1
Exhibit 1.1
LIBERTY PROPERTY LIMITED PARTNERSHIP
(a Pennsylvania Limited Partnership)
$250,000,000 7 3/4% SENIOR NOTES DUE 2009
UNDERWRITING AGREEMENT
April 15, 1999
▇▇▇▇▇▇ Brothers Inc.,
Banc One Capital Markets, Inc.
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ Securities Corporation
▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co.
▇.▇. ▇▇▇▇▇▇ Securities Inc.
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc.
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Read LLC
c/▇ ▇▇▇▇▇▇ Brothers Inc.
Three World Financial Center
New York, New York 10285
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., ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ Securities
Corporation, ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co., ▇.▇. ▇▇▇▇▇▇ Securities Inc., ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ Inc. and Warburg Dillon Read LLC (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 $250,000,000
aggregate principal amount of its 7 3/4% Senior Notes due 2009 (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. 333-43267 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
2
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 The First National
Bank of Chicago, as trustee (the "Trustee") has been qualified, and the
Third Supplemental Indenture, to be dated as of April 20, 1999, 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 statements and any amendments thereto have been delivered by
the Company to you. As used in this Agreement, "Effective Time" means, for
such registration statement, the date and the time as of which such
registration statement, or the most recent post-effective amendment
thereto, if any, was declared effective by the Commission; "Effective
Date" means, for such registration statement, the date of the Effective
Time; "Preliminary Prospectus" means each prospectus included in such
registration statement, or amendments thereto, before it became effective
under the Securities Act and any prospectus filed with the Commission by
the Company with the consent of the Underwriters pursuant to Rule 424(a)
of the Rules and Regulations; "Registration Statement" means the
registration statement, as amended at the respective 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 included as part of the Registration
Statement as originally filed or as part of any amendment or supplement
thereto, or filed pursuant to Rule 424 under the Rules and Regulations,
complied when so filed in all material respects with the provisions of the
Securities Act and the rules and regulations thereunder, and each
Preliminary Prospectus 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,
3
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 has been instituted or, to
the knowledge of either of the Transaction Entities, after due inquiry of
the Commission, threatened by the Commission or by the state securities
authority of any jurisdiction.
(f) The Company has been duly formed and is validly existing as a
real estate investment trust in good standing under the laws of the State
of Maryland, is duly qualified to do business and is in good standing in
each jurisdiction in which its ownership or lease of property or the
conduct of its business requires such qualification, and has all power and
authority necessary to own or hold its properties, to conduct the business
in which it is engaged and to enter into and perform its obligations under
this Agreement. None of the subsidiaries of the Company (other than the
Operating Partnership, Liberty Property
4
Development Corp. ("Development Corp."), Liberty Property Development
Corp.-II ("Development-II") and Liberty Special Purpose Corp. ("SP
Corp.")) is a "significant subsidiary," as such term is defined in Rule
405 of the Rules and Regulations. Except as described in the Prospectus
and other than the Property Affiliates (as defined herein) and the
Operating Partnership, Development Corp. and SP Corp., the Company owns no
direct or indirect equity interest in any entity, except for such
interests as, in the aggregate, are not material to the condition,
financial or otherwise, or the earnings, assets, business affairs or
business prospects of the Company and its subsidiaries considered as a
single enterprise.
(g) 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"), no shares of beneficial interest of the Company are reserved for
any purpose and except for the equity interests in the Operating
Partnership ("Units"), the Operating Partnership's Exchangeable
Subordinated Debentures due 2001 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, and has all partnership power and authority
necessary to own or hold its properties, to conduct the business in which
it is engaged and to enter into and perform its obligations under this
Agreement. The Company is the sole general partner of the Operating
Partnership. The limited partnership agreement of the Operating
Partnership, as amended (the "Operating Partnership Agreement") is in full
force and effect, and the aggregate percentage interests of the Company
and the limited partners in the Operating Partnership are as set forth in
the Prospectus. The owner's equity of the Operating Partnership is as set
forth in the Prospectus under "Capitalization." 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) 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,
5
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) 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) SP Corp. has been duly organized and is validly existing as a
corporation in good standing under the laws of the Commonwealth of
Pennsylvania, is duly qualified to do business and is in good standing as
a foreign corporation in each jurisdiction in which its ownership or lease
of property or the conduct of its business requires such qualification,
and has all corporate power and authority necessary to own or hold its
properties and to conduct the business in which it is engaged. All of the
issued and outstanding capital stock of SP Corp. has been duly authorized
and validly issued and is fully paid and non-assessable, has been offered
and sold in compliance with all applicable laws (including, without
limitation, federal or state securities laws) and all of the capital stock
of SP Corp. is owned by the Company free and clear of any security
interest, mortgage, pledge, lien, encumbrance, claim, restriction or
equities. No shares of capital stock of SP Corp. are reserved for any
purpose, and there are no outstanding securities convertible into or
exchangeable for any capital stock of SP Corp. and no outstanding options,
rights (preemptive or otherwise) or warrants to purchase or to subscribe
for shares of such capital stock or any other securities of SP Corp.
(l) Each of those certain partnerships, limited liability companies
or other entities holding title to one or more of the Properties (the
"Property Affiliates") are the only entities other than the Operating
Partnership, SP Corp., 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.
6
Each of the Property Affiliates has been duly organized and is validly
existing as a limited partnership, limited liability company or other
entity, as the case may be, is duly qualified to do business and is in
good standing under the laws of the jurisdiction in which it was
organized, and as the case may be, 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 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.
(m) 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.
(n) The Indenture has been, and the Supplemental Indenture will be,
duly authorized, and when duly executed and delivered by the Operating
Partnership (assuming due execution and delivery by the Trustee), shall
constitute a valid and binding agreement on the part 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.
(o) (A) This Agreement has been duly and validly authorized,
executed and delivered by each of the Transaction Entities, and assuming
due authorization, execution and delivery by the Underwriters, is a valid
and binding agreement of each of the Transaction Entities, enforceable
against the Transaction Entities in accordance with its terms; and (B) the
Operating Partnership Agreement and the partnership agreement of each
Property Affiliate, has been duly and validly authorized, executed and
delivered by the parties thereto and is a valid and binding agreement of
the parties thereto, enforceable against such parties in accordance with
its terms.
(p) 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
7
Properties or other assets of either of the Transaction Entities is
subject, nor will such actions result in any violation of the provisions
of the charter, by-laws, certificate of limited partnership or agreement
of limited partnership of either of the Transaction Entities, or any
statute or any order, rule or regulation of any court or governmental
agency or body having jurisdiction over either of the Transaction Entities
or any of their properties or assets; and except for the registration of
the 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.
(q) 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.
(r) 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,
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.
(s) Except as described or contemplated in the Prospectus or
pursuant to the Share Incentive Plan, neither Transaction Entity has sold
or issued any securities during the six-month period preceding the date of
the Prospectus, including any sales pursuant to Rule 144A or Regulations D
or S under, the Securities Act.
(t) Neither of the Transaction Entities nor any of the Properties
has sustained, since the date of the latest audited financial statements
included in the Prospectus, any material loss or interference with its
business from fire, explosion, flood or other calamity, whether or not
covered by insurance, or from any labor dispute or court or governmental
action, order or decree, other than as set forth or contemplated in the
Prospectus; and, since such date, there has not been any material change
in the capital 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.
8
(u) The financial statements (including the related notes and
supporting schedules thereto) filed as part of, or incorporated by
reference in, the Registration Statement and the Prospectus present fairly
the financial condition and results of operations of the entities
purported to be shown thereby, at the dates and for the periods indicated,
and have been prepared in conformity with generally 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 Current Report on Form 8-K to be filed by the
Transaction Entities promptly after the date hereof (the "Form 8-K") have
been calculated in compliance with Item 503(d) of Regulation S-K of the
Commission. Pro forma financial information included in or incorporated by
reference in the Registration Statement and the Prospectus has been
prepared in accordance with the applicable requirements of the Securities
Act, the Rules and Regulations and AICPA guidelines with respect to pro
forma financial information and includes all adjustments necessary to
present fairly the pro forma financial position of the respective entity
or entities presented therein at the respective dates indicated and the
results of operations for the respective periods specified.
(v) ▇▇▇▇▇ & Young LLP, who have certified certain financial
statements of the Operating Partnership, whose reports appear in the
Prospectus or are incorporated by reference therein and who have delivered
the initial letter referred to in Section 7(f) hereof, are independent
public accountants as required by the Securities Act and the Rules and
Regulations.
(w) (A) The Operating Partnership and the Property Affiliates have
good and marketable title to each of the Properties, free and clear of all
liens, encumbrances, claims, security interests and defects, other than
those referred to in the Prospectus, those relating to certain
intra-company debt with respect to Development and Development-II or those
which are not material in amount or those which would not have a material
adverse effect on the business, operations, use or value of any of the
Properties; (B) all liens, charges, encumbrances, claims or restrictions
on or affecting any of the Properties and the assets of any Transaction
Entity which are required to be disclosed in the Prospectus are disclosed
therein; (C) except as otherwise described in the Prospectus, neither
Transaction Entity and, to the knowledge of the Transaction Entities, no
tenant of any of the Properties is in default under (i) any space leases
(as lessor or lessee, as the case may be) relating to the Properties, or
(ii) any of the mortgages or other security documents or other agreements
encumbering or otherwise recorded against the Properties, in each case
which default would have a material adverse effect on the applicable
Property, and neither Transaction Entity knows of any event which, but for
the passage of time or the giving of notice, or both, would constitute
such a default under any of such documents or agreements; (D) each of the
Properties complies with all applicable codes, laws and regulations
(including, without limitation, building and zoning codes, laws and
regulations and laws relating to access to the Properties), except for
such failures to comply that would not have a material adverse effect on
the business operations, use or value of such Property; and (E) neither
Transaction Entity has knowledge of any pending or threatened condemnation
proceedings, zoning change or other proceeding or action that will in any
material manner adversely affect the size of, use of, improvements on,
construction on or access to the Properties.
9
(x) The mortgages and deeds of trust which encumber the Properties
are not convertible into equity securities of the entity owning such
Property and said mortgages and deeds of trust are not cross-defaulted or
cross-collateralized with any property other than other Properties.
(y) The 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.
(z) Except as disclosed in the Prospectus and except such as in each
case would not have a material adverse effect on any Property, Property
Affiliate, or Transaction Entity or any of their subsidiaries, taken
together as a whole; (A) to the knowledge of the Transaction Entities,
after due inquiry, the operations of the Company, the Operating
Partnership, Development Corp., Development II, SP Corp., and the
Properties are in compliance with all Environmental Laws (as defined
below) and all requirements of applicable permits, licenses, approvals and
other authorizations issued pursuant to Environmental Laws; (B) to the
knowledge of the Transaction Entities, after due inquiry, none of the
Transaction Entities, the Property Affiliates or any Property has caused
or suffered to occur any Release (as defined below) of any Hazardous
Substance (as defined below) into the Environment (as defined below) on,
in, under or from any Property, and no condition exists on, in, under or
adjacent to any Property that could result in the incurrence of
liabilities under, or any violations of, any Environmental Law or give
rise to the imposition of any Lien (as defined below), under any
Environmental Law; (C) none of the Transaction Entities or Property
Affiliates has received any written notice of a claim under or pursuant to
any Environmental Law or under common law pertaining to Hazardous
Substances on, in, under or originating from any Property; (D) neither of
the Transaction Entities has actual knowledge of, or received any written
notice from any Governmental Authority (as defined below) claiming, any
violation of any Environmental Law or a determination to undertake and/or
request the investigation, remediation, clean-up or removal of any
Hazardous Substance released into the Environment on, in, under or from
any Property; and (E) no Property is included or, to the knowledge of the
Transaction Entities, after due inquiry, proposed for inclusion on the
National Priorities List issued pursuant to CERCLA (as defined below) by
the United States Environmental Protection Agency (the "EPA") or on the
Comprehensive Environmental Response, Compensation, and Liability
Information System database maintained by the EPA, and neither of the
Transaction Entities has actual knowledge that any Property has otherwise
been identified in a published writing by the EPA as a potential CERCLA
removal, remedial or response site or, to the knowledge of the Transaction
Entities, is included on any similar list of potentially contaminated
sites pursuant to any other Environmental Law.
As used herein, "Hazardous Substance" shall include any hazardous
substance, hazardous waste, toxic substance, pollutant or hazardous
material, including, without limitation, oil, petroleum or any
petroleum-derived substance or waste, asbestos or asbestos-containing
materials, PCBs, pesticides, explosives, radioactive materials, dioxins,
urea formaldehyde insulation or any constituent of any such substance,
pollutant or waste which is subject to
10
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.
(aa) Each Transaction Entity and their subsidiaries, and each
Property carries, or is covered by, insurance in such amounts and covering
such risks as is adequate for the conduct of its business and the value of
such Property and as is customary for companies engaged in similar
businesses in similar industries.
(bb) Each Transaction Entity owns or possesses adequate rights to
use all material patents, patent applications, trademarks, service marks,
trade names, trademark registrations, service mark registrations,
copyrights and licenses necessary for the conduct of its business and has
no reason to believe that the conduct of its business will conflict with,
and has not received any notice of any claim of conflict with, any such
rights of others.
(cc) Except as described in the Prospectus, there are no legal or
governmental proceedings pending to which either Transaction Entity or
their subsidiaries is a party or of which any property or assets of either
Transaction Entity or their subsidiaries is the subject which, if
determined adversely to such Transaction Entity or subsidiary, could
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.
11
(dd) There are no contracts or other documents which are required to
be described in the Prospectus or filed as exhibits to the Registration
Statement by the Securities Act or by the Rules and Regulations which have
not been described in the Prospectus or filed as exhibits to the
Registration Statement or incorporated therein by reference as permitted
by the Rules and Regulations.
(ee) No relationship, direct or indirect, exists between or among
either of the Transaction Entities 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.
(ff) 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.
(gg) Each Transaction Entity is in compliance in all material
respects with all presently applicable provisions of the Employee
Retirement Income Security Act of 1974, as amended, including the
regulations and published interpretations thereunder ("ERISA"); no
"reportable event" (as defined in ERISA) has occurred with respect to any
"pension plan" (as defined in ERISA) for which either Transaction Entity
would have any liability; neither Transaction Entity has incurred or
expects to incur liability under (i) Title IV of ERISA with respect to
termination of, or withdrawal from, any "pension plan" or (ii) sections
412 or 4971 of the Internal Revenue Code of 1986, as amended, including
the regulations and published interpretations thereunder (the "Code"); and
each "pension plan" for which either Transaction Entity would have any
liability that is intended to be qualified under section 401(a) of the
Code is so qualified in all material respects and nothing has occurred,
whether by action or by failure to act, which would cause the loss of such
qualification.
(hh) 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.
(ii) At all times since June 16, 1994, the Company, the Operating
Partnership, Development Corp., Development II, and SP Corp. have been,
and upon the sale of the Notes will continue to be, organized and operated
in conformity with the requirements for qualification of the Company as a
real estate investment trust under the Code and the proposed method of
operation of the Company, the Operating Partnership, Development Corp. and
SP Corp. will enable the Company to continue to meet the requirements for
qualification and taxation as a real estate investment trust under the
Code.
(jj) Since the date as of which information is given in the
Prospectus through the date hereof, and except as may otherwise be
disclosed or contemplated in the Prospectus, neither
12
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).
(kk) Each Transaction Entity and their subsidiaries (i) makes and
keeps accurate books and records and (ii) maintains internal accounting
controls which provide reasonable assurance that (A) transactions are
executed in accordance with management's authorization, (B) transactions
are recorded as necessary to permit preparation of its financial
statements and to maintain accountability for its assets, (C) access to
its assets is permitted only in accordance with management's authorization
and (D) the reported accountability for its assets is compared with
existing assets at reasonable intervals.
(ll) 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.
(mm) 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.
(nn) Neither Transaction Entity or any of their subsidiaries is an
"investment company" within the meaning of such term under the Investment
Company Act of 1940 and the rules and regulations of the Commission
thereunder.
(oo) 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.
13
(pp) 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.
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 ▇▇▇▇▇▇ & ▇▇▇▇▇ 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
14
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;
(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
15
within a reasonable period of time prior to the filing thereof, and that
filing thereof shall not occur if the Underwriters shall have objected in
good faith thereto;
(f) The Operating Partnership will make generally available to its
security holders as soon as practicable but no later than 60 days after
the close of the period covered thereby an earnings statement (in form
complying with the provisions of Section 11(a) of the Securities Act and
Rule 158 of the Rules and Regulations), which need not be certified by
independent certified public accountants unless required by the Securities
Act or the Rules and Regulations, covering a twelve-month period
commencing after the "effective date" (as defined in said Rule 158) of the
Registration Statement;
(g) 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 neither
the Company, the Operating Partnership nor 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 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
16
(n) If this Agreement shall be terminated by the Underwriters
because of any failure or refusal on the part of the Transaction Entities
to comply with the terms or fulfill any of the conditions of this
Agreement, the Transaction Entities jointly and severally agree to
reimburse the Underwriters for all reasonable out-of-pocket expenses
(including 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.
17
(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) Wolf, Block, ▇▇▇▇▇▇ and ▇▇▇▇▇-▇▇▇▇▇ 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 has been duly formed and is
validly existing as a limited partnership under the laws of the
Commonwealth of Pennsylvania, is duly qualified to do business as a
foreign limited partnership in Delaware, Florida, Kansas, Maryland,
Michigan, Minnesota, New Jersey, North Carolina, South Carolina,
Tennessee, 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 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,
18
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. has been duly formed and is validly
existing as a corporation in good standing under the laws of the
Commonwealth of Pennsylvania, is duly qualified to do business and
is in good standing as a foreign corporation in Delaware, Florida,
Maryland, 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 has been duly formed and is validly
existing as a corporation in good standing under the laws of the
Commonwealth of Pennsylvania, is duly qualified to do business and
is in good standing as a foreign corporation in South Carolina, and
has all corporate power and authority necessary to own or hold its
properties and to conduct the business in which it is engaged as
described in the Registration Statement and the Prospectus. All of
the issued and outstanding capital stock of Development-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) SP Corp. has been duly formed and is validly existing as a
corporation in good standing under the laws of the Commonwealth of
Pennsylvania and has all corporate and authority necessary to own or
hold its properties and to conduct the business in which it is
engaged as described in the Registration Statement and the
Prospectus. All of the issued and outstanding capital stock of SP
Corp. has been duly authorized and validly issued and is fully paid
and non-assessable, is owned by the Company free and clear of any
security interest, mortgage, pledge, lien, encumbrance, claim,
restriction or equities and has been offered and sold in compliance
with all applicable laws (including, without limitation, federal or
state securities laws).
(vi) Each of the Property Affiliates has been duly organized
and 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
19
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.
(vii) (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.
(viii) The 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; the
Indenture conforms in all material respects to the descriptions
thereof contained in the Prospectus.
(ix) 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.
(x) 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
20
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 or the Indenture by the
Transaction Entities and the consummation of the transactions
contemplated hereby and thereby, and the issuance and delivery of
the Notes.
(xi) 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.
(xii) 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.
(xiii) 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, 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, 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.
(xiv) 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
21
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.
(xv) To the knowledge of such counsel, there are no contracts
or other documents which are required to be described in the
Prospectus or filed as exhibits to the Registration Statement by the
Securities Act or by the Rules and Regulations which have not been
described in the Prospectus or filed as exhibits to the Registration
Statement or incorporated therein by reference as permitted by the
Rules and Regulations.
(xvi) 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 to be described in the Prospectus
which is not so described.
(xvii) To the knowledge of such counsel, each Transaction
Entity is in compliance in all material respects with all presently
applicable provisions of ERISA; to the knowledge of such counsel, no
"reportable event" (as defined in ERISA) has occurred with respect
to any "pension plan" (as defined in ERISA) for which either
Transaction Entity would have any liability; 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; and, to the knowledge of such
counsel, each "pension plan" for which either Transaction Entity
would have any liability that is intended to be qualified under
section 401(a) of the Code is so qualified in all material respects
and nothing has occurred, whether by action or by failure to act,
which would cause the loss of such qualification.
(xviii) No Transaction Entity or Property Affiliate is in
violation of its charter, by-laws, certificate of limited
partnership, agreement of limited partnership, or other similar
organizational document, or, to the 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.
(xix) No consent, approval, authorization or other order of,
or registration or filing with, any court, regulatory body,
administrative agency or other governmental body, agency, or
official is required on the part of the Company (except as have been
obtained under the Securities Act and the Exchange Act or such as
may be required under state securities, real estate syndication or
Blue Sky laws governing the purchase and distribution of the Notes)
for the valid issuance and sale of the Notes to the Underwriters as
contemplated by this Agreement.
22
(xx) Neither Transaction Entity or their subsidiaries is an
"investment company" within the meaning of such term under the
Investment Company Act of 1940 and the rules and regulations of the
Commission thereunder.
(xxi) 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.
(xxii) 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.
(xxiii) 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.
(xxiv) The Operating Partnership is classified as a
partnership (and is not taxed as a corporation) for federal income
tax purposes.
(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.
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 ▇▇▇▇, Ewing, ▇▇▇▇▇▇ &
▇▇▇▇ LLP; (iii) state that its opinion does not address (A)
Federal Reserve Board margin regulations; (B) Federal or state
antitrust
23
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) ▇▇▇▇, Ewing, ▇▇▇▇▇▇ & ▇▇▇▇ 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, is in good standing with the State
Department of Assessments and Taxation of Maryland and
as a foreign trust or corporation in those jurisdictions
listed in such opinion, and has all trust power and
authority necessary to own or hold its properties and to
conduct the business in which it is engaged as described
in the Registration Statement and the Prospectus, and to
enter into and perform its obligations under this
Agreement.
24
(ii) 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 in all material respects to the description
thereof contained in the Prospectus.
(iii) 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.
(iv) To the knowledge of such counsel, the
execution, delivery and performance of this Agreement by
the Company and the consummation of the transactions
contemplated hereby will not conflict with or result in
any violation of the provisions of any statute or any
order, rule or regulation of any court or governmental
agency or body of the State of Maryland that has
jurisdiction over the Company or any of its properties
or assets.
(v) The execution, delivery and performance of
this Agreement by the Company and the consummation of
the transactions contemplated hereby will not conflict
with or result in any violation of the provisions of the
Declaration of Trust or by-laws of the Company.
(vi) To the knowledge of such counsel, there are
no legal or governmental 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 ▇▇▇▇▇▇ & ▇▇▇▇▇ LLP, counsel for
the Underwriters, may rely on its opinion.
(e) The Underwriters shall have received from ▇▇▇▇▇▇ &
▇▇▇▇▇ LLP, counsel for the Underwriters, such opinion or
opinions, dated the 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.
(f) At the time of execution of this Agreement, the
Underwriters shall have received from Ernst & Young LLP a
letter, in form and substance satisfactory to the
Underwriters, addressed to the Underwriters and dated the date
hereof (i) confirming that they are independent public
accountants within the meaning of the Securities Act and are
in compliance with the applicable requirements relating to the
25
qualification of accountants under Rule 2-01 of Regulation S-X
of the Commission, and (ii) stating, as of the date hereof
(or, with respect to matters involving changes or developments
since the respective dates as of which specified financial
information is given in, or incorporated by reference in, the
Prospectus, as of a date not more than five days prior to the
date hereof), the conclusions and findings of such firm with
respect to the financial information and other matters
ordinarily covered by accountants' "comfort letters" to
underwriters in connection with registered public offerings.
(g) With respect to the letter of ▇▇▇▇▇ & Young LLP
referred to in the preceding paragraph and delivered to the
Underwriters concurrently with the execution of this Agreement
(the "initial letter"), the Operating Partnership shall have
furnished to the Underwriters a letter (the "bring-down
letter") of such accountants, 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.
(h) 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
(ii) They have carefully examined the Registration
Statement and the Prospectus and, in their opinion (A)
as of the applicable Effective Date, the Registration
Statement and Prospectus did not include any untrue
statement of a material fact and did not omit to state a
material fact required to be stated therein or necessary
to make the statements therein not misleading (with
respect to the Prospectus, in light of the circumstances
in which they were made), and (B) since the applicable
Effective Date no event has occurred which should have
been set forth in a supplement or amendment to the
Registration Statement or the Prospectus.
26
(i) (i) None of the Transaction Entities or their
subsidiaries or any Property shall have sustained since the
date of the latest audited financial statements included in
the Prospectus any loss or interference with its business from
fire, explosion, flood or other calamity, whether or not
covered by insurance, or from any labor dispute or court or
governmental action, order or decree, otherwise than as set
forth or contemplated in the Prospectus or (ii) since such
date there shall not have been any change in the capital stock
or long-term debt of either Transaction Entity or any change,
or any development involving a prospective change, in or
affecting any Property Affiliate or Property or the general
affairs, management, financial position, shareholders' equity
or results of operations of either Transaction Entity,
otherwise than as set forth or contemplated in the Prospectus,
the effect of which, in any such case described in clause (i)
or (ii), is, in the judgment of the Underwriters, so material
and adverse as to make it impracticable or inadvisable to
proceed with the public offering or the delivery of the Notes
being delivered on the Delivery Date on the terms and in the
manner contemplated in the Prospectus.
(j) Subsequent to the execution and delivery of this
Agreement there shall not have occurred any of the following:
(i) trading in securities generally on the New York Stock
Exchange or the American Stock Exchange or in the
over-the-counter market, or trading in any securities of the
Company on any exchange or in the over-the-counter market,
shall have been suspended or minimum prices 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 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 (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.
(l) 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.
27
(m) 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.
(n) 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.
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
28
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 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,
29
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 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
30
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 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 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
31
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 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.
(e) The Underwriters severally confirm and each Transaction Entity
acknowledges that the statements with respect to the public offering of the
Notes by the Underwriters set forth on the cover page of, the concession and
reallowance figures appearing under the caption "Underwriting" and, pursuant to
Item 508 of Regulation S-K of the Securities Act, paragraph 3 and the last six
paragraphs of the section captioned "Plan of Distribution" in, the Preliminary
Prospectus and the comparable material in the Prospectus are correct and
constitute the only information concerning such Underwriters furnished in
writing to the Transaction Entities by or on behalf of the Underwriters
specifically for inclusion in the Registration Statement, the Preliminary
Prospectus and the Prospectus.
11. Termination. The obligations of the Underwriters hereunder may
be terminated by the Underwriters by notice given to and received by the
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) or 7(l), 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
32
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., Three
World Financial Center, New York, New York 10285, 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.
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.
33
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.
34
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: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇
Title: Chairman of the Board and Chief
Executive Officer
LIBERTY PROPERTY LIMITED PARTNERSHIP
By: Liberty Property Trust,
its general partner
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇
-------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇
Title: Chairman of the Board
and Chief Executive Officer
Accepted:
▇▇▇▇▇▇ BROTHERS INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
-------------------------------
Authorized Representative
For itself and on behalf of
the Underwriters
35
SCHEDULE I
UNDERWRITERS PRINCIPAL
AMOUNT OF NOTES
▇▇▇▇▇▇ Brothers Inc. $115,000,000
Banc One Capital Markets, Inc. 22,500,000
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ Securities Corporation 22,500,000
▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co. 22,500,000
▇.▇. ▇▇▇▇▇▇ Securities Inc. 22,500,000
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc. 22,500,000
Warburg Dillon Read LLC 22,500,000
$250,000,000
36
SCHEDULE II
Senior Notes Due 2009
Principal Amount: $250,000,000.00
Coupon: 7 3/4%
Settlement Date: April 20, 1999
Price to Public: 99.230%
Price to Public: $248,075,000
Underwriting Discount: 0.650%
Underwriting Discount: $1,625,000
Price to Company: 98.580%
Proceeds to the Company (before expenses): $246,450,000
Maturity Date: April 15, 2009