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LIBERTY PROPERTY LIMITED PARTNERSHIP
(a Pennsylvania Limited Partnership)
$250,000,000 7.250% SENIOR NOTES DUE 2011
UNDERWRITING AGREEMENT
March 9, 2001
Goldman, Sachs & Co.
Salomon Smith Barney Inc.
Chase Securities Inc.
Credit Suisse First Boston Corporation
Lehman Brothers Inc.
UBS Warburg LLC
c/o Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
Salomon Smith Barney Inc.
388 Greenwich Street
New York, New York 10013
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
Goldman, Sachs & Co., Salomon Smith Barney Inc., Chase Securities Inc., Credit
Suisse First Boston Corporation, Lehman Brothers Inc. and UBS Warburg 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
7.250% Senior Notes due 2011 (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:
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(a) A registration statement on Form S-3 (No. 333-39282) (the
"Registration Statement"), and any amendments thereto, with respect to
one or more series of debt securities of the Operating Partnership has
(i) been prepared by the Company and the Operating Partnership in
conformity with the requirements of the United States Securities Act of
1933, as amended (the "Securities Act"), and the rules and regulations
(the "Rules and Regulations") of the United States Securities and
Exchange Commission (the "Commission") thereunder, (ii) been filed with
the Commission under the Securities Act and (iii) become effective
under the Securities Act; and the indenture, dated as of October 24,
1997, as supplemented to the date hereof (the "Indenture"), between the
Operating Partnership and Bank One Trust Company, N.A. (as successor to
The First National Bank of Chicago), as trustee (the "Trustee"), has
been qualified, and the Fifth Supplemental Indenture, to be dated as of
March 14, 2001, between the Operating Partnership and the Trustee (the
"Supplemental Indenture"), pursuant to which the Notes shall be issued,
will be qualified, under the Trust Indenture Act of 1939 (the "Trust
Indenture Act"). Copies of such registration statement and any
amendments thereto have been delivered by the Company to you. As used
in this Agreement, "Effective Time" means, for the Registration
Statement, the date and the time as of which the Registration
Statement, or the most recent post-effective amendment thereto, if any,
was declared effective by the Commission; "Effective Date" means, for
the Registration Statement, the date of the Effective Time;
"Preliminary Prospectus" means any prospectus included in the
Registration Statement, or amendments thereto, before it became
effective under the Securities Act and any prospectus filed with the
Commission by the Company with the consent of the Underwriters pursuant
to Rule 424(a) of the Rules and Regulations; "Registration Statement"
means the Registration Statement, as amended at the Effective Time,
including any documents incorporated by reference therein at such time
and all information contained in the final prospectus filed with the
Commission pursuant to Rule 424(b) of the Rules and Regulations and
deemed to be a part of such registration statement as of the respective
Effective Time pursuant to paragraph (b) of Rule 430A of the Rules and
Regulations, and shall include any registration statement filed
pursuant to Rule 462(b) of the Rules and Regulations; and "Prospectus"
means such final prospectus, as first filed with the Commission
pursuant to paragraph (1) or (4) of Rule 424(b) of the Rules and
Regulations. Any reference herein to the Registration Statement, the
Prospectus or a Preliminary Prospectus shall be deemed to include the
documents incorporated or deemed to be incorporated by reference
therein which were filed under the Securities and Exchange Act of 1934,
as amended (the "Exchange Act"). For purposes of this Agreement, all
references to the Registration Statement, any Preliminary Prospectus or
the Prospectus or any amendment or supplement to any of the foregoing
shall be deemed to include the copy filed with the Commission pursuant
to its Electronic Data Gathering, Analysis and Retrieval system
("EDGAR").
(b) Each Preliminary Prospectus, if any, included as part of
the Registration Statement as originally filed or as part of any
amendment or
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supplement thereto, or filed pursuant to Rule 424 under the Rules and
Regulations, complied when so filed in all material respects with the
provisions of the Securities Act and the rules and regulations
thereunder, and each Preliminary Prospectus, if any, delivered to the
Underwriters for use in connection with this offering was identical to
the electronically transmitted copies thereof filed with the Commission
pursuant to EDGAR, except to the extent permitted by Regulation S-T.
(c) The Registration Statement conforms in all material
respects, and the Prospectus and any further amendments or supplements
to the Registration Statement or the Prospectus will, when they become
effective or are filed with the Commission, as the case may be, conform
in all material respects to the requirements of the Securities Act, the
Rules and Regulations and the Trust Indenture Act and the rules and
regulations thereunder, and do not and will not, as of the applicable
Effective Date (as to the Registration Statement and any amendment
thereto) and as of the applicable filing date and at the Delivery Date
(as defined below) (as to the Prospectus and any amendment or
supplement thereto) contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading (with respect
to the Prospectus, in light of the circumstances under which they were
made); provided that no representation or warranty is made as to
information contained in or omitted from the Registration Statement or
the Prospectus in reliance upon and in conformity with written
information furnished to the Company through the Underwriters by or on
behalf of any Underwriter specifically for inclusion therein. The
Indenture conforms, and the Supplemental Indenture will conform, in all
material respects to the requirements of the Trust Indenture Act and
the rules and regulations thereunder; provided, however, that no
representation or warranty is made as to information contained in or
omitted from that part of the Registration Statement which shall
constitute the Statement of Eligibility and Qualification on Form T-1
under the Trust Indenture Act of the Trustee under the Indenture. The
Prospectus delivered to the Underwriters for use in connection with
this offering was identical to the electronically transmitted copies
thereof filed with the Commission pursuant to EDGAR, 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,
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threatened by the Commission or by the state securities authority of
any jurisdiction. No order preventing or suspending the use of any
Preliminary Prospectus or the Prospectus has been issued and no
proceeding for that purpose has been instituted or, to the knowledge of
either of the Transaction Entities, after due inquiry of the
Commission, threatened by the Commission or by the state securities
authority of any jurisdiction.
(f) The Company has been duly formed and is validly existing
as a real estate investment trust in good standing under the laws of
the State of Maryland, is duly qualified to do business and is in good
standing in each jurisdiction in which its ownership or lease of
property or the conduct of its business requires such qualification,
and has all power and authority necessary to own or hold its
properties, to conduct the business in which it is engaged and to enter
into and perform its obligations under this Agreement. None of the
subsidiaries of the Company (other than the Operating Partnership,
Liberty Property Development Corp. ("Development Corp."), Liberty
Property Development Corp.-II ("Development-II"), Liberty Property
Development Corp.- III ("Development-III") and Liberty Special Purpose
Trust ("SP Trust")) is a "significant subsidiary," as such term is
defined in Rule 405 of the Rules and Regulations. Except as described
in the Prospectus and other than the Property Affiliates (as defined
herein) and the Operating Partnership, Development Corp. and SP Trust,
the Company owns no direct or indirect equity interest in any entity,
except for such interests as, in the aggregate, are not material to the
condition, financial or otherwise, or the earnings, assets, business
affairs or business prospects of the Company and its subsidiaries
considered as a single enterprise.
(g) All of the issued shares of beneficial interest of the
Company have been duly and validly authorized and issued, are fully
paid and non-assessable and conform to the description thereof
contained in the Prospectus. Except as disclosed in the Prospectus and
with respect to the Company's Amended and Restated Share Incentive Plan
and the Company's Employee Stock Purchase Plan (together, the "Share
Incentive Plans"), 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
Plans, 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
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hold its properties, to conduct the business in which it is engaged and
to enter into and perform its obligations under this Agreement. The
Company is the sole general partner of the Operating Partnership. The
limited partnership agreement of the Operating Partnership, as amended
(the "Operating Partnership Agreement"), is in full force and effect,
and the aggregate percentage interests of the Company and the limited
partners in the Operating Partnership are as set forth in the
Prospectus. The owner's equity of the Operating Partnership is as
described in the Prospectus. All of the Units have been duly and
validly authorized and issued, 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, 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
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purchase or to subscribe for shares of such capital stock or any other
securities of Development-II.
(k) Development-III has been duly organized and is validly
existing as a corporation in good standing under the laws of the
Commonwealth of Pennsylvania, is duly qualified to do business and is
in good standing in each jurisdiction in which its ownership or lease
of property or the conduct of its business requires such qualification,
and has all corporate power and authority necessary to own or hold its
properties and to conduct the business in which it is engaged. All of
the issued and outstanding capital stock of Development-III has been
duly authorized and validly issued and is fully paid and
non-assessable, has been offered and sold in compliance with all
applicable laws (including, without limitation, federal or state
securities laws) and all of the capital stock of Development-III owned
by the Operating Partnership, as described in the Prospectus, is owned
free and clear of any security interest, mortgage, pledge, lien,
encumbrance, claim, restriction or equities. No shares of capital stock
of Development-III are reserved for any purpose, and there are no
outstanding securities convertible into or exchangeable for any capital
stock of Development-III, and no outstanding options, rights
(preemptive or otherwise) or warrants to purchase or to subscribe for
shares of such capital stock or any other securities of
Development-III.
(l) SP Trust has been duly organized and is validly existing
as a business trust in good standing under the laws of the Commonwealth
of Pennsylvania, is duly qualified to do business and is in good
standing as a foreign corporation in each jurisdiction in which its
ownership or lease of property or the conduct of its business requires
such qualification, and has all corporate power and authority necessary
to own or hold its properties and to conduct the business in which it
is engaged. All of the issued and outstanding equity interests of SP
Trust have been duly authorized and validly issued and are fully paid
and non-assessable, has been offered and sold in compliance with all
applicable laws (including, without limitation, federal or state
securities laws) and all of the equity interests of SP Trust are owned
by the Company free and clear of any security interest, mortgage,
pledge, lien, encumbrance, claim, restriction or equities. No shares of
equity interests of SP Trust are reserved for any purpose, and there
are no outstanding securities convertible into or exchangeable for any
equity interests of SP Trust and no outstanding options, rights
(preemptive or otherwise) or warrants to purchase or to subscribe for
shares of such equity interests or any other securities of SP Trust.
(m) Each of those certain partnerships, limited liability
companies or other entities holding title to one or more of the
Properties (the "Property Affiliates") are the only entities other than
the Operating Partnership, SP Trust, Liberty Property Philadelphia
Corp., a Pennsylvania corporation, and Liberty Property Philadelphia
Trust, a Pennsylvania trust, through which the Company and the
Operating Partnership own interests in the Properties. Each of the
Property Affiliates has been duly organized and is validly existing as
a limited
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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, 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.
(n) The Notes have been duly and validly authorized and, when
duly executed, authenticated, issued and delivered against payment
therefor as provided herein and in the Indenture, will be duly and
validly issued and outstanding, and shall constitute valid and binding
obligations on the part of the Operating Partnership, entitled to the
benefits of the Indenture, and enforceable against the Operating
Partnership in accordance with their terms. Upon payment of the
purchase price and delivery of the Notes in accordance herewith, each
of the Underwriters will receive good, valid and marketable title to
the Notes, free and clear of all security interests, mortgages,
pledges, liens, encumbrances, claims, restrictions and equities.
(o) The Indenture has been duly and validly authorized,
executed and delivered by the Operating Partnership and, assuming due
authorization, execution and delivery by the Trustee, constitutes a
valid and binding agreement of the Operating Partnership, enforceable
against the Operating Partnership in accordance with its terms; the
Supplemental Indenture will be duly authorized and, when duly executed
and delivered by the Operating Partnership (assuming due execution and
delivery by the Trustee), will constitute a valid and binding agreement
of the Operating Partnership, enforceable against the Operating
Partnership in accordance with its terms; the Notes, the Indenture and
the Supplemental Indenture conform in all material respects to the
descriptions thereof contained in the Prospectus.
(p) (A) This Agreement has been duly and validly authorized,
executed and delivered by each of the Transaction Entities and,
assuming due authorization, execution and delivery by the Underwriters,
is a valid and binding agreement of each of the Transaction Entities,
enforceable against the Transaction Entities in accordance with its
terms; and (B) each of 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.
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(q) The execution, delivery and performance of this Agreement
by each of the Transaction Entities, the execution, delivery and
performance of the Indenture by the Operating Partnership and the
consummation of the transactions contemplated hereby and thereby will
not conflict with or result in a breach or violation of any of the
terms or provisions of, or constitute a default under, any indenture,
mortgage, deed of trust, loan agreement or other agreement or
instrument to which either of the Transaction Entities is a party or by
which either of the Transaction Entities is bound or to which any of
the Properties or other assets of either of the Transaction Entities is
subject, nor will such actions result in any violation of the
provisions of the charter, by-laws, certificate of limited partnership
or agreement of limited partnership of either of the Transaction
Entities, or any statute or any order, rule or regulation of any court
or governmental agency or body having jurisdiction over either of the
Transaction Entities or any of their properties or assets; and except
for the registration of the Notes under the Securities Act and the
qualification of the Indenture under the Trust Indenture Act and such
consents, approvals, authorizations, registrations or qualifications as
may be required under the Exchange Act and applicable state securities
laws in connection with the purchase and distribution of the Notes by
the Underwriters, no consent, approval, authorization or order of, or
filing or registration with, any such court or governmental agency or
body is required for the execution, delivery and performance of this
Agreement by the Transaction Entities or the Indenture by the Operating
Partnership, the consummation of the transactions contemplated hereby
and thereby, and the issuance and delivery of the Notes.
(r) No event has occurred and is continuing that, had the
Notes been issued, would (whether or not with the giving of notice
and/or the passage of time and/or the fulfillment of any other
requirement) constitute an Event of Default (as defined in the
Indenture) under the Indenture.
(s) Other than as described in the Prospectus and other than
rights of certain persons (i) who have contributed Properties to the
Partnership in exchange for Units, (ii) who have acquired securities in
a directed placement from the Company or (iii) 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.
(t) Except as described or contemplated in the Prospectus or
pursuant to the Share Incentive Plans, neither Transaction Entity has
sold or issued any securities during the six-month period preceding the
date of the Prospectus,
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including any sales pursuant to Rule 144A or Regulations D or S under
the Securities Act.
(u) Neither of the Transaction Entities nor any of the
Properties has sustained, since the date of the latest audited
financial statements included in the Prospectus, any material loss or
interference with its business from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor
dispute or court or governmental action, order or decree, other than as
set forth or contemplated in the Prospectus; and, since such date,
there has not been any material change in the capital stock or
long-term debt of either of the Transaction Entities or any material
adverse change, or any development involving a prospective material
adverse change, in or affecting the Properties or the general affairs,
management, financial position, shareholders' equity or results of
operations of either of the Transaction Entities, other than as set
forth or contemplated in the Prospectus.
(v) The financial statements (including the related notes and
supporting schedules thereto) filed as part of, or incorporated by
reference in, the Registration Statement and the Prospectus present
fairly the financial condition and results of operations of the
entities purported to be shown thereby, at the dates and for the
periods indicated, and have been prepared in conformity with generally
accepted accounting principles applied on a consistent basis throughout
the periods involved. The Company's ratios of earnings to fixed charges
(actual and, if any, pro forma) included in the Prospectus under the
captions "Certain Ratios" and in Exhibit 12.1 to the Registration
Statement, and the Company's ratio of earnings to fixed charges for the
year ended December 31, 2000, to be filed with the Commission in a
Current Report on Form 8-K prior to the Delivery Date, have been
calculated in compliance with Item 503(d) of Regulation S-K of the
Commission. Pro forma financial information included in or incorporated
by reference in the Registration Statement and the Prospectus has been
prepared in accordance with the applicable requirements of the
Securities Act, the Rules and Regulations and AICPA guidelines with
respect to pro forma financial information and includes all adjustments
necessary to present fairly the pro forma financial position of the
respective entity or entities presented therein at the respective dates
indicated and the results of operations for the respective periods
specified.
(w) Ernst & Young LLP, who have certified certain financial
statements of the Operating Partnership, whose reports appear in the
Prospectus or are incorporated by reference therein and who have
delivered the initial letter referred to in Section 7(g) hereof, are
independent public accountants as required by the Securities Act and
the Rules and Regulations.
(x) (A) The Operating Partnership and the Property Affiliates
have good and marketable title to each of the Properties, free and
clear of all liens, encumbrances, claims, security interests and
defects, other than those referred to in the Prospectus, those relating
to certain intra-company debt with respect to
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Development, Development-II and Development-III, 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.
(y) The mortgages and deeds of trust which encumber the
Properties are not convertible into equity securities of the entity
owning such Property and said mortgages and deeds of trust are not
cross-defaulted or cross-collateralized with any property other than
other Properties.
(z) The Operating Partnership and the Property Affiliates have
obtained title insurance on the fee or leasehold interests in each of
the Properties, in an amount at least equal to the greater of (A) the
mortgage indebtedness of each such Property or (B) the purchase price
(exclusive of improvements) of each such Property.
(aa) Except as disclosed in the Prospectus and except such as
in each case would not have a material adverse effect on any Property,
Property Affiliate, or Transaction Entity or any of their subsidiaries,
taken together as a whole: (A) to the knowledge of the Transaction
Entities, after due inquiry, (i) the operations of the Company, the
Operating Partnership, Development Corp., Development-II,
Development-III and SP Trust and (ii) the Properties are in compliance
with all Environmental Laws (as defined below) and all requirements of
applicable permits, licenses, approvals and other authorizations issued
pursuant to Environmental Laws; (B) to the knowledge of the Transaction
Entities, after due inquiry, none of the Transaction Entities, the
Property Affiliates or any Property has caused or suffered to occur any
Release (as defined below) of any Hazardous Substance (as defined
below) into the Environment (as defined below)
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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 regulation under any
Environmental Law (including, without limitation, materials listed in
the United States Department of Transportation 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
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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.
(bb) Each Transaction Entity and each of their subsidiaries
carries, or is covered by, insurance in such amounts and covering such
risks as is adequate for the conduct of its business and as is
customary for companies engaged in similar businesses in similar
industries; and each Property carries, or is covered by, insurance
covering the value of such Property.
(cc) Each Transaction Entity owns or possesses adequate rights
to use all material patents, patent applications, trademarks, service
marks, trade names, trademark registrations, service mark
registrations, copyrights and licenses necessary for the conduct of its
business and has no reason to believe that the conduct of its business
will conflict with, and has not received any notice of any claim of
conflict with, any such rights of others.
(dd) Except as described in the Prospectus, there are no legal
or governmental proceedings pending to which either Transaction Entity
or their subsidiaries is a party or of which any property or assets of
either Transaction Entity or their subsidiaries is the subject which,
if determined adversely to such Transaction Entity or subsidiary, could
reasonably be expected to have a material adverse effect on the
consolidated financial position, shareholders' equity, results of
operations, business or prospects of the Company; and to the knowledge
of the Transaction Entities, no such proceedings are threatened or
contemplated by governmental authorities or threatened by others.
(ee) There are no contracts or other documents which are
required to be described in the Prospectus or filed as exhibits to the
Registration Statement by the Securities Act or by the Rules and
Regulations which have not been described in the Prospectus or filed as
exhibits to the Registration Statement or incorporated therein by
reference as permitted by the Rules and Regulations.
(ff) No relationship, direct or indirect, exists between or
among either of the Transaction Entities, on the one hand, and the
trustees, officers, shareholders, customers or suppliers of the
Transaction Entities, on the other hand, that is required to be
described in the Prospectus that is not so described.
(gg) No labor disturbance by the employees of either
Transaction Entity exists or, to the knowledge of the Transaction
Entities, is imminent which might be expected to have a material
adverse effect on the consolidated financial
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position, shareholders' equity, results of operations, business or
prospects of such Transaction Entity.
(hh) 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.
(ii) Each Transaction Entity and their subsidiaries has filed
all federal, state and local income and franchise tax returns required
to be filed through the date hereof and has paid all taxes due thereon,
and no material tax deficiency has been determined adversely to either
Transaction Entity or their subsidiaries which has had (nor does either
Transaction Entity have any knowledge of any tax deficiency which, if
determined adversely to it might have) a material adverse effect on the
financial position, shareholders' equity, results of operations,
business or prospects of such Transaction Entity or subsidiary.
(jj) At all times since June 16, 1994, the Company, the
Operating Partnership, Development Corp., Development-II,
Development-III and SP Trust have been, and upon the sale of the Notes
will continue to be, organized and operated in conformity with the
requirements for qualification of the Company as a real estate
investment trust under the Code and the proposed method of operation of
the Company, the Operating Partnership, Development Corp.,
Development-II, Development-III and SP Trust will enable the Company to
continue to meet the requirements for qualification and taxation as a
real estate investment trust under the Code.
(kk) Since the date as of which information is given in the
Prospectus through the date hereof, and except as may otherwise be
disclosed or contemplated in the Prospectus, neither Transaction Entity
has (i) issued or granted any securities, (ii) incurred any liability
or obligation, direct or contingent, other than liabilities and
obligations which were incurred in the ordinary course of business,
(iii) entered into any transaction not in the ordinary course of
business or (iv) declared or paid any dividend on its capital stock
(other than regular quarterly dividends).
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14
(ll) Each Transaction Entity and each of their subsidiaries
(i) makes and keeps accurate books and records and (ii) maintains
internal accounting controls which provide reasonable assurance that
(A) transactions are executed in accordance with management's
authorization, (B) transactions are recorded as necessary to permit
preparation of its financial statements and to maintain accountability
for its assets, (C) access to its assets is permitted only in
accordance with management's authorization and (D) the reported
accountability for its assets is compared with existing assets at
reasonable intervals.
(mm) No Transaction Entity or any of their subsidiaries (i) is
in violation of its charter, by-laws, certificate of limited
partnership, agreement of limited partnership or other similar
organizational document, (ii) is in default in any material respect,
and no event has occurred which, with notice or lapse of time or both,
would constitute such a default, in the due performance or observance
of any term, covenant or condition contained in any material indenture,
mortgage, deed of trust, loan agreement or other agreement or
instrument to which it is a party or by which it is bound or to which
any of the Properties or any of its other properties or assets is
subject or (iii) is in violation in any material respect of any law,
ordinance, governmental rule, regulation or court decree to which it or
the Properties or any of its other properties or assets may be subject
or has failed to obtain any material license, permit, certificate,
franchise or other governmental authorization or permit necessary to
the ownership of the Properties or any of its other properties or
assets or to the conduct of its business.
(nn) Neither Transaction Entity, nor any trustee, officer,
agent, employee or other person associated with or acting on behalf of
either Transaction Entity, has used any corporate funds for any
unlawful contribution, gift, entertainment or other unlawful expense
relating to political activity; made any direct or indirect unlawful
payment to any foreign or domestic government official or employee from
corporate funds; violated or is in violation of any provision of the
Foreign Corrupt Practices Act of 1977; or made any bribe, rebate,
payoff, influence payment, kickback or other unlawful payment.
(oo) Neither Transaction Entity nor any of their subsidiaries
is an "investment company" within the meaning of such term under the
Investment Company Act of 1940 and the rules and regulations of the
Commission thereunder.
(pp) Other than this Agreement and as set forth in the
Prospectus under the heading "Underwriting," there are no contracts,
agreements or understandings between either Transaction Entity and any
person that would give rise to a valid claim against either Transaction
Entity or any Underwriter for a brokerage commission, finder's fee or
other like payment with respect to the consummation of the transactions
contemplated by this Agreement.
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(qq) Each Transaction Entity has complied with all applicable
provisions of Florida Statutes Section 517.075, relating to issuers
doing business with Cuba.
2. Purchase of the Notes by the Underwriters. On the basis of the
representations and warranties contained in, and subject to the terms and
conditions of, this Agreement, the Operating Partnership agrees to sell to the
several Underwriters, and each of the Underwriters, severally and not jointly,
agrees to purchase from the Operating Partnership, the respective principal
amount of Notes set forth opposite that Underwriter's name in Schedule I hereto
at the purchase price set forth in Schedule II hereto plus accrued interest, if
any, from the date specified in Schedule II hereto to the date of payment and
delivery.
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 offices of Sullivan & Cromwell, 125 Broad Street,
New York, New York 10004, 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
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becomes effective or any supplement to the Prospectus or any amended
Prospectus has been filed and to furnish the Underwriters with copies
thereof; to advise the Underwriters, promptly after it receives notice
thereof, of the issuance by the Commission of any stop order or of any
order preventing or suspending the use of any Preliminary Prospectus or
the Prospectus, of the suspension of the qualification of the Notes for
offering or sale in any jurisdiction, of the initiation or threatening
of any proceeding for any such purpose, or of any request by the
Commission for the amending or supplementing of the Registration
Statement or the Prospectus or for additional information; and, in the
event of the issuance of any stop order or of any order preventing or
suspending the use of any Preliminary Prospectus or the Prospectus or
suspending any such qualification, to use promptly its best efforts to
obtain its withdrawal;
(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 EDGAR, 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
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may, in the judgment of the Company or counsel for the Underwriters, be
required by the Securities Act or requested by the Commission;
(e) Prior to filing with the Commission any amendment to the
Registration Statement or supplement to the Prospectus or any
Prospectus pursuant to Rule 424 of the Rules and Regulations, to
furnish a copy thereof to the Underwriters and counsel for the
Underwriters within a reasonable period of time prior to the filing
thereof, and that filing thereof shall not occur if the Underwriters
shall have objected in good faith thereto;
(f) The Operating Partnership will make generally available to
its security holders as soon as practicable but no later than 60 days
after the close of the period covered thereby an earnings statement (in
form complying with the provisions of Section 11(a) of the Securities
Act and Rule 158 of the Rules and Regulations), which need not be
certified by independent certified public accountants unless required
by the Securities Act or the Rules and Regulations, covering a
twelve-month period commencing after the "effective date" (as defined
in said Rule 158) of the Registration Statement;
(g) 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 the Underwriters;
(j) To apply the net proceeds from the sale of the Notes in
accordance with the description set forth in the Prospectus under the
caption "Use of Proceeds";
(k) To take such steps as shall be necessary to ensure that
none of the Company, the Operating Partnership or any of their
subsidiaries shall become an "investment company" within the meaning of
such term under the Investment
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Company Act of 1940 and the rules and regulations of the Commission
thereunder;
(l) Except as stated in this Agreement and in the Preliminary
Prospectus, if any, and Prospectus, neither Transaction Entity has
taken, nor will take, directly or indirectly, any action designed to or
that might reasonably be expected to cause or result in stabilization
or manipulation of the price of the Notes to facilitate the sale or
resale of the Notes;
(m) The Company will use its best efforts to continue to meet
the requirements to qualify as a "real estate investment trust" under
the Code; and
(n) If this Agreement shall be terminated by the Underwriters
because of any failure or refusal on the part of the Transaction
Entities to comply with the terms or fulfill any of the conditions of
this Agreement, the Transaction Entities 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:
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(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.
(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) Morgan Lewis & Bockius 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:
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(i) The Company is in good standing as a foreign trust or
corporation in those jurisdictions listed in such opinion.
(ii) The Operating Partnership is validly existing as a
limited partnership under the laws of the Commonwealth of Pennsylvania,
is duly qualified to do business as a foreign limited partnership in
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, are fully paid and, to the extent
that such interests are owned by the Company, are owned by the Company
free and clear of all liens, encumbrances, equities or claims.
(iii) Development Corp. is validly existing as a corporation
in good standing under the laws of the Commonwealth of Pennsylvania, is
duly qualified to do business and is in good standing as a foreign
corporation in 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 is validly existing as a corporation in
good standing under the laws of the Commonwealth of Pennsylvania, is
duly qualified to do business and is in good standing as a foreign
corporation in Florida and Texas, and has all corporate power and
authority necessary to own or hold its properties and to conduct the
business in which it is engaged as described in the Registration
Statement and the Prospectus. All of the issued and outstanding capital
stock of Development-II has been duly authorized and validly issued and
is fully paid and non-assessable, has been offered and sold in
compliance with all applicable laws (including, without limitation,
federal or state securities laws) and all of
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the capital stock of Development-II owned by the Operating Partnership,
as described in the Prospectus, is owned free and clear of any security
interest, mortgage, pledge, lien, encumbrance, claim, restriction or
equities.
(v) Development-III is validly existing as a corporation in
good standing under the laws of the Commonwealth of Pennsylvania and
has all corporate power and authority necessary to own or hold its
properties and to conduct the business in which it is engaged as
described in the Registration Statement and the Prospectus. All of the
issued and outstanding capital stock of Development-III has been duly
authorized and validly issued and is fully paid and non-assessable, has
been offered and sold in compliance with all applicable laws
(including, without limitation, federal or state securities laws) and
all of the capital stock of Development-III owned by the Operating
Partnership, as described in the Prospectus, is owned free and clear of
any security interest, mortgage, pledge, lien, encumbrance, claim,
restriction or equities.
(vi) SP Trust is validly existing as a business trust in good
standing under the laws of the Commonwealth of Pennsylvania and has all
trust power and authority necessary to own or hold its properties and
to conduct the business in which it is engaged as described in the
Registration Statement and the Prospectus. All of the issued and
outstanding equity interests of SP Trust have been duly authorized and
validly issued and are fully paid and non-assessable, are owned by the
Company free and clear of any security interest, mortgage, pledge,
lien, encumbrance, claim, restriction or equities and have been offered
and sold in compliance with all applicable laws (including, without
limitation, federal or state securities laws).
(vii) Each of the Property Affiliates is validly existing as a
limited partnership, limited liability company or other entity in good
standing under the laws of the jurisdiction in which it was organized,
and has all power and authority necessary to own or hold its properties
and to conduct the business in which it is engaged. Except as set forth
in the Prospectus, all of the partnership interests, membership
interests or other equity interests, as the case may be, of each
Property Affiliate have been duly and validly authorized and issued,
are fully paid and non-assessable and all such interests owned directly
or indirectly by the Company and the Operating Partnership, as
described in the Prospectus, are owned free and clear of any security
interest, mortgage, pledge, lien, encumbrance, claim, restriction or
equities.
(viii) (A) This Agreement has been duly and validly
authorized, executed and delivered by the Operating Partnership, and
has been duly and validly executed and delivered by the Company, and
assuming due authorization, execution and delivery by the Underwriters
and due
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authorization by the Company, is a valid and binding agreement of the
Operating Partnership; and (B) the Operating Partnership Agreement and
the partnership agreement, limited liability company agreement or
similar such document of each Property Affiliate, have been duly and
validly authorized, executed and delivered by each Transaction Entity
party thereto and are valid and binding agreements of the parties
thereto, enforceable against such parties in accordance with their
terms.
(ix) Each of the Indenture and the Supplemental Indenture has
been duly authorized, executed and delivered by the Operating
Partnership and (assuming due execution and delivery by the Trustee)
constitutes a valid and binding agreement on the part of the Operating
Partnership, enforceable against the Operating Partnership in
accordance with its terms; each of the Indenture and the Supplemental
Indenture conforms in all material respects to the descriptions thereof
contained in the Prospectus.
(x) The Notes have been duly authorized, executed, issued and
delivered by the Operating Partnership, and constitute valid and
binding obligations of the Operating Partnership entitled to the
benefits of the Indenture and enforceable against the Operating
Partnership in accordance with their terms. Upon payment of the
purchase price and delivery of the Notes in accordance herewith, each
of the Underwriters will receive good, valid and marketable title to
the Notes, which to such counsel's knowledge, after due inquiry, are
free and clear of all security interests, mortgages, pledges, liens,
encumbrances, claims, restrictions and equities. The terms of the Notes
conform to all statements and descriptions related thereto contained in
the Prospectus. The Notes rank and will rank on a parity with all
unsecured indebtedness (other than subordinated indebtedness of the
Operating Partnership that is outstanding on the date thereof or that
may be incurred thereafter), and senior to all subordinated
indebtedness of the Operating Partnership that is outstanding on the
date thereof or that may be incurred thereafter, except that the Notes
will be effectively subordinated to the prior claims of each secured
mortgage lender to any specific Property which secures such lender's
mortgage.
(xi) To the knowledge of such counsel, the execution, delivery
and performance of this Agreement by each of the Transaction Entities
and the consummation of the transactions contemplated hereby will not
(i) conflict with or result in a breach or violation of any of the
terms or provisions of, or constitute a default under, any indenture,
mortgage, deed of trust, loan agreement or other agreement or
instrument to which either of the Transaction Entities or their
subsidiaries is a party or by which either of the Transaction Entities
or their subsidiaries is bound or to which any of the Properties or
other assets of either of the Transaction Entities or their
subsidiaries is subject, or (ii) conflict with or result in any
violation of the provisions of any statute or any order, rule or
regulation of any
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court or governmental agency or body having jurisdiction over either of
the Transaction Entities or their subsidiaries or any of their
properties or assets; and except for the registration of the Notes
under the Securities Act and the qualification of the Indenture under
the Trust Indenture Act and such consents, approvals, authorizations,
registrations or qualifications as may be required under the Exchange
Act and applicable state securities laws in connection with the
purchase and distribution of the Notes by the Underwriters, no consent,
approval, authorization or order of, or filing or registration with,
any such court or governmental agency or body is required for the
execution, delivery and performance of this Agreement, the Indenture or
the Supplemental Indenture by the Transaction Entities and the
consummation of the transactions contemplated hereby and thereby, and
the issuance and delivery of the Notes.
(xii) The issuance and delivery of the Notes by the Operating
Partnership and the compliance by the Operating Partnership with all of
the provisions of this Agreement, and the consummation of the
transactions contemplated hereby, have been duly authorized by all
necessary partnership action. The execution, delivery and performance
of this Agreement by each of the Transaction Entities and the
consummation of the transactions contemplated hereby will not conflict
with or result in any violation of the provisions of the charter,
by-laws, certificate of limited partnership or agreement of limited
partnership of either of the Transaction Entities or their
subsidiaries.
(xiii) Except as set forth in the Prospectus, to the knowledge
of such counsel, there are no preemptive or other rights to subscribe
for or to purchase, nor any restriction upon the transfer of the Notes
pursuant to the Operating Partnership's certificate of limited
partnership, its agreement of limited partnership, as amended to the
date hereof, or any agreement or other instrument to which the
Operating Partnership is a party.
(xiv) To the knowledge of such counsel, other than as set
forth in the Prospectus and other than rights of certain persons (A)
who have contributed Properties to the Partnership in exchange for
Units, (B) who have acquired securities in a directed placement by the
Company or (C) 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 hand, granting such person the right to
require the Company or the Operating Partnership to file a registration
statement under the Securities Act with respect to any securities of
the Company or the Operating Partnership owned or to be owned by such
person or to require the Company or the Operating Partnership to
include such securities in the securities registered pursuant to the
Registration Statement or in any securities being registered pursuant
to any other registration statement
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filed by the Company or the Operating Partnership under the Securities
Act.
(xv) To the knowledge of such counsel, there are no legal or
governmental proceedings pending to which either Transaction Entity or
their subsidiaries is a party or of which any property or assets of
either Transaction Entity or their subsidiaries is the subject which
are not disclosed in the Prospectus and which, if determined adversely
to such Transaction Entity or subsidiary, might reasonably be expected
to have a material adverse effect on the consolidated financial
position, shareholders' equity, results of operations, business or
prospects of the Company; and to the knowledge of such counsel no such
proceedings are threatened or contemplated by governmental authorities
or threatened by others.
(xvi) To the knowledge of such counsel, there are no contracts
or other documents which are required to be described in the Prospectus
or filed as exhibits to the Registration Statement by the Securities
Act or by the Rules and Regulations which have not been described in
the Prospectus or filed as exhibits to the Registration Statement or
incorporated therein by reference as permitted by the Rules and
Regulations.
(xvii) To the knowledge of such counsel, no relationship,
direct or indirect, exists between or among either of the Transaction
Entities, on the one hand, and the trustees, officers, shareholders,
customers or suppliers of the Transaction Entities, on the other hand,
which is required to be described in the Prospectus which is not so
described.
(xviii) 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.
(xix) To the knowledge of such counsel, no Transaction Entity
or Property Affiliate is in violation of its charter, by-laws,
certificate of limited partnership, agreement of limited partnership or
other similar
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organizational document, nor, to the knowledge of such counsel, has a
default been asserted in any respect, and it has not been asserted that
any event has occurred which, with notice or lapse of time or both,
would constitute such a default, in the due performance or observance
of any term, covenant or condition contained in any material indenture,
mortgage, deed of trust, loan agreement or other material agreement or
instrument to which it is a party or by which it is bound or to which
any of the Properties or any of its other properties or assets is
subject.
(xx) No consent, approval, authorization or other order of, or
registration or filing with, any court, regulatory body, administrative
agency or other governmental body, agency, or official is required on
the part of the Company (except as have been obtained under the
Securities Act and the Exchange Act or such as may be required under
state securities, real estate syndication or Blue Sky laws governing
the purchase and distribution of the Notes) for the valid issuance and
sale of the Notes to the Underwriters as contemplated by this
Agreement.
(xxi) Neither Transaction Entity nor any of their subsidiaries
is an "investment company" within the meaning of such term under the
Investment Company Act of 1940 and the rules and regulations of the
Commission thereunder.
(xxii) The documents incorporated or deemed to be incorporated
by reference in the Prospectus pursuant to Item 12 of Form S-3 under
the Securities Act (other than the financial statements and related
schedules and financial information and data included therein, as to
which no opinion need be rendered), at the time they were filed with
the Commission, complied and will comply as to form in all material
respects with the requirements of the Exchange Act and the rules and
regulations thereunder.
(xxiii) The Registration Statement was declared effective
under the Securities Act and the Indenture was duly qualified under the
Trust Indenture Act as of the date and time specified in such opinion,
the Prospectus was filed with the Commission pursuant to the
subparagraph of Rule 424(b) of the Rules and Regulations specified in
such opinion on the date specified therein and, to the knowledge of
such counsel, no stop order suspending the effectiveness of the
Registration Statement has been issued and, to the knowledge of such
counsel, no proceeding for that purpose is pending or threatened by the
Commission.
(xxiv) The Registration Statement and the Prospectus and any
further amendments or supplements thereto made by the Company prior to
the Delivery Date (other than the financial statements and related
schedules and other financial information and data included therein, as
to which such counsel need express no opinion) comply as to form in all
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material respects with the requirements of the Securities Act,
the Rules and Regulations and the Trust Indenture Act and the
rules and regulations thereunder, and the Indenture conforms
in all material respects to the requirements of the Trust
Indenture Act and the rules and regulations thereunder.
(xxv) The Operating Partnership is classified as a
partnership (and is not taxed as a corporation) for federal
income tax purposes.
(xxvi) 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 Saul
Ewing LLP; (iii) state that its opinion does not address (A) Federal
Reserve Board margin regulations; (B) Federal or state antitrust and
unfair competition laws and regulations; (C) Local Laws (as defined in
The Legal Opinion Accord of the ABA Section of Business Law (1991); (D)
compliance with fiduciary duty requirements; (E) Federal and state
racketeering laws and regulations; (F) Federal and state health and
safety laws and regulations; and (G) Federal and state laws,
regulations and policies concerning (x) national and local emergency,
(y) possible judicial deference to acts of foreign states, and (z)
criminal and civil forfeiture laws; and (iv) in giving the opinion
referred to in subclause (B) in Section 7(d)(A)(viii), 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,
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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) Saul 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, and
has all trust power and authority necessary to own or hold its
properties and to conduct the business in which it is engaged
as described in the Registration Statement and the Prospectus,
and to enter into and perform its obligations under this
Agreement.
(ii) This Agreement has been duly and validly
authorized, executed and delivered by the Company, and
assuming due authorization, execution and delivery by the
Underwriters and the Operating Partnership, is a valid and
binding agreement of the Company except as limited by (a)
bankruptcy, insolvency, reorganization, moratorium, fraudulent
conveyance or other laws relating to or affecting the
enforcement of creditors' rights or (b) general equitable
principles.
(iii) To the knowledge of such counsel, the
execution, delivery and performance of this Agreement by the
Company and the consummation of the transactions contemplated
hereby will not conflict with or result in any violation of
the provisions of any statute or any order, rule or regulation
of any court or governmental agency or body of the State of
Maryland that has jurisdiction over the Company or any of its
properties or assets.
(iv) The execution, delivery and performance of this
Agreement by the Company and the consummation of the
transactions contemplated hereby will not conflict with or
result in any violation of the provisions of the Declaration
of Trust or by-laws of the Company.
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(v) To the knowledge of such counsel, there are no
legal or governmental proceedings pending to which the Company
is a party or of which any property or assets of the Company
is the subject which are not disclosed in the Prospectus and
which, if determined adversely to the Company, might
reasonably be expected to have a material adverse effect on
the consolidated financial position, shareholders' equity,
results of operations, business or prospects of the Company;
and to the best knowledge of such counsel no such proceedings
are threatened or contemplated by governmental authorities or
threatened by others.
Such counsel shall state that Sullivan & Cromwell, counsel for the
Underwriters, may rely on its opinion.
(e) Wolf, Block, Schorr and Solis-Cohen LLP shall have
furnished to the Underwriters its written opinion, dated the Delivery
Date, with respect to such tax matters, including without limitation
the qualification of the Company as a real estate investment trust, as
the Underwriters may reasonably require.
(f) The Underwriters shall have received from Sullivan &
Cromwell, 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.
(g) At the time of execution of this Agreement, the
Underwriters shall have received from Ernst & Young LLP a letter, in
form and substance satisfactory to the Underwriters, addressed to the
Underwriters and dated the date hereof (i) confirming that they are
independent public accountants within the meaning of the Securities Act
and are in compliance with the applicable requirements relating to the
qualification of accountants under Rule 2-01 of Regulation S-X of the
Commission, and (ii) stating, as of the date hereof (or, with respect
to matters involving changes or developments since the respective dates
as of which specified financial information is given in, or
incorporated by reference in, the Prospectus, as of a date not more
than five days prior to the date hereof), the conclusions and findings
of such firm with respect to the financial information and other
matters ordinarily covered by accountants' "comfort letters" to
underwriters in connection with registered public offerings.
(h) With respect to the letter of Ernst & Young LLP referred
to in the preceding paragraph and delivered to the Underwriters
concurrently with the execution of this Agreement (the "initial
letter"), the 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
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Commission, (ii) stating, as of the date of the bring-down letter (or,
with respect to matters involving changes or developments since the
respective dates as of which specified financial information is given
in the Prospectus, as of a date not more than five days prior to the
date of the bring-down letter), the conclusions and findings of such
firm with respect to the financial information and other matters
covered by the initial letter and (iii) confirming in all material
respects the conclusions and findings set forth in the initial letter.
(i) The Transaction Entities shall have furnished to the
Underwriters a certificate, dated the Delivery Date, of the Chairman of
the Board, Chief Executive Officer, President or a Vice President of
the Company and the chief financial officer of the Company (in each
case, for the Company and for the Company as general partner of the
Operating Partnership) stating that:
(i) The representations, warranties and agreements of
the Transaction Entities in Section 1 are true and correct as
of the Delivery Date; the Transaction Entities complied with
all of their agreements contained herein; and the conditions
set forth in Sections 7(a) and 7(j) have been fulfilled; and
(ii) They have carefully examined the Registration
Statement and the Prospectus and, in their opinion (A) as of
the Effective Date, the Registration Statement and Prospectus
did not include any untrue statement of a material fact and
did not omit to state a material fact required to be stated
therein or necessary to make the statements therein not
misleading (with respect to the Prospectus, in light of the
circumstances in which they were made), and (B) since the
Effective Date no event has occurred which should have been
set forth in a supplement or amendment to the Registration
Statement or the Prospectus.
(j) (i) None of the Transaction Entities or 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.
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(k) Subsequent to the execution and delivery of this Agreement
there shall not have occurred any of the following: (i) trading in
securities generally on the New York Stock Exchange or the American
Stock Exchange or in the over-the-counter market, or trading in any
securities of the Company on any exchange or in the over-the-counter
market, shall have been suspended or minimum prices shall have been
established on any such exchange or such market by the Commission, by
such exchange or by any other regulatory body or governmental authority
having jurisdiction, (ii) a banking moratorium shall have been declared
by Federal or state authorities, (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.
(l) Subsequent to the execution and delivery of this Agreement
(i) no downgrading shall have occurred in the rating accorded the
Operating Partnership's debt securities by any "nationally recognized
statistical rating organization," as that term is defined by the
Commission for purposes of Rule 436(g)(2) of the Rules and Regulations
and (ii) no such organization shall have publicly announced that it has
under surveillance or review, with possible negative implications, its
rating of any of the Operating Partnership's debt securities.
(m) The Transaction Entities shall not have failed at or prior
to the Delivery Date to have performed or complied with any of their
agreements herein contained and required to be performed or complied
with by them hereunder at or prior to the Delivery Date.
(n) On the Delivery Date, counsel for the Underwriters shall
have been furnished with such documents and opinions as they may
require for the purpose of enabling them to pass upon the issuance and
sale of the Notes as herein contemplated and related proceedings, or in
order to evidence the accuracy of any of the representations or
warranties, or the fulfillment of any of the conditions, herein
contained; and all proceedings taken by the Transaction Entities in
connection with the issuance and sale of the Notes as herein
contemplated shall be satisfactory in form and substance to the
Underwriters and counsel for the Underwriters.
(o) The Operating Partnership shall have furnished or caused
to be furnished to the Underwriters such further certificates and
documents as the Underwriters shall have reasonably requested.
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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 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
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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, 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
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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 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
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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 hand, with respect to the statements or
omissions which resulted in such loss, claim, damage or liability, or action in
respect thereof, as well as any other relevant equitable considerations. The
relative benefits received by the Transaction Entities, on the one hand, and the
Underwriters, on the other hand, with respect to such offering shall be deemed
to be in the same proportion as the total net proceeds from the offering of the
Notes purchased under this Agreement (before deducting expenses) received by the
Transaction Entities, on the one hand, and the total underwriting discounts and
commissions received by the Underwriters with respect to the Notes purchased
under this Agreement, on the other hand, bear to the total gross proceeds from
the offering of the Notes under this Agreement, in each case as set forth in the
table on the cover page of the Prospectus. The relative fault shall be
determined by reference to whether the untrue or alleged untrue statement of a
material fact or omission or alleged omission to state a material fact relates
to information supplied by the Transaction Entities or the Underwriters, the
intent of the parties and their relative knowledge, access to information and
opportunity to correct or prevent such statement or omission. The Transaction
Entities and the Underwriters agree that it would not be
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just and equitable if contributions pursuant to this Section 10(d) 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 10
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, if any, 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, if any, and the Prospectus.
11. Termination. The obligations of the Underwriters hereunder may be
terminated by the Underwriters by notice given to and received by the Operating
Partnership prior to delivery of and payment for the Notes if, prior to that
time, any of the events described in Sections 7(j), 7(k) or 7(m), shall have
occurred or if the Underwriters shall decline to purchase the Notes for any
reason permitted under this Agreement.
12. Reimbursement of Underwriters' Expenses. If the Operating
Partnership shall fail to tender the Notes for delivery to the Underwriters by
reason of any failure, refusal or inability on the part of the Transaction
Entities to perform any agreement on their part to be performed, or because any
other condition of the Underwriters' obligations hereunder required to be
fulfilled by the Transaction Entities is not fulfilled, the Transaction Entities
will reimburse the Underwriters for all reasonable out-of-pocket expenses
(including fees and disbursements of counsel) incurred by the Underwriters in
connection with this Agreement and the proposed purchase of the Notes, and upon
demand the Transaction Entities shall pay the full amount thereof to the
Underwriters. If this Agreement is terminated pursuant to Section 9 by reason of
the default of one or more Underwriters, the Transaction Entities shall not be
obligated to reimburse any defaulting Underwriter on account of those expenses.
13. Notices, etc. All statements, requests, notices and agreements
hereunder shall be in writing, and:
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(a) if to the Underwriters, shall be delivered or sent by
mail, telex or facsimile transmission to Goldman, Sachs & Co.,
32 Old Slip, 9th Floor, New York, New York 10004, Attention:
Registration Department (Fax: 212-902-9020), and to Salomon Smith
Barney Inc., 388 Greenwich Street, New York, New York 10013,
Attention: Office of the General Counsel (Fax: 212-816-0949);
(b) if to the Transaction Entities shall be delivered or sent
by mail, telex or facsimile transmission to the Company, 65 Valley
Stream Parkway, Malvern, PA 19355, Attention: General Counsel (Fax:
610-644-2175);
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 Goldman, Sachs & Co. and Salomon Smith
Barney Inc.
14. Persons Entitled to Benefit of Agreement. This Agreement shall
inure to the benefit of and be binding upon the Underwriters, the Transaction
Entities and their respective personal representatives and successors. This
Agreement and the terms and provisions hereof are for the sole benefit of only
those persons, except that (A) the representations, warranties, indemnities and
agreements of the Transaction Entities contained in this Agreement shall also be
deemed to be for the benefit of the person or persons, if any, who control any
Underwriter within the meaning of Section 15 of the Securities Act and (B) the
indemnity agreement of the Underwriters contained in Section 10(b) of this
Agreement shall be deemed to be for the benefit of trustees of the Company,
officers of the Company who have signed the Registration Statement and any
person controlling the Transaction Entities within the meaning of section 15 of
the Securities Act. Nothing in this Agreement is intended or shall be construed
to give any person, other than the persons referred to in this Section 14, any
legal or equitable right, remedy or claim under or in respect of this Agreement
or any provision contained herein.
15. Survival. The respective indemnities, representations, warranties
and agreements of the Transaction Entities and the Underwriters contained in
this Agreement or made by or on behalf on them, respectively, pursuant to this
Agreement, shall survive the delivery of and payment for the 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.
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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.
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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/ Willard G. Rouse III
--------------------------------------------
Name: Willard G. Rouse III
Title: Chief Executive Officer
LIBERTY PROPERTY LIMITED PARTNERSHIP
By: Liberty Property Trust, its general partner
By: /s/ Willard G. Rouse III
----------------------------------------
Name: Willard G. Rouse III
Title: Chief Executive Officer
Accepted:
GOLDMAN, SACHS & CO.
/s/ Goldman, Sachs & Co.
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For itself and on behalf of
the Underwriters
SALOMON SMITH BARNEY INC.
By: /s/ Paul Ingrassia
------------------------------
Authorized Signatory
For itself and on behalf of
the Underwriters
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SCHEDULE I
PRINCIPAL
UNDERWRITERS AMOUNT OF NOTES
------------ ---------------
Goldman, Sachs & Co. $100,000,000
Salomon Smith Barney Inc. 100,000,000
Chase Securities Inc. 12,500,000
Credit Suisse First Boston Corporation 12,500,000
Lehman Brothers Inc. 12,500,000
UBS Warburg LLC 12,500,000
------------
$250,000,000
============
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SCHEDULE II
Senior Notes Due 2011
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Principal Amount $250,000,000
Coupon: 7.250%
Settlement Date: March 14, 2001
Price to Public: 99.293%
Price to Public: $248,232,500
Underwriting Discount: 0.650%
Underwriting Discount: $1,625,000
Price to Company: 98.643%
Proceeds to the Company (before expenses) $246,607,500
Maturity Date: March 15, 2011
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