Exhibit 1.1
LIBERTY PROPERTY LIMITED PARTNERSHIP
(a Pennsylvania Limited Partnership)
$200,000,000 5.65% SENIOR NOTES DUE 2014
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UNDERWRITING AGREEMENT
August 5, 2004
Goldman, Sachs & Co.,
As representative of the several Underwriters
Named in Schedule I hereto,
85 Broad Street,
New York, New York 10004.
Dear Sirs:
Liberty Property Trust, a Maryland real estate investment trust (the
"Company"), and Liberty Property Limited Partnership, a Pennsylvania limited
partnership (the "Operating Partnership" and, together with the Company, the
"Transaction Entities"), each wishes to confirm as follows its agreement (this
"Agreement") with the Underwriters named in Schedule I hereto (the
"Underwriters") with respect to the sale by the Operating Partnership and the
purchase by the Underwriters of an aggregate of $200,000,000 principal amount of
the 5.65% Senior Notes due 2014 of the Operating Partnership (the "Securities").
Capitalized terms used but not otherwise defined herein shall have the
meanings given to those terms in the Prospectus (as herein defined).
1. Representations, Warranties and Agreements of the Transaction Entities.
Each of the Transaction Entities, jointly and severally, represents and warrants
to, and agrees with, each of the Underwriters that:
(a) A registration statement on Form S-3 (No. 333-65592 (the "2001
Registration Statement") which also constitutes a post-effective amendment to a
previous registration statement No. 333-39282 (the "2000 Registration
Statement") pursuant to Rule 429 of the United States Securities Act of 1933, as
Amended (the "Securities Act")), and any amendments thereto, with respect to one
or more series of debt securities of the Operating Partnership has (i) been
prepared by the Company and the Operating Partnership in conformity with the
requirements of the Securities Act, and the rules and regulations (the "Rules
and Regulations") of the United States Securities and Exchange Commission (the
"Commission") thereunder, (ii) been filed with the Commission under the
Securities Act and (iii) become effective
under the Securities Act; and the indenture, dated as of October 24, 1997 as
supplemented to the date hereof (the "Indenture"), between the Operating
Partnership and J.P. Morgan Trust Company, National Association (as successor to
Bank One Trust Company, N.A., as successor to The First National Bank of
Chicago), as trustee (the "Trustee") has been qualified, and the Seventh
Supplemental Indenture, to be dated as of August 10, 2004, between the Operating
Partnership and the Trustee (the "Supplemental Indenture"), pursuant to which
the Securities shall be issued, will be qualified, under the Trust Indenture Act
of 1939 (the "Trust Indenture Act"). Copies of the Registration Statement and
any amendments thereto have been delivered by the Company to you. As used in
this Agreement, "Effective Time" means, for the Registration Statement, the date
and the time as of which the Registration Statement, or the most recent
post-effective amendment thereto, if any, was declared effective by the
Commission; "Effective Date" means, for the Registration Statement, the date of
the Effective Time; "Preliminary Prospectus" means any prospectus included in
the Registration Statement, or amendments thereto, before it became effective
under the Securities Act and any prospectus filed with the Commission by the
Company with your consent pursuant to Rule 424(a) of the Rules and Regulations;
"Registration Statement" means both the 2000 Registration Statement and the 2001
Registration Statement, together, each as amended at the Effective Time,
including any documents incorporated by reference therein at such time and all
information contained in the final prospectus filed with the Commission pursuant
to Rule 424(b) of the Rules and Regulations and deemed to be a part of such
registration statement as of the respective Effective Time pursuant to paragraph
(b) of Rule 430A of the Rules and Regulations, and shall include any
registration statement filed pursuant to Rule 462(b) of the Rules and
Regulations; and "Prospectus" means such final prospectus, as first filed with
the Commission pursuant to paragraph (1) or (4) of Rule 424(b) of the Rules and
Regulations. Any reference herein to the Registration Statement, the Prospectus
or a Preliminary Prospectus shall be deemed to include the documents
incorporated or deemed to be incorporated by reference therein which were filed
under the Securities Exchange Act of 1934, as amended (the "Exchange Act"). For
purposes of this Agreement, all references to the Registration Statement, any
Preliminary Prospectus or the Prospectus or any amendment or supplement to any
of the foregoing shall be deemed to include the copy filed with the Commission
pursuant to its Electronic Data Gathering, Analysis and Retrieval system
("EDGAR").
(b) Each Preliminary Prospectus, if any, included as part of the
Registration Statement as originally filed or as part of any amendment or
supplement thereto, or filed pursuant to Rule 424 under the Rules and
Regulations, complied when so filed in all material respects with the provisions
of the Securities Act and the rules and regulations thereunder, and each
Preliminary Prospectus, if any, delivered to the Underwriters for use in
connection with this offering was identical to the electronically transmitted
copies thereof filed with the Commission pursuant to EDGAR, except to the extent
permitted by Regulation S-T.
(c) On its Effective Date and on the Effective Date of any amendment
thereto, the Registration Statement conformed in all material respects, and as
of the date of this Agreement, the Registration Statement conforms in all
material respects, and the Prospectus and any further amendments or supplements
to the Registration Statement or the Prospectus will, when they become effective
or are filed with the Commission, as the case may be, conform in all material
respects to the requirements of the Securities Act, the Rules and Regulations
and the Trust Indenture Act and the rules and regulations thereunder, and do not
and will not, as of the applicable Effective Date (as to the Registration
Statement and any amendment thereto) and as of the applicable filing date and at
and as of each Time of Delivery (as defined below) (as to the Prospectus and any
amendment or
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supplement thereto) contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading (with respect to the Prospectus, in light of
the circumstances under which they were made); provided that no representation
or warranty is made as to information contained in or omitted from the
Registration Statement or the Prospectus in reliance upon and in conformity with
written information furnished to the Company by or on behalf of any Underwriter
specifically for inclusion therein. The Indenture conforms, and the Supplemental
Indenture will conform, in all material respects to the requirements of the
Trust Indenture Act and the rules and regulations thereunder; provided, however,
that no representation or warranty is made as to information contained in or
omitted from that part of the Registration Statement which shall constitute the
Statement of Eligibility and Qualification on Form T-1 under the Trust Indenture
Act of the Trustee under the Indenture. The Prospectus delivered to you for use
in connection with this offering was identical to the electronically transmitted
copies thereof filed with the Commission pursuant to 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, when
such incorporated or deemed to be incorporated documents became effective or
were filed with the Commission, as the case may be, complied in all material
respects with the Securities Act and the Rules and Regulations, and the Exchange
Act and the rules and regulations thereunder, as applicable, and none of such
documents, at such dates, contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances under which they
were made, not misleading; and any further documents so filed and incorporated
or deemed to be incorporated by reference in the Registration Statement, the
Prospectus or any Preliminary Prospectus, or any further amendment or supplement
thereto, when such documents become effective or are filed with the Commission,
as the case may be, will comply in all material respects with the Securities Act
and the Rules and Regulations, and the Exchange Act and the rules and
regulations thereunder, as applicable, will not contain an untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading.
(e) No stop order suspending the effectiveness of the Registration
Statement or any part thereof has been issued and no proceeding for that purpose
has been instituted or, to the knowledge of either of the Transaction Entities,
threatened by the Commission or by the state securities authority of any
jurisdiction. No order preventing or suspending the use of any Preliminary
Prospectus or the Prospectus has been issued and no proceeding for that purpose
has been instituted or, to the knowledge of either of the Transaction Entities,
after due inquiry of the Commission, threatened by the Commission or by the
state securities authority of any jurisdiction.
(f) The Company has been duly formed and is validly existing as a
real estate investment trust in good standing under the laws of the State of
Maryland, is duly qualified to do business and is in good standing in each
jurisdiction in which its ownership or lease of property or the conduct of its
business requires such qualification (each such jurisdiction as provided in
Schedule II), and has all power and authority necessary to own or hold its
properties, to conduct the business in which it is engaged and to enter into and
perform its obligations under this Agreement. None of the subsidiaries of the
Company (other than the Operating Partnership) is a "significant subsidiary," as
such term is defined in Rule 405 of the Rules and Regulations. Except as
described in the
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Prospectus and other than the Property Affiliates (as defined herein), the
entities listed in Schedule III and the Operating Partnership, Development Corp.
(as defined herein), Development-II (as defined herein) and SP Trust (as defined
herein), the Company owns no direct or indirect equity interest in any entity.
(g) The Company has an authorized capitalization as set forth in the
Prospectus, and all of the issued shares of beneficial interest of the Company
have been duly and validly authorized and issued, are fully paid and
non-assessable and conform to the description thereof contained in the
Prospectus. Except as disclosed in the Prospectus and with respect to the
Company's Amended and Restated Share Incentive Plan (the "Share Incentive
Plan"), the Company's Employee Stock Purchase Plan and the Company's Dividend
Reinvestment and Share Purchase Plan, no shares of beneficial interest of the
Company are reserved for any purpose and except for the equity interests in the
Operating Partnership ("Units") and options to purchase shares of beneficial
interest issued pursuant to the Share Incentive Plan, there are no outstanding
securities convertible into or exchangeable for any shares of beneficial
interest of the Company, and there are no outstanding options, rights
(preemptive or otherwise) or warrants to purchase or to subscribe for shares of
beneficial interest or any other securities of the Company.
(h) The Operating Partnership has been duly formed and is validly
existing as a limited partnership in good standing under the laws of the
Commonwealth of Pennsylvania, is duly qualified to do business and is in good
standing as a foreign limited partnership in each jurisdiction in which its
ownership or lease of property or the conduct of its business requires such
qualification (each such jurisdiction as provided in Schedule II), and has all
partnership power and authority necessary to own or hold its properties, to
conduct the business in which it is engaged and to enter into and perform its
obligations under this Agreement. The Company is the sole general partner of the
Operating Partnership. The limited partnership agreement of the Operating
Partnership, as amended (the "Operating Partnership Agreement"), is in full
force and effect, and the aggregate percentage interests of the Company and the
limited partners in the Operating Partnership are as set forth in the
Prospectus. The owner's equity of the Operating Partnership is as described in
the Prospectus. All of the Units have been duly and validly authorized and
issued, were issued in accordance with the applicable terms of the Operating
Partnership Agreement and the certificate of limited partnership of the
Operating Partnership and, to the extent that such interests are owned by the
Company, are owned by the Company free and clear of all liens, encumbrances,
equities or claims.
(i) Liberty Property Development Corp. ("Development Corp.") has
been duly organized and is validly existing as a corporation in good standing
under the laws of the Commonwealth of Pennsylvania, is duly qualified to do
business and is in good standing in each jurisdiction in which its ownership or
lease of property or the conduct of its business requires such qualification,
and has all corporate power and authority necessary to own or hold its
properties and to conduct the business in which it is engaged. All of the issued
and outstanding capital stock of Development Corp. has been duly and validly
authorized and issued and is fully paid and non-assessable, and has been offered
and sold in compliance with all applicable laws (including, without limitation,
federal or state securities laws). All of the capital stock of Development Corp.
owned by the Operating Partnership, as described in the Prospectus, is owned
free and clear of any security interest, mortgage, pledge, lien, encumbrance,
claim, restriction or equities. No shares of capital stock of Development Corp.
are reserved for any purpose, and there are no outstanding securities
convertible into or exchangeable for any capital stock of Development Corp., and
there are no
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outstanding options, rights (preemptive or otherwise) or warrants to purchase or
to subscribe for shares of such capital stock or any other securities of
Development Corp.
(j) Liberty Property Development Corp-II ("Development-II") has been
duly organized and is validly existing as a corporation in good standing under
the laws of the Commonwealth of Pennsylvania, is duly qualified to do business
and is in good standing in each jurisdiction in which its ownership or lease of
property or the conduct of its business requires such qualification, and has all
corporate power and authority necessary to own or hold its properties and to
conduct the business in which it is engaged. All of the issued and outstanding
capital stock of Development-II has been duly and validly authorized and issued
and is fully paid and non-assessable, and has been offered and sold in
compliance with all applicable laws (including, without limitation, federal or
state securities laws). All of the capital stock of Development-II owned by the
Operating Partnership, as described in the Prospectus, is owned free and clear
of any security interest, mortgage, pledge, lien, encumbrance, claim,
restriction or equities. No shares of capital stock of Development-II are
reserved for any purpose, and there are no outstanding securities convertible
into or exchangeable for any capital stock of Development-II, and there are no
outstanding options, rights (preemptive or otherwise) or warrants to purchase or
to subscribe for shares of such capital stock or any other securities of
Development-II.
(k) Liberty Property Special Trust ("SP Trust") has been duly
organized and is validly existing as a business trust in good standing under the
laws of the Commonwealth of Pennsylvania, is duly qualified to do business and
is in good standing in each jurisdiction in which its ownership or lease of
property or the conduct of its business requires such qualification, and has all
trust power and authority necessary to own or hold its properties and to conduct
the business in which it is engaged. All of the issued and outstanding equity
interests of SP Trust have been duly and validly authorized and issued and are
fully paid and non-assessable, and have been offered and sold in compliance with
all applicable laws (including, without limitation, federal or state securities
laws). All of the equity interests of SP Trust are owned by the Company free and
clear of any security interest, mortgage, pledge, lien, encumbrance, claim,
restriction or equities. No equity interests of SP Trust are reserved for any
purpose, and there are no outstanding securities convertible into or
exchangeable for any equity interests of SP Trust, and there are no outstanding
options, rights (preemptive or otherwise) or warrants to purchase or to
subscribe for such equity interests or any other securities of SP Trust.
(l) Each of those certain partnerships, limited liability companies
or other entities holding title to one or more of the Properties (the "Property
Affiliates") are the only entities other than the Operating Partnership, SP
Trust, Liberty Property Philadelphia Corp., a Pennsylvania corporation, Liberty
Property Philadelphia Trust, a Pennsylvania trust, Liberty Property Philadelphia
Corp-IV East, a Pennsylvania corporation, Liberty Property Philadelphia Corp-IV
West, a Pennsylvania corporation, LP Malvern LLC, a Pennsylvania limited
liability company, and Liberty UK Development Corp., a Pennsylvania corporation,
through which the Company and the Operating Partnership own interests in the
Properties. Each of the Property Affiliates has been duly organized and is
validly existing as a limited partnership, limited liability company or other
entity, is duly qualified to do business and is in good standing under the laws
of the jurisdiction in which it was organized, is duly qualified to do business
and is in good standing as a foreign entity in each jurisdiction in which its
ownership or lease of property or the conduct of its business requires such
qualification, and has all 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
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been duly and validly authorized and issued and are fully paid and
non-assessable. All of such ownership interests owned directly or indirectly by
the Company and the Operating Partnership, as described in the Prospectus, are
owned free and clear of any security interest, mortgage, pledge, lien,
encumbrance, claim, restriction or equities.
(m) The Securities have been duly and validly authorized and, when
duly executed, authenticated, issued and delivered against payment therefor as
provided herein and in the Indenture, will be duly and validly issued and
outstanding, and shall constitute valid and binding obligations on the part of
the Operating Partnership, entitled to the benefits provided in the Indenture,
and enforceable against the Operating Partnership in accordance with their
terms. Upon payment of the purchase price and delivery of the Securities in
accordance herewith, each of the Underwriters will receive good, valid and
marketable title to the Securities, free and clear of all security interests,
mortgages, pledges, liens, encumbrances, claims, restrictions and equities.
(n) The Indenture has been duly and validly authorized, executed and
delivered by the Operating Partnership and, assuming due authorization,
execution and delivery by the Trustee, constitutes a valid and binding agreement
of the Operating Partnership, enforceable against the Operating Partnership in
accordance with its terms; the Supplemental Indenture has been duly and validly
authorized and, when executed and delivered by the Operating Partnership
(assuming due execution and delivery by the Trustee), will constitute a valid
and binding agreement of the Operating Partnership, enforceable against the
Operating Partnership in accordance with its terms; the Securities, the
Indenture and the Supplemental Indenture will conform in all material respects
to the descriptions thereof contained in the Prospectus.
(o) (A) This Agreement has been duly and validly authorized,
executed and delivered by each of the Transaction Entities, and assuming due
authorization, execution and delivery by the Underwriters, is a valid and
binding agreement of each of the Transaction Entities, enforceable against the
Transaction Entities in accordance with its terms; and (B) the Operating
Partnership Agreement and the partnership agreement, limited liability company
operating agreement, and each other similar organizational document of each
Property Affiliate have been duly and validly authorized, executed and delivered
by the parties thereto and are valid and binding agreements of the parties
thereto, enforceable against such parties in accordance with their terms.
(p) The issue and sale of the Securities, the execution, delivery
and performance of this Agreement by each of the Transaction Entities, the
execution, delivery and performance of the Indenture by the Operating
Partnership and the consummation of the transactions contemplated hereby and
thereby will not conflict with or result in a breach or violation of any of the
terms or provisions of, or constitute a default under, any indenture, mortgage,
deed of trust, loan agreement or other agreement or instrument to which either
of the Transaction Entities or any of their subsidiaries is a party or by which
either of the Transaction Entities or any of their subsidiaries is bound or to
which any of the Properties or other assets of the Company or any of its
subsidiaries is subject, nor will such actions result in any violation of the
provisions of the charter, by-laws, certificate of limited partnership,
agreement of limited partnership, certificate of formation, limited liability
company operating agreement or other similar organizational document of either
of the Transaction Entities or any of their subsidiaries, or any statute or any
order, rule or regulation of any court or governmental agency or body having
jurisdiction over either of the Transaction Entities or any of their
subsidiaries or any of their properties or assets; and except for the
registration of the Securities under the Securities Act and the qualification of
the Indenture under the Trust Indenture Act and such consents,
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approvals, authorizations, orders, filings, registrations or qualifications as
may be required under state securities laws in connection with the purchase and
distribution of the Securities by the Underwriters, no consent, approval,
authorization or order of, or filing, registration or qualification with, any
such court or governmental agency or body is required for the execution,
delivery and performance of this Agreement by the Transaction Entities or the
Indenture by the Operating Partnership, the consummation of the transactions
contemplated hereby and thereby, and the issuance and delivery of the
Securities.
(q) No event has occurred and is continuing that, had the Securities
been issued, would (whether or not with the giving of notice and/or the passage
of time and/or the fulfillment of any other requirement) constitute an Event of
Default (as defined in the Indenture) under the Indenture.
(r) Other than as described in the Prospectus and other than rights
of certain persons who have contributed Properties to the Partnership in
exchange for Units and persons whose securities are already registered under the
Securities Act, and except with respect to certain persons who may acquire
preferred shares of the Company in exchange for preferred units of partnership
interest in the Operating Partnership, there are no contracts, agreements or
understandings between the Transaction Entities or any of their subsidiaries and
any person granting such person the right to require the Company to file a
registration statement under the Securities Act with respect to any securities
of either of the Transaction Entities or any of their subsidiaries owned or to
be owned by such person or to require either of the Transaction Entities or any
of their subsidiaries to include such securities in the securities registered
pursuant to the Registration Statement or in any securities being registered
pursuant to any other registration statement filed by the Transaction Entities
or any of their subsidiaries under the Securities Act.
(s) Except as described or contemplated in the Prospectus or
pursuant to the Share Incentive Plan, and except for the issuance of common
shares of beneficial interest in exchange for Units, neither Transaction Entity
has sold or issued any securities during the six-month period preceding the date
of the Prospectus, including any sales pursuant to Rule 144A or Regulations D or
S under the Securities Act.
(t) Neither of the Transaction Entities nor any of the Properties
has sustained, since the date of the latest audited financial statements
included in the Prospectus, any material loss or interference with its business
from fire, explosion, flood or other calamity, whether or not covered by
insurance, or from any labor dispute or court or governmental action, order or
decree, other than as set forth or contemplated in the Prospectus; and, since
such date, there has not been any material change in the capital shares or
long-term debt of either of the Transaction Entities or any material adverse
change, or any development involving a prospective material adverse change, in
or affecting the Properties or the general affairs, management, financial
position, shareholders' equity or results of operations of either of the
Transaction Entities, other than as set forth or contemplated in the Prospectus.
(u) The financial statements (including the related notes and
supporting schedules thereto) filed as part of, or incorporated by reference in,
the Registration Statement and the Prospectus present fairly the financial
condition and results of operations of the entities purported to be shown
thereby, at the dates and for the periods indicated, and have been prepared in
conformity with generally 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
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in the Prospectus under the captions "Ratios of Earnings to Fixed Charges" and
"Certain Ratios" and in Exhibit 12.1 to the Registration Statement have been
calculated in compliance with Item 503(d) of Regulation S-K of the Commission.
Pro forma financial information included in or incorporated by reference in the
Registration Statement and the Prospectus has been prepared in accordance with
the applicable requirements of the Securities Act, the Rules and Regulations and
AICPA guidelines with respect to pro forma financial information and includes
all adjustments necessary to present fairly the pro forma financial position of
the respective entity or entities presented therein at the respective dates
indicated and the results of operations for the respective periods specified.
(v) 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.
(w) (A) The Operating Partnership and the Property Affiliates have
good and marketable title to each of the Properties, free and clear of all
liens, encumbrances, claims, security interests and defects, other than those
referred to in the Prospectus, those relating to certain intra-company debt with
respect to Development and Development-II or those which are not material in
amount or those which would not have a material adverse effect on the business,
operations, use or value of any of the Properties; (B) all liens, charges,
encumbrances, claims or restrictions on or affecting any of the Properties and
the assets of any Transaction Entity which are required to be disclosed in the
Prospectus are disclosed therein; (C) except as otherwise described in the
Prospectus, none of the Company, the Operating Partnership or any Property
Affiliate and, to the knowledge of the Transaction Entities, no tenant of any of
the Properties is in default under (i) any space leases (as lessor or lessee, as
the case may be) relating to the Properties, or (ii) any of the mortgages or
other security documents or other agreements encumbering or otherwise recorded
against the Properties, in each case which default would have a material adverse
effect on either of the Transaction Entities or affect either Transaction
Entity's ability to perform its obligations hereunder, and neither of the
Transaction Entities knows of any event which, but for the passage of time or
the giving of notice, or both, would constitute such a default under any of such
documents or agreements; (D) each of the Properties complies with all applicable
codes, laws and regulations (including, without limitation, building and zoning
codes, laws and regulations and laws relating to access to the Properties),
except for such failures to comply that would not have a material adverse effect
on the business operations, use or value of such Property; and (E) neither of
the Transaction Entities has knowledge of any pending or threatened condemnation
proceedings, zoning change or other proceeding or action that will in any
material manner adversely affect the size of, use of, improvements on,
construction on or access to the Properties.
(x) The mortgages and deeds of trust which encumber the Properties
are not convertible into equity securities of the entity owning such Property
and said mortgages and deeds of trust are not cross-defaulted or
cross-collateralized with any property other than other Properties.
(y) The Company, the Operating Partnership and the Property
Affiliates have obtained title insurance on their fee or leasehold interests in
each of the Properties, in an amount at least equal to the greater of (A) the
mortgage indebtedness of each such Property or (B) the purchase price (exclusive
of improvements) of each such Property.
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(z) Except as disclosed in the Prospectus and except such as in each
case would not have a material adverse effect on any Property, any Property
Affiliate, the Company, the Operating Partnership or any of their subsidiaries,
taken together as a whole: (A) to the knowledge of the Transaction Entities,
after due inquiry, the operations of the Company, the Operating Partnership,
Development Corp., Development II, SP Trust and the Properties are in compliance
with all Environmental Laws (as defined below) and all requirements of
applicable permits, licenses, approvals and other authorizations issued pursuant
to Environmental Laws; (B) to the knowledge of the Transaction Entities, after
due inquiry, none of the Transaction Entities, the Property Affiliates or any
Property has caused or suffered to occur any Release (as defined below) of any
Hazardous Substance (as defined below) into the Environment (as defined below)
on, in, under or from any Property, and no condition exists on, in, under or
adjacent to any Property that would reasonably be expected to result in the
incurrence of liabilities by the Transaction Entities or any of their
subsidiaries under, or any violations of, any Environmental Law or give rise to
the imposition of any Lien (as defined below) against the Transaction Entities
or any of their subsidiaries, under any Environmental Law; (C) none of the
Transaction Entities or the Property Affiliates has received any written notice
of a claim under or pursuant to any Environmental Law or under common law
pertaining to Hazardous Substances on, in, under or originating from any
Property; (D) neither of the Transaction Entities has actual knowledge of, or
received any written notice from any Governmental Authority (as defined below)
claiming, any violation of any Environmental Law or a determination to undertake
and/or request the investigation, remediation, clean-up or removal of any
Hazardous Substance released into the Environment on, in, under or from any
Property; and (E) no Property is included or, to the knowledge of the
Transaction Entities, after due inquiry, proposed for inclusion on the National
Priorities List issued pursuant to CERCLA (as defined below) by the United
States Environmental Protection Agency (the "EPA") or on the Comprehensive
Environmental Response, Compensation, and Liability Information System database
maintained by the EPA, and neither of the Transaction Entities has actual
knowledge that any Property has otherwise been identified in a published writing
by the EPA as a potential CERCLA removal, remedial or response site or, to the
knowledge of the Transaction Entities, is included on any similar list of
potentially contaminated sites pursuant to any other Environmental Law.
As used herein, "Hazardous Substance" shall include any hazardous
substance, hazardous waste, toxic substance, pollutant or hazardous material,
including, without limitation, oil, petroleum or any petroleum-derived substance
or waste, asbestos or asbestos-containing materials, PCBs, pesticides,
explosives, radioactive materials, dioxins, urea formaldehyde insulation or any
constituent of any such substance, pollutant or waste which is subject to
regulation under any Environmental Law (including, without limitation, materials
listed in the United States Department of Transportation Optional Hazardous
Material Table, 49 C.F.R. Section 172.101, or in the EPA's List of Hazardous
Substances and Reportable Quantities, 40 C.F.R. Part 302); "Environment" shall
mean any surface water, drinking water, ground water, land surface, subsurface
strata, river sediment, buildings, structures, and ambient, workplace and indoor
and outdoor air; "Environmental Law" shall mean the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended (42 U.S.C. Section
9601 et seq.) ("CERCLA"), the Resource Conservation and Recovery Act of 1976, as
amended (42 U.S.C. Section 6901, et seq.), the Clean Air Act, as amended (42
U.S.C. Section 7401, et seq.), the Clean Water Act, as amended (33 U.S.C.
Section 1251, et seq.), the Toxic Substances Control Act, as amended (15 U.S.C.
Section 2601, et seq.), the Occupational Safety and Health Act of 1970, as
amended (29 U.S.C. Section 651, et seq.), the Hazardous Materials Transportation
Act, as amended (49 U.S.C. Section 1801, et seq.), and all other federal, state
and local laws, ordinances, regulations, rules and orders relating to the
protection of the
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Environment or of human health from environmental effects; "Governmental
Authority" shall mean any federal, state or local governmental office, agency or
authority having the duty or authority to promulgate, implement or enforce any
Environmental Law; "Lien" shall mean, with respect to any Property, any lien,
encumbrance, penalty, fine, charge, assessment, judgment or other liability in,
on or affecting such Property; and "Release" shall mean any spilling, leaking,
pumping, pouring, emitting, emptying, discharging, injecting, escaping,
leaching, dumping, emanating or disposing of any Hazardous Substance into the
Environment, including, without limitation, the abandonment or discard of
barrels, containers, tanks (including, without limitation, underground storage
tanks) or other receptacles containing or previously containing any Hazardous
Substance.
(aa) Each Transaction Entity and each of their subsidiaries carries,
or is covered by, insurance in such amounts and covering such risks as is
adequate for the conduct of its business and as is customary for companies
engaged in similar businesses in similar industries; and each Property carries,
or is covered by, insurance covering the value of such Property.
(bb) Each Transaction Entity owns or possesses adequate rights to
use all material patents, patent applications, trademarks, service marks, trade
names, trademark registrations, service mark registrations, copyrights and
licenses necessary for the conduct of its business and has no reason to believe
that the conduct of its business will conflict with, and has not received any
notice of any claim of conflict with, any such rights of others.
(cc) Except as described in the Prospectus, there are no legal or
governmental proceedings pending to which either Transaction Entity or their
subsidiaries is a party or of which any property or assets of either Transaction
Entity or their subsidiaries is the subject which, if determined adversely to
such Transaction Entity or subsidiary, could individually or in the aggregate
reasonably be expected to have a material adverse effect on the consolidated
financial position, shareholders' equity, results of operations, business or
prospects of the Company; and to the knowledge of the Transaction Entities, no
such proceedings are threatened or contemplated by governmental authorities or
threatened by others.
(dd) There are no contracts or other documents which are required to
be described in the Prospectus or filed as exhibits to the Registration
Statement by the Securities Act or by the Rules and Regulations which have not
been described in the Prospectus or filed as exhibits to the Registration
Statement or incorporated therein by reference as permitted by the Rules and
Regulations.
(ee) No relationship, direct or indirect, exists between or among
either of the Transaction Entities or any of their subsidiaries on the one hand,
and the trustees, officers, shareholders, customers or suppliers of the
Transaction Entities or any of their subsidiaries on the other hand, that is
required to be described in the Prospectus that is not so described.
(ff) No labor disturbance by the employees of either Transaction
Entity or any of their subsidiaries exists or, to the knowledge of the
Transaction Entities, is imminent which might be expected to have a material
adverse effect on the consolidated financial position, shareholders' equity,
results of operations, business or prospects of such Transaction Entity.
(gg) Each "pension plan" for which either Transaction Entity would
have any liability that is intended to be qualified under section 401(a) of the
Code (as defined below) is (i) so qualified
10
in all material respects and nothing has occurred, whether by action or by
failure to act, which would cause the loss of such qualification and (ii) in
compliance in all material respects with all presently applicable provisions of
the Employee Retirement Income Security Act of 1974, as amended, including the
regulations and published interpretations thereunder ("ERISA"); to the knowledge
of the Transaction Entities, after due inquiry, no "reportable event" (as
defined in ERISA) has occurred with respect to any "pension plan" (as defined in
ERISA) for which either Transaction Entity would have any liability; neither
Transaction Entity has incurred or expects to incur liability under (i) Title IV
of ERISA with respect to termination of, or withdrawal from, any "pension plan"
or (ii) sections 412 or 4971 of the Internal Revenue Code of 1986, as amended,
including the regulations and published interpretations thereunder (the "Code").
(hh) Each Transaction Entity and each of their subsidiaries has
filed all federal, state, local and foreign income and franchise tax returns
required to be filed through the date hereof and has paid all taxes due thereon
(taking into account any extension that is properly granted under the law), and
no material tax deficiency has been asserted against either Transaction Entity
or any of their subsidiaries which has had (nor does either Transaction Entity
have any knowledge of any tax deficiency which, if determined adversely to it
might have) a material adverse effect on the financial position, shareholders'
equity, results of operations, business or prospects of such Transaction Entity
or subsidiary.
(ii) At all times since June 16, 1994, the Company, the Operating
Partnership, Development Corp., Development II and SP Trust have been, and upon
the sale of the Securities will continue to be, organized and operated in
conformity with the requirements for qualification and taxation of the Company
as a real estate investment trust under the Code and the proposed method of
operation of the Company, the Operating Partnership, Development Corp.,
Development II and SP Trust will enable the Company to continue to meet the
requirements for qualification and taxation as a real estate investment trust
under the Code.
(jj) Since the date as of which information is given in the
Prospectus through the date hereof, and except as may otherwise be disclosed or
contemplated in the Prospectus, neither Transaction Entity has (i) issued or
granted any securities, (ii) incurred any liability or obligation, direct or
contingent, other than liabilities and obligations which were incurred in the
ordinary course of business, (iii) entered into any transaction not in the
ordinary course of business or (iv) declared or paid any dividend on its capital
shares (other than regular quarterly dividends).
(kk) 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.
(ll) Neither Transaction Entity nor any of their subsidiaries (i) is
in violation of its charter, by-laws, certificate of limited partnership,
agreement of limited partnership, certificate of formation, limited liability
company operating agreement or other similar organizational document, (ii) is in
default in any material respect, and no event has occurred which, with notice or
lapse of time or both, would constitute such a default, in the due performance
or observance of any term, covenant or
11
condition contained in any material indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument to which it is a party or by which it
is bound or to which any of the Properties or any of its other properties or
assets is subject or (iii) is in violation in any material respect of any law,
ordinance, governmental rule, regulation or court decree to which it or the
Properties or any of its other properties or assets may be subject or has failed
to obtain any material license, permit, certificate, franchise or other
governmental authorization or permit necessary to the ownership of the
Properties or any of its other properties or assets or to the conduct of its
business.
(mm) Neither Transaction Entity, nor any trustee, officer, agent,
employee or other person associated with or acting on behalf of either
Transaction Entity, has used any corporate funds for any unlawful contribution,
gift, entertainment or other unlawful expense relating to political activity;
made any direct or indirect unlawful payment to any foreign or domestic
government official or employee from corporate funds; violated or is in
violation of any provision of the Foreign Corrupt Practices Act of 1977, as
amended; or made any bribe, rebate, payoff, influence payment, kickback or other
unlawful payment.
(nn) Neither Transaction Entity nor any of their subsidiaries is,
and after giving effect to the offering and sale of the Securities neither
Transaction Entity nor any of their subsidiaries will be, an "investment
company" within the meaning of such term under the Investment Company Act of
1940, as amended, and the rules and regulations of the Commission thereunder.
(oo) Other than this Agreement and as set forth in the Prospectus
under the heading "Underwriting," there are no contracts, agreements or
understandings between either Transaction Entity and any person that would give
rise to a valid claim against either Transaction Entity or any Underwriter for a
brokerage commission, finder's fee or other like payment with respect to issue
and sale of the Securities and the consummation of the transactions contemplated
by this Agreement.
(pp) Each Transaction Entity and their subsidiaries has complied
with all applicable provisions of Florida Statutes Section 517.075, relating to
issuers doing business with Cuba.
2. Purchase of the Securities by the Underwriters. On the basis of the
representations and warranties contained in, and subject to the terms and
conditions of, this Agreement, the Operating Partnership agrees to issue and
sell to each of the Underwriters, and each of the Underwriters agrees, severally
and not jointly, to purchase from the Operating Partnership, at a purchase price
of 98.971% of the principal amount thereof, plus accrued interest, if any, from
August 10, 2004 to the Time of Delivery hereunder, the principal amount of
Securities set forth opposite the name of such Underwriter in Schedule I hereto.
3. Offering of the Securities by the Underwriters. Upon the authorization
by you of the release of the Securities, the several Underwriters propose to
offer the Securities for sale upon the terms and conditions set forth in the
Prospectus.
4. Closing. (a) The Securities to be purchased by each Underwriter
hereunder will be represented by one or more definitive global Securities in
book-entry form which will be deposited by or on behalf of the Company with The
Depository Trust Company ("DTC") or its designated custodian. The Company will
deliver the Securities to Goldman, Sachs & Co., for the account of each
Underwriter, against payment by or on behalf of such Underwriter of the purchase
price therefor by
12
wire transfer of Federal (same-day) funds to the account specified by the
Company to Goldman, Sachs & Co. at least forty-eight hours in advance, by
causing DTC to credit the Securities to the account of Goldman, Sachs & Co. at
DTC. The Company will cause the certificates representing the Securities to be
made available to Goldman, Sachs & Co. for checking at least twenty-four hours
prior to the Time of Delivery (as defined below) at the office of DTC or its
designated custodian (the "Designated Office"). The time and date of such
delivery and payment shall be 9:30 a.m., New York City time, on August 10, 2004
or such other time and date as Goldman, Sachs & Co. and the Company may agree
upon in writing. Such time and date are herein called the "Time of Delivery".
(b) The documents to be delivered at the Time of Delivery by or on
behalf of the parties hereto pursuant to Section 7 hereof, including the
cross-receipt for the Securities and any additional documents requested by the
Underwriters pursuant to Section 7(p) hereof, will be delivered at the offices
of Hogan & Hartson L.L.P., 555 13th Street, N.W., Washington, DC 20004 (the
"Closing Location"), and the Securities will be delivered at the Designated
Office, all at the Time of Delivery.
5. Further Agreements of the Transaction Entities. Each of the Transaction
Entities jointly and severally agrees with each of the Underwriters:
(a) To prepare the Prospectus in a form approved by the Underwriters
and to file such Prospectus pursuant to Rule 424(b) under the Act not later than
the Commission's close of business on the second business day following the
execution and delivery of this Agreement, or, if applicable, such earlier time
as may be required by Rule 430A(a)(3) under the Act; to make no further
amendment or any supplement to the Registration Statement or Prospectus prior to
the Time of Delivery (except in accordance with Section 5(e) hereof) which shall
be disapproved by the Underwriters promptly after reasonable notice thereof; to
advise the Underwriters, promptly after it receives notice thereof, of the time
when any amendment to the Registration Statement has been filed or becomes
effective or any supplement to the Prospectus or any amended Prospectus has been
filed and to furnish the Underwriters with copies thereof; to file promptly all
reports and any definitive proxy or information statements required to be filed
by the Company with the Commission pursuant to Section 13(a), 13(c), 14 or 15(d)
of the Exchange Act subsequent to the date of the Prospectus and for so long as
the delivery of a prospectus is required in connection with the offering or sale
of the Securities; to advise the Underwriters, promptly after it receives notice
thereof, of the issuance by the Commission of any stop order or of any order
preventing or suspending the use of any Preliminary Prospectus or prospectus, of
the suspension of the qualification of the Securities for offering or sale in
any jurisdiction, of the initiation or threatening of any proceeding for any
such purpose, or of any request by the Commission for the amending or
supplementing of the Registration Statement or Prospectus or for additional
information; and, in the event of the issuance of any stop order or of any order
preventing or suspending the use of any Preliminary Prospectus or prospectus or
suspending any such qualification, to promptly use its best efforts to obtain
the withdrawal of such order;
(b) To furnish promptly to the Underwriters and to counsel for the
Underwriters such number of conformed copies as the Underwriters shall
reasonably request of the Registration Statement as originally filed with the
Commission, and each amendment thereto filed with the Commission, including all
consents and exhibits filed therewith or incorporated by reference therein and
all documents incorporated by reference therein;
13
(c) Prior to 5:00 P.M., New York City time, on the New York Business
Day (as defined below) next succeeding the date of this Agreement and from time
to time, to furnish the Underwriters with such number of written and electronic
copies of the following documents as the Underwriters shall reasonably request:
(i) conformed copies of the Registration Statement as originally filed with the
Commission and each amendment thereto (in each case excluding exhibits other
than this Agreement) and (ii) each Preliminary Prospectus, the Prospectus and
any amended or supplemented Prospectus; and, if the delivery of a prospectus is
required at any time after the applicable Effective Time in connection with the
offering or sale of the Securities and if at such time any event shall have
occurred as a result of which the Prospectus as then amended or supplemented
would include an untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made when such Prospectus is delivered,
not misleading, or, if for any other reason it shall be necessary to amend or
supplement the Prospectus or to file under the Exchange Act any document
incorporated by reference in the Prospectus in order to comply with the
Securities Act, the Exchange Act or the Trust Indenture Act, to notify the
Underwriters and, upon their request, to file such document and to prepare and
furnish without charge to each Underwriter and to any dealer in securities as
many written and electronic copies as the Underwriters may from time to time
reasonably request of an amended or supplemented Prospectus which will correct
such statement or omission or effect such compliance. The aforementioned
documents furnished to the Underwriters will be identical to the electronically
transmitted copies thereof filed with the Commission pursuant to EDGAR, except
to the extent permitted by Regulation S-T. As used in this Agreement, "New York
Business Day" shall mean each Monday, Tuesday, Wednesday, Thursday and Friday
which is not a day on which banking institutions in New York are generally
authorized or obligated by law or executive order to close;
(d) To file promptly with the Commission any amendment to the
Registration Statement or the Prospectus or any supplement to the Prospectus
that may, in the judgment of the Company or counsel for the Underwriters, be
required by the Securities Act or requested by the Commission;
(e) Prior to filing with the Commission any amendment to the
Registration Statement or supplement to the Prospectus or any Prospectus
pursuant to Rule 424 of the Rules and Regulations, to furnish a copy thereof to
the Underwriters and counsel for the Underwriters within a reasonable period of
time prior to the filing thereof, and that filing thereof shall not occur if the
Underwriters shall have objected in good faith thereto;
(f) The Operating Partnership will make generally available to its
security holders as soon as practicable but no later than 60 days after the
close of the period covered thereby an earnings statement (in form complying
with the provisions of Section 11(a) of the Securities Act and Rule 158 of the
Rules and Regulations), which need not be certified by independent certified
public accountants unless required by the Securities Act or the Rules and
Regulations, covering a twelve-month period commencing after the "effective
date" (as defined in said Rule 158) of the Registration Statement;
(g) The Company and the Operating Partnership will file any reports
required to be furnished to the Commission pursuant to the Exchange Act or any
rule or regulation of the Commission thereunder on EDGAR to the extent required
to be filed via EDGAR;
14
(h) Promptly from time to time to take such action as the
Underwriters may reasonably request to qualify the Securities for offering and
sale under the securities or real estate syndication laws of such jurisdictions
as the Underwriters may request and to comply with such laws so as to permit the
continuance of sales and dealings therein in such jurisdictions for as long as
may be necessary to complete the distribution of the Securities, except that the
Operating Partnership shall not be required in connection therewith to qualify
as a foreign entity or to file a general consent to service of process in any
jurisdiction;
(i) During the period beginning from the date hereof and continuing
to and including the later of the Time of Delivery and such earlier time as the
Underwriters may notify the Company, not to offer, sell, contract to sell,
pledge, grant any option to purchase, make any short sale or otherwise dispose
of, except as provided hereunder any securities of the Company that are
substantially similar to the Securities, without your prior written consent of
the Underwriters;
(j) To apply the net proceeds from the sale of the Securities
pursuant to this Agreement in accordance with the description set forth in the
Prospectus under the caption "Use of Proceeds";
(k) To take such steps as shall be necessary to ensure that none of
the Company, the Operating Partnership or any of their subsidiaries shall become
an "investment company" within the meaning of such term under the Investment
Company Act of 1940, as amended, and the rules and regulations of the Commission
thereunder;
(l) Except as stated in this Agreement and in the Preliminary
Prospectus, if any, and Prospectus, neither Transaction Entity has taken, nor
will take, directly or indirectly, any action designed to or that might
reasonably be expected to cause or result in stabilization or manipulation of
the price of the Securities to facilitate the sale or resale of the Securities;
(m) The Company will use its best efforts to continue to meet the
requirements to qualify as a "real estate investment trust" under the Code; and
(n) If this Agreement shall be terminated by the Underwriters
because of any failure or refusal on the part of the Transaction Entities to
comply with the terms or fulfill any of the conditions of this Agreement, the
Transaction Entities jointly and severally agree to reimburse the Underwriters
for all reasonable out-of-pocket expenses (including reasonable fees and
expenses of counsel for the Underwriters) incurred by the Underwriters in
connection herewith.
6. Expenses. The Transaction Entities jointly and severally agree to pay
(a) the costs incident to the authorization, issuance, sale and delivery of the
Securities and any taxes payable in connection therewith; (b) the costs incident
to the preparation, printing and filing under the Securities Act of the
Registration Statement and any amendments and exhibits thereto; (c) the costs of
distributing the Registration Statement as originally filed and each amendment
thereto and any post-effective amendments thereof (including, in each case,
exhibits), any Preliminary Prospectus, the Prospectus and any amendment or
supplement to the Prospectus, all as provided in this Agreement; (d) the costs
of producing and distributing this Agreement and any other related documents in
connection with the offering, purchase, sale and delivery of the Securities; (e)
the filing fees incident to securing any required review by the National
Association of Securities Dealers, Inc. of the terms of sale of the Securities;
(f) any applicable listing or other fees; (g) the fees and expenses of
qualifying
15
the Securities under the securities laws of the several jurisdictions as
provided in Section 5(h) and of preparing, printing and distributing a Blue Sky
Memorandum (including related fees and expenses of counsel to the Underwriters);
(h) any fees charged by securities rating services or agencies in connection
with the rating of the Securities; and (i) all other costs and expenses incident
to the performance of the obligations of the Transaction Entities under this
Agreement; provided that, except as provided in this Section 6 and in Section
10, the Underwriters shall pay their own costs and expenses, including the costs
and expenses of their counsel, any transfer taxes on the Securities which they
may sell and the expenses of advertising any offering of the Securities made by
the Underwriters.
7. Conditions of the Underwriters' Obligations. The respective obligations
of the Underwriters hereunder, as to the Securities to be delivered at the Time
of Delivery, are subject to the accuracy, when made and at and as of the Time of
Delivery, of the representations and warranties of the Transaction Entities
contained herein, to the performance by each Transaction Entity of its
obligations hereunder, and to each of the following additional terms and
conditions:
(a) If the Company has elected to rely upon Rule 462(b) and, at the
time this Agreement is executed and delivered, it is necessary for the
Registration Statement or a post-effective amendment thereto to be declared
effective before the offering of the Securities may commence, the Registration
Statement or such post-effective amendment shall have become effective not later
than 10:00 P.M., Washington, D.C. time, on the date hereof, or at such later
date and time as shall be consented to in writing by you, and all filings, if
any, required to have been made by such time by Rules 424 and 430A under the
Rules and Regulations shall have been timely made; no stop order suspending the
effectiveness of the Registration Statement or any part thereof shall have been
issued and no proceeding for that purpose shall have been instituted or, to the
knowledge of the Transaction Entities or any Underwriter, threatened by the
Commission, and any request of the Commission for additional information (to be
included in the Registration Statement or the Prospectus or otherwise) shall
have been complied with to your satisfaction.
(b) Subsequent to the effective date of this Agreement, there shall
not have occurred (i) any change, or any development involving a prospective
change, in or affecting the condition, financial or otherwise, business,
properties, net worth, or results of operations of either Transaction Entity or
any of their subsidiaries or any Property not contemplated by the Prospectus
which, in your reasonable opinion, would materially adversely affect the market
for the Securities, or (ii) any event or development relating to or involving
either Transaction Entity, or any partner, officer, director or trustee of
either Transaction Entity, which makes any statement of a material fact made in
the Prospectus untrue or which, in the reasonable opinion of the Company and its
counsel or you and your 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 Securities.
(c) All trust and partnership proceedings and other legal matters
incident to the authorization, form and validity of this Agreement, the
Indenture, the Securities, the Registration Statement and the Prospectus, and
all other legal matters relating to this Agreement, the Indenture, the
Securities, the Registration Statement and the Prospectus and the transactions
contemplated hereby and thereby shall be reasonably satisfactory in all material
respects to counsel for the
16
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 such Time of Delivery, in form and
substance reasonably satisfactory to the Underwriters, to the effect that:
(i) The Company is duly qualified to do business as a foreign
entity in Florida, Kansas, Michigan, New Jersey, Pennsylvania, South Carolina
and Virginia.
(ii) The Operating Partnership is validly existing and in good
standing as a limited partnership under the laws of the Commonwealth of
Pennsylvania, is duly qualified to do business as a foreign limited partnership
in Florida, Kansas, Maryland, Michigan, Minnesota, New Jersey, North Carolina,
South Carolina, Texas, Virginia and Wisconsin, and has the requisite partnership
power and authority necessary to own or hold its properties and to conduct the
business in which it is engaged as described in the Registration Statement and
the Prospectus, and to enter into and perform its obligations under this
Agreement. The Company is the sole general partner of the Operating Partnership.
To the knowledge of such counsel, the Operating Partnership Agreement is in full
force and effect, and the aggregate percentage interests of the Company and the
limited partners in the Operating Partnership are as set forth in the
Prospectus. All of the partnership interests of the Operating Partnership have
been duly and validly authorized and issued, were issued in accordance with the
applicable terms of the Operating Partnership Agreement and the certificate of
limited partnership of the Operating Partnership and, to the knowledge of such
counsel, to the extent that such interests are owned by the Company, are owned
by the Company free and clear of any adverse claims as defined in Section 8-302
of the Uniform Commercial Code.
(iii) Development Corp. is validly existing and subsisting
under the laws of the Commonwealth of Pennsylvania, is duly qualified to do
business and is in good standing as a foreign corporation in Florida, Maryland,
Michigan, Minnesota, New Jersey, North Carolina, Virginia and Wisconsin, and has
the requisite corporate power and authority necessary to own or hold its
properties and to conduct the business in which it is engaged as described in
the Registration Statement and the Prospectus.
(iv) Development-II is validly existing and subsisting under
the laws of the Commonwealth of Pennsylvania, is duly qualified to do business
and is in good standing as a foreign corporation in Florida and Texas, and has
the requisite corporate power and authority necessary to own or hold its
properties and to conduct the business in which it is engaged as described in
the Registration Statement and the Prospectus.
(v) SP Trust is validly existing as a business trust and
subsisting under the laws of the Commonwealth of Pennsylvania and has the
requisite trust power and authority necessary to own or hold its properties and
to conduct the business in which it is engaged as described in the Registration
Statement and the Prospectus.
(vi) This Agreement has been duly and validly authorized,
executed and delivered by each of the Operating Partnership and the Company.
17
(vii) Each of the Indenture and the Supplemental Indenture has
been duly authorized, executed and delivered by the Operating Partnership and
(assuming due execution and delivery by the Trustee) constitutes a valid and
binding agreement on the part of the Operating Partnership, enforceable against
the Operating Partnership in accordance with its terms; each of the Indenture
and the Supplemental Indenture conforms in all material respects to the
descriptions thereof contained in the Prospectus.
(viii) The Indenture has been duly qualified under the Trust
Indenture Act.
(ix) The Securities have been duly authorized, executed,
issued and delivered by the Operating Partnership and, when executed, issued and
authenticated in the manner provided for in the Indenture and delivered against
payment therefore in accordance with the terms of this Agreement, will be
entitled to the benefits of the Indenture, and will constitute valid and binding
obligations of the Operating Partnership, enforceable against the Operating
Partnership in accordance with their terms. The terms of the Securities conform
in all material respects to the description thereof in the Prospectus.
(x) The execution, delivery and performance of this Agreement
by each of the Transaction Entities, the issue and sale of the Securities being
delivered at such Time of Delivery by the Operating Partnership and the
consummation of the transactions contemplated hereby will not (i) conflict with
or result in a breach or violation of any of the terms or provisions of, or
constitute a default under, any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument that is filed as an exhibit to the
Registration Statement or to any exhibit contained in any document incorporated
by reference in the Prospectus and as to which either of the Transaction
Entities or any of their subsidiaries is a party or by which either of the
Transaction Entities or any of their subsidiaries is bound or by which any of
the Properties or other assets of either of the Transaction Entities or any of
their subsidiaries is subject, or (ii) to the knowledge of such counsel,
conflict with or result in any violation of the provisions of any statute or any
order, rule or regulation of any court or governmental agency or body having
jurisdiction over either of the Transaction Entities or any of their
subsidiaries or any of their properties or other assets, except with respect to
clause (ii), where such conflict, breach or violation would not have a material
adverse effect on the Transaction Entities and their subsidiaries taken as a
whole; and, to the knowledge of such counsel, except for the registration of the
Securities under the Securities Act and the qualification of the Indenture under
the Trust Indenture Act and such consents, approvals, authorizations,
registrations or qualifications as may have been obtained under the Exchange Act
or may be required under applicable state securities laws in connection with the
purchase and distribution of the Securities by the Underwriters, no consent,
approval, authorization or order of, or filing or registration with, any such
court or governmental agency or body is required for the execution, delivery and
performance of this Agreement, the Indenture or the Supplemental Indenture by
the Transaction Entities, the consummation of the transactions contemplated
hereby and thereby, and the issuance, sale and delivery of the Securities to the
Underwriters.
(xi) The execution, delivery and performance of this Agreement
by each of the Transaction Entities, the issue and sale of the Securities being
delivered at such Time of Delivery by the Operating Partnership and the
consummation of the transactions contemplated hereby will not conflict with or
result in any violation of the provisions of the charter, by-laws, certificate
of limited partnership, agreement of limited partnership, certificate of
formation or limited liability company operating agreement of either of the
Transaction Entities or any of their subsidiaries.
18
(xii) Except as set forth in the Prospectus, there are no
statutory or, to the knowledge of such counsel, contractual or other preemptive
or other rights to subscribe for or to purchase, nor any restriction upon the
transfer of the Securities pursuant to the Operating Partnership's certificate
of limited partnership or its agreement of limited partnership, as amended to
the date hereof, or, to the knowledge of such counsel, any agreement or other
instrument to which the Operating Partnership is a party.
(xiii) To the knowledge of such counsel, there are no
contracts, agreements or understandings between the Company and/or the Operating
Partnership, on the one hand, and any person, on the other hand, granting such
person the right (A) to require the Company or the Operating Partnership to file
a registration statement under the Securities Act with respect to any securities
of the Company or the Operating Partnership owned or to be owned by such person
or (B) to require the Company or the Operating Partnership to include such
securities in the securities registered pursuant to the Registration Statement,
other than, in the case of clause (A) above, (i) as set forth in the Prospectus,
(ii) rights of certain persons who have contributed Properties to the
Partnership in exchange for Units, (iii) rights of holders of securities that
already have been registered under the Securities Act, and (iv) rights of
persons who may acquire preferred shares of the Company in exchange for
preferred units of partnership interest in the Operating Partnership.
(xiv) To the knowledge of such counsel, there are no legal or
governmental proceedings pending to which either Transaction Entity or any of
their subsidiaries is a party or by which any property or assets of either
Transaction Entity or any of their subsidiaries is subject, that are required to
be described in the Prospectus which have not been described as required. To the
knowledge of such counsel, no such proceedings are threatened by governmental
authorities or others.
(xv) To the knowledge of such counsel, there are no contracts
or other documents which are required to be described in the Prospectus or filed
as exhibits to the Registration Statement by the Securities Act or by the Rules
and Regulations which have not been described in the Prospectus or filed as
exhibits to the Registration Statement or incorporated therein by reference as
permitted by the Rules and Regulations.
(xvi) Neither Transaction Entity nor any of their subsidiaries
is an "investment company" within the meaning of such term under the Investment
Company Act of 1940, as amended, and the rules and regulations of the Commission
thereunder.
(xvii) The documents incorporated or deemed to be incorporated
by reference in the Prospectus pursuant to Item 12 of Form S-3 under the
Securities Act (other than the financial statements and related schedules and
financial information and data included therein, as to which no opinion need be
rendered), at the time they were filed with the Commission, complied and will
comply as to form in all material respects with the requirements of the Exchange
Act and the rules and regulations thereunder.
(xviii) Based solely upon the oral advice of a member of the
staff of the Securities and Exchange Commission and, to the knowledge of such
counsel, no stop order suspending the effectiveness of the Registration
Statement has been issued and, to the knowledge of such counsel, no proceeding
for that purpose is pending or threatened by the Commission. The
19
Registration Statement was declared effective under the Securities Act as of the
date and time specified in such opinion.
(xix) The Prospectus was filed with the Commission pursuant to
the subparagraph of Rule 424(b) of the Rules and Regulations specified in such
opinion on the date specified therein.
(xx) The Registration Statement and the Prospectus and any
further amendments or supplements thereto made by the Company prior to such Time
of Delivery (other than the financial statements and related schedules and other
financial information and data included therein, as to which no opinion need be
rendered) comply as to form in all material respects with the requirements of
the Securities Act, and the Trust Indenture Act and the Indenture conforms in
all material respects to the requirements of the Trust Indenture Act.
(xxi) The statements contained in the Prospectus under the
captions "Risk Factors," "Description of Debt Securities," and "Description of
Notes," insofar as those statements are descriptions of contracts, agreements or
other legal documents, or describe federal statutes, rules and regulations, and
except to the extent such statements are statistics or calculations constitute a
fair summary thereof.
In rendering such opinion, such counsel may (i) state that its opinion is
limited to matters governed by the federal laws of the United States of America,
the laws of the Commonwealth of Pennsylvania and the laws of the State of
Maryland; and (ii) as to matters of Maryland law, state that its opinion is
given solely in reliance upon the opinion of Saul Ewing LLP; and (iii) in giving
the opinions referred to in subclauses (vii) and (ix), state that such opinion
with respect to the enforceability of such documents may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
creditors' rights generally and by equitable principles of general
applicability. Such counsel shall also have furnished to the Underwriters a
written statement, addressed to the Underwriters and dated such Time of
Delivery, in form and substance satisfactory to the Underwriters, to the effect
that (x) such counsel has acted as counsel to the Company in connection with the
preparation of the Prospectus and has reviewed the Registration Statement, and
(y) based on the foregoing, no facts have come to the attention of such counsel
which lead it to believe that the Registration Statement, as of the Effective
Time, contained any untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary in order to make the
statements therein not misleading, or that the Prospectus, as of its date or as
of such Time of Delivery, contained or contains any untrue statement of a
material fact or omitted or omits to state a material fact required to be stated
therein or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. The foregoing opinion
and statement may be qualified by a statement to the effect that such counsel
does not assume any responsibility for the accuracy, completeness or fairness of
the statements contained in the Registration Statement or the Prospectus, and
may state that such counsel expresses no belief with respect to the financial
statements and related schedules and other financial information and data
included or incorporated by reference in, or omitted from, the Registration
Statement or the Prospectus, or the Statement of Eligibility on Form T-1 of the
Trustee.
(B) Saul Ewing LLP shall have furnished to the Underwriters its
written opinion, as Maryland counsel to the Company, addressed to the
Underwriters and dated such Time of Delivery, in
20
form and substance reasonably satisfactory to the Underwriters, to the effect
that:
(i) The Company has been duly formed and is validly existing
as a real estate investment trust in good standing under and by virtue of the
laws of the State of Maryland, and has all trust power and authority necessary
to own or hold its properties, to conduct the business in which it is engaged as
described in the Registration Statement and the Prospectus, and to enter into
and perform its obligations under this Agreement.
(ii) The Company has an authorized capitalization as set forth
in the Prospectus.
(iii) This Agreement has been duly and validly authorized,
executed and delivered by the Company.
(iv) To the knowledge of such counsel, the execution, delivery
and performance of this Agreement by the Company and the consummation of the
transactions contemplated hereby will not conflict with or result in any
violation of the provisions of any statute or any order, rule or regulation of
any court or governmental agency or body of the State of Maryland that has
jurisdiction over the Company or any of its properties or assets.
(v) The execution, delivery and performance of this Agreement
by the Company and the consummation of the transactions contemplated hereby will
not conflict with or result in any violation of the provisions of the
Declaration of Trust or by-laws of the Company.
(vi) To the knowledge of such counsel, there are no
legal or governmental proceedings pending to which the Company is a party or of
which any property or assets of the Company is the subject which are not
disclosed in the Prospectus and which, if determined adversely to the Company,
might reasonably be expected to have a material adverse effect on the
consolidated financial position, shareholders' equity, results of operations,
business or prospects of the Company; and to the best knowledge of such counsel
no such proceedings are threatened or contemplated by governmental authorities
or threatened by others.
(e) (i) Wolf, Block, Schorr and Solis-Cohen LLP shall have furnished
to the Underwriters its written opinion, as counsel to the Company, addressed to
the Underwriters and dated such Time of Delivery, with respect to such tax
matters, including, without limitation, the qualification of the Company as a
real estate investment trust and the classification of the Operating Partnership
as a partnership (and not as a corporation) for federal income tax purposes, as
the Underwriters may reasonably require.
(ii) The statements contained in the Prospectus under the
caption "Federal Income Tax Considerations with Respect to the Trust and
Operating Partnership," and in the Prospectus Supplement under the caption
"Certain Federal Income Tax Considerations", insofar as those statements are
descriptions of contracts, agreements or other legal documents, or they describe
federal statutes, rules and regulations, and except to the extent such
statements are statistics or calculations, are correct in all material respects.
(f) The Underwriters shall have received from Hogan & Hartson
L.L.P., counsel for the Underwriters, such opinion or opinions, addressed to the
Underwriters and dated such Time
21
of Delivery, with respect to the issuance and sale of the Securities being
delivered at such Time of Delivery by the Operating Partnership, the
Registration Statement, the Prospectus and other related matters as the
Underwriters may reasonably require, and the Company shall have furnished to
such counsel such documents as they reasonably request for the purpose of
enabling them to pass upon such matters.
(g) At the time of execution of this Agreement, the Underwriters
shall have received from Ernst & Young LLP a letter, in form and substance
satisfactory to the Underwriters, to the effect set forth in Annex A hereto,
addressed to the Underwriters and dated the date hereof.
(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 Underwriters shall have
received from Ernst & Young LLP, on the effective date of any post-effective
amendment to the Registration Statement filed subsequent to the date of this
Agreement and also at the Time of Delivery, a letter (the "bring-down letter"),
in form and substance satisfactory to the Underwriters, addressed to the
Underwriters and dated the effective date of such post-effective amendment or
the date of such Time of Delivery, as applicable, (i) confirming that they are
independent public accountants within the meaning of the Securities Act and are
in compliance with the applicable requirements relating to the qualification of
accountants under Rule 2-01 of Regulation S-X of the Commission, (ii) stating,
as of the date of the bring-down letter (or, with respect to matters involving
changes or developments since the respective dates as of which specified
financial information is given in the Prospectus, as of a date not more than
five days prior to the date of such bring-down letter), the conclusions and
findings of such firm with respect to the financial information and other
matters covered by the initial letter and (iii) confirming in all material
respects the conclusions and findings set forth in the initial letter.
(i) The Transaction Entities shall have furnished to the
Underwriters at the Time of Delivery a certificate, addressed to the
Underwriters and dated the Time of Delivery, of the Chairman of the Board, Chief
Executive Officer, President or a Vice President of the Company and the chief
financial officer of the Company (in each case, for the Company and for the
Company as general partner of the Operating Partnership) stating that:
(i) The representations and warranties of the Transaction
Entities in Section 1 are true and correct as of the Time of Delivery; the
Transaction Entities complied with all of their covenants and agreements
contained herein; and the conditions set forth in Sections 7(a), 7(i) and 7(j)
have been fulfilled; and
(ii) They have carefully examined the Registration Statement
and the Prospectus and, in their opinion (A) as of the Effective Date, the
Registration Statement and Prospectus did not include any untrue statement of a
material fact and did not omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading (with respect
to the Prospectus, in light of the circumstances in which they were made), and
(B) since the Effective Date no event has occurred which should have been set
forth in a supplement or amendment to the Registration Statement or the
Prospectus.
(j) (i) None of the Transaction Entities or any of their
subsidiaries or any Property shall have sustained since the date of the latest
audited financial statements included or incorporated by reference in the
Prospectus any loss or interference with its business from fire,
22
explosion, flood or other calamity, whether or not covered by insurance, or from
any labor dispute or court or governmental action, order or decree, otherwise
than as set forth or contemplated in the Prospectus or (ii) since such date
there shall not have been any change in the capital shares or long-term debt of
either Transaction Entity or any change, or any development involving a
prospective change, in or affecting any Property Affiliate or Property or the
general affairs, management, financial position, shareholders' equity or results
of operations of either Transaction Entity, otherwise than as set forth or
contemplated in the Prospectus, the effect of which, in any such case described
in clause (i) or (ii), is, in your judgment so material and adverse as to make
it impracticable or inadvisable to proceed with the public offering or the
delivery of the Securities being delivered at such Time of Delivery on the terms
and in the manner contemplated in the Prospectus.
(k) Subsequent to the execution and delivery of this Agreement there
shall not have occurred any of the following: (i) trading in securities
generally on the New York Stock Exchange or the American Stock Exchange or in
the over-the-counter market, or trading in any securities of the Company on any
exchange or in the over-the-counter market, shall have been suspended or minimum
prices shall have been established on any such exchange or such market by the
Commission, by such exchange or by any other regulatory body or governmental
authority having jurisdiction, (ii) a banking moratorium shall have been
declared by Federal or New York State authorities or there shall have occurred a
material disruption in commercial banking or securities settlement or clearance
services in the United States, (iii) the United States shall have become engaged
in hostilities, there shall have been an escalation in hostilities involving the
United States or there shall have been a declaration of a national emergency or
war by the United States or (iv) there shall have occurred any other calamity or
crisis in the United States or elsewhere resulting in a material disruption in
the financial markets in the United States or there shall have occurred such a
material adverse change in general economic, political or financial conditions
(or the effect of international conditions on the financial markets in the
United States shall be such) as to make it, in your judgment, impracticable or
inadvisable to proceed with the public offering or delivery of the Securities
being delivered at such Time of Delivery on the terms and in the manner
contemplated in the Prospectus.
(l) Subsequent to the execution and delivery of this Agreement (i)
no downgrading shall have occurred in the rating accorded the Company's or the
Operating Partnership's debt securities by any "nationally recognized
statistical rating organization," as that term is defined by the Commission for
purposes of Rule 436(g)(2) of the Rules and Regulations and (ii) no such
organization shall have publicly announced that it has under surveillance or
review, with possible negative implications, its rating of any of the Company's
or the Operating Partnership's debt securities.
(m) The Company shall have complied with the provisions of Section
5(c) hereof with respect to the furnishing of prospectuses on the New York
Business Day next succeeding the date of this Agreement.
(n) The Transaction Entities shall not have failed at or prior to
the Time of Delivery to have performed or complied with any of their agreements
herein contained and required to be performed or complied with by them hereunder
at or prior to the Time of Delivery.
(o) At the Time of Delivery, counsel for the Underwriters shall have
been furnished with such documents and opinions as they may require for the
purpose of enabling them to
23
pass upon the issuance and sale of the Securities as herein contemplated and
related proceedings, or in order to evidence the accuracy of any of the
representations or warranties, or the fulfillment of any of the conditions,
herein contained; and all proceedings taken by the Transaction Entities in
connection with the issuance and sale of the Securities being delivered at such
Time of Delivery as herein contemplated shall be satisfactory in form and
substance to you and your counsel.
(p) The Transaction Entities shall have furnished or caused to be
furnished to the Underwriters such further certificates and documents as the
Underwriters shall have reasonably requested.
All opinions, letters, evidence and certificates mentioned above or
elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if they are in form and substance reasonably satisfactory
to counsel for the Underwriters.
Any certificate or document signed by any officer of the Transaction
Entities and delivered to the Underwriters, or to counsel for the Underwriters,
shall be deemed a representation and warranty by the Transaction Entities to
each Underwriter as to the statements made therein.
8. Indemnification and Contribution. (a) The Transaction Entities jointly
and severally shall indemnify and hold harmless each Underwriter, its officers
and employees and each person, if any, who controls any Underwriter within the
meaning of the Securities Act, from and against any loss, claim, damage or
liability, joint or several, or any action in respect thereof (including, but
not limited to, any loss, claim, damage, liability or action relating to
purchases and sales of Securities), to which such Underwriter or each such
officer, employee or controlling person may become subject, under the Securities
Act or otherwise, insofar as such loss, claim, damage, liability or action
arises out of, or is based upon, (i) any untrue statement or alleged untrue
statement of a material fact contained in any Preliminary Prospectus, the
Registration Statement or the Prospectus or in any amendment or supplement
thereto, (ii) the omission or alleged omission to state in any Preliminary
Prospectus, the Registration Statement or the Prospectus, or in any amendment or
supplement thereto, any material fact required to be stated therein or necessary
to make the statements therein not misleading (with respect to the Prospectus,
in light of the circumstances under which they were made), or (iii) any act or
failure to act or any alleged act or failure to act by any Underwriter in
connection with, or relating in any manner to, the Securities or the offering
contemplated hereby, and which is included as part of or referred to in any
loss, claim, damage, liability or action arising out of or based upon matters
covered by clause (i) or (ii) above (provided that the Company shall not be
liable under this clause (iii) to the extent that it is determined in a final
judgment by a court of competent jurisdiction that such loss, claim, damage,
liability or action resulted directly from any such acts or failures to act
undertaken or omitted to be taken by such Underwriter through its gross
negligence or willful misconduct), and shall reimburse each Underwriter and each
such officer, employee or controlling person for any legal or other expenses
reasonably incurred by such Underwriter or such officer, employee or controlling
person in connection with investigating or defending or preparing to defend
against any such loss, claim, damage, liability or action as such expenses are
incurred; provided, however, that the Transaction Entities shall not be liable
in any such case to the extent that any such loss, claim, damage, liability or
action arises out of, or is based upon, any untrue statement or alleged untrue
statement or omission or alleged omission made in any Preliminary Prospectus,
the Registration Statement or the Prospectus, or in any such amendment or
supplement, in reliance upon and in conformity with written information
concerning
24
such Underwriter furnished to the Transaction Entities by or on behalf of any
Underwriter specifically for inclusion therein. The foregoing indemnity
agreement is in addition to any liability which the Transaction Entities may
otherwise have to any Underwriter or to any officer, employee or controlling
person of that Underwriter.
(b) Each Underwriter, severally and not jointly, shall indemnify and
hold harmless each Transaction Entity, its officers and employees, each of its
trustees, and each person, if any, who controls each Transaction Entity within
the meaning of the Securities Act, from and against any loss, claim, damage or
liability, joint or several, or any action in respect thereof, to which each
Transaction Entity or any such trustee, officer or controlling person may become
subject, under the Securities Act or otherwise, insofar as such loss, claim,
damage, liability or action arises out of, or is based upon, (i) any untrue
statement or alleged untrue statement of a material fact contained in any
Preliminary Prospectus, the Registration Statement or the Prospectus or in any
amendment or supplement thereto, or (ii) the omission or alleged omission to
state in any Preliminary Prospectus, the Registration Statement or the
Prospectus, or in any amendment or supplement thereto any material fact required
to be stated therein or necessary to make the statements therein not misleading,
but in each case only to the extent that the untrue statement or alleged untrue
statement or omission or alleged omission was made in reliance upon and in
conformity with written information concerning such Underwriter furnished to the
Transaction Entities by or on behalf of that Underwriter specifically for
inclusion therein, and shall reimburse each Transaction Entity and any such
trustee, officer or controlling person for any legal or other expenses
reasonably incurred by each Transaction Entity or any such trustee, officer or
controlling person in connection with investigating or defending or preparing to
defend against any such loss, claim, damage, liability or action as such
expenses are incurred. The foregoing indemnity agreement is in addition to any
liability which any Underwriter may otherwise have to each Transaction Entity or
any such trustee, officer, employee or controlling person.
(c) Promptly after receipt by an indemnified party under subsection
(a) or (b) of this Section 8 of notice of any claim or the commencement of any
action, the indemnified party shall, if a claim in respect thereof is to be made
against the indemnifying party under such subsection, notify the indemnifying
party in writing of the claim or the commencement of that action; provided,
however, that the failure to notify the indemnifying party shall not relieve it
from any liability which it may have under this Section 8 except to the extent
it has been materially prejudiced by such failure and, provided further, that
the failure to notify the indemnifying party shall not relieve it from any
liability which it may have to an indemnified party otherwise than under
subsection (a) or (b) of this Section 8. If any such claim or action shall be
brought against an indemnified party, and it shall notify the indemnifying party
thereof, the indemnifying party shall be entitled to participate therein and, to
the extent that it wishes, jointly with any other similarly notified
indemnifying party, to assume the defense thereof with counsel reasonably
satisfactory to the indemnified party. After notice from the indemnifying party
to the indemnified party of its election to assume the defense of such claim or
action, the indemnifying party shall not be liable to the indemnified party
under such subsection for any legal or other expenses subsequently incurred by
the indemnified party in connection with the defense thereof other than
reasonable costs of investigation; provided, however, that the indemnified party
shall have the right to employ no more than one firm of its own counsel (in
addition to local counsel), with such counsel, in the case of the Underwriters,
to represent jointly the Underwriters and their respective officers, employees
and controlling persons who may be subject to liability arising out of any claim
in respect of which indemnity may be sought by the Underwriters against the
Transaction Entities under this Section 8 if, in the reasonable judgment of the
Underwriters, it is
25
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 8 shall for
any reason be unavailable to or insufficient to hold harmless an indemnified
party under Section 8(a) or 10(b) in respect of any loss, claim, damage or
liability, or any action in respect thereof, referred to therein, then each
indemnifying party shall, in lieu of indemnifying such indemnified party,
contribute to the amount paid or payable by such indemnified party as a result
of such loss, claim, damage or liability, or action in respect thereof, (i) in
such proportion as shall be appropriate to reflect the relative benefits
received by the Transaction Entities on the one hand and the Underwriters on the
other from the offering of the Securities or (ii) if the allocation provided by
clause (i) above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of the Transaction Entities, on the one hand,
and the Underwriters, on the other hand, with respect to the statements or
omissions which resulted in such loss, claim, damage or liability, or action in
respect thereof, as well as any other relevant equitable considerations. The
relative benefits received by the Transaction Entities, on the one hand, and the
Underwriters, on the other hand, with respect to such offering shall be deemed
to be in the same proportion as the total net proceeds from the offering of the
Securities purchased under this Agreement (before deducting expenses) received
by the Transaction Entities, on the one hand, and the total underwriting
discounts and commissions received by the Underwriters with respect to the
Securities purchased under this Agreement, on the other hand, bear to the total
gross proceeds from the offering of the Securities under this Agreement, in each
case as set forth in the table on the cover page of the Prospectus. The relative
fault shall be determined by reference to whether the untrue or alleged untrue
statement of a material fact or omission or alleged omission to state a material
fact relates to information supplied by the Transaction Entities or the
Underwriters, the intent of the parties and their relative knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Transaction Entities and the Underwriters agree that it would not be just
and equitable if contributions pursuant to this Section were to be determined by
pro rata allocation or by any other method of allocation which does not take
into account the equitable considerations referred to herein. The amount paid or
payable by an indemnified party as a result of the loss, claim, damage or
liability, or action in respect thereof, referred to above in this Section shall
be deemed to include, for purposes of this Section 8(d), any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 8(d), no Underwriter shall be required to contribute
any amount in excess of the amount by which the total price at which the
Securities underwritten by it and distributed to the public was offered to the
public exceeds the amount of any
26
damages which such Underwriter has otherwise paid or become liable to pay by
reason of any untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the meaning
of section 11(f) of the Securities Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation.
(e) The Underwriters severally confirm that the statements on pages
S-15 and S-16 of the prospectus supplement to the Prospectus dated August 5,
2004 in the third, fourth, fifth, sixth and seventh paragraphs of the
"Underwriting" section, are correct and each Transaction Entity acknowledges
that these statements constitute the only information concerning such
Underwriters furnished in writing to the Transaction Entities by or on behalf of
the Underwriters specifically for inclusion in the Registration Statement, the
Preliminary Prospectus, if any, and the Prospectus.
9. Termination. The obligations of the Underwriters hereunder may be
terminated by you by notice given to and received by the Company prior to
delivery of and payment for the Securities if, prior to that time, any of the
events described in Sections 7(i), 7(j), 7(k), 7(l), or 7(m), shall have
occurred or if the Underwriters shall decline to purchase the Securities for any
reason permitted under this Agreement.
10. Reimbursement of Underwriters' Expenses. If the Operating Partnership
shall fail to tender the Securities for delivery to the Underwriters by reason
of any failure, refusal or inability on the part of the Transaction Entities to
perform any agreement on their part to be performed, or because any other
condition of the Underwriters' obligations hereunder required to be fulfilled by
the Transaction Entities is not fulfilled, the Transaction Entities will
reimburse the Underwriters for all reasonable out-of-pocket expenses (including
reasonable fees and disbursements of counsel) incurred by the Underwriters in
connection with this Agreement and the proposed purchase of the Securities, and
upon demand the Transaction Entities shall pay the full amount thereof to the
Underwriters.
11. Notices, etc. All statements, requests, notices and agreements
hereunder shall be in writing, and:
(a) if to the Underwriters, shall be delivered or sent by mail,
telex or facsimile transmission to you as the representative at Goldman, Sachs &
Co., 85 Broad Street, New York, New York 10004, Attention: Registration
Department; and
(b) if to the Transaction Entities shall be delivered or sent by
mail, telex or facsimile transmission to the Company, at Liberty Property Trust,
65 Valley Stream Parkway, Malvern, PA 19355, Attention: General Counsel (Fax:
610-644-2175).
Any such statements, requests, notices or agreements shall take effect at the
time of receipt thereof.
12. Persons Entitled to Benefit of Agreement. This Agreement shall inure
to the benefit of and be binding upon the Underwriters, the Transaction Entities
and their respective successors. This Agreement and the terms and provisions
hereof are for the sole benefit of only those persons, except that (A) the
representations, warranties, indemnities and agreements of the Transaction
Entities contained in this Agreement shall also be deemed to be for the benefit
of the person or persons, if any, who control any Underwriter within the meaning
of section 15 of the Securities Act and (B) the
27
indemnity agreement of the Underwriters contained in Section 8(b) of this
Agreement shall be deemed to be for the benefit of trustees of the Company,
officers of the Company who have signed the Registration Statement and any
person controlling the Transaction Entities within the meaning of section 15 of
the Securities Act. Nothing in this Agreement is intended or shall be construed
to give any person, other than the persons referred to in this Section 12, any
legal or equitable right, remedy or claim under or in respect of this Agreement
or any provision contained herein.
13. Survival. The respective indemnities, representations, warranties and
agreements of the Transaction Entities and the Underwriters contained in this
Agreement, or made by or on behalf of the Transaction Entities or the
Underwriters pursuant to this Agreement, shall survive the delivery of and
payment for the Securities and shall remain in full force and effect, regardless
of any investigation made by or on behalf of any of them or any person
controlling any of them.
14. Time of the Essence. Time shall be of the essence of this Agreement.
15. Definition of the Terms "Business Day" and "Subsidiary". For purposes
of this Agreement, (a) "business day" means any day on which the New York Stock
Exchange, Inc. is open for trading and (b) "subsidiary" has the meaning set
forth in Rule 405 of the Rules and Regulations.
16. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
17. Counterparts. This Agreement may be executed in one or more
counterparts and, if executed in more than one counterpart, the executed
counterparts shall each be deemed to be an original but all such counterparts
shall together constitute one and the same instrument.
18. Headings. The headings herein are inserted for convenience of
reference only and are not intended to be part of, or to affect the meaning or
interpretation of, this Agreement.
19. Authorization to Disclose Tax Matters. The Underwriters and the
Transaction Entities (and each employee, representative, or other agent of such
party) are authorized, subject to applicable law, to disclose any and all
aspects of this potential transaction that are necessary to support any U.S.
federal income tax benefits expected to be claimed with respect to such
transaction, and all materials of any kind (including tax opinions and other tax
analyses) related to those benefits, without any limitation of any kind.
[SIGNATURES APPEAR ON NEXT PAGE]
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If the foregoing is in accordance with your understanding, please sign and
return to us four counterparts hereof (one for the Transaction Entities, one for
you, one for the Transaction Entities' counsel and one for your counsel), and
upon the acceptance hereof by you, on behalf of each of the Underwriters, this
letter and such acceptance hereof shall constitute a binding agreement between
each of the Underwriters and the Transaction Entities. It is understood that
your acceptance of this letter on behalf of each of the Underwriters is pursuant
to the authority set forth in a form of Agreement among Underwriters, the form
of which shall be submitted to the Company for examination upon request, but
without warranty on your part as to the authority of the signers thereof.
Very truly yours,
LIBERTY PROPERTY TRUST
By: /s/ William P. Hankowsky
--------------------------------------------
Name: William P. Hankowsky
Title: President and Chief Executive Officer
LIBERTY PROPERTY LIMITED PARTNERSHIP
By: Liberty Property Trust, its general partner
By: /s/ William P. Hankowsky
--------------------------------------------
Name: William P. Hankowsky
Title: President and Chief Executive Officer
Accepted:
/s/ Goldman, Sachs & Co.
- -----------------------------------
(Goldman, Sachs & Co.)
On behalf of each of the Underwriters
SCHEDULE I
PRINCIPAL
AMOUNT OF
SECURITIES
TO BE
UNDERWRITER PURCHASED
----------- ---------
Goldman, Sachs & Co ................................... $140,000,000
Citigroup Global Markets Inc .......................... $ 10,000,000
Credit Suisse First Boston LLC ........................ $ 10,000,000
J.P. Morgan Securities Inc ............................ $ 10,000,000
UBS Securities LLC .................................... $ 10,000,000
Banc of America Securities LLC ........................ $ 6,666,667
SunTrust Capital Markets, Inc ......................... $ 6,666,667
Wachovia Capital Markets, LLC ......................... $ 6,666,666
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Total ............................. $200,000,000
SCHEDULE II
Florida, Kansas, Maryland, Michigan, Pennsylvania, Minnesota, New Jersey, North
Carolina, South Carolina, Texas, Virginia and Wisconsin.
SCHEDULE III
Liberty Property Philadelphia Corp., a Pennsylvania corporation
Liberty Property Philadelphia Trust, a Pennsylvania trust
Liberty Property Philadelphia Corp-IV East, a Pennsylvania corporation
Liberty Property Philadelphia Corp-IV West, a Pennsylvania corporation
LP Malvern LLC, a Pennsylvania limited liability company
Liberty UK Development Corp., a Pennsylvania corporation
ANNEX A
COMFORT LETTER -- DESCRIPTION
Pursuant to Sections 7(g) and 7(h) of the Underwriting Agreement, the
accountants shall furnish letters to the Underwriters to the effect that:
(i) They are independent certified public accountants with respect
to Liberty Property Trust and Liberty Property Limited Partnership
(together the "Company") and its subsidiaries within the meaning of the
Securities Act and the applicable published rules and regulations
thereunder, and they are in compliance with the applicable requirements
relating to the qualification of accountants under Rule 2-01 of Regulation
S-X of the Commission;
(ii) In their opinion, the financial statements and any
supplementary financial information and schedules (and, if applicable,
financial forecasts and/or pro forma financial information) examined by
them and included or incorporated by reference in the Registration
Statement or the Prospectus comply as to form in all material respects
with the applicable accounting requirements of the Securities Act or the
Exchange Act, as applicable, and the related published rules and
regulations thereunder; and, if applicable, they have made a review in
accordance with standards established by the American Institute of
Certified Public Accountants of the consolidated interim financial
statements, selected financial data, pro forma financial information,
financial forecasts and/or condensed financial statements derived from
audited financial statements of the Company for the periods specified in
such letter, as indicated in their reports thereon, copies of which have
been furnished to Goldman, Sachs & Co., as representative of the
Underwriters, and are attached hereto;
(iii)They have made a review in accordance with standards
established by the American Institute of Certified Public Accountants of
the unaudited condensed consolidated statements of income, consolidated
balance sheets and consolidated statements of cash flows included in the
Prospectus and/or included in the Company's quarterly report on Form 10-Q
incorporated by reference into the Prospectus as indicated in their
reports thereon copies of which are attached hereto; and on the basis of
specified procedures including inquiries of officials of the Company who
have responsibility for financial and accounting matters regarding whether
the unaudited condensed consolidated financial statements referred to in
paragraph (vi)(A)(i) below comply as to form in the related in all
material respects with the applicable accounting requirements of the
Securities Act and the Exchange Act and the related published rules and
regulations, nothing came to their attention that caused them to believe
that the unaudited condensed consolidated financial statements do not
comply as to form in all material respects with the applicable accounting
requirements of the Securities Act and the Exchange Act and the related
published rules and regulations;
(iv) The unaudited selected financial information with respect to
the consolidated results of operations and financial position of the
Company for the five most recent fiscal years included in the Prospectus
and included or incorporated by reference in Item 6 of the Company's
Annual Report on Form 10-K for the most recent fiscal year agrees with the
corresponding amounts (after restatement where applicable) in the audited
consolidated financial statements for such five fiscal years which were
included or incorporated by reference in the Company's Annual Reports on
Form 10-K for such fiscal years;
(v) They have compared the information in the Prospectus under
selected captions with the disclosure requirements of Regulation S-K and
on the basis of limited procedures specified in such letter nothing came
to their attention as a result of the foregoing procedures that caused
them to believe that this information does not conform in all material
respects with the disclosure requirements of Items 301, 302, 402 and
503(d), respectively, of Regulation S-K;
(vi) On the basis of limited procedures, not constituting an
examination in accordance with generally accepted auditing standards,
consisting of a reading of the unaudited financial statements and other
information referred to below, a reading of the latest available interim
financial statements of the Company and its subsidiaries, inspection of
the minute books of the Company and its subsidiaries since the date of the
latest audited financial statements included or incorporated by reference
in the Prospectus, inquiries of officials of the Company and its
subsidiaries responsible for financial and accounting matters and such
other inquiries and procedures as may be specified in such letter, nothing
came to their attention that caused them to believe that:
(A) (i) the unaudited condensed consolidated statements of
income, consolidated balance sheets and consolidated statements of
cash flows included in the Prospectus and/or included or
incorporated by reference in the Company's Quarterly Reports on Form
10-Q incorporated by reference in the Prospectus do not comply as to
form in all material respects with the applicable accounting
requirements of the Exchange Act and the related published rules and
regulations, or (ii) any material modifications should be made to
the unaudited condensed consolidated statements of income,
consolidated balance sheets and consolidated statements of cash
flows included in the Prospectus or included in the Company's
Quarterly Reports on Form 10-Q incorporated by reference in the
Prospectus, for them to be in conformity with generally accepted
accounting principles;
(B) any other unaudited income statement data and balance
sheet items included in the Prospectus do not agree with the
corresponding items in the unaudited consolidated financial
statements from which such data and items were derived, and any such
unaudited data and items were not determined on a basis
substantially consistent with the basis for the corresponding
amounts in the audited consolidated financial statements included or
incorporated by reference in the Company's Annual Report on Form
10-K for the most recent fiscal year;
(C) the unaudited financial statements which were not included
in the Prospectus but from which were derived the unaudited
condensed financial statements referred to in clause (A) and any
unaudited income statement data and balance sheet items included in
the Prospectus and referred to in clause (B) were not determined on
a basis substantially consistent with the basis for the audited
financial statements included or incorporated by reference in the
Company's Annual Report on Form 10-K for the most recent fiscal
year;
(D) any unaudited pro forma consolidated condensed financial
statements included or incorporated by reference in the Prospectus
do not comply as to form in all material respects with the
applicable accounting requirements of the Securities Act and the
published rules and regulations thereunder or the pro forma
adjustments
have not been properly applied to the historical amounts in the
compilation of those statements;
(E) as of a specified date not more than five days prior to
the date of such letter, there have been any changes in the
consolidated capital shares (other than issuances of capital shares
upon exercise of options and share appreciation rights, upon
earn-outs of performance shares and upon conversions of convertible
securities, in each case which were outstanding on the date of the
latest balance sheet included or incorporated by reference in the
Prospectus) or any increase in the consolidated long-term debt of
the Company and its subsidiaries, or any decreases in consolidated
net current assets or shareholders' equity or other items specified
by Goldman, Sachs & Co., or any increases in any items specified by
Goldman, Sachs & Co., in each case as compared with amounts shown in
the latest balance sheet included or incorporated by reference in
the Prospectus, except in each case for changes, increases or
decreases which the Prospectus discloses have occurred or may occur
or which are described in such letter; and
(F) for the period from the date of the latest financial
statements included or incorporated by reference in the Prospectus
to the specified date referred to in clause (E) there were any
decreases in consolidated net revenues or operating profit or the
total or per share amounts of consolidated net income or other items
specified by Goldman, Sachs & Co., or any increases in any items
specified by Goldman, Sachs & Co., in each case as compared with the
comparable period of the preceding year and with any other period of
corresponding length specified by Goldman, Sachs & Co., except in
each case for increases or decreases which the Prospectus discloses
have occurred or may occur or which are described in such letter;
and
(vii)In addition to the examination referred to in their report(s)
included or incorporated by reference in the Prospectus and the limited
procedures, inspection of minute books, inquiries and other procedures
referred to in paragraphs (iii) and (vi) above, they have carried out
certain specified procedures, not constituting an examination in
accordance with generally accepted auditing standards, with respect to
certain amounts, percentages and financial information specified by
Goldman, Sachs & Co. which are derived from the general accounting records
of the Company and its subsidiaries, which appear in the Prospectus
(excluding documents incorporated by reference) or in Part II of, or in
exhibits and schedules to, the Registration Statement specified by
Goldman, Sachs & Co. or in documents incorporated by reference in the
Prospectus specified by Goldman, Sachs & Co., and have compared certain of
such amounts, percentages and financial information with the accounting
records of the Company and its subsidiaries and have found them to be in
agreement.