and 11-02 of Regulation S-X under the
Securities Act, and the necessary pro forma adjustments have been
properly applied to the historical amounts in the compilation of such
information. Other than the historical and pro forma financial
statements (and schedules) included therein, no other historical or pro
forma financial statements (or schedules) are required by the
Securities Act or the Rules and Regulations to be included in the
Registration Statement.
(n) ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, L.L.P., who have certified certain
financial statements included or incorporated reference in the
Prospectus, 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
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Regulations; and, in regard to the financial statements of Lehigh
Valley Associates, Ernst & Young L.L.P., whose report appears in the
Prospectus or is incorporated by reference therein, were independent
accountants as required by the Securities Act and the Rules and
Regulations during the periods covered by the financial statements on
which they reported contained or incorporated in the Prospectus.
(o) (i) The Trust, the Operating Partnership and each of their
subsidiaries, have good and marketable title in fee simple to all real
property and own all personal property in each case owned by them, in
each case free and clear of all liens, encumbrances and defects except
such as are described in the Prospectus or such as do not materially
affect the value of such property and do not materially interfere with
the use made and proposed to be made of such property by the Trust, the
Operating Partnership and their subsidiaries; and (ii) all real
property, buildings and personal property held under lease by the
Trust, the Operating Partnership and their subsidiaries are held by
them under valid, existing and enforceable leases in each case free and
clear of all liens, encumbrances and defects with such exceptions as
are not material and do not materially interfere with the use made and
proposed to be made of such property and buildings by the Trust, the
Operating Partnership and their subsidiaries.
(p) Except as described in the Prospectus, the Trust, the
Operating Partnership and each of their subsidiaries carry, or are
covered by, insurance (including title insurance) in such amounts and
covering such risks as is adequate for the conduct of their respective
businesses and the value of their respective properties and as is
customary for organizations engaged in similar businesses in similar
industries.
(q) The Trust, the Operating Partnership and each of their
subsidiaries own or possess adequate rights to use all trademarks,
service marks, trade names, trademark registrations, service ▇▇▇▇
registrations, copyrights and licenses necessary for the conduct of
their respective businesses and have no reason to believe that the
conduct of their respective businesses will conflict with, and have not
received any notice of any claim of conflict with, any such rights of
others.
(r) There are no legal or governmental proceedings pending to
which the Trust, the Operating Partnership or any of their subsidiaries
is a party or of which any property or assets of the Trust, the
Operating Partnership or any of their subsidiaries is the subject
which, if determined adversely to any of them might have a material
adverse effect on the consolidated financial position, shareholders'
equity, results of operations, business or prospects of the Trust, the
Operating Partnership and their subsidiaries ("Material Adverse
Effect"); and to the best
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of the Trust's knowledge, no such proceedings are threatened or
contemplated by governmental authorities or threatened by others.
(s) The conditions for use of Form S-3, as set forth in the
General Instructions thereto, have been satisfied.
(t) 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.
(u) No relationship, direct or indirect, exists between or
among the Trust or the Operating Partnership on the one hand, and the
trustees, officers, shareholders (in the case of the Trust), limited
partners (in the case of the Operating Partnership), customers or
suppliers of the Trust or the Operating Partnership on the other hand,
which is required to be described in the Prospectus which is not so
described.
(v) No labor disturbance by the employees of the Trust, the
Operating Partnership or their subsidiaries exists or, to the knowledge
of the Trust, is imminent, which might be expected to have a Material
Adverse Effect.
(w) The Trust, the Operating Partnership and their
subsidiaries are in compliance in all material respects with all
presently applicable provisions of the Employee Retirement Income
Security Act of 1974, as amended, including the regulations and
published interpretations thereunder ("ERISA"); no "reportable event"
(as defined in ERISA) has occurred with respect to any "pension plan"
(as defined in ERISA) for which the Trust or the Operating Partnership
would have any liability; the Trust or the Operating Partnership have
not incurred and does not expect to incur liability under (i) Title IV
of ERISA with respect to termination of, or withdrawal from, any
"pension plan" or (ii) Sections 412 or 4971 of the Internal Revenue
Code of 1986, as amended, including the regulations and published
interpretations thereunder (the "Code"); and each "pension plan" for
which the Trust or the Operating Partnership would have any liability
that is intended to be qualified under Section 401(a) of the Code is so
qualified in all material respects and nothing has occurred, whether by
action or by failure to act, which would cause the loss of such
qualification.
(x) The Trust, the Operating Partnership and their
subsidiaries have filed all federal, state and local income and
franchise tax returns required to be filed through the date hereof and
have paid all taxes due thereon (except for taxes being contested in
good faith), and no tax deficiency has been determined
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adversely to the Trust, the Operating Partnership or any of their
subsidiaries which has had nor does the Trust have any knowledge of
any tax deficiency which, if determined adversely to the Trust, the
Operating Partnership or any of their subsidiaries, might have a
Material Adverse Effect.
(y) Since the date as of which information is given in the
Prospectus through the date hereof, and except as may otherwise be
disclosed in the Prospectus, the Trust and the Operating Partnership
have not (i) issued or granted any securities, (ii) incurred any
liability or obligation, direct or contingent, other than liabilities
and obligations which were incurred in the ordinary course of business,
(iii) entered into any transaction not in the ordinary course of
business or (iv) declared or paid any distribution on their beneficial
shares or partnership interests.
(z) The Trust, the Operating Partnership and their
subsidiaries (i) make and keep accurate books and records and (ii)
maintain 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 their financial statements and to maintain
accountability for their assets, (C) access to their assets is
permitted only in accordance with management's authorization and (D)
the reported accountability for their assets is compared with existing
assets at reasonable intervals.
(aa) Neither the Trust, the Operating Partnership nor any of
their subsidiaries (i) is in violation of its trust agreement, charter,
limited partnership agreement or bylaws, (ii) is in default in any
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 its properties or assets is subject or (iii) is in
violation in any respect of any law, ordinance, governmental rule,
regulation or court decree to which it or its property 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 their property or to the conduct of their
business, except in the cases of clauses (ii) and (iii) for such
matters as would not, individually or in the aggregate, have a Material
Adverse Effect.
(ab) Neither the Trust, the Operating Partnership, any of
their subsidiaries, nor any trustee, director, officer, agent, employee
or other person associated with or acting on behalf of them has used
any trust, corporate, or partnership funds for any unlawful
contribution, gift, entertainment or other unlawful expense relating to
political activity; made any direct or indirect
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unlawful payment to any foreign or domestic government official or
employee from trust, corporate, or partnership 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.
(aa) Except as disclosed in the Prospectus, there has been no
storage, disposal, generation, manufacture, refinement, transportation,
handling or treatment of toxic wastes, medical wastes, hazardous wastes
or hazardous substances by the Trust, the Operating Partnership or any
of their subsidiaries (or, to the knowledge of the Trust, any of their
predecessors in interest or any other person) at, upon or from any of
the property now or previously owned or leased by the Trust, the
Operating Partnership or any of their subsidiaries in violation of any
applicable law, ordinance, rule, regulation, order, judgment, decree or
permit or which would require any removal, remedial or other response
action under any applicable law, ordinance, rule, regulation, order,
judgment, decree or permit, except for any violation or response action
which would not have singularly or in the aggregate with all such
violations and response actions, a Material Adverse Effect; there also
has been no storage, disposal, generation, manufacture, refinement,
transportation, handling or treatment of toxic wastes, medical wastes,
hazardous wastes or hazardous substances by the Trust, the Operating
Partnership or any of their subsidiaries (or, to the knowledge of the
Trust, any of their predecessors in interest) at or upon any property
owned by anyone else in violation of any applicable law, ordinance,
rule, regulation, order, judgment, decree or permit or which would
require any removal, remedial or other response action under any
applicable law, ordinance, rule, regulation, order, judgment, decree or
permit, except for any violation or response action which would not
have singularly or in the aggregate with all such violations and
response actions, a Material Adverse Effect; there has been no material
spill, discharge, leak, emission, injection, escape, placement, dumping
or release of any kind onto such property or into the environment
surrounding such property of any toxic wastes, medical wastes, solid
wastes, hazardous wastes or hazardous substances due to or caused by
the Trust, the Operating Partnership or any of their subsidiaries or
with respect to which the Trust, the Operating Partnership or any of
their subsidiaries have knowledge, except for any such spill,
discharge, leak, emission, injection, escape, placement, dumping or
release which would not have singularly or in the aggregate with all
such spills, discharges, leaks, emissions, injections, escapes,
placements, dumpings and releases, a Material Adverse Effect; and the
terms "hazardous wastes," "toxic wastes," "hazardous substances" and
"medical wastes" shall have the meanings specified in any applicable
local, state, federal and foreign laws or regulations with respect to
environmental protection. There are no underground storage tanks
located on or in any of the Trusts' properties except such tanks the
existence of which would not have a Material Adverse Effect.
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(ad) Neither the Trust, the Operating Partnership nor any
subsidiary 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.
(ae) Except as described in the Prospectus, the Operating
Partnership is not currently prohibited, directly or indirectly, from
paying any distributions to the Trust to the extent permitted by
applicable law, from making any other distribution on the Operating
Partnership's partnership interest, from repaying to the Trust any
loans or advances to the Operating Partnership from the Trust or from
transferring any of the Operating Partnership's property or assets to
the Trust.
(af) The Trust is organized in conformity with the
requirements for qualification as a real estate investment trust under
the Internal Revenue Code of 1986, as amended (the "Code"), has
qualified as a REIT for each taxable year since its formation, and its
proposed method of operation will enable it to continue to meet the
requirements for taxation as a REIT under the Code. All statements in
the Prospectus regarding the Trust's qualification as a REIT are true,
complete and correct in all material respects.
2. Purchase of the Shares by the Underwriters. On the basis of
the representations and warranties contained in, and subject to the terms and
conditions of, this Agreement, the Trust agrees to sell 4,000,000 Firm Shares to
the several Underwriters and each of the Underwriters, severally and not
jointly, agrees to purchase the number of shares of the Firm Shares set opposite
that Underwriter's name in Schedule 1 hereto. The respective purchase
obligations of the Underwriters with respect to the Firm Shares shall be rounded
among the Underwriters to avoid fractional shares, as the Representatives may
determine.
In addition, the Trust grants to the Underwriters an option to
purchase up to 600,000 Option Shares. Such option is granted solely for the
purpose of covering over-allotments in the sale of Firm Shares and is
exercisable as provided in Section 4 hereof. Option Shares shall be purchased
severally for the account of the Underwriters in proportion to the number of
Firm Shares set opposite the name of such Underwriters in Schedule 1 hereto. The
respective purchase obligations of each Underwriter with respect to the Option
Shares shall be adjusted by the Representatives so that no Underwriter shall be
obligated to purchase Option Shares other than in 100 share amounts. The price
of both the Firm Shares and any Option Shares shall be $21.035 per share.
The Trust shall not be obligated to deliver any of the Shares
to be delivered on the First Delivery Date or the Second Delivery Date (as
hereinafter defined), as the case may be, except upon payment for all the Shares
to be purchased on such Delivery Date as provided herein.
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3. Offering of Shares by the Underwriters.
Upon authorization by the Representatives of the release of
the Firm Shares, the several Underwriters propose to offer the Firm Shares for
sale upon the terms and conditions set forth in the Prospectus.
4. Delivery of and Payment for the Shares. Delivery of and
payment for the Firm Shares shall be made at the office of ▇▇▇▇▇ & ▇▇▇▇▇▇▇
L.L.P., Columbia Square, ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇., ▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇, at
10:00 A.M., New York City time, on the fourth full business day following the
date of this Agreement or at such other date or place as shall be determined by
agreement between the Representatives and the Trust. This date and time are
sometimes referred to as the "First Delivery Date." On the First Delivery Date,
the Trust shall deliver or cause to be delivered certificates representing the
Firm Shares to the Representatives for the account of each Underwriter against
payment to or upon the order of the Trust of the purchase price in immediately
available funds. Time shall be of the essence, and delivery at the time and
place specified pursuant to this Agreement is a further condition of the
obligation of each Underwriter hereunder. Upon delivery, the Firm Shares shall
be registered in such names and in such denominations as the Representatives
shall request in writing not less than two full business days prior to the First
Delivery Date. For the purpose of expediting the checking and packaging of the
certificates for the Firm Shares, the Trust shall make the certificates
representing the Firm Shares available for inspection by the Representatives in
New York, New York, not later than 2:00 P.M., New York City time, on the
business day prior to the First Delivery Date.
At any time on or before the thirtieth day after the date of
this Agreement the option granted in Section 2 may be exercised by written
notice being given to the Trust by the Representatives. Such notice shall set
forth the aggregate number of Option Shares as to which the option is being
exercised, the names in which the Option Shares are to be registered, the
denominations in which the Option Shares are to be issued and the date and time,
as determined by the Representatives, when the Option Shares are to be
delivered; provided, however, that this date and time shall not be earlier than
the First Delivery Date nor earlier than the second business day after the date
on which the option shall have been exercised nor later than the fifth business
day after the date on which the option shall have been exercised. The date and
time the Option Shares are delivered are sometimes referred to as the "Second
Delivery Date" and the First Delivery Date and the Second Delivery Date are
sometimes each referred to as a "Delivery Date."
Delivery of and payment for the Option Shares shall be made at
the place specified in the first sentence of the first paragraph of this Section
4 (or at such other place as shall be determined by agreement between the
Representatives and the Trust) at 10:00 A.M., New York City time, on the Second
Delivery Date. On the Second Delivery Date, the Trust shall deliver or cause to
be delivered the certificates representing the Option Shares to the
Representatives for the account of each Underwriter against payment to or upon
the order of the
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Trust of the purchase price in immediately available funds. Time shall be of the
essence, and delivery at the time and place specified pursuant to this Agreement
is a further condition of the obligation of each Underwriter hereunder. Upon
delivery, the Option Shares shall be registered in such names and in such
denominations as the Representatives shall request in the aforesaid written
notice. For the purpose of expediting the checking and packaging of the
certificates for the Option Shares, the Trust shall make the certificates
representing the Option Shares available for inspection by the Representatives
in New York, New York, not later than 2:00 P.M., New York City time, on the
business day prior to the Second Delivery Date.
5. Further Agreements of the Trust and the Operating
Partnership. The Trust and the Operating Partnership agree:
(a) To prepare the Prospectus in a form approved by
the Representatives and to file such Prospectus pursuant to
Rule 424(b) under the Securities Act not later than
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 prior to the last Delivery Date except as
permitted herein; to advise the Representatives, 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
Representatives with copies thereof; to file promptly all
reports and any definitive proxy or information statements
required to be filed by the Trust with the Commission pursuant
to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act
subsequent to the date of the Prospectus and for so long as
the delivery of a prospectus is required in connection with
the offering or sale of the Shares, to advise the
Representatives, 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 Shares for offering or sale in any
jurisdiction, of the initiation or threatening of any
proceeding for any such purpose, or of any request by the
Commission for the amending or supplementing of the
Registration Statement or the Prospectus or for additional
information; and, in the event of the issuance of any stop
order or of any order preventing or suspending the use of any
Preliminary Prospectus or the Prospectus or suspending any
such qualification, to use promptly its best efforts to obtain
its withdrawal;
(b) To furnish promptly to the Representatives and to
counsel for the Underwriters a signed copy 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;
- 12 -
(c) To deliver promptly to the Representatives such
number of the following documents as the Representatives 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 the computation of per share earnings) and,
(ii) each Preliminary Prospectus, the Prospectus and any
amended or supplemented Prospectus and (iii) any document
incorporated by reference in the Prospectus (excluding
exhibits thereto); and, if the delivery of a prospectus is
required at any time after the Effective Time in connection
with the offering or sale of the Shares or any other
securities relating thereto and if at such time any events
shall have occurred as a result of which the Prospectus as
then amended or supplemented would include an untrue statement
of a material fact or omit to state any material fact
necessary in order to make the statements therein, in the
light of the circumstances under which they were made when
such Prospectus is delivered, not misleading, or, if for any
other reason it shall be necessary to amend or supplement the
Prospectus or to file under the Exchange Act any document
incorporated by reference in the Prospectus in order to comply
with the Securities Act or the Exchange Act, to notify the
Representatives and, upon its 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
Representatives may from time to time reasonably request of an
amended or supplemented Prospectus which will correct such
statement or omission or effect such compliance.
(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 reasonable
judgment of the Trust or the Representatives, 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,
any document incorporated by reference in the Prospectus or
any Prospectus pursuant to Rule 424 of the Rules and
Regulations, to furnish a copy thereof to the Representatives
and counsel for the Underwriters and afford them a reasonable
opportunity to comment on any such filing prior to the filing
thereof;
(f) For a period of five years following the
Effective Date, to furnish to the Representatives copies of
all materials furnished by the Trust to its shareholders and
all public reports and all reports and financial statements
furnished by the Trust to the principal national securities
exchange upon which the Shares may be listed pursuant to
requirements of or agreements with such exchange or to the
Commission pursuant to the Exchange Act or any rule or
regulation of the Commission thereunder;
- 13 -
(g) Promptly from time to time to take such action as
the Representatives may reasonably request to qualify the
Shares for offering and sale under the securities laws of such
jurisdictions as the Representatives may request and to comply
with such laws so as to permit the continuance of sales and
dealings therein in such jurisdictions for as long as may be
necessary to complete the distribution of the Shares,
provided, that no foreign qualification of the Trust in any
jurisdiction be required in connection therewith;
(h) For a period of 90 days from the date of the
Prospectus, not to, directly or indirectly, (1) offer for
sale, sell, pledge or otherwise dispose of (or enter into any
transaction or device which is designed to, or could be
expected to, result in the disposition by any person at any
time in the future of) any shares of beneficial interest or
securities convertible into or exchangeable for shares of
beneficial interest (other than the shares issued upon
conversion of currently outstanding OP Units and shares issued
pursuant to employee benefit plans, qualified stock option
plans or other employee compensation plans existing on the
date hereof or pursuant to currently outstanding options,
warrants or rights or as a stock bonus not to exceed 2000
shares in the aggregate), or sell or grant options, rights or
warrants with respect to shares of beneficial interest or
securities convertible into or exchangeable for shares of
beneficial interest (other than the grant of options pursuant
to option plans existing on the date hereof and the issuance
by the Operating Partnership of OP Units in connection with
property acquisitions, provided, that such OP Units are not
redeemable prior to 90 days from the date of the Prospectus,
or (2) enter into any swap or other derivatives transaction
that transfers to another, in whole or in part, any of the
economic benefits or risks of ownership of such shares of
beneficial interest, whether any such transaction described in
clause (1) or (2) above is to be settled by delivery of shares
of beneficial interest or other securities, in cash or
otherwise, in each case without the prior written consent of
▇▇▇▇▇▇ Brothers Inc.; and to cause the holder(s) of the
currently outstanding Class B OP Units of the Operating
Partnership and each officer and trustee of the Company to
furnish to the Representatives, prior to the First Delivery
Date, a letter or letters, in form and substance satisfactory
to counsel for the Underwriters, pursuant to which each such
person shall agree not to, directly or indirectly, (1) offer
for sale, sell, pledge or otherwise dispose of (or enter into
any transaction or device which is designed to, or could be
expected to, result in the disposition by any person at any
time in the future of) any shares of beneficial interest or
securities convertible into or exchangeable for shares of
beneficial interest or (2) enter into any swap or other
derivatives transaction that transfers to another, in whole or
in part, any of the economic benefits or risks of ownership of
such shares of beneficial interest, whether any such
transaction described in clause (1) or (2) above is to be
settled by delivery of beneficial interest or other
securities, in cash or
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otherwise, in each case for a period of 90 days from the date
of the Prospectus, without the prior written consent of ▇▇▇▇▇▇
Brothers Inc.;
(i) Prior to the Effective Date, to apply for the
listing of the Shares on the New York Share Exchange, and to
use its best efforts to complete that listing, subject only to
official notice of issuance and evidence of satisfactory
distribution, prior to the First Delivery Date;
(j) To apply the net proceeds from the sale of the
Shares being sold by the Trust as set forth in the Prospectus;
(k) To take such steps as shall be necessary to
ensure that neither the Trust, the Operating Partnership nor
any subsidiary 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.
6. Expenses. The Trust agrees to pay (a) the costs incident to
the authorization, issuance, sale and delivery of the Shares and any taxes
payable in that connection; (b) the costs incident to the preparation, printing
and filing under the Securities Act of the Registration Statement and any
amendments and exhibits thereto; (c) the costs of distributing the Registration
Statement as originally filed and each amendment thereto and any post-effective
amendments thereof (including, in each case, exhibits), any Preliminary
Prospectus, the Prospectus and any amendment or supplement to the Prospectus or
any document incorporated by reference therein, all as provided in this
Agreement; (d) any applicable listing or other fees; (e) the fees and expenses
of qualifying the Shares under the securities laws of the several jurisdictions
as provided in Section 6 (j) and of preparing, printing and distributing a Blue
Sky Memorandum (including related fees and expenses of counsel to the
Underwriters); under this Agreement; provided that, except as provided in this
Section 6 and in Section 11 the Underwriters shall pay their own costs and
expenses, including the costs and expenses of their counsel, any transfer taxes
on the Shares which they may sell and the expenses of advertising any offering
of the Shares made by the Underwriters
7. Conditions of Underwriters' Obligations. The respective
obligations of the Underwriters hereunder are subject to the accuracy, when made
and on each Delivery Date, of the representations and warranties of the Trust
and the Operating Partnership contained herein, to the performance by the Trust
of its obligations hereunder, and to each of the following additional terms and
conditions:
(a) The Prospectus shall have been timely filed with
the Commission in accordance with Section 5(a); no stop order
suspending the effectiveness of the Registration Statement or
any part thereof shall have been issued and no proceeding for
that purpose shall have been initiated or threatened by the
Commission; and any request of the Commission for inclusion of
additional
- 15 -
information in the Registration Statement or the Prospectus or
otherwise shall have been complied with.
(b) No Underwriter shall have discovered and
disclosed to the Trust on or prior to such Delivery Date that
the Registration Statement or the Prospectus or any amendment
or supplement thereto contains an untrue statement of a fact
which, in the opinion of ▇▇▇▇▇ & ▇▇▇▇▇▇▇ L.L.P., counsel for
the Underwriters, is material or omits to state a fact which,
in the opinion of such counsel, is material and is required to
be stated therein or is necessary to make the statements
therein not misleading.
(c) All corporate proceedings and other legal matters
incident to the authorization, form and validity of this
Agreement, the Shares, the Registration Statement and the
Prospectus, and all other legal matters relating to this
Agreement and the transactions contemplated hereby shall be
reasonably satisfactory in all material respects to counsel
for the Underwriters, and the Trust shall have furnished to
such counsel all documents and information that they may
reasonably request to enable them to pass upon such matters.
(d) Drinker ▇▇▇▇▇▇ & ▇▇▇▇▇ L.L.P. shall have
furnished to the Representatives its written opinion, as
counsel to the Trust and the Operating Partnership, addressed
to the Underwriters and dated such Delivery Date, in form and
substance reasonably satisfactory to the Representatives, to
the effect that:
(i) The Trust and the Operating Partnership
have been duly organized, and each of their
subsidiaries have been organized, and all of the
foregoing are validly existing organizations in good
standing under the laws of their respective
jurisdictions, are duly qualified to do business and
are in good standing in each jurisdiction listed on a
Schedule to the opinion and have all power and
authority necessary to own or hold their respective
properties and conduct the businesses in which they
are engaged;
(ii) The Trust has an authorized
capitalization as set forth in the Prospectus under
the caption "Capitalization," and all of the issued
shares of beneficial interest of the Trust (including
the Shares being delivered on such Delivery Date)
have been duly and validly authorized and issued, are
fully paid and non-assessable and conform in all
material respects, to the description thereof
contained in the Prospectus; and all of the equity
interests in the Operating Partnership and each
subsidiary have been duly and validly authorized,
assuming receipt of consideration therefor as
provided in the resolutions authorizing issuance
thereof of the board of directors of the Trust, as
general partner of the Operating Partnership, or
- 16 -
by the board of directors of such subsidiary, are
fully paid and (except as set forth in the
Prospectus) are owned of record by the Trust, the
Operating Partnership or another subsidiary; and to
the knowledge of such counsel, are owned free and
clear of all liens, encumbrances, equities or claims;
(iii) There are no preemptive or other rights
to subscribe for or to purchase, nor any restriction
upon the voting or transfer of, any of the Trust's
shares of beneficial interest pursuant to the Trust's
Trust Agreement or bylaws or any agreement or other
instrument known to such counsel; nor are there any
restrictions upon the voting or transfer of, any
limited partnership interests ("Units") beneficially
owned by the Trust pursuant to the Operating
Partnership Agreement of Limited Partnership or, to
the knowledge of such counsel, any other agreement or
instrument to which the Operating Partnership is a
party, except those arising under the securities
laws;
(iv) To the knowledge of such counsel and
other than as set forth in the Prospectus, there are
no legal or governmental proceedings pending to which
the Trust, the Operating Partnership or any of their
subsidiaries is a party or of which any property or
assets of them is the subject which, if determined
adversely to the Trust, the Operating Partnership or
any of their subsidiaries, could reasonably be
expected to have a Material Adverse Effect; and, to
the knowledge of such counsel, no such proceedings
are threatened or contemplated by governmental
authorities or threatened by others which, if
commenced, could reasonably be expected to leave a
Material Adverse Effect;
(v) The Registration Statement was declared
effective under the Securities Act as of the date and
time specified in such opinion, the Prospectus was
filed with the Commission pursuant to the
subparagraph of Rule 424(b) of the Rules and
Regulations specified in such opinion on the date
specified therein and, to the knowledge of such
counsel, no stop order suspending the effectiveness
of the Registration Statement has been issued and no
proceeding for that purpose is pending or threatened
by the Commission;
(vi) The Registration Statement and the
Prospectus and any further amendments or supplements
thereto made by the Trust prior to such Delivery Date
(other than the financial statements and related
schedules and numerical and statistical data therein,
as to which such counsel need express no opinion)
comply as to form in all material respects with the
requirements of the Securities Act and the Rules and
- 17 -
Regulations; and the documents incorporated by
reference in the Prospectus and any further amendment
or supplement to any such incorporated document made
by the Trust prior to such Delivery Date (other than
the financial statements and related schedules and
numerical and statistical data therein, as to which
such counsel need express no opinion), when they
became effective or were filed with the Commission,
as the case may be, complied as to form in all
material respects with the requirements of the
Securities Act or the Exchange Act, as applicable,
and the rules and regulations of the Commission
thereunder;
(vii) The statements contained in the
Prospectus under the caption "Certain Federal Income
Tax Consequences" and "Risk Factors -- Adverse
Consequences of Failure to Qualify as a REIT,"
insofar as they describe federal statutes, rules and
regulations, constitute a fair summary thereof and
the opinion of such counsel filed as Exhibit 8 to the
Registration Statement is confirmed and the
Underwriters may rely upon such opinion as if it were
addressed to them;
(viii) 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 or filed as exhibits to the
Registration Statement or incorporated therein by
reference as permitted by the Rules and Regulations;
(ix) This Agreement has been duly authorized,
executed and delivered by the Trust and the Operating
Partnership;
(x) The issue and sale of the Shares being
delivered on such Delivery Date by the Trust and the
compliance by the Trust and the Operating Partnership
with all of the provisions of this Agreement and the
consummation of the transactions contemplated hereby
will not conflict with or result in a breach or
violation of any of the terms or provisions of, or
constitute a default under, any indenture, mortgage,
deed of trust, loan agreement or other agreement or
instrument known to such counsel to which the Trust,
the Operating Partnership or any of their
subsidiaries is a party or by which they are bound or
to which any of the property or assets of the Trust,
the Operating Partnership or any of their
subsidiaries is subject, nor will such actions result
in any violation of the provisions of the trust
agreement, charter or bylaws or partnership agreement
of the Trust, the Operating Partnership or any of
their subsidiaries or any statute or any order, rule
or regulation known to such counsel of any court or
governmental agency or body having jurisdiction over
the Trust, the
- 18 -
Operating Partnership or any of their subsidiaries or
any of their properties or assets; and, except for
the registration of the Shares under the Securities
Act and such consents, approvals, authorizations,
registrations or qualifications as may be required
under the Exchange Act and applicable state
securities laws in connection with the purchase and
distribution of the Shares by the Underwriters, no
consent, approval, authorization or order of, or
filing or registration with, any such court or
governmental agency or body is required for the
execution, delivery and performance of this Agreement
by the Trust and the Operating Partnership and the
consummation of the transactions contemplated hereby;
(xi) Except as described in the Prospectus,
to the knowledge of such counsel, there are no
contracts, agreements or understandings between the
Trust and any person granting such person the right
to require the Trust to file a registration statement
under the Securities Act with respect to any
securities of the Trust owned or to be owned by such
person or to require the Trust 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 Trust under the Securities
Act; and.
(xii) Neither the Trust, the Operating
Partnership nor any subsidiary 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.
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 Pennsylvania and the
corporate law of Delaware; (ii) rely (to the extent such
counsel deems proper and specifies in their opinion), as to
matters involving the application of laws of other
jurisdictions upon the opinion of other counsel of good
standing, provided that such other counsel is satisfactory to
counsel for the Underwriters and furnishes a copy of its
opinion to the Representatives. Such counsel shall also have
furnished to the Representatives a written statement,
addressed to the Underwriters and dated such Delivery Date, in
form and substance satisfactory to the Representatives, to the
effect that (x) such counsel has acted as counsel to the Trust
on a regular basis and has acted as counsel to the Trust in
connection with the preparation of the Prospectus, and (y)
based on the foregoing, no facts have come to the attention of
such counsel which lead them to believe that (I) the
Registration Statement, as of the date of the Trust's most
recently filed Annual Report on Form 10-K as amended through
the date hereof, 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
- 19 -
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
or (II) any document incorporated by reference in the
Prospectus or any further amendment or supplement to any such
incorporated document made by the Trust prior to such Delivery
Date, when they became effective or were filed with the
Commission, as the case may be, contained, in the case of a
registration statement which became effective under the
Securities Act, 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, in the case of other documents which were
filed under the Exchange Act with the Commission, an untrue
statement of a material fact or omitted to state a material
fact 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 for the statements made in
the Prospectus under the caption "Description of Shares of
Beneficial Interest" and "Certain Federal Income Tax
Consequences," insofar as such statements relate to the Shares
and concern legal matters and that such counsel expresses no
view as to the financial statements and related schedules
included or incorporated by reference in the Registration
Statement or Prospectus.
(e) The Representatives shall have received from
▇▇▇▇▇ & ▇▇▇▇▇▇▇ L.L.P., counsel for the Underwriters, such
opinion or opinions, dated such Delivery Date, with respect to
the issuance and sale of the Shares, the Registration
Statement, the Prospectus and other related matters as the
Representatives may reasonably require, and the Trust shall
have furnished to such counsel such documents as they
reasonably request for the purpose of enabling them to pass
upon such matters.
(f) At the time of execution of this Agreement, the
Representatives shall have received from ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇,
L.L.P. a letter, in form and substance satisfactory to the
Representatives, 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, (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 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
- 20 -
covered by accountants' "comfort letters" to underwriters in
connection with registered public offerings.
(g) With respect to the letter of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
L.L.P., referred to in the preceding paragraph and delivered
to the Representatives concurrently with the execution of this
Agreement (the "initial letter"), the Trust shall have
furnished to the Representatives a letter (the "bring-down
letter") of such accountants, addressed to the Underwriters
and dated such Delivery Date (i) confirming that they are
independent public accountants within the meaning of the
Securities Act and are in compliance with the applicable
requirements relating to the qualification of accountants
under Rule 2-01 of Regulation S-X of the Commission, (ii)
stating, as of the date of the bring-down letter (or, with
respect to matters involving changes or developments since the
respective dates as of which specified financial 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 firms with respect to the
financial information and other matters covered by the initial
letter and (iii) confirming in all material respects the
conclusions and findings set forth in the initial letter.
(h) The Trust shall have furnished to the
Representatives a certificate, dated such Delivery Date, of
its Chairman of the Board, its Chief Executive Officer, its
President and its Chief Financial Officer stating that:
(i) The representations, warranties and
agreements of the Trust and the Operating Partnership
in Section 1 are true and correct as of such Delivery
Date; the Trust and the Operating Partnership have
complied with all of their agreements contained
herein; and the conditions set forth in Sections 7(a)
and 7(i) have been fulfilled; and
(ii) They have carefully examined the
Registration Statement and the Prospectus and, in
their opinion (A) as of the Effective Date and the
date of the Trust's most recently filed Annual Report
on Form 10-K, as amended through the date hereof,
(the "10-K"), 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, and (B)
since the filing date of the 10-K no event has
occurred which should have been set forth in a
supplement or amendment to the Registration Statement
or the Prospectus.
(i) (i) Neither the Trust, the Operating Partnership
nor any of their subsidiaries shall have sustained since the
date of the latest audited financial statements included or
incorporated by reference in the Prospectus any loss or
- 21 -
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 equity or long-term debt of the Trust, the
Operating Partnership or any of their subsidiaries or any
change, or any development involving a prospective change, in
or affecting the general affairs, management, financial
position, shareholders' equity or results of operations of the
Trust, the Operating Partnership and their subsidiaries,
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 Representatives, so
material and adverse as to make it impracticable or
inadvisable to proceed with the public offering or the
delivery of the Shares being delivered on such Delivery Date
on the terms and in the manner contemplated in the Prospectus.
(j) Subsequent to the execution and delivery of this
Agreement there shall not have occurred any of the following:
(i) trading in securities generally on the New York Stock
Exchange or the American Stock Exchange or in the
over-the-counter market, or trading in any securities of the
Trust 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, (iii) the United States shall have become engaged
in hostilities, there shall have been an escalation in
hostilities involving the United States or there shall have
been a declaration of a national emergency or war by the
United States or (iv) there shall have occurred such a
material adverse change in general economic, political or
financial conditions (or the effect of international
conditions on the financial markets in the United States shall
be such) as to make it, in the judgment of a majority in
interest of the several Underwriters, impracticable or
inadvisable to proceed with the public offering or delivery of
the Shares being delivered on such Delivery Date on the terms
and in the manner contemplated in the Prospectus.
(k) The New York Stock Exchange shall have approved
the Shares for listing, subject only to official notice of
issuance.
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.
- 22 -
8. Indemnification and Contribution.
(a) The Trust and the Operating Partnership, jointly and
severally, shall indemnify and hold harmless each Underwriter, its officers and
employees and each person, if any, who controls any Underwriter within the
meaning of the Securities Act, from and against any loss, claim, damage or
liability, joint or several, or any action in respect thereof (including, but
not limited to, any loss, claim, damage, liability or action relating to
purchases and sales of Shares), to which that Underwriter, officer, employee or
controlling person may become subject, under the Securities Act or otherwise,
insofar as such loss, claim, damage, liability or action arises out of, or is
based upon, (i) any untrue statement or alleged untrue statement of a material
fact contained (A) in any Preliminary Prospectus, the Registration Statement or
the Prospectus or in any amendment or supplement thereto or (B) in any blue sky
application or other document prepared or executed by the Trust (or based upon
any written information furnished by the Trust) specifically for the purpose of
qualifying any or all of the Shares under the securities laws of any state or
other jurisdiction (any such application, document or information being
hereinafter called a "Blue Sky Application"), (ii) the omission or alleged
omission to state in any Preliminary Prospectus, the Registration Statement or
the Prospectus, or in any amendment or supplement thereto, or in any Blue Sky
Application any material fact required to be stated therein or necessary to make
the statements therein not misleading or (iii) any act or failure to act or any
alleged act or failure to act by any Underwriter in connection with, or relating
in any manner to, the Shares or the offering contemplated hereby, and which is
included as part of or referred to in any loss, claim, damage, liability or
action arising out of or based upon matters covered by clause (i) or (ii) above
(provided that the Trust and the Operating Partnership 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 promptly upon demand 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 Trust and the Operating
Partnership 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, (i)
the failure of any Underwriter to deliver a Prospectus as required by law,
provided, that the Company has satisfied its obligation hereunder to deliver to
the Underwriter the number of Prospectuses requested by such Underwriter, or
(ii) 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 Trust through the Representatives
by or on behalf of any Underwriter specifically for inclusion therein. The
foregoing indemnity agreement is in addition to any liability which the Trust or
the Operating Partnership may otherwise have to any Underwriter or to any
officer, employee or controlling person of that Underwriter.
- 23 -
(b) Each Underwriter, severally and not jointly, shall
indemnify and hold harmless the Trust, the Operating Partnership, their officers
and employees, each of their trustees (including any person who, with his or her
consent, is named in the Registration Statement as about to become a trustee of
the Trust), and each person, if any, who controls the Trust 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 the Trust or any
such trustee, officer or controlling person may become subject, under the
Securities Act or otherwise, insofar as such loss, claim, damage, liability or
action arises out of, or is based upon, (i) any untrue statement or alleged
untrue statement of a material fact contained (A) in any Preliminary Prospectus,
the Registration Statement or the Prospectus or in any amendment or supplement
thereto, or (B) in any Blue Sky Application or (ii) the omission or alleged
omission to state in any Preliminary Prospectus, the Registration Statement or
the Prospectus, or in any amendment or supplement thereto, or in any Blue Sky
Application any material fact required to be stated therein or necessary to make
the statements therein not misleading, but in each case only to the extent that
the untrue statement or alleged untrue statement or omission or alleged omission
was made in reliance upon and in conformity with written information concerning
such Underwriter furnished to the Trust through the Representatives by or on
behalf of that Underwriter specifically for inclusion therein, and shall
reimburse the Trust and any such trustee, officer or controlling person for any
legal or other expenses reasonably incurred by the Trust 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 the Trust or any such
trustee, officer, employee or controlling person.
(c) Promptly after receipt by an indemnified party under this
Section 8 of notice of any claim or the commencement of any action, the
indemnified party shall, if a claim in respect thereof is to be made against the
indemnifying party under this Section 8, notify the indemnifying party in
writing of the claim or the commencement of that action; provided, however, that
the failure to notify the indemnifying party shall not relieve it from any
liability which it may have under this Section 8 except to the extent it has
been materially prejudiced by such failure and, provided further, that the
failure to notify the indemnifying party shall not relieve it from any liability
which it may have to an indemnified party otherwise than under this Section 11.
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 8 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 Representatives shall have the right to employ counsel to represent jointly
the Representatives and those other Underwriters and their respective officers,
employees and controlling persons who may be subject to liability arising out of
any
- 24 -
claim in respect of which indemnity may be sought by the Underwriters against
the Trust or the Operating Partnership under this Section 8 if, in the
reasonable judgment of the Representatives, it is advisable for the
Representatives and those Underwriters, 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 Trust or the
Operating Partnership. No indemnifying party shall (i) without the prior written
consent of the indemnified parties (which consent shall not be unreasonably
withheld), settle or compromise or consent to the entry of any judgment with
respect to any pending or threatened claim, action, suit or proceeding in
respect of which indemnification or contribution may be sought hereunder
(whether or not the indemnified parties are actual or potential parties to such
claim or action) unless such settlement, compromise or consent includes an
unconditional release of each indemnified party from all liability arising out
of such claim, action, suit or proceeding, or (ii) be liable for any settlement
of any such action effected without its written consent (which consent shall not
be unreasonably withheld), but if settled with the consent of the indemnifying
party or if there be a final judgment of the plaintiff in any such action, the
indemnifying party agrees to indemnify and hold harmless any indemnified party
from and against any loss or liability by reason of such settlement or judgment.
(d) If the indemnification provided for in this Section 8
shall for any reason be unavailable to or insufficient to hold harmless an
indemnified party under Section 8(a) or 8(b) in respect of any loss, claim,
damage or liability, or any action in respect thereof, referred to therein, then
each indemnifying party shall, in lieu of indemnifying such indemnified party,
contribute to the amount paid or payable by such indemnified party as a result
of such loss, claim, damage or liability, or action in respect thereof, (i) in
such proportion as shall be appropriate to reflect the relative benefits
received by the Trust or the Operating Partnership on the one hand and the
Underwriters on the other from the offering of the Shares or (ii) if the
allocation provided by clause (i) above is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Trust and the
Operating Partnership on the one hand and the Underwriters on the other with
respect to the statements or omissions which resulted in such loss, claim,
damage or liability, or action in respect thereof, as well as any other relevant
equitable considerations. The relative benefits received by the Trust and the
Operating Partnership on the one hand and the Underwriters on the other with
respect to such offering shall be deemed to be in the same proportion as the
total net proceeds from the offering of the Shares purchased under this
Agreement (before deducting expenses) received by the Trust and the Operating
Partnership on the one hand, and the total underwriting discounts and
commissions received by the Underwriters with respect to the Shares purchased
under this Agreement, on the other hand, bear to the total gross proceeds from
the offering of the Shares under this Agreement, in each case as set forth in
the table on the cover page of the Prospectus. The relative fault shall be
determined by reference to whether the untrue or alleged untrue statement of a
material fact or omission or alleged omission to state a material fact relates
to information supplied by the Trust, the Operating Partnership, or the
Underwriters, the intent of the parties and their relative knowledge, access to
information and opportunity to correct or prevent such
- 25 -
statement or omission. For purposes of the preceding two sentences, the net
proceeds deemed to be received by the Trust shall be deemed to be also for the
benefit of the Operating Partnership and information supplied by the Trust shall
also be deemed to have been supplied by the Operating Partnership. The Trust,
the Operating Partnership, 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 8(d), any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 8(d), no Underwriter shall be required to contribute
any amount in excess of the amount by which the total price at which the Shares
underwritten by it and distributed to the public was offered to the public
exceeds the amount of any damages which such Underwriter has otherwise paid or
become liable to pay by reason of any untrue or alleged untrue statement or
omission or alleged omission. No person guilty of fraudulent misrepresentation
(within the meaning of Section 8(e) 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 8(d) are several in proportion to their respective underwriting
obligations and not joint.
(e) The Underwriters severally confirm and the Trust and the
Operating Partnership acknowledge that the statements with respect to the public
offering of the Shares by the Underwriters set forth on the cover page of, the
legend concerning over-allotments on the inside front cover page of and the
concession and reallowance figures appearing under the caption "Underwriting"
in, the Prospectus are correct and constitute the only information concerning
such Underwriters furnished in writing to the Trust and the Operating
Partnership by or on behalf of the Underwriters specifically for inclusion in
the Registration Statement and the Prospectus.
9. Defaulting Underwriters.
If, on either Delivery Date, any Underwriter defaults in the
performance of its obligations under this Agreement, the remaining
non-defaulting Underwriters shall be obligated to purchase the Shares which the
defaulting Underwriter agreed but failed to purchase on such Delivery Date in
the respective proportions which the number of Firm Shares set opposite the name
of each remaining non-defaulting Underwriter in Schedule 1 hereto bears to the
total number of Firm Shares set opposite the names of all the remaining
non-defaulting Underwriters in Schedule 1 hereto; provided, however, that the
remaining non-defaulting Underwriters shall not be obligated to purchase any of
the Shares on such Delivery Date if the total number of the Shares which the
defaulting Underwriter or Underwriters agreed but failed to purchase on such
date exceeds 9.09% of the total number of the Shares to be purchased on such
Delivery Date,
- 26 -
and any remaining non-defaulting Underwriter shall not be obligated to purchase
more than 110% of the number of the Shares which it agreed to purchase on such
Delivery Date pursuant to the terms of Section 2. If the foregoing maximums are
exceeded, the remaining non-defaulting Underwriters, or those other underwriters
satisfactory to the Representatives who so agree, shall have the right, but
shall not be obligated, to purchase, in such proportion as may be agreed upon
among them, all the Shares to be purchased on such Delivery Date. If the
remaining Underwriters or other underwriters satisfactory to the Representatives
do not elect to purchase the shares which the defaulting Underwriter or
Underwriters agreed but failed to purchase on such Delivery Date, this Agreement
(or, with respect to the Second Delivery Date, the obligation of the
Underwriters to purchase, and of the Trust to sell, the Option Shares) shall
terminate without liability on the part of any non-defaulting Underwriter or the
Trust, except that the Trust will continue to be liable for the payment of
expenses to the extent set forth in Sections 6 and 11. As used in this
Agreement, the term "Underwriter" includes, for all purposes of this Agreement
unless the context requires otherwise, any party not listed in Schedule 1 hereto
who, pursuant to this Section 9, purchases Firm Shares which a defaulting
Underwriter agreed but failed to purchase.
Nothing contained herein shall relieve a defaulting
Underwriter of any liability it may have to the Trust for damages caused by its
default. If other underwriters are obligated or agree to purchase the Shares of
a defaulting or withdrawing Underwriter, either the Representatives or the Trust
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 Trust or counsel for
the Underwriters may be necessary in the Registration Statement, the Prospectus
or in any other document or arrangement.
10. Termination. The obligations of the Underwriters hereunder
may be terminated by the Representatives by notice given to and received by the
Trust prior to delivery of and payment for the Firm Shares if, prior to that
time, any of the events described in Sections 7(i) or 7(j), shall have occurred
or if the Underwriters shall decline to purchase the Firm Shares for any reason
permitted under this Agreement.
11. Reimbursement of Underwriters' Expenses. If (a) the Trust
shall fail to tender the Shares for delivery to the Underwriters by reason of
any failure, refusal or inability on the part of the Trust or the Operating
Partnership to perform any agreement on its part to be performed, or because any
other condition of the Underwriters' obligations hereunder required to be
fulfilled by the Trust or the Operating Partnership is not fulfilled, the Trust
and the Operating Partnership will reimburse the Underwriters for all reasonable
out-of-pocket expenses (including fees and disbursements of counsel) incurred by
the Underwriters in connection with this Agreement and the proposed purchase of
the Shares, and upon demand the Trust and the Operating Partnership shall pay
the full amount thereof to the Representatives. If this Agreement is terminated
pursuant to Section 9 by reason of the default of one or more Underwriters,
neither the Trust nor the Operating Partnership shall not be obligated to
reimburse any defaulting Underwriter on account of those expenses.
- 27 -
12. Notices, etc. All statements, requests, notices and
agreements hereunder shall be in writing, and:
(a) if to the Underwriters, shall be delivered or
sent by mail, telex or facsimile transmission to ▇▇▇▇▇▇
Brothers Inc., Three World Financial Center, New York, New
York 10285, Attention: Syndicate Department (Fax: 212-526-
6588), with a copy, in the case of any notice pursuant to
Section 11(d), to the Director of Litigation, Office of the
General Counsel, ▇▇▇▇▇▇ Brothers Inc., ▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇;
(b) if to the Trust or the Operating Partnership,
shall be delivered or sent by mail, telex or facsimile
transmission to the address of the Trust set forth in the
Registration Statement, Attention: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇,
President and Chief Operating Officer (Fax: (▇▇▇) ▇▇▇-▇▇▇▇);
provided, however, that any notice to an Underwriter pursuant to Section 8(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
Representatives, which address will be supplied to any other party hereto by the
Representatives upon request. Any such statements, requests, notices or
agreements shall take effect at the time of receipt thereof. The Trust 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.
13. Persons Entitled to Benefit of Agreement. This Agreement
shall inure to the benefit of and be binding upon the Underwriters, the Trust,
the Operating Partnership and their respective successors. This Agreement and
the terms and provisions hereof are for the sole benefit of only those persons,
except that (A) the representations, warranties, indemnities and agreements of
the Trust and the Operating Partnership contained in this Agreement shall also
be deemed to be for the benefit of the person or persons, if any, who control
any Underwriter within the meaning of Section 15 of the Securities Act and (B)
the indemnity agreement of the Underwriters contained in Section 8(b) of this
Agreement shall be deemed to be for the benefit of trustees of the Trust, the
Operating Partnership, officers of the Trust who have signed the Registration
Statement and any person controlling the Trust 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
13, any legal or equitable right, remedy or claim under or in respect of this
Agreement or any provision contained herein.
14. Survival. The respective indemnities, representations,
warranties and agreements of the Trust, the Operating Partnership and the
Underwriters contained in this Agreement or made by or on behalf on them,
respectively, pursuant to this Agreement, shall survive the delivery of and
payment for the Shares and shall remain in full force and effect, regardless of
any investigation made by or on behalf of any of them or any person controlling
any of them.
- 28 -
15. Definition of the Terms "Business Day" and "Subsidiary."
For purposes of this Agreement, (a) "business day" means any day on which the
New York Share Exchange is open for trading and (b) "subsidiary" has the meaning
set forth in Rule 405 of the Rules and Regulations, and for purposes hereof
"subsidiary" shall include PREIT-▇▇▇▇▇, Inc.
16. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of New York.
Each party irrevocably agrees that any legal suit,
action or proceeding arising out of or based upon this Agreement or the
transactions contemplated hereby ("Related Proceedings") may be instituted in
the federal courts of the United States of America located in the City of New
York or the courts of the State of New York in each case located in the Borough
of Manhattan in the City of New York (collectively, the "Specified Courts"), and
irrevocably submits to the exclusive jurisdiction (except for proceedings
instituted in regard to the enforcement of a judgment of any such court (a
"Related Judgment"), as to which such jurisdiction is non-exclusive) of such
courts in any such suit, action or proceeding. The parties further agree that
service of any process, summons, notice or document by mail to such party's
address set forth above shall be effective service of process for any lawsuit,
action or other proceeding brought in any such court. The parties hereby
irrevocably and unconditionally waive any objection to the laying of venue of
any lawsuit, action or other proceeding in the Specified Courts, and hereby
further irrevocably and unconditionally waive and agree not to plead or claim in
any such court that any such lawsuit, action or other proceeding brought in any
such court has been brought in an inconvenient forum.
17. Counterparts. This Agreement may be executed in one or
more counterparts and, if executed in more than one counterpart, the executed
counterparts shall each be deemed to be an original but all such counterparts
shall together constitute one and the same instrument.
18. Headings. The headings herein are inserted for convenience
of reference only and are not intended to be part of, or to affect the meaning
or interpretation of, this Agreement.
- 29 -
If the foregoing correctly sets forth the agreement between
the Trust, the Operating Partnership and the Underwriters, please indicate your
acceptance in the space provided for that purpose below.
Very truly yours,
PENNSYLVANIA REAL ESTATE INVESTMENT
TRUST
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President
PREIT ASSOCIATES, L.P., the Operating
Partnership
By: Pennsylvania Real Estate Investment Trust,
its General Partner
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President
Accepted:
▇▇▇▇▇▇ BROTHERS INC.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, INCORPORATED
▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ & ▇▇▇▇▇
INCORPORATED
▇▇▇▇▇ ▇▇▇▇▇▇ INC.
WHEAT, FIRST SECURITIES, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------
Authorized Representative
For themselves and as Representatives
of the several Underwriters named
in Schedule 1 hereto
- 30 -
SCHEDULE 1
Number of Underwriters Shares
---------------------- ------
▇▇▇▇▇▇ Brothers Inc..................................... 800,000
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, Incorporated.................... 800,000
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated....... 800,000
▇▇▇▇▇ ▇▇▇▇▇▇ Inc........................................ 800,000
Wheat, First Securities, Inc............................ 800,000
-------
Total.......................................... 4,000,000
=========