EXHIBIT 10.1
$450,000,000 (F1)
LIBERTY PROPERTY LIMITED PARTNERSHIP
(a Pennsylvania Limited Partnership)
MEDIUM TERM NOTES
DISTRIBUTION AGREEMENT
----------------------
January 12, 1998
LEHMAN BROTHERS
Lehman Brothers Inc.
Three World Financial Center
New York, New York 10285
DONALDSON, LUFKIN & JENRETTE SECURITIES CORPORATION
277 Park Avenue
New York, New York 10172
FIRST CHICAGO CAPITAL MARKETS, INC.
One First National Plaza
Chicago, Illinois 60670
J.P. MORGAN SECURITIES INC.
60 Wall Street
New York, New York 10260
UBS SECURITIES LLC
299 Park Avenue
New York, New York 10171
(F1) Or the U.S. dollar equivalent in certain specified foreign
currencies or currency units.
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 wish to confirm as follows
its agreement with Lehman Brothers Inc., Donaldson, Lufkin & Jenrette
Securities Corporation, First Chicago Capital Markets, Inc., J.P. Morgan
Securities Inc. and UBS Securities LLC (individually, an "Agent" and
collectively, the "Agents"), with respect to the issuance and sale by
the Operating Partnership, directly to certain purchasers, including the
Agents, of an aggregate of $450,000,000 (F1) in gross proceeds of the
Operating Partnership's Medium-Term Notes (the "Notes"). The Notes are
to be issued from time to time pursuant to an Indenture, dated as of
October 24, 1997, as supplemented by a First Supplemental Indenture,
dated as of October 24, 1997, and a Second Supplemental Indenture, dated
as of January 12, 1998 (together, the "Indenture"), between the
Operating Partnership and The First National Bank of Chicago, as trustee
(the "Trustee").
The Notes shall have the maturity ranges, applicable interest rates or
interest rate formulas, specified currencies, issue prices, redemption
and repayment provisions and other terms set forth in the Prospectus
referred to in Section 1(a) as it may be amended or supplemented from
time to time, including any supplement providing for the interest rate,
maturity and other terms of any Note (a "Pricing Supplement"). The
Notes will be issued, and the terms thereof established, from time to
time, by the Operating Partnership in accordance with the Indenture and
the Procedures referred to below. This Agreement shall only apply to
sales of the Notes and not to sales of any other securities or evidences
of indebtedness of the Operating Partnership and only on the specific
terms set forth herein.
Subject to the terms and conditions stated herein and to the reservation
by the Operating Partnership of the right to sell its Notes directly on
its own behalf, the Operating Partnership hereby (i) appoints each of
the Agents, on a non-exclusive basis, as the agent of the Operating
Partnership for the purpose of soliciting and receiving offers to
purchase Notes from the Operating Partnership and (ii) agrees that
whenever the Operating Partnership determines to sell Notes directly to
an Agent as principal it will enter into a separate agreement with such
Agent (each, a "Purchase Agreement"). Each such Purchase Agreement,
whether oral (in which case such Purchase Agreement shall be confirmed
in writing within one business day of such Purchase Agreement, which may
be by facsimile transmission) or in writing, shall be with respect to
such information (as applicable) as specified in Exhibit C hereto,
relating to such sale in accordance with Section 2(e) hereof.
Capitalized terms used but not otherwise defined herein shall have the
meanings given to those terms in the Prospectus (as defined below).
1. REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF THE TRANSACTION
ENTITIES. Each of the Transaction Entities, jointly and severally,
represents and warrants to each Agent, and agrees, as of the date
hereof, as of the Closing Date (defined herein) and as of the times
referred to in Sections 6(a) and 6(b) hereof (the Closing Date and each
such time being hereinafter sometimes referred to as a "Representation
Date"), as follows:
a) Registration statements on Form S-3 (Nos. 333-22211 and 333-43267)
(together, the "Registration Statement"), and any amendments thereto,
with respect to one or more series of debt securities of the Operating
Partnership, including the Notes, has (i) been prepared by the
Transaction Entities in conformity with the requirements of the United
States Securities Act of 1933, as amended (the "Securities Act") and the
rules and regulations (the "Rules and Regulations") of the United States
Securities and Exchange Commission (the "Commission") thereunder, (ii)
been filed with the Commission under the Securities Act and (iii) become
effective under the Securities Act; and the Indenture has been qualified
under the Trust Indenture Act of 1939, as amended (the "Trust Indenture
Act"). Copies of such registration statement and any amendments thereto
have been delivered by the Operating Partnership to you. As used in
this Agreement, "Effective Time" means, for such registration statement,
the date and the time as of which such registration statement, or the
most recent post-effective amendment thereto, if any, was declared
effective by the Commission; "Effective Date" means, for such
registration statement, the date of the Effective Time; "Registration
Statement" means such registration statement when it became effective
under the Securities Act, and as from time to time amended or
supplemented thereafter (if any post-effective amendment to such
registration statement has been filed with the Commission prior to the
execution and delivery of this Agreement, the time the most recent such
amendment has been declared effective by the Commission), 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 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 with respect to the Registration Statement; "Basic
Prospectus" means the prospectus (including all documents incorporated
therein by reference) included in the Registration Statement; and
"Prospectus" means the Basic Prospectus and any amendments or
supplements thereto (including the applicable Pricing Supplement)
relating to the Notes, as filed with the Commission pursuant to
paragraph (b) of Rule 424 of the Rules and Regulations. Any reference
herein to the Registration Statement or the Prospectus shall be deemed
to include the documents incorporated or deemed to be incorporated by
reference therein which were filed under the Securities and Exchange Act
of 1934, as amended (the "Exchange Act"). Any reference herein to
amending or supplementing the Prospectus shall be deemed to include the
filing of materials incorporated by reference in the Prospectus after
the Closing Date (defined herein) and any reference herein to any
amendment or supplement to the Prospectus shall be deemed to include any
such materials incorporated by reference in the Prospectus after the
Closing Date (defined herein). For purposes of this Agreement, all
references to the Registration Statement, 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) The Registration Statement conforms in all material respects, and
each Prospectus and any further amendments or supplements to the
Registration Statement or any Prospectus will conform, when they become
effective or are filed with the Commission, as the case may be, and as
of the applicable Representation Date and at all times during each
period during which, in the opinion of counsel for the Agents, a
prospectus relating to the Notes is required to be delivered under the
Securities Act (each, a "Marketing Period"), in all material respects to
the requirements of the Securities Act, the Exchange Act, the Trust
Indenture Act, and the rules and regulations of the Commission under
such Acts, and do not and will not, as of the Effective Date (as to the
Registration Statement and any amendment thereto) and as of the
applicable filing date (as to the Prospectus and any amendment or
supplement thereto), and as of the applicable Representation Date and at
all times during each Marketing Period, 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 Operating Partnership through the Agents by
or on behalf of any Agent specifically for inclusion therein. The
Indenture conforms in all material respects to the requirements of the
Trust Indenture Act and the rules and regulations thereunder; provided,
however, that no representation or warranty is made as to information
contained in or omitted from that part of the Registration Statement
which shall constitute the Statement of Eligibility and Qualification on
Form T-1 under the Trust Indenture Act of the Trustee under the
Indenture. The Prospectus delivered to the Agents for use in connection
with this offering was identical to the electronically transmitted
copies thereof filed with the Commission pursuant to EDGAR, except to
the extent permitted by Regulation S-T.
c) The documents incorporated or deemed to be incorporated by reference
into the Registration Statement or any Prospectus have been, and will be
as of the applicable Representation Date and at all times during each
Marketing Period, prepared by the Operating Partnership in conformity in
all material respects with the applicable requirements of the Securities
Act and the Rules and Regulations and the Exchange Act and the rules and
regulations of the Commission thereunder; and none of such documents
contained, or will contain as of the applicable Representation Date and
at all times during each Marketing Period, an untrue statement of a
material fact or omitted, or will 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; and such documents have been, or will be, as of the
applicable Representation Date and at all times during each Marketing
Period, timely filed as required thereby.
d) 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 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.
e) The Company has been duly formed and is validly existing as a real
estate investment trust in good standing under the laws of the State of
Maryland, is duly qualified to do business and is in good standing in
each jurisdiction in which its ownership or lease of property or the
conduct of its business requires such qualification, and has all power
and authority necessary to own or hold its properties, to conduct the
business in which it is engaged and to enter into and perform its
obligations under this Agreement. None of the subsidiaries of the
Company (other than the Operating Partnership, Liberty Property
Development Corp. ("Development Corp."), Liberty Property Development
Corp.-II ("Development-II") and Liberty Special Purpose Corp. ("SP
Corp.")) is a "significant subsidiary," as such term is defined in Rule
405 of the Rules and Regulations. Except as described in the Prospectus
and other than the Property Affiliates (as defined below), and the
Operating Partnership, Development Corp., Development-II and SP Corp.,
the Company owns no direct or indirect equity interest in any entity,
except for such interests as, in the aggregate, are not material to the
condition, financial or otherwise, or the earnings, assets, business
affairs or business prospects of the Company and its subsidiaries
considered as a single enterprise.
f) All of the issued shares of beneficial interest of the Company have
been duly and validly authorized and issued, and are fully paid and non-
assessable. The description of the Common Shares conforms to the
description thereof contained in the Prospectus. Except as disclosed in
the Prospectus, 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 the Operating Partnership's
Exchangeable Subordinated Debentures due 2001 (the "Debentures"), there
are no outstanding securities convertible into or exchangeable for any
shares of beneficial interest of the Company. Except for transactions
described in the Prospectus and transactions in connection with stock
option and other benefit plans, there are no outstanding options, rights
(preemptive or otherwise) or warrants to purchase or subscribe for
shares of beneficial interest or any other securities of the Company.
g) The Operating Partnership has been duly formed and is validly
existing as a limited partnership in good standing under the laws of the
Commonwealth of Pennsylvania, is duly qualified to do business and is in
good standing as a foreign limited partnership in each jurisdiction in
which its ownership or lease of property or the conduct of its business
requires such qualification, and has all partnership power and authority
necessary to own or hold its properties, to conduct the business in
which it is engaged and to enter into and perform its obligations under
this Agreement. The Company is the sole general partner of the
Operating Partnership. The agreement of limited partnership of the
Operating Partnership, as amended to date (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 Units have
been duly and validly authorized and issued, are fully paid and, to the
extent that such interests are owned by the Company, are owned by the
Company free and clear of all liens, encumbrances, equities or claims.
h) Development Corp. has been duly organized and is validly existing as
a corporation in good standing under the laws of the Commonwealth of
Pennsylvania, is duly qualified to do business and is in good standing
in each jurisdiction in which its ownership or lease of property or the
conduct of its business requires such qualification, and has all
corporate power and authority necessary to own or hold its properties
and to conduct the business in which it is engaged. All of the issued
and outstanding capital stock of Development Corp. has been duly
authorized and validly issued and is fully paid and non-assessable, has
been offered and sold in compliance with all applicable laws (including,
without limitation, federal or state securities laws) and all of the
capital stock of Development Corp. owned by the Operating Partnership,
as described in the Prospectus, is owned free and clear of any security
interest, mortgage, pledge, lien, encumbrance, claim, restriction or
equities. No shares of capital stock of Development Corp. are reserved
for any purpose, and there are no outstanding securities convertible
into or exchangeable for any capital stock of Development Corp., and no
outstanding options, rights (preemptive or otherwise) or warrants to
purchase or to subscribe for shares of such capital stock or any other
securities of Development Corp.
i) Development-II has been duly organized and is validly existing as a
corporation in good standing under the laws of the Commonwealth of
Pennsylvania, is duly qualified to do business and is in good standing
in each jurisdiction in which its ownership or lease of property or the
conduct of its business requires such qualification, and has all
corporate power and authority necessary to own or hold its properties
and to conduct the business in which it is engaged. All of the issued
and outstanding capital stock of Development-II has been duly authorized
and validly issued and is fully paid and non-assessable, has been
offered and sold in compliance with all applicable laws (including,
without limitation, federal or state securities laws) and all of the
capital stock of Development-II owned by the Operating Partnership, as
described in the Prospectus, is owned free and clear of any security
interest, mortgage, pledge, lien, encumbrance, claim, restriction or
equities. No shares of capital stock of Development-II are reserved for
any purpose, and there are no outstanding securities convertible into or
exchangeable for any capital stock of Development-II, and no outstanding
options, rights (preemptive or otherwise) or warrants to purchase or to
subscribe for shares of such capital stock or any other securities of
Development-II.
j) SP Corp. has been duly organized and is validly existing as a
corporation in good standing under the laws of the Commonwealth of
Pennsylvania, is duly qualified to do business and is in good standing
as a foreign corporation in each jurisdiction in which its ownership or
lease of property or the conduct of its business requires such
qualification, and has all corporate power and authority necessary to
own or hold its properties and to conduct the business in which it is
engaged. All of the issued and outstanding capital stock of SP Corp.
has been duly authorized and validly issued and is fully paid and non-
assessable, has been offered and sold in compliance with all applicable
laws (including, without limitation, federal or state securities laws)
and all of the capital stock of SP Corp. is owned by the Company free
and clear of any security interest, mortgage, pledge, lien, encumbrance,
claim, restriction or equities. No shares of capital stock of SP Corp.
are reserved for any purpose, and there are no outstanding securities
convertible into or exchangeable for any capital stock of SP Corp. and
no outstanding options, rights (preemptive or otherwise) or warrants to
purchase or to subscribe for shares of such capital stock or any other
securities of SP Corp.
k) 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 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 in good standing under the laws of the
jurisdiction in which it is organized, is duly qualified to do business
and is in good standing as a foreign entity in each jurisdiction in
which its ownership or lease of property or the conduct of its business
requires such qualification, and has all power and authority necessary
to own or hold its properties and to conduct the business in which it is
engaged. Except as set forth in the Prospectus, all of the ownership
interests of each Property Affiliate have been duly and validly
authorized and issued, are fully paid and non-assessable and all of the
ownership interests owned directly or indirectly by the Company and the
Operating Partnership, as described in the Prospectus, are owned free
and clear of any security interest, mortgage, pledge, lien, encumbrance,
claim, restriction or equities.
l) The Notes have been validly authorized for issuance and sale
pursuant to this Agreement and, when the terms of the Notes and of their
issue and sale have been duly established in accordance with the
Indenture and this Agreement so as not to violate any applicable law or
agreement or instrument then binding on the Operating Partnership, and
the Notes have been duly executed, authenticated and delivered against
payment therefor as provided in this Agreement and the Indenture, the
Notes will be validly issued and outstanding, and will constitute valid
and legally binding obligations of the Operating Partnership entitled to
the benefits of the Indenture and enforceable in accordance with their
terms and the terms of the Indenture.
m) The Indenture has been duly authorized, executed and delivered by
the Operating Partnership, and constitutes a valid and binding agreement
on the part of the Operating Partnership, enforceable against the
Operating Partnership in accordance with its terms; the Notes and the
Indenture conform in all material respects to the descriptions thereof
contained in each Prospectus.
(n) (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 each of the Agents, is a valid
and binding agreement of each of the Transaction Entities, enforceable
against the Transaction Entities in accordance with its terms; and (B)
the Operating Partnership Agreement and the partnership agreement of
each Property Affiliate, has been duly and validly authorized, executed
and delivered by the parties thereto and is a valid and binding
agreement of the parties thereto, enforceable against such parties in
accordance with its terms.
(o) The execution, delivery and performance of this Agreement by each
of the Transaction Entities, the execution, delivery and performance of
the Indenture, the Notes, and each applicable Purchase Agreement, if
any, 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,
result in the creation or imposition of any lien, charge or encumbrance
upon any of the assets of the Company, the Operating Partnership or any
of their subsidiaries pursuant to the terms 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 is bound or to which any of the Properties or other
assets of either of the Transaction Entities or any of their
subsidiaries is subject, nor will such actions result in any violation
of the provisions of the charter, by-laws, certificate of limited
partnership or agreement of limited partnership of either of the
Transaction Entities or any 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 respective properties or assets; and
except for the registration of the Notes under the Securities Act and
the qualification of the Indenture under the Trust Indenture Act and
such consents, approvals, authorizations, registrations or
qualifications as may be required under the Exchange Act and applicable
state securities laws in connection with the purchase and distribution
of the Notes by the Agents, no consent, approval, authorization or order
of, or filing or registration with, any such court or governmental
agency or body is required for the execution, delivery and performance
of this Agreement by the Transaction Entities or the Notes, each
applicable Purchase Agreement, if any, or the Indenture by the Operating
Partnership, the consummation of the transactions contemplated hereby
and thereby, and the issuance and delivery of the Notes. Compliance by
the Operating Partnership with the provisions of the Notes and the
Indenture has been duly authorized by all necessary partnership action.
(p) Since the date of the Indenture, no event has occurred and is
continuing that, had the Notes been issued, would (whether or not with
the giving of notice and/or the passage of time and/or the fulfillment
of any other requirement) constitute an Event of Default (as defined in
the Indenture) under the Indenture.
(q) Other than as described in the Prospectus and other than rights of
persons whose securities are already registered under the Securities
Act, there are no contracts, agreements or understandings between the
Transaction Entities and any person granting such person the right to
require the Company to file a registration statement under the
Securities Act with respect to any securities of either of the
Transaction Entities owned or to be owned by such person or to require
either of the Transaction Entities to include such securities in the
securities registered pursuant to the Registration Statement or in any
securities being registered pursuant to any other registration statement
filed by the Transaction Entities under the Securities Act.
(r) Except as described or contemplated in the Prospectus, 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 under, or Regulation D or S under, the Securities
Act.
(s) Neither of the Transaction Entities nor any of the Properties has
sustained, since the date of the latest audited financial statements
included in the Prospectus, any material loss or interference with its
business from fire, explosion, flood or other calamity, whether or not
covered by insurance, or from any labor dispute or court or governmental
action, order or decree, other than as set forth or contemplated in the
Prospectus; and, since such date, there has not been any material change
in the capital stock or long-term debt of either of the Transaction
Entities or any material adverse change, or any development involving a
prospective material adverse change, in or affecting any of 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.
(t) The financial statements (including the related notes and
supporting schedules) filed as part of, or incorporated by reference in,
the Registration Statement and the Prospectus present fairly and will
present fairly as of the applicable Representation Date and at all times
during each Marketing Period 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 and will be as of the
applicable Representation Date and at all times during each Marketing
Period prepared in conformity with generally accepted accounting
principles applied on a consistent basis throughout the periods
involved. The unaudited financial statements of the Transition
Entities, if any, and the related notes, included or incorporated by
reference in each Prospectus present fairly and will present fairly at
all times during each period specified in Section 3(d) hereof the
financial position of the Company at the dates and for the periods
indicated in conformity with generally accepted accounting principles
(except for the absence of notes) applied on a consistent basis
throughout the periods shown, subject to normally recurring changes
resulting from year-end audit adjustments, and prepared in accordance
with the instructions to Form 10-Q. The Company's ratios of earnings to
fixed charges and of earnings to combined fixed charges and preferred
share dividends (actual and, if any, pro forma) included in the
Prospectus under the captions "Certain Ratios" and in Exhibit 12.1 to
the Registration Statement have been calculated in compliance with Item
503(d) of Regulation S-K of the Commission. Pro forma financial
information, if any, 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.
(u) Ernst & Young LLP, who have certified certain financial statements
of the Operating Partnership, whose reports appear in each Prospectus or
are incorporated by reference therein, are independent public
accountants as required by the Securities Act and the Rules and
Regulations.
(v) (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 or those which are not material
in amount or those which would not have a material adverse effect on the
business, operations, use or value of any of the Properties; (B) all
liens, charges, encumbrances, claims or restrictions on or affecting any
of the Properties and the assets of any Transaction Entity which are
required to be disclosed in the Prospectus are disclosed therein;
(C) except as otherwise described in the Prospectus, neither Transaction
Entity and, to the knowledge of the Transaction Entities, no tenant of
any of the Properties is in default under (i) any space leases (as
lessor or lessee, as the case may be) relating to the Properties, or
(ii) any of the mortgages or other security documents or other
agreements encumbering or otherwise recorded against the Properties,
which individually or in the aggregate would have a material adverse
effect on the Company and its subsidiaries taken together as a whole,
and neither Transaction Entity knows of any event which, but for the
passage of time or the giving of notice, or both, would constitute such
a default under any of such documents or agreements; (D) each of the
Properties complies with all applicable codes, laws and regulations
(including, without limitation, building and zoning codes, laws and
regulations and laws relating to access to the Properties), except for
such failures to comply that would not have a material adverse effect on
the business operations, use or value of such Property; and (E) neither
Transaction Entity has knowledge of any pending or threatened
condemnation proceedings, zoning change or other proceeding or action
that will in any material manner adversely affect the size of, use of,
improvements on, construction on or access to the Properties.
(w) Except as described in the Prospectus, 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.
(x) Except as described in the Prospectus, the Operating Partnership
and the Property Affiliates have obtained title insurance on the fee or
leasehold interests in each of the Properties, in an amount at least
equal to the greater of (A) the mortgage indebtedness of each such
Property or (B) the purchase price of each such Property.
(y) Except as disclosed in the Prospectus and except such as in each
case would not have a material adverse effect on any Property, Property
Affiliate, or Transaction Entity or any of their subsidiaries, taken
together as a whole; (A) to the knowledge of the Transaction Entities,
after due inquiry, the operations of the Company, the Operating
Partnership, Development Corp., Development-II, SP Corp., and the
Properties are in compliance with all Environmental Laws (as defined
below) and all requirements of applicable permits, licenses, approvals
and other authorizations issued pursuant to Environmental Laws; (B) to
the knowledge of the Transaction Entities, after due inquiry, none of
the Transaction Entities, the Property Affiliates or any Property has
caused or suffered to occur any Release (as defined below) of any
Hazardous Substance (as defined below) into the Environment (as defined
below) on, in, under or from any Property, and no condition exists on,
in, under or adjacent to any Property that could result in the
incurrence of liabilities under, or any violations of, any Environmental
Law or give rise to the imposition of any Lien (as defined below), under
any Environmental Law; (C) none of the Transaction Entities or Property
Affiliates has received any written notice of a claim under or pursuant
to any Environmental Law or under common law pertaining to Hazardous
Substances on, in, under or originating from any Property; (D) neither
of the Transaction Entities has actual knowledge of, or received any
written notice from any Governmental Authority (as defined below)
claiming, any violation of any Environmental Law or a determination to
undertake and/or request the investigation, remediation, clean-up or
removal of any Hazardous Substance released into the Environment on, in,
under or from any Property; and (E) no Property is included or, to the
knowledge of the Transaction Entities, after due inquiry, proposed for
inclusion on the National Priorities List issued pursuant to CERCLA (as
defined below) by the United States Environmental Protection Agency (the
"EPA") or on the Comprehensive Environmental Response, Compensation, and
Liability Information System database maintained by the EPA, and neither
of the Transaction Entities has actual knowledge that any Property has
otherwise been identified in a published writing by the EPA as a
potential CERCLA removal, remedial or response site or, to the knowledge
of the Transaction Entities, is included on any similar list of
potentially contaminated sites pursuant to any other Environmental Law.
As used herein, "Hazardous Substance" shall include any hazardous
substance, hazardous waste, toxic substance, pollutant or hazardous
material, including, without limitation, oil, petroleum or any
petroleum-derived substance or waste, asbestos or asbestos-containing
materials, PCBs, pesticides, explosives, radioactive materials, dioxins,
urea formaldehyde insulation or any constituent of any such substance,
pollutant or waste which is subject to 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. 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. 9601 et seq.) ("CERCLA"),
the Resource Conservation and Recovery Act of 1976, as amended (42
U.S.C. 6901, et seq.), the Clean Air Act, as amended (42 U.S.C. 7401,
et seq.), the Clean Water Act, as amended (33 U.S.C. 1251, et seq.),
the Toxic Substances Control Act, as amended (15 U.S.C. 2601, et seq.),
the Occupational Safety and Health Act of 1970, as amended (29 U.S.C.
651, et seq.), the Hazardous Materials Transportation Act, as amended
(49 U.S.C. 1801, et seq.), and all other federal, state and local laws,
ordinances, regulations, rules and orders relating to the protection of
the Environment or of human health from environmental effects;
"Governmental Authority" shall mean any federal, state or local
governmental office, agency or authority having the duty or authority to
promulgate, implement or enforce any Environmental Law; "Lien" shall
mean, with respect to any Property, any lien, encumbrance, penalty,
fine, charge, assessment, judgment or other liability in, on or
affecting such Property; and "Release" shall mean any spilling, leaking,
pumping, pouring, emitting, emptying, discharging, injecting, escaping,
leaching, dumping, emanating or disposing of any Hazardous Substance
into the Environment, including, without limitation, the abandonment or
discard of barrels, containers, tanks (including, without limitation,
underground storage tanks) or other receptacles containing or previously
containing any Hazardous Substance.
(z) Each Transaction Entity and their subsidiaries, and each Property
carries, or is covered by, insurance in such amounts and covering such
risks as is adequate for the conduct of its business and the value of
such Property and as is customary for companies engaged in similar
businesses in similar industries.
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.
(aa) Except as described in the Prospectus, there are no legal or
governmental proceedings pending to which either Transaction Entity or
their subsidiaries is a party or of which any property or assets of
either Transaction Entity or their subsidiaries is the subject which, if
determined adversely to such Transaction Entity or subsidiary, could
reasonably be expected to have a material adverse effect on the
consolidated financial position, shareholders' equity, results of
operations, business or prospects of the Company; and, except as
described in the Prospectus, to the best knowledge of the Transaction
Entities, no such proceedings are threatened or contemplated by
governmental authorities or threatened by others.
(bb) 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.
(cc) No relationship, direct or indirect, exists between or among
either of the Transaction Entities on the one hand, and the trustees,
officers, shareholders, customers or suppliers of the Transaction
Entities on the other hand, that is required to be described in the
Prospectus that is not so described.
(dd) No labor disturbance by the employees of either Transaction Entity
exists or, to the knowledge of the Transaction Entities, is imminent
which might be expected to have a material adverse effect on the
consolidated financial position, shareholders' equity, results of
operations, business or prospects of such Transaction Entity.
(ee) Each Transaction Entity is in compliance in all material respects
with all presently applicable provisions of the Employee Retirement
Income Security Act of 1974, as amended, including the regulations and
published interpretations thereunder ("ERISA"); no "reportable event"
(as defined in ERISA) has occurred with respect to any "pension plan"
(as defined in ERISA) for which either Transaction Entity would have any
liability; neither Transaction Entity has incurred or expects to incur
liability under (i) Title IV of ERISA with respect to termination of, or
withdrawal from, any "pension plan" or (ii) sections 412 or 4971 of the
Internal Revenue Code of 1986, as amended, including the regulations and
published interpretations thereunder (the "Code"); and each "pension
plan" for which either Transaction Entity would have any liability that
is intended to be qualified under section 401(a) of the Code is so
qualified in all material respects and nothing has occurred, whether by
action or by failure to act, which would cause the loss of such
qualification.
(ff) Each Transaction Entity and their subsidiaries has filed all
federal, state and local income and franchise tax returns required to be
filed through the date hereof and has paid all taxes due thereon, and no
material tax deficiency has been determined adversely to either
Transaction Entity or their subsidiaries which has had (nor does either
Transaction Entity have any knowledge of any tax deficiency which, if
determined adversely to it might have) a material adverse effect on the
financial position, shareholders' equity, results of operations,
business or prospects of such Transaction Entity or subsidiary.
(gg) At all times since June 16, 1994, the Company, the Operating
Partnership, Development Corp., Development-II and SP Corp. have been,
and upon the sale of the Notes will continue to be, organized and
operated in conformity with the requirements for qualification of the
Company as a real estate investment trust under the Code and the
proposed method of operation of the Company, the Operating Partnership,
Development Corp., Development-II and SP Corp. will enable the Company
to continue to meet the requirements for qualification and taxation as a
real estate investment trust under the Code.
(hh) 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 (other than in connection with stock
option or other benefit plans, the conversion of Units to common shares
of beneficial interest of the Company, the issuance of common shares of
beneficial interest of the Company in exchange for Debentures and the
issuance of Units in connection with the acquisition of property), (ii)
incurred any liability or obligation, direct or contingent, other than
liabilities and obligations which were incurred in the ordinary course
of business, (iii) entered into any transaction not in the ordinary
course of business nor (iv) declared or paid any dividend on its capital
stock (other than regular quarterly dividends).
(ii) Each Transaction Entity and their subsidiaries (i) makes and keeps
accurate books and records and (ii) maintains internal accounting
controls which provide reasonable assurance that (A) transactions are
executed in accordance with management's authorization, (B) transactions
are recorded as necessary to permit preparation of its financial
statements and to maintain accountability for its assets, (C) access to
its assets is permitted only in accordance with management's
authorization and (D) the reported accountability for its assets is
compared with existing assets at reasonable intervals.
(jj) No Transaction Entity or any of their subsidiaries (i) is in
violation of its charter, by-laws, certificate of limited partnership,
agreement of limited partnership or other similar organizational
document, (ii) is in default in any material respect, and no event has
occurred which, with notice or lapse of time or both, would constitute
such a default, in the due performance or observance of any term,
covenant or condition contained in any material indenture, mortgage,
deed of trust, loan agreement or other agreement or instrument to which
it is a party or by which it is bound or to which any of the Properties
or any of its other properties or assets is subject or (iii) is in
violation in any material respect of any law, ordinance, governmental
rule, regulation or court decree to which it or the Properties or any of
its other properties or assets may be subject or has failed to obtain
any material license, permit, certificate, franchise or other
governmental authorization or permit necessary to the ownership of the
Properties or any of its other properties or assets or to the conduct of
its business.
(kk) Neither Transaction Entity, nor any trustee, officer, agent,
employee or other person associated with or acting on behalf of either
Transaction Entity, has used any corporate funds for any unlawful
contribution, gift, entertainment or other unlawful expense relating to
political activity; made any direct or indirect unlawful payment to any
foreign or domestic government official or employee from corporate
funds; violated or is in violation of any provision of the Foreign
Corrupt Practices Act of 1977; or made any bribe, rebate, payoff,
influence payment, kickback or other unlawful payment.
(ll) Neither Transaction Entity or any of their subsidiaries is an
"investment company" within the meaning of such term under the
Investment Company Act of 1940 and the rules and regulations of the
Commission thereunder.
(mm) Other than this Agreement and as set forth in the Prospectus under
the heading "Plan of Distribution," 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 Agent for a brokerage commission, finder's fee or other like payment
with respect to the consummation of the transactions contemplated by
this Agreement.
(nn) The Notes have been rated by a "nationally recognized statistical
rating agency" (as that term is defined by the Commission for purposes
of Rule 436(g)(2) under the Act), including one or both of Moody's
Investor Services, Inc. and Standard & Poor's Corporation.
(oo) The certificates delivered pursuant to paragraph (h) of Section 5
hereof and all other documents delivered by the Transaction Entities or
their representatives in connection with the issuance and sale of the
Notes were on the dates on which they were delivered, or will be on the
dates on which they are to be delivered, true and complete in all
material respects.
(pp) Each Transaction Entity has complied with all applicable
provisions of Florida Statutes 517.075, relating to issuers doing
business with Cuba.
SOLICITATIONS AS AGENT; PURCHASES AS PRINCIPAL.
(a) APPOINTMENT. Subject to the terms and conditions stated herein,
and subject to the reservation by the Operating Partnership of the right
to sell Notes directly on its own behalf and through or to other dealers
or agents, the Operating Partnership hereby appoints each of the Agents
on a non-exclusive basis as an agent of the Operating Partnership for
the purpose of soliciting or receiving offers to purchase the Notes from
the Operating Partnership by others. The Operating Partnership may from
time to time offer Notes for sale otherwise than through an Agent;
provided, however, that so long as this Agreement shall be in effect,
the Operating Partnership shall not solicit offers to purchase Notes
through any other agent without amending this Agreement to appoint such
agent as an additional Agent hereunder on the same terms and conditions
as provided herein for the Agents and without giving the Agents prior
notice of such appointment. The consent of the then-current Agents
shall not be necessary for such purpose. In the absence of such an
amendment, the Operating Partnership may accept offers to purchase Notes
from or through an agent other than an Agent, provided that (i) the
Operating Partnership shall not have solicited such offers, (ii) the
Operating Partnership and such agent shall have executed an agreement
with respect to such purchases having terms and conditions (including,
without limitation, commission rates) with respect to such purchases
substantially the same as the terms and conditions that would apply to
such purchases under this Agreement if such agent was an Agent (which
may be accomplished by incorporating by reference in such agreement the
terms and conditions of this Agreement), and (iii) the Operating
Partnership shall provide the Agents with a copy of such agreement
following the execution thereof. On the basis of the representations
and warranties contained herein, but subject to the terms and conditions
herein set forth, each Agent agrees, as an agent of the Operating
Partnership, to use its reasonable efforts to solicit offers to purchase
the Notes upon the terms and conditions set forth in the Prospectus.
Except as otherwise provided herein, so long as this Agreement shall
remain in effect with respect to any Agent, the Operating Partnership
shall not, without the consent of each such Agent, solicit or accept
offers to purchase Notes otherwise than through one of the Agents;
provided, however, the Operating Partnership expressly reserves the
right to sell Notes directly to investors, in which case no commission
will be payable with respect to any such sale. Each Agent may also
purchase Notes from the Operating Partnership as principal for purposes
of resale, as more fully described in paragraph (e) of this Section.
(b) SUSPENSION OF SOLICITATION. The Operating Partnership reserves the
right, in its sole discretion, to suspend solicitation of offers to
purchase the Notes commencing at any time for any period of time or
indefinitely. Upon receipt of at least one business day's prior written
notice from the Operating Partnership, the Agents will forthwith suspend
solicitation of offers to purchase Notes from the Operating Partnership
until such time as the Operating Partnership has advised the Agents that
such solicitation may be resumed. For the purpose of the foregoing
sentence, "business day" shall mean any day which is not a Saturday or
Sunday and which is not a day on which (i) banking institutions are
generally authorized or obligated by law to close in The City of New
York and (ii) The New York Stock Exchange, Inc. is closed for trading.
Upon receipt of notice from the Operating Partnership as
contemplated by Section 3(d) hereof, each Agent shall suspend its
solicitation of offers to purchase Notes until such time as the
Operating Partnership shall have furnished it with an amendment or
supplement to the Registration Statement or the Prospectus, as the case
may be, contemplated by Section 3(d) and shall have advised such Agent
that such solicitation may be resumed.
(c) AGENT'S COMMISSION. Promptly upon the closing of the sale of any
Notes sold by the Operating Partnership as a result of a solicitation
made by or offer to purchase received by an Agent, the Operating
Partnership agrees to pay such Agent a commission in accordance with the
schedule set forth in Schedule A hereto.
(d) SOLICITATION OF OFFERS. The Agents are authorized to solicit
offers to purchase the Notes only in denominations as are specified in
the Prospectus at a purchase price as shall be specified by the
Operating Partnership. Each Agent shall communicate to the Operating
Partnership, orally or in writing, each reasonable offer to purchase
Notes received by it as an Agent. The Operating Partnership shall have
the sole right to accept offers to purchase the Notes and may reject any
such offer in whole or in part. Each Agent shall have the right, in its
discretion reasonably exercised without advising the Operating
Partnership, to reject any offer to purchase the Notes received by it,
in whole or in part, and any such rejection shall not be deemed a breach
of its agreement contained herein.
No Note which the Operating Partnership has agreed to sell pursuant
to this Agreement shall be deemed to have been purchased and paid for,
or sold by the Operating Partnership, until such Note shall have been
delivered to the purchaser thereof against payment by such purchaser.
(e) PURCHASES AS PRINCIPAL. Each sale of Notes to any Agent as
principal, for resale to one or more investors or to another broker-
dealer (acting as principal for purposes of resale), shall be made in
accordance with the terms of this Agreement and a Purchase Agreement,
whether oral (in which case such Purchase Agreement shall be confirmed
in writing within one business day of such Purchase Agreement by such
Agent to the Operating Partnership, which may be by facsimile
transmission) or in writing, which will provide for the sale of such
Notes to, and the purchase thereof by, such Agent. A Purchase Agreement
may also specify certain provisions relating to the reoffering of such
Notes by such Agent. The commitment of any Agent to purchase Notes from
the Operating Partnership as principal shall be deemed to have been made
on the basis of the representations and warranties of the Transaction
Entities herein contained and shall be subject to the terms and
conditions herein set forth. Each Purchase Agreement shall contain, to
the extent applicable, those terms specified in Exhibit A hereto,
including the principal amount and terms of the Notes to be purchased by
an Agent, the time and date (each such time and date being referred to
herein as a "Time of Delivery") and place of delivery of and payment for
such Notes and such other information (as applicable) as is set forth in
Exhibit C hereto. The Operating Partnership agrees that if any Agent
purchases Notes as principal for resale such Agent shall receive such
compensation, in the form of a discount or otherwise, as shall be
indicated in the applicable Purchase Agreement or, if no compensation is
indicated therein, a commission in accordance with Schedule A hereto.
Any Agent may utilize a selling or dealer group in connection with the
resale of such Notes. In addition, any Agents may offer the Notes they
have purchased as principal to other dealers. Any Agent may sell Notes
to any dealer at a discount and, unless otherwise specified in the
applicable Pricing Supplement, such discount allowed to any dealer will
not be in excess of 66 2/3% of the discount to be received by such Agent
from the Operating Partnership. Such Purchase Agreement shall also
specify any requirements for delivery of opinions of counsel,
accountant's letters and officers' certificates pursuant to Section 5
hereof.
(f) ADMINISTRATIVE PROCEDURES. The purchase price, interest rate or
formula, maturity date and other terms of the Notes (as applicable)
specified in Exhibit A hereto shall be agreed upon by the Operating
Partnership and the applicable Agent or Agents and specified in a
Pricing Supplement to be prepared in connection with each sale of Notes.
Administrative procedures respecting the sale of Notes (the
"Procedures") are set forth in Exhibit B hereto and may be amended in
writing from time to time by the Agents and the Operating Partnership.
Each Agent and the Operating Partnership agree to perform the respective
duties and obligations specifically provided to be performed by each of
them herein and in the Procedures. The Procedures shall apply to all
transactions contemplated hereunder including sales of Notes to any
Agent as principal pursuant to a Purchase Agreement, unless otherwise
set forth in such Purchase Agreement.
(g) DELIVERY OF DOCUMENTS. The documents required to be delivered by
Section 5 hereof shall be delivered at the offices of Rogers & Wells,
200 Park Avenue, New York, New York 10166, not later than 10:00 A.M.,
New York City time, on the date of this Agreement or at such later time
as may be mutually agreed upon by the Company and the Agents, which in
no event shall be later than the time at which the Agents commence
solicitation of offers to purchase Notes hereunder (the "Closing Date").
2. FURTHER AGREEMENTS OF THE TRANSACTION ENTITIES. Each of the
Transaction Entities jointly and severally agrees:
(a) To prepare the Prospectus in a form approved by the Agents and to
file such Prospectus pursuant to Rule 424(b) under the Securities Act
not later than the Commission's close of business on the fifth business
day following the execution and delivery of this Agreement or, if
applicable, such earlier time as may be required by Rule 424 or Rule
430A(a)(3) under the Securities Act; to make no further amendment or any
supplement to the Registration Statement or to the Prospectus except in
accordance with Section 3(d) hereof; to advise the Agents, 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 Agents with copies thereof; to advise the Agents,
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 the Prospectus, of the suspension of the qualification of the
Notes for offering or sale in any jurisdiction, of the initiation or
threatening of any proceeding for any such purpose, or of any request by
the Commission for the amending or supplementing of the Registration
Statement or the Prospectus or for additional information; and, in the
event of the issuance of any stop order or of any order preventing or
suspending the use of the Prospectus or suspending any such
qualification, to use promptly its best efforts to obtain its
withdrawal;
(b) To furnish promptly to the Agents and to counsel for the Agents
such number of conformed copies as the Agents shall reasonably request
of the Registration Statement as originally filed with the Commission,
and each amendment thereto filed with the Commission, including all
consents and exhibits filed therewith or incorporated by reference
therein and all documents incorporated by reference therein;
(c) To deliver promptly to the Agents such number of the following
documents as the Agents shall reasonably request: (i) the Basic
Prospectus, (ii) each Prospectus and any amended or supplemented
Prospectus and (iv) any documents incorporated by reference into the
Prospectus.
(d) If, during any Marketing Period, any event occurs as a result of
which the Prospectus would include an untrue statement of a material
fact or omit to state any material fact necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading, or if it is necessary at any time to amend any Prospectus to
comply with the Securities Act, to notify the Agents promptly, in
writing, to suspend solicitation of purchases of the Notes; and if the
Operating Partnership shall decide to amend or supplement the
Registration Statement or any Prospectus, to promptly advise the Agents
by telephone (with confirmation in writing) and to promptly, in writing,
prepare and file with the Commission an amendment or supplement which
will correct such statement or omission or an amendment which will
effect such compliance; provided, however, that if during the period
referred to above any Agent shall own any Notes which it has purchased
from the Operating Partnership as principal with the intention of
reselling them, the Operating Partnership shall promptly prepare and
timely file with the Commission any amendment or supplement to the
Registration Statement or any Prospectus that may, in the judgment of
the Operating Partnership or the Agents, be required by the Securities
Act or requested by the Commission. The aforementioned documents
furnished to the Agents 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.
(e) 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 Operating Partnership or
counsel for the Agents, be required by the Securities Act or requested
by the Commission;
(f) To timely file with the Commission during any Marketing Period, all
documents (and any amendments to previously filed documents) required to
be filed by the Operating Partnership pursuant to Section 13(a), 13(c),
14 or 15(d) of the Exchange Act.
(g) Prior to filing with the Commission during any Marketing Period,
any amendment to the Registration Statement or supplement to any
Prospectus or any Prospectus pursuant to Rule 424 of the Rules and
Regulations or any document incorporated by reference in any of the
foregoing or any amendment of or supplement to any such incorporated
document, to furnish a copy thereof to the Agents and counsel for the
Agents within a reasonable period of time prior to the filing thereof,
and that filing thereof shall not occur if the Agents shall have
objected in good faith thereto;
(h) To advise the Agents promptly (i) when any post-effective amendment
to the Registration Statement relating to or covering the Notes becomes
effective, (ii) of any request or proposed request by the Commission for
an amendment or supplement to the Registration Statement, to any
Prospectus, to any document incorporated by reference in any of the
foregoing or for any additional information and the Operating
Partnership will afford the Agents a reasonable opportunity to comment
on any such proposed amendment or supplement, (iii) of the issuance by
the Commission of any stop order suspending the effectiveness of the
Registration Statement or any part thereof or any order directed to any
Prospectus or any document incorporated therein by reference or the
initiation or threat of any stop order proceeding or of any challenge to
the accuracy or adequacy of any document incorporated by reference in
any Prospectus, (iv) of receipt by the Operating Partnership of any
notification with respect to the suspension of the qualification of the
Notes for sale in any jurisdiction or the initiation or threat of any
proceeding for that purpose, (v) of any downgrading in the rating of the
Notes or any other debt securities of the Operating Partnership, or any
proposal to downgrade the rating of the Notes or any other debt
securities of the Operating Partnership, by any "nationally recognized
statistical rating organization" (as defined for purposes of Rule 436(g)
under the Act), or any public announcement that any such organization
has under surveillance or review its rating of any debt securities of
the Operating Partnership (other than an announcement with positive
implications of a possible upgrading, and no implication of a possible
downgrading of such rating) as soon as the Operating Partnership learns
of any such downgrading, proposal to downgrade or public announcement
and (vi) of the happening of any event which makes untrue in any
material respect any statement of a material fact made in the
Registration Statement or any Prospectus or which requires the making of
a change in the Registration Statement or any Prospectus in order to
make any material statement therein, in light of the circumstances under
which it was made, not misleading.
(i) If, during any Marketing Period, the Commission shall issue a stop
order suspending the effectiveness of the Registration Statement, to
make every reasonable effort to obtain the lifting of that order at the
earliest possible time.
(j) As soon as practicable after the date of each acceptance by the
Operating Partnership of an offer to purchase Notes hereunder, but not
later than 18 months after any such offer, to make generally available
to its security holders an earnings statement covering a period of at
least 12 months beginning after the later of (i) the effective date of
the Registration Statement, (ii) the effective date of the most recent
post-effective amendment to the Registration Statement to become
effective prior to the date of such acceptance and (iii) the date of the
Operating Partnership's most recent Annual Report on Form 10-K filed
with the Commission prior to the date of such acceptance which will
satisfy the provisions of Section 11(a) of the Act (including, at the
option of the Operating Partnership, Rule 158 of the Rules and
Regulations under the Act);
(k) So long as any of the Notes are outstanding, to furnish to the
Agents, not later than the time the Operating Partnership makes the same
available to others, copies of all public reports or releases and all
reports and financial statements furnished by the Operating Partnership
to any securities exchange on which the Notes are listed pursuant to
requirements of or agreements with such exchange or to the Commission
pursuant to the Exchange Act or any rule or regulation of the Commission
thereunder.
(l) Promptly from time to time to take such action as the Agents may
reasonably request to qualify the Notes for offering and sale under the
securities, real estate syndication or Blue Sky laws of such
jurisdictions as the Agents may designate and to comply with such laws
so as to permit the continuance of sales and dealings therein in such
jurisdictions for as long as may be necessary to complete the
distribution of the Notes, except that the Operating Partnership shall
not be required in connection therewith to qualify as a foreign limited
partnership or to execute a consent to service of process in any
jurisdiction;
(m) Between the date of a Purchase Agreement and the date of delivery
of the Notes specified therein, neither of the Transaction Entities
will, directly or indirectly, offer for sale, contract to sell, sell or
otherwise dispose of, or register for sale under the Securities Act, any
debt securities, or sell or grant options, rights or warrants with
respect to any debt securities, without the prior written consent of
Lehman Brothers Inc., other than borrowings under the Operating
Partnership's revolving credit agreements and lines of credit, the
private placement of securities and issuances of its commercial paper;
(n) To apply the net proceeds from the sale of the Notes in accordance
with the description set forth in the Prospectus under the caption "Use
of Proceeds";
(o) To take such steps as shall be necessary to ensure that neither the
Company, the Operating Partnership nor any of their subsidiaries shall
become an "investment company" within the meaning of such term under the
Investment Company Act of 1940 and the rules and regulations of the
Commission thereunder;
(p) Except as stated in this Agreement and the Prospectus, neither
Transaction Entity has taken, nor will take, directly or indirectly, any
action designed to or that might reasonably be expected to cause or
result in stabilization or manipulation of the price of the Notes to
facilitate the sale or resale of the Notes;
(q) 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
(r) If this Agreement shall be terminated by the Agents 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 Agents
for all reasonable out-of-pocket expenses (including fees and expenses
of counsel for the Agents) incurred by the Agents in connection herewith
through the date of such termination.
(s) To prepare, with respect to any Notes to be sold through or to the
Agents pursuant to this Agreement, a Pricing Supplement with respect to
such Notes in a form previously approved by the Agents and to file such
Pricing Supplement pursuant to Rule 424 under the Act with the
Commission. (F2)
(F2) If clause (b)(3) of Rule 424 is applicable, such filing shall
be made no later than the fifth business day following the earlier
of the date of determination of the settlement information
described below or the date such Pricing Supplement is first used.
If clause (b)(2) or (b)(5) of Rule 424 is applicable, such filing
shall be made no later than the second busines day following the
earlier of the date of determination of the settlement information
or the date such Pricing Supplement is first used.
3. EXPENSES. The Transaction Entities jointly and severally agree to
pay (a) the costs incident to the authorization, issuance, sale and
delivery of the Notes and any taxes payable in that connection; (b) the
costs incident to the preparation, printing and filing under the
Securities Act of the Registration Statement and any amendments and
exhibits thereto; (c) the costs incident to the preparation, printing
and filing of any document and any amendments and exhibits thereto
required to be filed by the Operating Partnership under the Exchange
Act; (d) the costs of distributing the Registration Statement, as
originally filed, and each amendment and post-effective amendment
thereof (including, in each case, exhibits), the Basic Prospectus, each
Prospectus, any supplement or amendment to any Prospectus and any
documents incorporated by reference in any of the foregoing documents;
(e) the fees and disbursements of the Trustee, any paying agent, any
calculation agent, any exchange rate agent and any other agents
appointed by the Operating Partnership, and their respective counsel;
(f) the costs and fees in connection with the listing of the Notes on
any securities exchange; (g) the cost and fees in connection with any
filings with the National Association of Securities Dealers, Inc.; (h)
the fees and disbursements of counsel to the Operating Partnership and
counsel to the Agents; (i) the fees paid to rating agencies in
connection with the rating of the Notes; (j) the fees and expenses of
qualifying the Notes under the securities laws of the several
jurisdictions as provided in Section 3(l) hereof and of preparing and
printing a Blue Sky Memorandum and a memorandum concerning the legality
of the Notes as an investment (including fees and expenses of counsel
for the Agents in connection therewith); (k) all advertising expenses in
connection with the offering of the Notes incurred with the consent of
the Operating Partnership; and (l) all other costs and expenses arising
out of the transactions contemplated hereunder and incident to the
performance of the Operating Partnership's obligations under this
Agreement or otherwise in connection with the activities of the Agents
under this Agreement.
4. CONDITIONS OF AGENTS' OBLIGATIONS. The respective obligations of
the Agents under this Agreement, as agents of the Operating Partnership,
to solicit offers to purchase the Notes; the obligation of any person
who has agreed to purchase, make payment for and take delivery of Notes;
and the obligation of any Agent to purchase Notes pursuant to any
Purchase Agreement, are all subject to (i) the accuracy, on each
Representation Date, of the representations and warranties of the
Transaction Entities contained herein, (ii) the accuracy of the
statements of the Transaction Entities' officers made in any certificate
furnished pursuant to the provisions hereof, (iii) the performance by
the Transaction Entities of each of its obligations hereunder and (iv)
each of the following additional terms and conditions:
(a) The Prospectus as amended or supplemented (including the Pricing
Supplement) with respect to such Notes shall have been filed with the
Commission pursuant to Rule 424(b) under the Act within the applicable
time period prescribed for such filing by the Rules and Regulations and
in accordance with Section 3(s) hereof; no stop order suspending the
effectiveness of the Registration Statement or any part thereof nor any
order directed to any document incorporated by reference in any
Prospectus shall have been issued and no stop order proceeding shall
have been initiated or threatened by the Commission and no challenge
shall have been made to the accuracy or adequacy of any document
incorporated by reference in any Prospectus; any request of the
Commission for inclusion of additional information in the Registration
Statement or any Prospectus or otherwise shall have been complied with;
and the Operating Partnership shall not have filed with the Commission
any amendment or supplement to the Registration Statement or any
Prospectus (or any document incorporated by reference therein) without
the consent of the Agents.
(b) No order suspending the sale of the Notes in any jurisdiction
designated by the Agents pursuant to Section 3(l) hereof shall have been
issued, and no proceeding for that purpose shall have been initiated or
threatened.
(c) Subsequent to the effective date of this Agreement, there shall not
have occurred (i) any change, or any development involving a prospective
change, in or affecting the condition, financial or otherwise, business,
properties, net worth, or results of operations of either Transaction
Entity or any of their subsidiaries or any Property not contemplated by
the Prospectus, which, in the opinion of the Agents, would materially
adversely affect the market for the Notes, or (ii) any event or
development relating to or involving either Transaction Entity, or any
partner, officer, director or trustee of either Transaction Entity,
which makes any statement of a material fact made in the Prospectus
untrue or which, in the opinion of the Company and its counsel or the
Agents and their counsel, requires the making of any addition to or
change in the Prospectus in order to state a material fact required by
the Securities Act or any other law to be stated therein or necessary in
order to make the statements therein not misleading, if amending or
supplementing the Prospectus to reflect such event or development would,
in your opinion, materially adversely affect the market for the Notes.
(d) All corporate and partnership proceedings and other legal matters
incident to the authorization, form and validity of this Agreement, the
Indenture, the Notes, the Registration Statement and each Prospectus,
and all other legal matters relating to this Agreement, the Indenture,
the Notes, the Registration Statement and the Prospectus and the
transactions contemplated hereby and thereby shall be reasonably
satisfactory in all material respects to counsel for the Agents, 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.
(e) At the Closing Date, the Agents shall have received the opinion,
addressed to the Agents and dated the Closing Date, of Wolf, Block,
Schorr and Solis-Cohen LLP, counsel to the Transaction Entities, in form
and substance satisfactory to the Agents and their counsel, to the
effect that:
(i) The Company is in good standing as a foreign trust or
corporation in those jurisdictions listed in such opinion.
(ii) The Operating Partnership has been duly formed and is
validly existing as a limited partnership under the laws of the
Commonwealth of Pennsylvania, is duly qualified to do business as a
foreign limited partnership in Delaware, Florida, Maryland, Michigan,
Minnesota, New Jersey, North Carolina, South Carolina, Tennessee, Texas
and Virginia, and has all partnership power and authority necessary to
own or hold its properties, to conduct the business in which it is
engaged as described in the Registration Statement and the Prospectus,
and to enter into and perform its obligations under this Agreement. The
Company is the sole general partner of the Operating Partnership. The
Operating Partnership Agreement is in full force and effect, and the
aggregate percentage interests of the Company and the limited partners
in the Operating Partnership are as set forth in the Prospectus. All of
the partnership interests of the Operating Partnership have been duly
and validly authorized and issued, are fully paid and, to the extent
that such interests are owned by the Company, are owned by the Company
free and clear of all liens, encumbrances, equities or claims.
(iii) Development Corp. has been duly formed and is validly
existing as a corporation in good standing under the laws of the
Commonwealth of Pennsylvania, is duly qualified to do business and is in
good standing as a foreign corporation in Delaware, Florida, Maryland,
New Jersey and North Carolina, and has all corporate power and authority
necessary to own or hold its properties and to conduct the business in
which it is engaged as described in the Registration Statement and the
Prospectus. All of the issued and outstanding capital stock of
Development Corp. has been duly authorized and validly issued and is
fully paid and non-assessable, has been offered and sold in compliance
with all applicable laws (including, without limitation, federal or
state securities laws) and all of the capital stock of Development Corp.
owned by the Operating Partnership, as described in the Prospectus, is
owned free and clear of any security interest, mortgage, pledge, lien,
encumbrance, claim, restriction or equities.
(iv) Development-II has been duly formed and is validly existing
as a corporation in good standing under the laws of the Commonwealth of
Pennsylvania, and has all corporate power and authority necessary to own
or hold its properties and to conduct the business in which it is
engaged as described in the Registration Statement and the Prospectus.
All of the issued and outstanding capital stock of Development-II has
been duly authorized and validly issued and is fully paid and non-
assessable, has been offered and sold in compliance with all applicable
laws (including, without limitation, federal or state securities laws)
and all of the capital stock of Development-II owned by the Operating
Partnership, as described in the Prospectus, is owned free and clear of
any security interest, mortgage, pledge, lien, encumbrance, claim,
restriction or equities.
(v) SP Corp. has been duly formed and is validly existing as a
corporation in good standing under the laws of the Commonwealth of
Pennsylvania and has all corporate and authority necessary to own or
hold its properties and to conduct the business in which it is engaged
as described in the Registration Statement and the Prospectus. All of
the issued and outstanding capital stock of SP Corp. has been duly
authorized and validly issued and is fully paid and non-assessable, is
owned by the Company free and clear of any security interest, mortgage,
pledge, lien, encumbrance, claim, restriction or equities and has been
offered and sold in compliance with all applicable laws (including,
without limitation, federal or state securities laws).
(vi) Each of the Property Affiliates has been duly organized and
is validly existing as a limited partnership, limited liability company
or other entity in good standing under the laws of the jurisdiction in
which it is organized, and has all partnership power and authority
necessary to own or hold its properties and to conduct the business in
which it is engaged. Except as set forth in the Prospectus, all of the
partnership interests, membership interests or other equity interests,
as the case may be, of each Property Affiliate have been duly and
validly authorized and issued, are fully paid and non-assessable and all
of such interests owned directly or indirectly by the Company and the
Operating Partnership, as described in the Prospectus, are owned free
and clear of any security interest, mortgage, pledge, lien, encumbrance,
claim, restriction or equities.
(vii) (A)This Agreement has been duly and validly authorized,
executed and delivered by the Operating Partnership, and has been duly
and validly executed and delivered by the Company, and assuming due
authorization, execution and delivery by the Agents and due
authorization by the Company, is a valid and binding agreement of the
Operating Partnership; and (B) the partnership agreement, limited
liability company agreement or similar such document of each Property
Affiliate has been duly and validly authorized, executed and delivered
by the Operating Partnership, and each such agreement and the Operating
Partnership Agreement have been duly and validly executed and delivered
by the Company, and assuming due authorization by the Company, each such
agreement is a valid and binding agreement of the parties thereto,
enforceable against such parties in accordance with its terms.
(viii) (A) The Indenture has been duly authorized, executed and
delivered by the Operating Partnership, duly qualified under the
Indenture Act and (assuming due authorization, 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; and (B) the Indenture conforms in all
material respects to the descriptions thereof contained in the
Registration Statement and the Prospectus.
(ix) The Notes are in a form contemplated by the Indenture and
have been validly authorized for issuance and sale pursuant to this
Agreement and, when the terms of the Notes and of their issue and sale
have been duly established in accordance with the Indenture and this
Agreement so as not to violate any applicable law or agreement or
instrument then binding on the Operating Partnership, and when the Notes
have been duly executed, authenticated and delivered against payment
therefor as provided in this Agreement and the Indenture, the Notes will
be validly issued and outstanding, and will constitute valid and legally
binding obligations of the Operating Partnership entitled to the
benefits of the Indenture and enforceable in accordance with their terms
and the terms of the Indenture. The terms of the Notes conform in all
material respects to all statements and descriptions related thereto
contained in the Registration Statement and the Prospectus. The Notes
rank and will rank on a parity with all unsecured indebtedness (other
than subordinated indebtedness of the Operating Partnership that was
outstanding on the date of the applicable Pricing Supplement or that may
be incurred thereafter), and senior to all subordinated indebtedness of
the Operating Partnership that was outstanding on the date of the
applicable Pricing Supplement or that may be incurred thereafter, except
that the Notes will be effectively subordinated to the prior claims of
each secured mortgage lender to any specific Property which secures such
lender's mortgage.
(x) To the knowledge of such counsel, the execution, delivery and
performance of this Agreement by each of the Transaction Entities, the
execution, delivery and performance of the Indenture, the Notes, and
each applicable Purchase Agreement, if any, by the Operating
Partnership, the consummation of the transactions contemplated hereby
and thereby, and the compliance by the Operating Partnership with the
provisions of the Notes and the Indenture, will not conflict with or
result in a breach or violation of any of the terms or provisions of,
result in the creation or imposition of any lien, charge or encumbrance
upon any of the assets of either of the Transaction Entities or any of
their subsidiaries pursuant to the terms of, or constitute a default
under, any indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument to which either of the Transaction Entities or
their subsidiaries is a party or by which either of the Transaction
Entities or their subsidiaries is bound or to which any of the
Properties or other assets of either of the Transaction Entities is
subject, nor will such actions result in any violation of the provisions
of the charter, by-laws, certificate of limited partnership or agreement
of limited partnership of either of the Transaction Entities or 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 properties or assets; and
except for the registration of the Notes under the Securities Act and
the qualification of the Indenture under the Trust Indenture Act and
such consents, approvals, authorizations, registrations or
qualifications as may be required under the Exchange Act and applicable
state securities laws in connection with the issuance and delivery of
the Notes by the Company and the purchase and distribution of the Notes
by the Agents, no consent, approval, authorization or order of, or
filing or registration with, any such court or governmental agency or
body is required for the execution, delivery and performance of this
Agreement by the Transaction Entities or the Notes, each applicable
Purchase Agreement, if any, or the Indenture by the Operating
Partnership, the consummation of the transactions contemplated hereby
and thereby, and the issuance and delivery of the Notes.
(xi) (A) The issuance and delivery of the Notes by the Operating
Partnership and the compliance by the Operating Partnership with all of
the provisions of this Agreement, and the consummation of the
transactions contemplated hereby, have been duly authorized by all
necessary partnership action; and (B) the execution, delivery and
performance of this Agreement by each of the Transaction Entities and
the consummation of the transactions contemplated hereby will not
conflict with or result in any violation of the provisions of the
charter, by-laws, certificate of limited partnership or agreement of
limited partnership of either of the Transaction Entities or their
subsidiaries.
(xii) Except as set forth in the Prospectus, to the knowledge of
such counsel, there are no preemptive or other rights to subscribe for
or to purchase, nor any restriction upon the transfer of, the Notes
pursuant to the Operating Partnership's certificate of limited
partnership, its agreement of limited partnership, as amended to the
date hereof, or any agreement or other instrument to which the Operating
Partnership is a party.
(xiii) To the knowledge of such counsel, other than as set forth
in the Prospectus and other than rights of persons whose securities are
already registered under the Securities Act, there are no contracts,
agreements or understandings between the Company and/or the Operating
Partnership, on the one hand, and any person, on the other, granting
such person the right to require the Company or the Operating
Partnership to file a registration statement under the Securities Act
with respect to any securities of the Company or the Operating
Partnership owned or to be owned by such person or to require the
Company or the Operating Partnership to include such securities in the
securities registered pursuant to the Registration Statement or in any
securities being registered pursuant to any other registration statement
filed by the Company or the Operating Partnership under the Securities
Act.
(xiv) To the knowledge of such counsel, there are no legal or
governmental proceedings pending to which either Transaction Entity or
their subsidiaries is a party or of which any property or assets of
either Transaction Entity or their subsidiaries is the subject which are
not disclosed in the Prospectus and which, if determined adversely to
such Transaction Entity or subsidiary, might reasonably be expected to
have a material adverse effect on the consolidated financial position,
owners' equity, results of operations, business or prospects of the
Company; and to the knowledge of such counsel no such proceedings are
threatened or contemplated by governmental authorities or threatened by
others.
(xv) To the knowledge of such counsel, there are no contracts or
other documents which are required by the Securities Act or by the Rules
and Regulations to be described in the Prospectus or filed as exhibits
to the Registration Statement which have not been described in the
Prospectus or filed as exhibits to the Registration Statement or
incorporated therein by reference as permitted by the Rules and
Regulations.
(xvi) To the knowledge of such counsel, no relationship, direct
or indirect, exists between or among either of the Transaction Entities
on the one hand, and the trustees, officers, shareholders, customers or
suppliers of the Transaction Entities on the other hand, which is
required to be described in the Prospectus which is not so described.
(xvii) To the knowledge of such counsel, each Transaction Entity
is in compliance in all material respects with all presently applicable
provisions of ERISA; to the knowledge of such counsel, no "reportable
event" (as defined in ERISA) has occurred with respect to any "pension
plan" (as defined in ERISA) for which either Transaction Entity would
have any liability; to the knowledge of such counsel, neither
Transaction Entity has incurred or expects to incur, liability under (i)
Title IV of ERISA with respect to termination of, or withdrawal from,
any "pension plan" or (ii) section 412 or 4971 of the Code; and, to the
knowledge of such counsel, each "pension plan" for which either
Transaction Entity would have any liability that is intended to be
qualified under section 401(a) of the Code is so qualified in all
material respects and, to the knowledge of such counsel, nothing has
occurred, whether by action or by failure to act, which would cause the
loss of such qualification.
(xviii) To the knowledge of such counsel, no Transaction Entity
or Property Affiliate is in violation of its charter, by-laws,
certificate of limited partnership, agreement of limited partnership, or
other similar organizational document, or, to the knowledge of such
counsel, has a default been asserted in any respect, and, to the
knowledge of such counsel, it has not been asserted that any event has
occurred which, with notice or lapse of time or both, would constitute
such a default, in the due performance or observance of any term,
covenant or condition contained in any material indenture, mortgage,
deed of trust, loan agreement or other material agreement or instrument
to which it is a party or by which it is bound or to which any of the
Properties or any of its other properties or assets is subject.
(xix) No consent, approval, authorization or other order of, or
registration or filing with, any court, regulatory body, administrative
agency or other governmental body, agency, or official is required to
the date hereof on the part of the Company (except as have been obtained
or made under the Securities Act and the Exchange Act or such as may be
required under state securities, real estate syndication or Blue Sky
laws governing the purchase and distribution of the Notes) for the valid
issuance and sale of the Notes to the Agents as contemplated by this
Agreement.
(xx) Neither Transaction Entity or their subsidiaries is an
"investment company" within the meaning of such term under the
Investment Company Act of 1940 and the rules and regulations of the
Commission thereunder.
(xxi) The Operating Partnership is not required to register under
the provisions of the Investment Company Act; and no action need be
taken with respect to or under the Investment Company Act by reason of
the issuance of the Notes by the Operating Partnership.
(xxii) The documents incorporated or deemed to be incorporated by
reference in the Prospectus pursuant to Item 12 of Form S-3 under the
Securities Act (other than the financial statements and related
schedules and financial information and data included therein, as to
which no opinion need be rendered), at the time they were filed with the
Commission, complied as to form in all material respects with the
requirements of the Exchange Act and the rules and regulations
thereunder.
(xxiii) The Registration Statement was declared effective under
the Securities Act and the Indenture was duly qualified under the Trust
Indenture Act as of the date and time specified in such opinion, the
Prospectus was filed with the Commission pursuant to the subparagraph of
Rule 424(b) of the Rules and Regulations specified in such opinion on
the date specified therein and, to the knowledge of such counsel, no
stop order suspending the effectiveness of the Registration Statement
has been issued and, to the knowledge of such counsel, no proceeding for
that purpose is pending or threatened by the Commission.
(xxiv) To the knowledge of such counsel, no order directed to any
document incorporated by reference in the Prospectus has been issued and
no assertion of a material misstatement or omission regarding any such
document has been made.
(xxv) The Registration Statement and the Prospectus (other than
the financial statements and related schedules and other financial
information and data included therein, as to which such counsel need
express no opinion) comply as to form in all material respects with the
requirements of the Securities Act, the Rules and Regulations and the
Trust Indenture Act and the rules and regulations thereunder, and the
Indenture conforms in all material respects to the requirements of the
Trust Indenture Act and the rules and regulations thereunder.
(xxvi) The Operating Partnership is classified as a partnership
(and is not taxed as a corporation) for federal income tax purposes.
(xxvii) The statements contained in the Prospectus under the
captions "Risk Factors," "Description of Debt Securities," "Description
of Notes," and "Special Provisions Relating to Multi-Currency Notes,"
insofar as those statements are descriptions of contracts, agreements or
other legal documents, or they describe federal statutes, rules and
regulations, and except to the extent such statements are statistics or
calculations, constitute a fair summary thereof.
(xxviii) The description contained in the Prospectus under the
headings "Federal Income Tax Considerations With Respect to the Trust
and the Operating Partnership," and "Certain United States Federal
Income Tax Considerations," while not purporting to discuss all possible
income tax ramifications of the proposed issuance, is correct in all
material respects.
Such counsel shall state that Rogers & Wells, counsel for the
Agents, may rely on its opinion in Section 5(e)(A)(ii) with regard to
the due formation of the Operating Partnership for the purpose of giving
its opinion as required by Section 5(f) hereof.
In rendering such opinion, such counsel may (i) state that its
opinion is limited to matters governed by the Federal laws of the United
States of America, the laws of the Commonwealth of Pennsylvania and the
laws of the State of Maryland; (ii) as to matters of Maryland law, state
that its opinion is given solely in reliance upon the opinion of
Weinberg & Green LLC; (iii) state that its opinion does not address (A)
Federal Reserve Board margin regulations; (B) Federal or state antitrust
and unfair competition laws and regulations; (C) Local Laws (as defined
in The Legal Opinion Accord of the ABA Section of Business Law (1991);
(D) compliance with fiduciary duty requirements; (E) Federal and state
racketeering laws and regulations; (F) Federal and state health and
safety laws and regulations; and (G) Federal and state laws, regulations
and policies concerning (x) national and local emergency, (y) possible
judicial deference to acts of foreign states, and (z) criminal and civil
forfeiture laws; and (iv) in giving the opinion referred to in subclause
(B) in Section 5(e)(A)(vii)(A), state that such opinion with respect to
the enforceability of such documents may be limited by bankruptcy,
fraudulent conveyance, insolvency, reorganization, moratorium, and other
laws relating to or affecting creditors' rights generally and by general
equitable principles. Such counsel shall also have furnished to the
Agents a written statement, addressed to the Agents and dated the
Closing Date, in form and substance satisfactory to the Agents, to the
effect that (x) such counsel has acted as counsel to the Transaction
Entities in connection with the preparation of the Registration
Statement and the Prospectus and (y) based on the foregoing, no facts
have come to the attention of such counsel which lead it to believe that
the Registration Statement, as of the Effective Date, contained any
untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary in order to make the
statements therein not misleading, or that the Prospectus contains any
untrue statement of a material fact or omits to state a material fact
required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were
made, not misleading, or that any documents incorporated by reference in
the Prospectus, when they became effective or were so filed, as the case
may be, contained, in the case of a registration statement which became
effective under the Securities Act, an untrue statement of a material
fact or omitted to state a material fact required to be stated therein
or necessary to make the statements therein not misleading, and in the
case of other documents which were filed under the Securities Act of the
Exchange Act with the Commission, an untrue statement of a material fact
or omitted to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made when such documents were so filed, not misleading. The
foregoing opinions 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, the Prospectus or any documents incorporated by
reference in the Prospectus except to the extent of the opinion
contained in Section 5(e)(A)(xxv), and may state that such counsel
expresses no belief with respect to the financial statements and notes
thereto and other financial information and data included or
incorporated by reference in, or omitted from, the Registration
Statement or the Prospectus or the Statement of Eligibility on Form T-1
of the Trustee.
(f) At the Closing Date, the Agents shall have received the opinion,
addressed to the Agents and dated the Closing Date, of Weinberg & Green
LLC, Maryland counsel to the Company, in form and substance reasonably
satisfactory to the Agents and their counsel, to the effect that:
(i) The Company has been duly formed and is validly existing as a
real estate investment trust in good standing under and by virtue of the
laws of the State of Maryland, is in good standing with the State
Department of Assessments and Taxation of Maryland, and has all trust
power and authority necessary to own or hold its properties and to
conduct the business in which it is engaged as described in the
Registration Statement and the Prospectus, and to enter into and perform
its obligations under this Agreement.
(ii) This Agreement has been duly and validly authorized,
executed and delivered by the Company, and assuming due authorization,
execution and delivery by the Agents and the Operating Partnership, is a
valid and binding agreement of the Company.
(iii) To the knowledge of such counsel, the execution, delivery
and performance of this Agreement by the Company and the consummation of
the transactions contemplated hereby will not conflict with or result in
any violation of the provisions of any statute or any order, rule or
regulation of any court or governmental agency or body of the State of
Maryland that has jurisdiction over the Company or any of its properties
or assets.
(iv) The execution, delivery and performance of this Agreement by
the Company and the consummation of the transactions contemplated hereby
will not conflict with or result in any violation of the provisions of
the Declaration of Trust or by-laws of the Company.
(v) To the knowledge of such counsel, there are no legal or
governmental proceedings pending to which the Company is a party or of
which any property or assets of the Company is the subject which are not
disclosed in the Prospectus and which, if determined adversely to the
Company, might reasonably be expected to have a material adverse effect
on the consolidated financial position, shareholders' equity, results of
operations, business or prospects of the Company; and to the knowledge
of such counsel no such proceedings are threatened or contemplated by
governmental authorities or threatened by others.
Such counsel shall state that Rogers & Wells, counsel for the
Agents, may rely on its opinion.
(g) The Agents shall have received from Rogers & Wells, counsel for the
Agents, such opinion or opinions, dated the Closing Date, with respect
to the issuance and sale of the Notes, the Registration Statement, the
Prospectus and other related matters as the Agents 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.
(h) The Operating Partnership shall have furnished to the Agents on the
Closing Date a letter of Ernst & Young LLP, addressed jointly to the
Operating Partnership and the Agents and dated the Closing Date, of the
type described in the American Institute of Certified Public
Accountants' Statement on Auditing Standards No. 49, in form and
substance reasonably satisfactory to the Agents confirming that they are
independent accountants within the meaning of the Act and the applicable
published Rules and Regulations thereunder and stating in effect that:
(i) In their opinion, the financial statements and schedules
examined by them and included in the prospectus contained in the
Registration Statement comply in form in all material respects with the
applicable accounting requirements of the Act and the related published
Rules and Regulations;
(ii) They have made a review of any unaudited financial
statements included in the Prospectus in accordance with standards
established by the American Institute of Certified Public Accountants,
as indicated in their report or reports attached to such letter;
(iii) On the basis of the review referred to in (ii) above and a
reading of the latest available interim financial statements of the
Operating Partnership, inquiries of officials of the Operating
Partnership who have responsibility for financial and accounting matters
and other specified procedures, nothing came to their attention that
caused them to believe that:
A. the unaudited financial statements, if any, included
in the Prospectus do not comply in form in all material respects with
the applicable accounting requirements of the Act and the related
published Rules and Regulations or are not in conformity with generally
accepted accounting principles applied on a basis substantially
consistent with that of the audited financial statements included in the
Prospectus;
B. the unaudited capsule information, if any, included in
the Prospectus does not agree with the amounts set forth in the
unaudited consolidated financial statements from which it was derived or
was not determined on a basis substantially consistent with that of the
audited financial statements included in the Prospectus;
C. at the date of the latest available balance sheet read
by such accountants, or at a subsequent specified date not more than
five days prior to the Closing Date, there was any change in the capital
stock, any increase in short-term indebtedness or long-term debt of the
Operating Partnership and consolidated subsidiaries or, at the date of
the latest available balance sheet read by such accountants, there was
any decrease in consolidated net current assets or net assets as
compared with amounts shown on the latest balance sheet included in the
Prospectus; or
D. for the period from the date of the latest income
statement included in the Prospectus to the closing date of the latest
available income statement read by such accountants there were any
decreases, as compared with the corresponding period of the previous
year, in consolidated rental income, total revenues, net income or in
the ratio of earnings to fixed charges;
except in all cases set forth in clauses C. and D. above for changes,
increases or decreases which the Prospectus discloses have occurred or
may occur or which are described in such letter; and
(iv) They have compared specified dollar amounts (or percentages
derived from such dollar amounts) and other financial information
contained in the Prospectus (in each case to the extent that such dollar
amounts, percentages and other financial information are derived from
the general accounting records of the Company and its subsidiaries
subject to the internal controls of the Company's accounting system or
are derived directly from such records by analysis or computation) with
the results obtained from inquiries, a reading of such general
accounting records and other procedures specified in such letter and
have found such dollar amounts, percentages and other financial
information to be in agreement with such results, except as otherwise
specified in such letter.
All financial statements and schedules included in material
incorporated by reference into the Prospectus shall be deemed included
in the Prospectus for purposes of this subsection.
(i) The Transaction Entities shall have furnished to the Agents on the
Closing Date a certificate, dated the Closing Date, of the Chairman of
the Board, Chief Executive Officer, President or a Vice President of the
Company and the Chief Financial Officer, Treasurer or an Assistant
Treasurer of the Company (in each case, for the Company and for the
Company as general partner of the Operating Partnership) stating that:
(i) The representations, warranties and agreements of the Company
in Section 1 hereof are true and correct as of the Closing Date; each
Transaction Entity has complied with all its agreements contained
herein; and the conditions set forth in Sections 5(a) and 5(b) hereof
have been fulfilled; and
(ii) They have carefully examined the Registration Statement and
the Prospectus and, in their opinion, (A) the Registration Statement, as
of its effective date, did not contain any untrue statement of a
material fact or omitted to state any material fact required to be
stated therein or necessary to make the statements therein not
misleading, (B) the Prospectus does not contain any untrue statement of
a material fact or omit to state a material fact required to be stated
therein or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading,
and (C) since the effective date of the Registration Statement there has
not occurred any event required to be set forth in an amended or
supplemented prospectus which has not been so set forth.
(j) (i) None of the Transaction Entities or their subsidiaries or any
Property shall have sustained any loss or interference with its business
from fire, explosion, flood or other calamity, whether or not covered by
insurance, or from any labor dispute or court or governmental action,
order or decree, otherwise than as set forth or contemplated in the
Prospectus, and there shall not have been any change in the capital
stock or long-term debt of either Transaction Entity or any of their
subsidiaries 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 the
judgment of the Agents, materially impairs the investment quality of the
Notes; (ii) 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, (iii) a banking moratorium
shall have been declared by Federal or state authorities, (iv) 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 (v) there shall have occurred such a material adverse
change in general economic, political or financial conditions (or the
effect of international conditions on the financial markets in the
United States shall be such), as to make it, in the judgment of a
majority in interest of the several Agents, impracticable or inadvisable
to proceed with the solicitation of offers to purchase Notes or the
purchase of Notes from the Operating Partnership as principal pursuant
to the applicable Purchase Agreement, as the case may be.
(k) Subsequent to the execution and delivery of this Agreement (i) no
downgrading shall have occurred in the rating accorded the Operating
Partnership's debt securities by any "nationally recognized statistical
rating organization," as that term is defined by the Commission for
purposes of Rule 436(g)(2) of the Rules and Regulations and (ii) no such
organization shall have publicly announced that it has under
surveillance or review, with possible negative implications, its rating
of any of the Operating Partnership's debt securities.
(l) The Transaction Entities shall not have failed at or prior to the
Closing Date to have performed or complied with any of their agreements
herein contained and required to be performed or complied with by them
hereunder at or prior to the Closing Date.
(m) On the Closing Date, counsel for the Agents shall have been
furnished with such documents and opinions as they may require for the
purpose of enabling them to pass upon the issuance and sale of the Notes
as herein contemplated and related proceedings, or in order to evidence
the accuracy of any of the representations or warranties, or the
fulfillment of any of the conditions, herein contained; and all
proceedings taken by the Transaction Entities in connection with the
issuance and sale of the Notes as herein contemplated shall be
satisfactory in form and substance to the Agents and counsel for the
Agents.
(n) Prior to the Closing Date the Operating Partnership shall have
furnished or caused to be furnished to the Agents such further
certificates and documents as the Agents 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 Agents.
Any certificate or document signed by any officer of the
Transaction Entities and delivered to the Agents, or to counsel for the
Agents, shall be deemed a representation and warranty by the Transaction
Entities to each Agent as to the statements made therein.
5. ADDITIONAL AGREEMENTS OF THE TRANSACTION ENTITIES. Each of the
Transaction Entities jointly and severally agrees:
(a) Each acceptance by the Operating Partnership of an offer for the
purchase of Notes shall be deemed to be an affirmation that the
representations and warranties of the Transaction Entities contained in
this Agreement and in any certificate theretofore given to the Agents
pursuant hereto are true and correct in all material respects at the
time of such acceptance, and an undertaking that such representations
and warranties will be true and correct in all material respects at the
time of delivery to the purchaser or his agent of the Notes relating to
such acceptance as though made at and as of each such time (and such
representations and warranties shall relate to the Registration
Statement and the Prospectus as amended or supplemented to each such
time).
(b) The Operating Partnership agrees that during each Marketing Period,
each time that the Registration Statement or any Prospectus shall be
amended or supplemented (other than by a Pricing Supplement providing
solely for the interest rates or maturities of the Notes or the
principal amount of Notes remaining to be sold or similar changes), each
time the Operating Partnership sells Notes to an Agent as principal and
the applicable Purchase Agreement specifies the delivery of an officers'
certificate under this Section 6(b) as a condition to the purchase of
Notes pursuant to such Purchase Agreement or the Operating Partnership
files with the Commission any document incorporated by reference into
any Prospectus, the Operating Partnership shall submit to the Agents a
certificate, (i) as of the date of such amendment, supplement, Time of
Delivery relating to such sale or filing or (ii) if such amendment,
supplement or filing was not filed during a Marketing Period, as of the
first day of the next succeeding Marketing Period, representing that the
statements contained in the certificate referred to in Section 5(h)
hereof which was last furnished to the Agents are true and correct in
all material respects at the time of such amendment, supplement or
filing, as the case may be, as though made at and as of such time
(except that such statements shall be deemed to relate to the
Registration Statement and each Prospectus as amended and supplemented
to such time).
(c) The Operating Partnership agrees that during each Marketing Period,
each time that the Registration Statement or any Prospectus shall be
amended or supplemented (other than by a Pricing Supplement providing
solely for the interest rates or maturities of the Notes or the
principal amount of Notes remaining to be sold or similar changes), each
time the Operating Partnership sells Notes to an Agent as principal and
the applicable Purchase Agreement specifies the delivery of a legal
opinion under this Section 6(c) as a condition to the purchase of Notes
pursuant to such Purchase Agreement or the Operating Partnership files
with the Commission any document incorporated by reference into any
Prospectus, the Operating Partnership shall, (i) concurrently with such
amendment, supplement, Time of Delivery relating to such sale or filing
or (ii) if such amendment, supplement or filing was not filed during a
Marketing Period, on the first day of the next succeeding Marketing
Period, furnish the Agents and their counsel with the written opinions
of Wolf, Block, Schorr and Solis-Cohen LLP and of Weinberg & Green LLC,
each addressed to the Agents and dated the date of delivery of such
opinion, in form satisfactory to the Agents, of the same effect as the
opinions referred to in Section 5(e) hereof, but modified, as necessary,
to relate to the Registration Statement and each Prospectus as amended
or supplemented to the time of delivery of such opinion; provided,
however, that in lieu of such opinions, each such counsel may furnish
the Agents with a letter to the effect that the Agents may rely on the
applicable prior opinion to the same extent as though it was dated the
date of such letter authorizing reliance (except that statements in such
prior opinion shall be deemed to relate to the Registration Statement
and each Prospectus as amended or supplemented to the time of delivery
of such letter authorizing reliance).
(d) The Operating Partnership agrees that during each Marketing Period,
each time that the Registration Statement or any Prospectus shall be
amended or supplemented to include additional financial information,
each time the Operating Partnership sells Notes to an Agent as principal
and the applicable Purchase Agreement specifies the delivery of a letter
under this Section 6(d) as a condition to the purchase of Notes pursuant
to such Purchase Agreement or the Operating Partnership files with the
Commission any document incorporated by reference into any Prospectus
which contains additional financial information, the Operating
Partnership shall cause Ernst & Young LLP (or other independent accounts
of the Operating Partnership acceptable to the Agents to furnish the
Agents, (i) concurrently with such amendment, supplement, Time of
Delivery relating to such sale or filing or (ii) if such amendment,
supplement, or filing was not filed during a Marketing Period, on the
first day of the next succeeding Marketing Period, a letter, addressed
jointly to the Operating Partnership and the Agents and dated the date
of delivery of such letter, in form and substance reasonably
satisfactory to the Agents, of the same effect as the letter referred to
in Section 5(g) hereof but modified to relate to the Registration
Statement and each Prospectus, as amended and supplemented to the date
of such letter, with such changes as may be necessary to reflect changes
in the financial statements and other information derived from the
accounting records of the Operating Partnership; provided, however, that
if the Registration Statement or any Prospectus is amended or
supplemented solely to include financial information as of and for a
fiscal quarter, such accountants may limit the scope of such letter to
the unaudited financial statements included in such amendment or
supplement unless there is contained therein any other accounting,
financial or statistical information that, in the reasonable judgment of
the Agents, should be covered by such letter, in which event such letter
shall also cover such other information.
(e) On any settlement date for the sale of Notes, the Operating
Partnership shall, if requested by the Agent that solicited or received
the offer to purchase any Notes being delivered on such settlement date,
furnish such Agent with the written opinions of Wolf, Block, Schorr and
Solis Cohen LLP and Weinberg & Green LLC, each dated such settlement
date, in form satisfactory to such Agent, to the effect set forth in
section 5(e) hereof, but modified, as necessary, to relate to the
Prospectus relating to the Notes to be delivered on such settlement
date; provided, however, that in lieu of such opinions, each such
counsel may furnish the Agents with letters to the effect that the
Agents may rely on the applicable prior opinion to the same extent as
though it was dated such settlement date (except that statements in such
prior opinion shall be deemed to relate to the Registration Statement
and such Prospectus as amended or supplemented to the time of delivery
of such letter authorizing reliance).
6. INDEMNIFICATION AND CONTRIBUTION.
(a) The Transaction Entities, jointly and severally, shall indemnify
and hold harmless each Agent, its officers and employees and each
person, if any, who controls any Agent 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
solicitations of offers to purchase and purchases of Notes from the
Operating Partnership by an Agent as Principal), to which such Agent,
officer, employee or controlling person may become subject, under the
Securities Act, the Exchange Act or other federal or state statutory law
or regulation, at common law or otherwise, insofar as such loss, claim,
damage, liability or action arises out of, or is based upon, (i) any
untrue statement or alleged untrue statement of a material fact
contained (A) the Registration Statement or the Prospectus or in any
amendment or supplement thereto or (B) in any blue sky application or
other document prepared or executed by the Operating Partnership (or
based upon any written information furnished by the Operating
Partnership) specifically for the purpose of qualifying any or all of
the Notes under the securities laws of any state or other jurisdiction
(any such application, document or information being hereinafter called
a "Blue Sky Application"), (ii) the omission or alleged omission to
state in the Registration Statement or the Prospectus, or in any
amendment or supplement thereto, or in any Blue Sky Application any
material fact required to be stated therein or necessary to make the
statements therein not misleading (with respect to the Prospectus, in
light of the circumstances under which they were made), and shall
reimburse each Agent, officer, employee or controlling person for any
legal and other expenses reasonably incurred by such Agent, officer,
employee or controlling person in investigating or defending or
preparing to defend against such loss, claim, damage, liability or
action; 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 the Registration Statement or the Prospectus, or in any such
amendment or supplement, or in any Blue Sky Application, in reliance
upon and in conformity with written information furnished to the
Transaction Entities through the Agents by or on behalf of any Agent
specifically for inclusion therein; provided further, that as to any
prospectus included in the Registration Statement before it became
effective under the Securities Act (a "Preliminary Prospectus") this
indemnity agreement shall not inure to the benefit of any Agent on
account of any loss, claim, damage, liability or action arising from the
sale of Notes to any person by that Agent if that Agent failed to send
or give a copy of the Prospectus, as the same may be amended or
supplemented, to that person within the time required by the Act, and
the untrue statement or alleged untrue statement of a material fact or
omission or alleged omission to state a material fact in such
Preliminary Prospectus was corrected in the Prospectus, unless such
failure resulted from non-compliance by the Operating Partnership with
Section 3(b). The foregoing indemnity agreement is in addition to any
liability which the Transaction Entities may otherwise have to any Agent
or to any officer, employee or controlling person of that Agent.
(b) Each Agent, severally and not jointly, shall indemnify and hold
harmless each Transaction Entity, each of its directors, its officers
who signed the Registration Statement 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 director, officer or controlling person may become
subject, under the Securities Act, the Exchange Act or other federal or
state statutory law or regulation, at common law or otherwise, insofar
as such loss, claim, damage, liability or action arises out of, or is
based upon, (i) any untrue statement or alleged untrue statement of a
material fact contained (A) in the Registration Statement or the
Prospectus or in any amendment or supplement thereto, or (B) in any Blue
Sky Application or (ii) the omission or alleged omission to state in the
Registration Statement or the Prospectus, or in any amendment or
supplement thereto, or in any Blue Sky Application any material fact
required to be stated therein or necessary to make the statements
therein not misleading, but in each case only to the extent that the
untrue statement or alleged untrue statement or omission or alleged
omission was made in reliance upon and in conformity with written
information furnished to the Transaction Entities through the Agents by
or on behalf of that Agent specifically for inclusion therein, and shall
reimburse each Transaction Entity and any such director, officer or
controlling person for any legal or other expenses reasonably incurred
by each Transaction Entity or any such director, officer or controlling
person in connection with investigating or defending or preparing to
defend against any such loss, claim, damage, liability or action. The
foregoing indemnity agreement is in addition to any liability which any
Agent may otherwise have to each Transaction Entity or any such
director, officer, or controlling person.
(c) Promptly after receipt by an indemnified party under this Section 7
of notice of any claim or the commencement of any action, the
indemnified party shall, if a claim in respect thereof is to be made
against the indemnifying party under this Section 7, 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 7 except to the extent it has been materially prejudiced by
such failure and, provided further, that the failure to notify the
indemnifying party shall not relieve it from any liability which it may
have to an indemnified party otherwise than under this Section 7. If
any such claim or action shall be brought against an indemnified party,
and it shall notify the indemnifying party thereof, the indemnifying
party shall be entitled to participate therein and, to the extent that
it wishes, jointly with any other similarly notified indemnifying party,
to assume the defense thereof with counsel reasonably satisfactory to
the indemnified party. After notice from the indemnifying party to the
indemnified party of its election to assume the defense of such claim or
action, the indemnifying party shall not be liable to the indemnified
party under this Section 7 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 counsel to
represent jointly the Agents 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 Agents
against the Transaction Entities under this Section 7 if, in the
reasonable judgment of the Agents, it is advisable for the Agents 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 be liable for any settlement of any proceeding
effected without its written consent, but if settled with such consent
or if there be a final judgment for the plaintiff, the indemnifying
party agrees to indemnify the indemnified party from and against any
loss or liability by reason of such settlement or judgment.
Notwithstanding the foregoing sentence, if at any time an indemnified
party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel, the indemnifying
party agrees that is shall be liable for any settlement of any
proceeding effected without its written consent if (i) such settlement
is entered into more than 30 days after receipt by such indemnifying
party of the aforesaid request and (ii) such indemnifying party shall
not have reimbursed the indemnified party in accordance with such
request prior to the date of such settlement. No indemnifying party
shall, without the prior written consent of the indemnified party,
effect any settlement of any pending or threatened proceeding in respect
of which any indemnified party is or could have been a party and
indemnity could have been sought hereunder by such indemnified party,
unless such settlement includes an unconditional release of such
indemnified party from all liability on claims that are the subject
matter of such proceeding.
(d) If the indemnification provided for in this Section 7 shall for any
reason be unavailable to an indemnified party under Section 7(a) or 7(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 Agents on
the other from the offering of the Notes or (ii) if the allocation
provided by clause (i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the
Transaction Entities on the one hand and the Agents on the other with
respect to the statements or omissions which resulted in such loss,
claim, damage or liability, or action in respect thereof, as well as any
other relevant equitable considerations. The relative benefits received
by the Transaction Entities on the one hand and the Agents on the other
with respect to such offering shall be deemed to be in the same
proportion as the total net proceeds from the offering of the (before
deducting expenses) received by the Transaction Entities bears to the
total commissions received by the Agents with respect to such offering.
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 Agents, 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 Agents agree that it would not be just and
equitable if contributions pursuant to this Section were to be
determined by pro rata allocation (even if the Agents were treated as
one entity for such purpose) or by any other method of allocation which
does not take into account the equitable considerations referred to
herein. The amount paid or payable by an indemnified party as a result
of the loss, claim, damage or liability, or action in respect thereof,
referred to above in this Section shall be deemed to include, for
purposes of this Section 7(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 7(d), no Agent shall be required to contribute any amount
in excess of the amount by which the total price at which the Notes sold
through such Agent and distributed to the public were offered to the
public exceeds the amount of any damages which such Agent 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.
7. STATUS OF EACH AGENT. In soliciting offers to purchase the Notes
from the Operating Partnership pursuant to this Agreement (other than in
respect of any Purchase Agreement), each Agent is acting individually
and not jointly and is acting solely as agent for the Operating
Partnership and not as principal. Each Agent will make reasonable
efforts to assist the Operating Partnership in obtaining performance by
each purchaser whose offer to purchase Notes from the Operating
Partnership has been solicited by such Agent and accepted by the
Operating Partnership but such Agent shall have no liability to the
Operating Partnership in the event any such purchase is not consummated
for any reason. If the Operating Partnership shall default in its
obligations to deliver Notes to a purchaser whose offer it has accepted,
the Operating Partnership shall (i) hold the Agents harmless against any
loss, claim or damage arising from or as a result of such default by the
Operating Partnership and (ii), in particular, pay to the Agents any
commission to which they would be entitled in connection with such sale.
8. TERMINATION. This Agreement may be terminated for any reason with
respect to any party hereto, at any time, by any party hereto upon the
giving of one day's written notice of such termination to the other
parties hereto; provided, however, if such terminating party is an
Agent, such termination shall be effective only with respect to such
terminating party. If, at the time of a termination, an offer to
purchase any of the Notes has been accepted by the Operating Partnership
but the time of delivery to the purchaser has not occurred, the
provisions of this Agreement shall remain in effect until such Notes are
delivered. The provisions of Sections 2(c), 3(f), 3(j), 3(k), 4, 7, 8
and 12 hereof shall survive any termination of this Agreement.
9. NOTICES, ETC. All statements, requests, notices and agreements
hereunder shall be in writing, and:
(a) if to the Agents, shall be delivered or sent by mail, telex or
facsimile transmission to: Lehman Brothers Inc., Three World Financial
Center, New York, New York 10285, Attention: Medium Term Note
Department, 9th Floor; Telephone No. (212) 640-8400; Fax No.: (212)
528-7035, with a copy, in the case of any notice pursuant to Section
7(c), to the Director of Litigation, Office of the General Counsel,
Lehman Brothers Inc., 3 World Financial Center, 10th Floor, New York, NY
10285; Donaldson, Lufkin & Jenrette Securities Corporation, Corporate
Syndicate, 277 Park Avenue, 9th Floor, New York, NY 10172, (212) 892-
4801, telecopier (212) 892-2682; First Chicago Capital Markets, Inc.,
One First National Plaza, Suite 0307, Chicago, Illinois 60670,
Attention: Operations Manager, Medium Term Notes/ Cherie McNight, (312)
732-9633, telecopier: (312) 732-7966; J.P. Morgan Securities Inc., 60
Wall Street, 3d Floor, New York, New York 10260, Attention: MTN Trading
Desk, (212) 648-0591, telecopier: (212) 648-5909; UBS Securities LLC,
299 Park Avenue, 26th Floor, New York, New York 10171, Attention:
Richard Messina, (212) 821-4542, telecopier: (212) 821-3667;
(b) if to the Transaction Entities, shall be delivered or sent by mail,
telex or facsimile transmission to the Company, 65 Valley Stream
Parkway, Malvern, PA 19355, Attention: General Counsel (Fax: 610-644-
2175);
provided, however, that any notice to an Agent pursuant to Section 7(c)
shall be delivered or sent by mail, telex or facsimile transmission to
such Agent at its address set forth in its acceptance telex to the
Agents, which address will be supplied to any other party hereto by the
Agents upon request. Any such statements, requests, notices or
agreements shall take effect at the time of receipt thereof. The
Transaction Entities shall be entitled to act and rely upon any request,
consent, notice or agreement given or made on behalf of the Agents by
Lehman Brothers Inc.
10. PERSONS ENTITLED TO BENEFIT OF AGREEMENT. This Agreement shall
inure to the benefit of and be binding upon the Agents, the Transaction
Entities and their respective personal representatives and successors.
This Agreement and the terms and provisions hereof are for the sole
benefit of only those persons, except that (A) the representations,
warranties, indemnities and agreements of the Transaction Entities
contained in this Agreement shall also be deemed to be for the benefit
of the person or persons, if any, who control any Agent within the
meaning of Section 15 of the Securities Act and (B) the indemnity
agreement of the Agents contained in Section 7 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 11, any legal or equitable right, remedy or claim under or in
respect of this Agreement or any provision contained herein.
11. SURVIVAL. The respective indemnities, representations, warranties
and agreements of the Transaction Entities and the Agents contained in
this Agreement or made by or on behalf on them, respectively, pursuant
to this Agreement, shall survive each delivery of and payment for any of
the Notes and shall remain in full force and effect, regardless of any
investigation made by or on behalf of any of them or any person
controlling any of them, and shall survive each delivery of and payment
for any of the Notes.
12. SALES OF NOTES DENOMINATED IN A FOREIGN CURRENCY AND INDEXED NOTES.
If at any time the Operating Partnership and any of the Agents shall
determine to issue and sell Notes denominated in a currency or currency
unit other than U.S. Dollars, which other currency may include a
composite currency, or with respect to which an index is used to
determine the amounts of payments of principal and any premium or
interest, the Company and any such Agent shall execute and deliver an
Amendment (a "Foreign Currency Amendment" or "Indexed Note Amendment,"
as the case may be) in the form attached hereto as Exhibit D. Such
amendment shall establish, as appropriate additions and modifications
that shall apply to the sales, whether offered on an agency or principal
basis, of the Notes covered thereby. The Agents are authorized to
solicit offers to purchase Notes with respect to which an index is used
to determine the amounts of payments of principal and any premium and
interest, and the Company shall agree to any sales of such Notes
(whether offered on an agency or principal basis), only in a minimum
aggregate amount of $2,500,000.
13. DEFINITION OF THE TERM "SUBSIDIARY". For purposes of this
Agreement, "subsidiary" has the meaning set forth in Rule 405 of the
Rules and Regulations.
14. GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the laws of New York.
15. 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.
16. 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.
If the foregoing correctly sets forth the agreement between the Company
and the Agents, please indicate your acceptance in the space provided
for that purpose below.
Very truly yours,
LIBERTY PROPERTY TRUST
By:
--------------------------------
Name: Willard G. Rouse III
Title: Chairman of the Board and Chief Executive Officer
LIBERTY PROPERTY LIMITED PARTNERSHIP
By:Liberty Property Trust, its sole general partner
By:
--------------------------------
Name: Willard G. Rouse III
Title: Chairman of the Board and Chief Executive Officer
Confirmed and Accepted,
as of the date first above written:
Lehman Brothers Inc.
By: /s/ BART MCDADE
--------------------------------
Authorized Representative
Donaldson, Lufkin & Jenrette Securities Corporation
By: /s/ ROGER THOMPSON
--------------------------------
Name: Roger Thompson
--------------------------------
Title: Senior Vice President
--------------------------------
First Chicago Capital Markets, Inc.
By: /s/ EVONNE W. TAYLOR
--------------------------------
Name: Evonne W. Taylor
--------------------------------
Title: Vice President
--------------------------------
J.P. Morgan Securities Inc.
By: /s/ KEYSHA BAILEY
--------------------------------
Name: Keysha Bailey
--------------------------------
Title: Vice President
--------------------------------
UBS Securities LLC
By: /s/ RICHARD MESSINA
--------------------------------
Name: Richard Messina
--------------------------------
Title: Director
--------------------------------
Schedule A
Liberty Property Limited Partnership
Medium-Term Notes
Schedule of Payments
The Operating Partnership agrees to pay each Agent a commission equal to
the following percentage of the aggregate U.S. dollar equivalent of the
principal amount of Notes:
TERM COMMISSION RATE
- --------------------------------- ---------------
9 months to less than 12 months 0.125%
12 months to less than 18 months 0.150%
18 months to less than 2 years 0.200%
2 years to less than 3 years 0.250%
3 years to less than 4 years 0.350%
4 years to less than 5 years 0.450%
5 years to less than 6 years 0.500%
6 years to less than 7 years 0.550%
7 years to less than 10 years 0.600%
10 years to less than 15 years 0.625%
15 years to less than 20 years 0.650%
20 years to 30 years 0.750%
More than 30 years to be negotiated
at time of sale
Exhibit A
The following terms, if applicable, shall be agreed to by one or more
Agents and the Operating Partnership in connection with each sale of
Notes:
Principal Amount: $
(or principal amount of foreign currency or composite currency)
Interest Rate or Formula:
If Fixed Rate Note,
Interest Rate:
Default Rate:
Interest Payment Dates:
If Floating Rate Note,
Interest Rate Basis(es):
If LIBOR,
---- LIBOR Reuters
Page:
---- LIBOR Telerate
Page:
Designated LIBOR Currency:
If CMT Rate,
Designated CMT Telerate Page:
Designated CMT Maturity Index:
Index Maturity:
Spread and/or Spread Multiplier, if any:
Initial Interest Rate, if any:
Initial Interest Reset Date:
Interest Reset Dates:
Interest Payment Dates:
Default Rate:
Maximum Interest Rate, if any:
Minimum Interest Rate, if any:
Fixed Rate Commencement Date, if any:
Fixed Interest Rate, if any:
Calculation Agent:
If Redeemable:
Initial Redemption Date:
Initial Redemption Percentage:
Annual Redemption Percentage Reduction, if any:
If Repayable:
Optional Repayment Date(s):
Original Issue Date:
Stated Maturity Date:
Specified Currency:
Exchange Rate Agent:
Authorized Denomination:
Purchase Price: %, plus accrued interest, if any, from
Closing Date and Time:
Additional/Other Terms:
EXHIBIT B
LIBERTY PROPERTY LIMITED PARTNERSHIP
MEDIUM-TERM NOTES
ADMINISTRATIVE PROCEDURES
Medium-Term Notes Due Nine Months or More from Date of Issuance (the
"Notes") are to be offered on a continuing basis by Liberty Property
Limited Partnership (the "Operating Partnership"). Lehman Brothers
Inc., Donaldson, Lufkin & Jenrette Securities Corporation, First Chicago
Capital Markets, Inc., J.P. Morgan Securities Inc. and UBS Securities
LLC, as agents (each, an "Agent" and collectively, the "Agents"), have
each agreed to use their reasonable best efforts to solicit offers to
purchase the Notes. The Notes are being sold pursuant to a Distribution
Agreement between the Operating Partnership, Liberty Property Trust, a
Maryland real estate investment trust, its General Partner, and the
Agents dated January 12, 1998 (as it may be supplemented or amended from
time to time, the "Distribution Agreement") to which these
administrative procedures are attached as an exhibit. The Notes will be
issued under an indenture dated October 24, 1997 between the Operating
Partnership and The First National Bank of Chicago, as trustee (the
"Trustee"), as heretofore supplemented. The Notes will rank equally
with all other unsecured and unsubordinated indebtedness of the
Operating Partnership and will have been registered with the Securities
and Exchange Commission (the "Commission"). Terms defined in the
Prospectus relating to the Notes (the "Prospectus") and in the
Distribution Agreement shall have the same meaning when used in this
exhibit. Special administrative procedures for Multi-Currency Notes and
for Global Securities relating to Book-Entry Notes follow these
administrative procedures.
Administrative responsibilities, document control and record-keeping
functions to be performed by the Operating Partnership will be performed
by its Chief Financial Officer. Administrative procedures for the
offering are explained below.
PRICE TO PUBLIC
Each Note will be issued at 100% of principal amount, unless otherwise
determined by the Operating Partnership.
DATE OF ISSUANCE
Each Note will be dated and issued as of the date of its authentication
by the Trustee.
MATURITIES
Each Note will mature on a Business Day (as defined below) selected by
the purchaser and agreed upon by the Operating Partnership, such date
being at least nine months from the date of issuance. Each Floating
Rate Note will mature on an Interest Payment Date (as defined below).
"Business Day" shall mean any day which is not a Saturday or Sunday and
which is not a day on which banking institutions are generally
authorized or required by law to close in the City of New York.
REGISTRATION
Notes will be issued only in fully registered form as either a Book-
Entry Note or a Certificated Note. Certificated Notes may be presented
for registration of transfer or exchange at the Trustee's New York
office.
DENOMINATIONS
The Notes (other than Notes represented by Global Securities) will be
issued and payable in U.S. dollars in the denomination of $100,000 and
any larger denomination which is an integral multiple of $1,000.
INTEREST PAYMENTS
Each Note bearing interest at a fixed rate (a "Fixed Rate Note") will
bear interest from its issue date at the annual rate stated on the face
thereof, payable on March 15 and September 15 of each year (each an
"Interest Payment Date" with respect to such Fixed Rate Note) and at
Stated Maturity or upon redemption, if applicable.
Special provisions are set forth in the Prospectus relating to Notes
bearing interest at a rate or rates determined by reference to an
interest rate formula ("Floating Rate Notes") at a rate determined
pursuant to the formula stated on the face thereof, payable in arrears
on such dates as are specified therein (each an "Interest Payment Date"
with respect to such Floating Rate Note).
Interest on Fixed Rate Notes will be calculated and paid on the basis of
a 360-day year of twelve 30-day months. Interest will be payable to the
person in whose name such Note is registered at the close of business on
the fifteenth day (whether or not a Business Day) next preceding an
Interest Payment Date with respect to Floating Rate Notes (the "Record
Dates") next preceding the respective Interest Payment Date; provided,
however, that interest payable at Stated Maturity will be payable to the
person to whom principal shall be payable. Any payment of principal and
interest on such Note required to be paid on an Interest Payment Date or
at Stated Maturity or upon redemption, if applicable, which is not a
Business Day shall be postponed to the next day which is a Business Day.
The first payment of interest on any Note originally issued between a
Record Date and an Interest Payment Date will be made on the Interest
Payment Date following the next succeeding Record Date. All interest
payments, excluding interest payments made at Stated Maturity or upon
redemption, if applicable, will be made by check mailed to the person
entitled thereto as provided above, or, at the option of the Operating
Partnership, by wire transfer to an account maintained by such person
with a bank located in the United States. Notwithstanding the
foregoing, the holder of $1 million or more in aggregate principal
amount of Notes with the same Interest Payment Date may request payment
by wire transfers.
On the fifth Business Day immediately preceding each Interest Payment
Date, the Trustee will furnish the Operating Partnership with the total
amount of the interest payments to be made on such Interest Payment
Date. The Trustee (or any duly selected paying agent) will provide
monthly to the Operating Partnership's Treasury Department a list of the
principal and interest to be paid on Notes maturing in the next
succeeding month. The Operating Partnership will provide to the Trustee
not later than the payment date sufficient moneys to pay in full all
principal and interest payments due on such payment date. The Trustee
will assume responsibility for withholding taxes on interest paid as
required by law.
ACCEPTANCE AND REJECTION OF OFFERS
The Operating Partnership shall have the sole right to accept offers to
purchase Notes and may reject any such offer in whole or in part. Each
Agent shall promptly communicate to the Operating Partnership, orally or
in writing, each reasonable offer to purchase Notes from the Operating
Partnership received by it other than those rejected by such Agent.
Each Agent shall have the right, in its discretion reasonably exercised
without advising the Operating Partnership, to reject any offers in
whole or in part.
SETTLEMENT
The receipt of immediately available funds in U.S. Dollars by the
Operating Partnership in payment for a Note (less the applicable
commission) and the authentication and issuance of such Note shall, with
respect to such Note, constitute "Settlement." All offers accepted by
the Operating Partnership will be settled from one to five Business Days
from the date of acceptance by the Operating Partnership pursuant to the
timetable for Settlement set forth below unless the Operating
Partnership and the purchaser agree to Settlement on a later date;
provided, however, that the Operating Partnership will so notify the
Trustee of any such later date on or before the Business Day immediately
prior to the Settlement date.
SETTLEMENT PROCEDURES
In the event of a purchase of Notes by an Agent, as principal,
appropriate Settlement details will be set forth in the applicable
Purchase Agreement to be entered into between such Agent and the
Operating Partnership pursuant to the Distribution Agreement. In the
event of the sale of a Multi-Currency Note or an Indexed Note,
additional or different Settlement details may be set forth in the
applicable Amendment to be entered into between the Agent and the
Operating Partnership pursuant to the Distribution Agreement.
Settlement procedures with regard to each Note sold through each Agent
shall be as follows:
A) Such Agent (the "Presenting Agent") will advise the Operating
Partnership by telephone, telex or facsimile, of the following
Settlement information:
1) Exact name in which the Note is to be registered ("Registered
Owner").
2) Exact address of the Registered Owner and address for payment
of principal and interest, if any.
3) Taxpayer identification number of the Registered Owner.
4) Principal amount of the Note (and, if multiple Notes are to be
issued, denominations thereof).
5) Settlement date.
6) Stated Maturity.
B) Issue Price and any OID information.
1) Trade Date/Original Issue Date.
a) Interest rate:
(i) Fixed Rate Notes:
(A) interest rate
(B) overdue rate, if any
(ii) Floating Rate Notes:
(A) interest rate basis
(B) initial interest rate
(C) spread or spread multiplier, if any
(D) interest rate reset periods
(E) interest payment dates
(F) index maturity
(G) maximum and minimum interest rates, if any
(H) record dates
(I) interest determination dates
(J) overdue rate, if any
2) The date on or after which the Notes are redeemable at the
option of the Operating Partnership, and additional redemption or
repurchase provisions, if any.
3) Wire transfer information.
4) Presenting Agent's Commission (to be paid in the form of a
discount from the proceeds remitted to the Operating Partnership upon
Settlement).
B. The Operating Partnership will confirm the above Settlement
information to the Trustee by telephone, telex or facsimile, and the
Trustee will assign a Note number to the transaction. If the Operating
Partnership rejects an offer, the Operating Partnership will promptly
notify the Presenting Agent and the Trustee by telephone.
C. The Trustee will complete the first page of the preprinted 4-ply
Note packet [Note: Such a packet need not be prepared if the Operating
Partnership is utilizing the book-entry system, see procedures below,
the form of which was previously approved by the Operating Partnership,
the Agents and the Trustee.]
D. The Trustee will deliver the Note (with the attached white
confirmation) and the yellow and blue stubs to the Agent. The
Presenting Agent will acknowledge receipt of the Note by completing the
yellow stub and returning it to the Trustee.
E. The Presenting Agent will cause to be wire transferred to a bank
account designated by the Operating Partnership immediately available
funds in U.S. dollars in the amount of the principal amount of the Note,
less the applicable commission or discount, if any.
F. The Presenting Agent will deliver the Note (with the attached white
confirmation) to the purchaser against payment in immediately available
funds in the amount of the principal amount of the Note. The Presenting
Agent will deliver to the purchaser a copy of the most recent Prospectus
applicable to the Note with or prior to any written offer of Notes,
delivery of the Note and the confirmation and payment by the purchaser
for the Note.
G. The Presenting Agent will obtain the acknowledgement of receipt for
the Note and Prospectus by the purchaser through the purchaser's
completion of the blue stub.
H. The Trustee will mail the pink stub to the Operating Partnership's
Treasurer.
SETTLEMENT PROCEDURES TIMETABLE
For offers accepted by the Operating Partnership, Settlement procedures
"A" through "H" set forth above shall be completed on or before the
respective times set forth below:
SETTLEMENT
PROCEDURE TIME (NEW YORK)
- ---------- -------------------------------------------------
A 5 PM on date of order
B 3 PM on the Business Day prior to Settlement Date
C-D 12 Noon on the Settlement Date
E 2:15 PM on the Settlement date
F-G 3 PM on the Settlement Date
H 5 PM on Business Day after the Settlement Date
FAILS
In the event that a purchaser of a Note shall either fail to accept
delivery of or make payment for such Note on the date fixed by the
Operating Partnership for Settlement, the Presenting Agent will
immediately notify the Trustee and the Operating Partnership's Treasurer
by telephone, confirmed in writing, of such failure and return the Note
to the Trustee. Upon the Trustee's receipt of the Note from the
Presenting Agent, the Operating Partnership will promptly return to the
Presenting Agent an amount of immediately available funds in U.S.
dollars equal to any amount previously transferred to the Operating
Partnership in respect of the Note pursuant to advances made by the
Agent. Such returns will be made on the Settlement date, if possible,
and in any event not later than 12 noon (New York City time) on the
Business Day following the Settlement date. The Operating Partnership
will reimburse the Presenting Agent on an equitable basis for its loss
of the use of the funds during the period when the funds were credited
to the account of the Operating Partnership. Upon receipt of the Note
in respect of which the default occurred, the Trustee will mark the Note
"cancelled," make appropriate entries in its records and deliver the
Note to the Operating Partnership with an appropriate debit advice. The
Presenting Agent will not be entitled to any commission with respect to
any Note which the purchaser does not accept or make payment for.
PRICING REDEMPTION
Except as otherwise specified in the applicable Pricing Supplement and
on the Notes, the Notes will not be redeemable prior to their Stated
Maturity. If so specified in a Pricing Supplement and on the Note, such
Note will be subject to redemption by the Operating Partnership, at any
time on or after the date set forth on such supplement and the Note, in
whole or from time to time in part, at the option of the Operating
Partnership, at the redemption price set forth therein, together with
interest accrued thereon on the date of redemption.
Notice of redemption shall be given by first-class mail postage prepaid,
mailed not less than 30 days nor more than 60 days prior to the date of
redemption, to each holder of Notes to be redeemed, in the manner and in
accordance with the Indenture. In the event of redemption in part of
any Note, a new Note for the amount of the unredeemed portion shall be
issued in the name of the Holder upon cancellation of the redeemed Note.
MATURITY
Upon presentation of each Note at Maturity the Trustee (or any duly
appointed Paying Agent) will pay the principal amount thereof, together
with accrued interest through the date of redemption. Such payment
shall be made in immediately available funds in U.S. dollars, provided
that the Note is presented to the Trustee (or any such Paying Agent) in
time for the Trustee (or such Paying Agent) to make payments in such
funds in accordance with its normal procedures. The Operating
Partnership will provide the Trustee (and any such Paying Agent) with
funds available for immediate use for such purpose. Notes presented at
Maturity will be cancelled by the Trustee as provided in the Indenture.
PROCEDURES FOR ESTABLISHING THE TERMS OF THE NOTES
The Operating Partnership and the Agents will discuss from time to time
the rates to be borne by the Notes that may be sold as a result of the
solicitation of offers by the Agents. Once any Agent has recorded any
indication of interest in Notes upon certain terms, and communicated
with the Operating Partnership, if the Operating Partnership accepts an
offer to purchase Notes upon such terms, it will prepare a Pricing
Supplement in the form previously approved by the Agents, reflecting the
terms of such Notes and, after approval from the Presenting Agent, will
arrange to have 10 copies of such Pricing Supplement (together with the
Prospectus, if amended or supplemented) filed with the Commission and
will supply an appropriate number of copies of the Prospectus, as then
amended or supplemented, together with such Pricing Supplement, to the
Presenting Agent. See "Delivery of Prospectus." No settlements with
respect to Notes upon such terms may occur prior to such filing and the
Presenting Agent will not, prior to such filing, mail confirmations to
customers who have offered to purchase Notes upon such terms. After
such filing, sales, mailing of confirmations and settlements may occur
with respect to Notes upon such terms, subject to the provisions of
"Delivery of Prospectus" below.
If the Operating Partnership decides to post rates and a decision has
been reached to change interest rates, the Operating Partnership will
promptly notify each Agent. Each Agent will forthwith suspend
solicitation of purchases. At that time, the Agents will recommend and
the Operating Partnership will establish rates to be so "posted."
Following establishment of posted rates and prior to the filing
described in the following sentence, the Agents may only record
indications of interest in purchasing Notes at the posted rates. Once
any Agent has recorded any indication of interest in Notes at the posted
rates and communicated with the Operating Partnership, if the Operating
Partnership plans to accept an offer at the posted rate, it will prepare
a Pricing Supplement reflecting such posted rates and, after approval
from the Presenting Agent, will arrange to have 10 copies of such
Pricing Supplement (together with the Prospectus if amended or
supplemented) filed with the Commission and will supply an appropriate
number of copies of the Prospectus, as then amended or supplemented, to
the Presenting Agent. See "Delivery of Prospectus." No settlements at
the posted rates may occur prior to such filing and the Presenting Agent
will not, prior to such filing, mail confirmations to customers who have
offered to purchase Notes at the posted rates. After such filing,
sales, mailing of confirmations and settlements may resume, subject to
the provisions of "Delivery of Prospectus" below.
SUSPENSION OF SOLICITATION; AMENDMENT OR SUPPLEMENT
In the event that at the time the Agents, at the direction of the
Operating Partnership, suspends solicitation of offers to purchase from
the Operating Partnership there shall be any orders outstanding which
have not been settled, the Operating Partnership will promptly advise
the Agents and the Trustee whether such orders may be settled and
whether copies of the Prospectus as theretofore amended and/or
supplemented as in effect at the time of the suspension may be delivered
in connection with the settlement of such orders. The Operating
Partnership will have the sole responsibility for such decision and for
any arrangements which may be made in the event that the Operating
Partnership determines that such orders may not be settled or that
copies of such Prospectus may not be so delivered.
DELIVERY OF PROSPECTUS
A copy of the Prospectus as most recently amended or supplemented on the
date of delivery thereof, together with the applicable Pricing
Supplement, must be delivered to a purchaser prior to or together with
the earlier of the delivery of (i) the written confirmation of a sale
sent to a purchaser or his agent and (ii) any Note purchased by such
purchaser. The Operating Partnership shall ensure that the Presenting
Agent receives copies of the Prospectus and each amendment or supplement
thereto (including the applicable Pricing Supplement) in such quantities
and within such time limits as will enable the Presenting Agent to
deliver such confirmation or Note to a purchaser as contemplated by
these procedures and in compliance with the preceding sentence. Copies
of Pricing Supplements should be delivered to the applicable address:
if to Lehman Brothers Inc., to c/o ADP, Prospectus Services, 536 Broad
Hollow Road, Melville, New York 11747, Attention: Mike Ward, (516)
254-7106, telecopier: (516) 249-7942 and by hand to Lehman Brothers
Inc., 3 World Financial Center, 9th floor, New York, New York 10285,
Attention: Brunnie Vazquez, (212) 526-8400; if to Donaldson, Lufkin &
Jenrette Securities Corporation, to: Donaldson, Lufkin & Jenrette
Securities Corporation, Corporate Syndicate, 277 Park Avenue, 9th Floor,
New York, NY 10172, (212) 892-4801, telecopier (212) 892-2682; if to
First Chicago Capital Markets, Inc., to: First Chicago Capital Markets,
Inc., One First National Plaza, Suite 0307, Chicago, Illinois 60670,
Attention: Operations Manager, Medium Term Notes/ Cherie McNight, (312)
732-9633, telecopier: (312) 732-7966; if to J.P. Morgan Securities Inc.,
to: J.P. Morgan Securities Inc., 60 Wall Street, 3d Floor, New York, New
York 10260, Attention: MTN Trading Desk, (212) 648-0591, telecopier:
(212) 648-5909; if to UBS Securities LLC, to: UBS Securities LLC, 299
Park Avenue, 26th Floor, New York, New York 10171, Attention: Richard
Messina, (212) 821-4542, telecopier: (212) 821-3667; with a copy to
Rogers & Wells, 200 Park Avenue, New York, New York 10166, Attention:
Robert E. King, Jr., Esq. If, since the date of acceptance of a
purchaser's offer, the Prospectus shall have been supplemented solely to
reflect any sale of Notes on terms different from those agreed to
between the Operating Partnership and such purchaser or a change in
posted rates not applicable to such purchaser, such purchaser shall not
receive the Prospectus as supplemented by such new supplement, but shall
receive the Prospectus as supplemented to reflect the terms of the Notes
being purchased by such purchaser and otherwise as most recently amended
or supplemented on the date of delivery of the Prospectus. The Trustee
will make all such deliveries with respect to all Notes sold directly by
the Operating Partnership.
AUTHENTICITY OF SIGNATURES
The Operating Partnership will cause the Trustee to furnish the Agents
from time to time with the specimen signatures of each of the Trustee's
officers, employees and agents who have been authorized by the Trustee
to authenticate Notes, but the Agents will have no obligation or
liability to the Operating Partnership or the Trustee in respect of the
authenticity of the signature of any officer, employee or agent of the
Operating Partnership or the Trustee on any Note.
ADVERTISING COSTS
The Operating Partnership will determine with the Agents the amount and
nature of advertising that may be appropriate in offering the Notes.
Advertising expenses incurred with the consent of the Operating
Partnership will be paid by the Operating Partnership.
SPECIAL ADMINISTRATIVE PROCEDURES
FOR MULTI-CURRENCY NOTES
Unless otherwise set forth in an applicable Foreign Currency Amendment,
the following procedures and terms shall apply to Multi-Currency Notes
in addition to, and to the extent inconsistent therewith in replacement
of, the procedures and terms set forth above.
DENOMINATIONS
The authorized denominations for Multi-Currency Notes will be set forth
in the applicable Pricing Supplement.
CURRENCIES
Unless otherwise specified in the applicable Pricing Supplement,
purchasers of MultiCurrency Notes are required to pay for such Multi-
Currency Notes in the Specified Currency in immediately available funds.
If requested by the purchaser of the Multi-Currency Note on or prior to
the fifth Business Day preceding the date of delivery of the Multi-
Currency Notes (or by such other day as the Presenting Agent shall
determine), the Presenting Agent will arrange the conversion of U.S.
dollars into such Specified Currency to enable the purchaser to pay for
the Multi-Currency Notes. Each such conversion will be made by the
Presenting Agent on such terms and subject to such conditions,
limitations and charges as such Presenting Agent may from time to time
establish in accordance with its regular foreign exchange practices.
All costs of exchange will be borne by the purchasers of the Multi-
Currency Notes.
PAYMENT OF PRINCIPAL AND INTEREST
The principal of, premium, if any, and interest on Multi-Currency Notes
will be payable in the Specified Currency. Unless otherwise indicated
in the applicable Pricing Supplement, the agent appointed by the
Operating Partnership (the "Exchange Rate Agent") will convert all such
payments of principal, premium, if any, and interest to U.S. dollars.
However, unless otherwise indicated in the applicable Pricing
Supplement, the holder of a Multi-Currency Note may elect to receive
such payments in the Specified Currency as described below.
Any U.S. dollar amount to be received by a holder of a Multi-Currency
Note will be based on the highest bid quotation in The City of New York
received by the Exchange Rate Agent at approximately 11:00 A.M., New
York City time, on the second Business Day preceding the applicable
payment date from three recognized foreign exchange dealers (one of
which may be the Exchange Rate Agent) for the purchase by the quoting
dealer of the Specified Currency for U.S. dollars for settlement on such
payment date in the aggregate amount of the Specified Currency payable
to all holders of Notes scheduled to receive U.S. dollar payments and at
which the applicable dealer commits to execute a contract. If such bid
quotations are not available, payments will be made in the Specified
Currency. All currency exchange costs will be borne by the holder of
the Multi-Currency Note by deductions from such payments.
A holder of a Multi-Currency Note may, unless otherwise specified in the
applicable Pricing Supplement, elect to receive payment of the principal
of, premium, if any, and interest on such Multi-Currency Notes in the
Specified Currency, by transmitting a written request for such payment
by mail, hand delivered, or by cable, telex or other form of facsimile
transmission to the principal office of the Trustee (acting as the
Operating Partnership's paying agent in The City of New York) on or
prior to the Record Date or at least sixteen days prior to Maturity, as
the case may be, such election to remain in effect until revoked by
written notice to the Trustee received by the Trustee on or prior to the
Record Date or at least sixteen days prior to Maturity, as the case may
be. A holder of a Multi-Currency Note may elect to receive payment in
the Specified Currency for all principal, premium, if any, and interest
payments and need not file a separate election for each payment.
Interest on Multi-Currency Notes paid in U.S. dollars will be paid in
the manner specified in the applicable Pricing Supplement. Unless
otherwise specified in the applicable Pricing Supplement, interest on
Multi-Currency Notes paid in the Specified Currency will be paid by wire
transfer to a bank account maintained by the holder in the country of
the Specified Currency. The principal of Multi-Currency Notes, together
with interest accrued and unpaid therein, due at Maturity will be paid
in immediately available funds against presentation of such Multi-
Currency Notes at the principal office of the Trustee, provided that
principal, premium, if any, and interest payable at Maturity in a
Specified Currency will be paid by wire transfer to such bank account.
Any payment of principal or interest required to be made on an Interest
Payment Date or at Maturity of a Multi-Currency Note which is not a
Business Day need not be made on such day, but may be made on the next
succeeding Business Day with the same force and effect as if made on the
Interest Payment Date or Maturity, as the case may be, and no interest
shall accrue from the period from and after such Interest Payment Date
or Maturity.
PAYMENT OF PRINCIPAL AND INTEREST
If a Specified Currency is not available for payment of principal or
interest with respect to a Multi-Currency Note due to the imposition of
exchange controls or other circumstances beyond the reasonable control
of the Operating Partnership, the Operating Partnership will be entitled
to satisfy its obligations to holders of Multi-Currency Notes by making
such payment in U.S. dollars on the basis of the noon buying rate in The
City of New York for cable transfers of the Specified Currency as
certified for customs purposes by the Federal Reserve Bank of New York
(the "Market Exchange Rate") on the second day prior to such payment, or
if such Market Exchange Rate is not then available, on the basis of the
most recently available Market Exchange Rate or as otherwise indicated
in the applicable Pricing Supplement. Any payment made under such
circumstances in U.S. dollars where required payment is in a Specified
Currency will not constitute a default under the Indenture.
OUTSTANDING MULTI-CURRENCY NOTES
For purposes of calculating the principal amount of any Multi-Currency
Note for any purpose under the Indenture, the principal amount of such
Multi-Currency Note at any time Outstanding shall be deemed to be the
U.S. dollar equivalent at the Market Exchange Rate, determined as of the
date of the original issuance of such Multi-Currency Note, of the
principal amount of such Multi-Currency Note.
DETAILS FOR SETTLEMENT OF MULTI-CURRENCY NOTES
In addition to the Settlement information specified in "Settlement
Procedures" above, the Presenting Agent shall communicate to the
Operating Partnership in the manner set forth in "Settlement Procedures"
the following information:
1. Specified Currency
2. Denominations
3. Wire transfer and overseas bank account information (if holder has
elected payment in a Specified Currency).
SPECIAL ADMINISTRATIVE PROCEDURES FOR BOOK-ENTRY NOTES
Each Note will be represented by either a Global Security delivered to
the Trustee, as agent for the Depository Trust Operating Partnership
("DTC"), and recorded in the book-entry system maintained by DTC or a
certificate delivered to the Holder thereof or a Person designated by
such Holder. An owner of a Book-Entry Note will not be entitled to
receive a certificate representing such Note. In connection with the
qualification of the Book-Entry Notes for eligibility in the book-entry
system maintained by DTC, the Trustee will perform the custodial,
document control and administrative functions described below, in
accordance with its respective obligations under a Letter of
Representations from the Operating Partnership and the Trustee to DTC
and a Medium-Term Note Certificate Agreement previously entered into
between the Trustee and DTC, and its obligations as a participant in
DTC, including DTC's Same-Day Funds Settlement System ("SDFS"'). Except
as otherwise set forth in this Exhibit B, Book-Entry Notes will be
issued in accordance with the administrative procedures set forth below.
ISSUANCE
On any date of settlement (as defined under "Settlement" below one or
more Fixed Rate Book-Entry Notes, the Operating Partnership will issue a
single Global Security in fully registered form without coupons
representing up to $450,000,000 principal amount of all of such Notes
that have the same original issuance date, interest rate and Stated
Maturity. Similarly, on any settlement date for one or more Floating
Rate Book-Entry Notes, the Operating Partnership will issue a single
Global Security representing up to $450,000,000 principal amount of all
of such Notes that have the same interest rate formula, original
issuance date, Initial Interest Rate, Interest Payment Dates, Index
Maturity, Spread, Spread Multiplier, minimum interest rate (if any),
maximum interest rate (if any) and Stated Maturity. Each Global
Security will be dated and issued as of the date of its authentication
by the Trustee, as Trustee. Each Global Security will have an interest
accrual date (the "Interest Accrual Date"), which will be (i) with
respect to an original Global Security (or any portion thereof), its
original issuance date and (ii) with respect to any Global Security (or
portion thereof) issued subsequently upon exchange of a Global Security
or in lieu of a destroyed, lost or stolen Global Security, the most
recent Interest Payment Date to which interest has been paid or duly
provided for on the predecessor Global Security or Securities (or if no
such payment or provision has been made, the original issuance date of
the predecessor Global Security), regardless of the date of
authentication of such subsequently issued Global Security. No Global
Security will represent (i) both Fixed Rate and Floating Rate Book-Entry
Notes or (ii) any Certificated Note or (iii) any Multi-Currency or
Indexed Note.
IDENTIFICATION NUMBERS
The Operating Partnership will arrange, on or prior to commencement of a
program for the offering of Book-Entry Notes, with the CUSIP Service
Bureau of Standard & Poor's Corporation (the "CUSIP Service Bureau") for
the reservation of a series of CUSIP numbers (including tranche
numbers), consisting of approximately 900 CUSIP numbers and relating to
Global Securities representing the Book-Entry Notes. The Trustee has or
will obtain from the CUSIP Service Bureau a written list of such series
of reserved CUSIP numbers and will deliver to the Operating Partnership
and DTC such written list of 900 CUSIP numbers of such series. The
Operating Partnership will assign CUSIP numbers to Global Securities as
described below under Settlement Procedure "B." DTC will notify the
CUSIP Service Bureau periodically of the CUSIP numbers that the
Operating Partnership has assigned to Global Securities. The Trustee
will notify the Operating Partnership at any time when fewer than 100 of
the reserved CUSIP numbers remain unassigned to Global Securities, and
if it deems necessary, the Operating Partnership will reserve additional
CUSIP numbers for assignment to Global Securities representing Book-
Entry Notes. Upon obtaining such additional CUSIP numbers the Trustee
shall deliver such additional CUSIP numbers to the Operating Partnership
and DTC.
REGISTRATION
Each Global Security will be registered in the name of Cede & Co., as
nominee for DTC, on the Securities Register maintained under the
Indenture governing such Global Security. The beneficial owner of a
Book-Entry Note (or one or more indirect participants in DTC designated
by such owner) will designate one or more participants in DTC (with
respect to such Note, the "Participants") to act as agent or agents for
such owner in connection with the book-entry system maintained by DTC,
and DTC will record in book-entry form, in accordance with instructions
provided by such Participants, a credit balance with respect to such
Note in the account of such Participants. The ownership interest of
such beneficial owner in such Note will be recorded through the records
of such Participants or through the separate records of such
Participants and one or more indirect participants in DTC.
TRANSFERS
Transfers of a Book-Entry Note will be accomplished by book entries made
by DTC and, in turn, by Participants (and in certain cases, one or more
indirect participants in DTC) acting on behalf of beneficial transferors
and transferees of such Note.
CONSOLIDATION AND EXCHANGE
The Trustee may deliver to DTC and the CUSIP Service Bureau at any time
a written notice of consolidation specifying (i) the CUSIP numbers of
two or more Outstanding Global Securities that represent (A) Fixed Rate
Book-Entry Notes having the same original issuance date, interest rate
and Stated Maturity and with respect to which interest has been paid to
the same date or (B) Floating Rate Book-Entry Notes having the same
interest rate formula, original issuance date, Initial Interest Rate,
Interest Payment Dates, Index Maturity, Spread or Spread Multiplier,
minimum interest rate (if any), maximum interest rate (if any) and with
respect to which interest has been paid to the same date, (ii) a date,
occurring at least thirty days after such written notice is delivered
and at least thirty days before the next Interest Payment Date for such
Book-Entry Notes, on which such Global Securities shall be exchanged for
a single replacement Global Security and (iii) a new CUSIP number,
obtained from the Operating Partnership, to be assigned to such
replacement Global Security. Upon receipt of such a notice, DTC will
send to its participants (including the Trustee) a written
reorganization notice to the effect that such exchange will occur on
such date. Prior to the specified exchange date the Trustee will
deliver to the CUSIP Service Bureau a written notice setting forth such
exchange date and the new CUSIP number and stating that, as of such
exchange date, the CUSIP numbers of the Global Securities to be
exchanged will no longer be valid. On the specified exchange date, the
Trustee will exchange such Global Securities for a single Global
Security bearing the new CUSIP number and a new Interest Accrual Date,
and the CUSIP numbers of the exchanged Global Securities will, in
accordance with CUSIP Service Bureau procedures, be cancelled and not
immediately reassigned. Notwithstanding the foregoing, if the Global
Securities to be exchanged exceed $200,000,000 in aggregate principal
amount, one Global Security will be authenticated and issued to
represent each $200,000,000 of principal amount of the exchanged Global
Securities and an additional Global Security will be authenticated and
issued to represent any remaining principal amount of such Global
Securities (see "Denominations" below).
MATURITIES
Each Book-Entry Note will mature on a date not less than nine months
after the settlement date for such Note. A Floating Rate Book-Entry
Note will mature only on an Interest Payment Date for such Note.
DENOMINATIONS
Book-Entry Notes will be issued in principal amounts of $100,000 or any
amount in excess thereof that is an integral multiple of $1,000. Global
Securities representing one or more Book-Entry Notes will be denominated
in principal amounts not in excess of $1,000,000. If one or more Book-
Entry Notes having an aggregate principal amount in excess of
$200,000,000 would, but for the preceding sentence, be represented by a
single Global Security, then one Global Security will be issued to
represent each $200,000,000 principal amount of such Book-Entry Note or
Notes and an additional Global Security will be issued to represent any
remaining principal amount of such Book-Entry Note or Notes. In such a
case, each of the Global Securities representing such Book-Entry Note or
Notes shall be assigned the same CUSIP number.
INTEREST
General. Interest on each Book-Entry Note will accrue from the Interest
Accrual Date of the Global Security representing such Note. Each
payment of interest on a Book-Entry Note will include interest accrued
through the day preceding, as the case may be, the Interest Payment Date
or Maturity; provided, however, that if the Interest Reset Dates with
respect to any such Note are daily or weekly, interest payable on any
Interest Payment Date, other than interest payable on any date on which
principal for such Note is payable, will include interest accrued from
but excluding the second preceding Regular Record Date to and including
the next preceding Regular Record Date. Interest payable at the
Maturity of a Book-Entry Note will be payable to the Person to whom the
principal of such Note is payable. Standard & Poor's Corporation will
use the information received in the pending deposit message described
under Settlement Procedure "C" below in order to include the amount of
any interest payable and certain other information regarding the related
Global Security in the appropriate weekly bond report published by
Standard & Poor's Corporation.
On the first Business Day of January, April, July and October of each
year, the Trustee will deliver to the Operating Partnership and DTC a
written list of Regular Record Dates and Interest Payment Dates that
will occur with respect to Floating Rate Book-Entry Notes during the
six-month period beginning on such first Business Day. Promptly after
each Interest Determination Date (as defined in Appendix A hereto) for
Floating Rate Notes, the Operating Partnership will notify the Trustee,
and the Trustee in turn will notify Standard & Poor's Corporation, of
the interest rates determined on such Interest Determination Date.
PAYMENTS OF PRINCIPAL INTEREST
Payments of Interest Only. Promptly after each Regular Record Date, the
Trustee will deliver to the Operating Partnership and DTC a written
notice specifying by CUSIP number the amount of interest to be paid on
each Global Security on the following Interest Payment Date (other than
an Interest Payment Date coinciding with Maturity) and the total of such
amounts. DTC will confirm the amount payable on each Global Security on
such Interest Payment Date by reference to the daily bond reports
published by Standard & Poor's Corporation. The Operating Partnership
will pay to the Trustee, as paying agent, the total amount of interest
due on such Interest Payment Date (other than at Maturity), and the
Trustee will pay such amount to DTC at the times and in the manner set
forth below under "Manner of Payment."
Payments at Maturity. On or about the first Business Day of each month,
the Trustee will deliver to the Operating Partnership, DTC and each of
the Trustees a written list of principal and interest to be paid on each
Global Security maturing in the following month. The Operating
Partnership, the Trustee and DTC will confirm the amounts of such
principal and interest payments with respect to each such Global
Security on or about the fifth Business Day preceding the Maturity of
such Global Security. The Operating Partnership will pay to the
Trustee, as the paying agent, the principal amount of such Global
Security, together with interest due at such Maturity. The Trustee will
pay such amount to DTC at the times and in the manner set forth below
under "Manner of Payment."
Promptly after payment to DTC of the principal and interest due at the
Maturity of such Global Security, the Trustee will cancel such Global
Security and deliver it to the Operating Partnership with an appropriate
debit advice. On the first Business Date of each month, the Trustee
will prepare a written statement indicating the total principal amount
of Outstanding Global Securities for which it serves as trustee as of
the immediately preceding Business Day.
Manner Of Payment. The total amount of any principal and interest due
on Global Securities on any Interest Payment Date or at Maturity shall
be paid by the Operating Partnership to the Trustee in funds available
for use by the Trustee as of 9:30 A.M. (New York City time) on such
date. The Operating Partnership will make such payment on such Global
Securities by instructing the Trustee to withdraw funds from an account
maintained by the Operating Partnership at the Trustee. The Operating
Partnership will confirm such instructions in writing to the Trustee,
with a copy to the Trustee under the Indenture governing such Global
Securities if such Global Securities are of subordinated or junior
subordinated rank. For maturity, redemption or any other principal
payments: prior to 10 A.M. (New York City time) on such date or as soon
as possible thereafter, the Trustee will make such payments to DTC in
same day funds in accordance with DTC's Same Day Funds Settlement Paying
Agent Operating Procedures. For interest payments: the Trustee will
make such payments to DTC in accordance with existing arrangements
between DTC and the Trustee. DTC will allocate such payments to its
participants in accordance with its existing operating procedures.
Neither the Operating Partnership (either as issuer or as Paying Agent)
nor the Trustee shall have any direct responsibility or liability for
the payment by DTC to such Participants of the principal of and interest
on the Book-Entry Notes.
The amount of any taxes required under applicable law to be withheld
from any interest payment on a Book-Entry Note will be determined and
withheld by the Participant, indirect participant in DTC or other Person
responsible for forwarding payments and materials directly to the
beneficial owner of such Note.
SETTLEMENT PROCEDURES
Settlement Procedures with regard to each Book-Entry Note sold by the
Operating Partnership through an Agent, as agent, shall be as follows:
The Presenting Agent will advise the Operating Partnership by telephone,
telex or facsimile, of the following settlement information:
1. Exact name in which Note is to be registered ("Registered
Owner").
2. Exact address of the Registered Owner and address for payments
of principal and interest, if any.
3. Taxpayer identification number of the Registered Owner.
4. Principal amount of the Note (and, if multiple Notes are to be
issued, denominations thereof).
5. Settlement date.
6. Stated Maturity
7. Issue Price and any OID information.
8. Trade date.
9. The DTC Participant account number of such Agent.
10. Interest rate:
(a) Fixed Rate Notes:
i) interest rate
ii) overdue rate, if any
(b) Floating Rate Notes:
i) interest rate basis
ii) initial interest rate
iii) spread or spread multiplier, if any
iv) interest rate reset periods
v) interest payment dates
vi) index maturity
vii) maximum and minimum interest rates, if any
viii) record dates
ix) interest determination dates
x) overdue rate, if any
11. The date on or after which the Notes are redeemable at the
option of the Operating Partnership, and additional redemption or
repurchase provisions, if any.
12. Wire transfer information.
13. Presenting Agent's commission (to be paid in the form of a
discount from the proceeds remitted to the Operating Partnership upon
settlement.
B. The Operating Partnership will assign a CUSIP number to the Global
Security representing such Note and then advise the Trustee by telephone
(confirmed in writing at any time on the same date) or electronic
transmission of the information set forth in Settlement Procedure "A"
above, such CUSIP number and the name of such Agent.
C. The Trustee will enter a pending deposit message through DTC's
Participant Terminal System, providing the following settlement
information to DTC, the Presenting Agent, Standard & Poor's Corporation
and, upon request, the Trustee under the Indenture pursuant to which
such Note is to be issued:
1. The information set forth in Settlement Procedure "A."
(a) Identification as a Fixed Rate Book-Entry Note or a
Floating Rate Book-Entry Note.
(b) Initial Interest Payment Date for such Note, number of
days by which such date succeeds the related "DTC Record Date" (which
term means the Regular Record Date except in the case of floating rate
notes which reset daily or weekly in which case it means the date 5
calendar days immediately preceding the Interest Payment Date) and
amount of interest payable on such Interest Payment Date.
(c) Frequency of interest payments (monthly, semiannually,
quarterly, etc.).
(d) CUSIP number of the Global Security representing such
Note.
(e) Whether such Global Security will represent any other
Book-Entry Note (to the extent known at such time).
(f) The Trustee, as Trustee, will complete and authenticate
the note certificate evidencing the Global Security representing such
Book-Entry Note.
D) DTC will credit such Note to the Trustee's participant account at
DTC.
E) The Trustee will enter an SDFS deliver order through DTC's
Participant Terminal System instructing DTC to (i) debit such Note to
the Trustee's participant account and credit such Note to the Presenting
Agent's participant account and (ii) debit the Presenting Agent's
settlement account and credit the Trustee's settlement account for an
amount equal to the price of such Note less the Presenting Agent's
commission.
F) The Presenting Agent will enter an SDFS deliver order through DTC's
Participant Terminal System instructing DTC (i) to debit such Note to
the Presenting Agent's participant account and credit such Note to the
participant accounts of the Participants with respect to such Note and
(ii) to debit the settlement accounts of such Participants and credit
the settlement account of the Presenting Agent for an amount equal to
the price of such Note.
G) Transfers of funds in accordance with SDFS deliver orders described
in Settlement Procedures "F" and "G" will be settled in accordance with
SDFS operating procedures in effect on the settlement date.
H) The Trustee will credit to an account of the Operating Partnership
maintained at the Trustee funds available for immediate use in the
amount transferred to the Trustee in accordance,with Settlement
Procedure "F."
I) The Presenting Agent will deliver to the purchaser a copy of the
most recent Prospectus applicable to the Note with or prior to any
written offer of Notes and the confirmation and payment by the purchaser
of the Note.
The Presenting Agent will confirm the purchase of such Note to the
purchaser either by transmitting to the Participants with respect to
such Note a confirmation order or orders through DTC's institutional
delivery system or by mailing a written confirmation to such purchaser.
SETTLEMENT PROCEDURES TIMETABLE
For orders of Book-Entry Notes solicited by an Agent, as agent, and
accepted by the Operating Partnership for settlement, Settlement
Procedures "A" through "J" set forth above shall be completed as soon as
possible but not later than the respective times (New York City time)
set forth below:
SETTLEMENT
PROCEDURE TIME (NEW YORK)
- ---------- -----------------------------------------
A-B 11:00 A.M. on the Sale date
C 2:00 PM on Sale date
D 3:00 P.M. on date before Settlement date
E 10:00 A.M. on Settlement date
F-G 2:00 P.M. on Settlement Date
H 4:45 P.M. on Settlement date
I-J 5:00 P.M. on Settlement date
If a sale is to be settled more than one Business Day after the sale
date, Settlement Procedures "A," "B" and "C" shall be completed as soon
as practicable but no later than 11:00 A.M. and 2:00 P.M., as the case
may be, on the first Business Day after the sale date. If the initial
interest rate for a Floating Rate Book-Entry Note has not been
determined at the time that Settlement Procedure "A" is completed,
Settlement Procedures "B" and "C" shall be completed as soon as such
rate has been determined but no later than 11:00 A.M. and 12:00 Noon,
respectively, on the second Business Day before the settlement date.
Settlement Procedure "I" is subject to extension in accordance with any
extension of Fedwire closing deadlines and in the other events specified
in the SDFS operating procedures in effect on the settlement date.
If settlement of a Book-Entry Note is rescheduled or canceled, the
Trustee will deliver to DTC, through DTC's Participant Terminal System,
a cancellation message to such effect by no later than 2:00 P.M. on the
Business Day immediately preceding the scheduled settlement date.
FAILURE TO SETTLE
If the Trustee fails to enter an SDFS deliver order with respect to a
Book-Entry Note pursuant to Settlement Procedure "F," the Trustee may
deliver to DTC, through DTC's Participant Terminal System, as soon as
practicable a withdrawal message instructing DTC to debit such Note to
the Trustee's participant account. DTC will process the withdrawal
message, provided that the Trustee's participant account contains a
principal amount of the Global Security representing such Note that is
at least equal to the principal amount to be debited. If a withdrawal
message is processed with respect to all the Book-Entry Notes
represented by a Global Security, the Trustee will mark such Global
Security "canceled," make appropriate entries in the Trustee's records
and send such canceled Global Security to the Operating Partnership.
The CUSIP number assigned to such Global Security shall, in accordance
with CUSIP Service Bureau procedures, be canceled and not immediately
reassigned. If a withdrawal message is processed with respect to one or
more, but not all, of the Book-Entry Notes represented by a Global
Security, the Trustee will exchange such Global Security for two Global
Securities, one of which shall represent such Book-Entry Note or Notes
and shall be canceled immediately after issuance and the other of which
shall represent the other Book-Entry Notes previously represented by the
surrendered Global Security and shall bear the CUSIP number of the
surrendered Global Security.
If the purchase price for any Book-Entry Note is not timely paid to the
Participants with respect to such Note by the beneficial purchaser
thereof (or a Person, including an indirect participant in DTC, acting
on behalf of such purchaser), such Participants and, in turn, the Agent
for such Note may enter SDFS deliver orders through DTC's Participant
Terminal System reversing the orders entered pursuant to Settlement
Procedures "F" and "G," respectively. Thereafter, the Trustee will
deliver the withdrawal message and take the related actions described in
the preceding paragraph.
Notwithstanding the foregoing, upon any failure to settle with respect
to a Book-Entry Note, DTC may take any actions in accordance with its
SDFS operating procedures then in effect. In the event of a failure to
settle with respect to one or more, but not all, of the Book-Entry Notes
to have been represented by a Global Security, the Trustee will provide,
in accordance with Settlement Procedure "D," for the authentication and
issuance of a Global Security representing the other Book-Entry Notes to
have been represented by such Global Security and will make appropriate
entries in its records.
EXHIBIT C
PURCHASE AGREEMENT
- -----------------, 1998
Liberty Property Limited Partnership
65 Valley Stream Parkway
Malvern, PA 19355
Attention: George J. Alburger, Jr.
The undersigned agrees to purchase the following principal amount of the
Notes described in the Distribution Agreement dated January 12, 1998 (as
it may be supplemented or amended from time to time, the "Distribution
Agreement"):
Principal Amount: $
Specified Currency:
Denominated and Indexed Currencies:
Interest Rate: %
Discount: % of Principal Amount
Aggregate Price to be paid to Operating Partnership (in immediately
available funds): $
Settlement Date:
Other Terms:
(In the case of Notes issued in a foreign currency or currency unit,
unless otherwise specified below, settlement and payments of principal
and interest will be in U.S. dollars based on the highest bid quotation
in The City of New York received by the Exchange Rate Agent at
approximately 11:00 A.M., New York City time, on the second Business Day
preceding the applicable payment date from three recognized foreign
exchange dealers (one of which may be the Exchange Rate Agent) for the
purchase by the quoting dealer of the Specified Currency for U.S.
dollars for settlement on such payment date in the aggregate amount of
the Specified Currency payable to all holders of Notes denominated in
such Specified Currency electing to receive U.S. dollar payments and at
which the applicable dealer commits to execute a contract. If such bid
quotations are not available, payments will be made in the Specified
Currency.)
Our obligation to purchase Notes hereunder is subject to the continued
accuracy of your representations and warranties contained in the
Distribution Agreement and to your performance and observance of all
applicable covenants and agreements contained therein, including,
without limitation, your obligations pursuant to Section 7 thereof. Our
obligation hereunder is subject to the further condition that we shall
receive (a) the opinions required to be delivered pursuant to Sections
5(e) and 5(f) of the Distribution Agreement, (b) the certificate
required to be delivered pursuant to Section 5(h) of the Distribution
Agreement, (c) the letter referred to in Section 5(g) in each case dated
as of the above Settlement Date and (d) (insert other conditions as
appropriate).
In further consideration of our agreement hereunder, you agree that
between the date hereof and the above Settlement Date, you will not
offer or sell, or enter into any agreement to sell, any debt securities
of the Operating Partnership, other than borrowings under your revolving
credit agreements and lines of credit, the private placement of
securities and issuances of your commercial paper.
We may terminate this Agreement, immediately upon notice to you, at any
time prior to the Settlement Date, if prior thereto there shall have
occurred: (i) any change, or any development involving a prospective
change, in or affecting primarily the business, properties, condition
(financial or other), results of operations or prospects of the
Operating Partnership or the Operating Partnership and its subsidiaries
taken as a whole which materially impairs the investment quality of the
Notes; (ii) a suspension or material limitation in trading in securities
generally on the New York Stock Exchange or the establishment of minimum
prices on such exchange; (iii) a general moratorium on commercial
banking activities declared by Federal or state authorities; (iv) any
downgrading in the rating accorded the Operating Partnership's debt
securities by any "nationally recognized statistical rating
organization," as that term is defined by the Commission for purposes of
Rule 436(g)(2) under the Act or any public announcement that any such
organization has under surveillance or review its rating of any debt
securities of the Operating Partnership (other than an announcement with
positive implications of a possible upgrading, and no implication of a
possible downgrading, of such rating); (v) any outbreak or escalation of
major hostilities in which the United States is involved, any
declaration of war by Congress or any other substantial national
calamity or emergency; or (vi) any material adverse change in the
existing financial, political or economic conditions in the United
States, or you are unable to provide any of the opinions, certificates
or letters referred to in the second preceding paragraph. In the event
of such termination, no party shall have any liability to the other
party hereto, except as provided in Sections 4, 7 and 15 of the
Distribution Agreement.
This Agreement shall be governed by and construed in accordance with the
laws of New York.
Lehman Brothers Inc.
By:
Authorized Signatory
Donaldson, Lufkin & Jenrette Securities Corporation
By:
Name:
Title:
First Chicago Capital Markets, Inc.
By:
Name:
Title:
J.P. Morgan Securities Inc.
By:
Name:
Title:
UBS Securities LLC
By:
Name:
Title:
Confirmed and Accepted:
LIBERTY PROPERTY LIMITED PARTNERSHIP
By:Liberty Property Trust
By: _______________________
Name:
Title:
EXHIBIT D
[FOREIGN CURRENCY] [INDEXED NOTE]
AMENDMENT NO. ___
TO DISTRIBUTION AGREEMENT DATED JANUARY 12, 1998, AS AMENDED
[Insert Title of Foreign Currency or, in the case of
Indexed Notes, the Denominated and Indexed
Currencies]
The undersigned hereby agree that for the purposes of the issue and sale
of Notes denominated in title of currency or currency unit (the
"Applicable Foreign Currency") [and indexed to title of currency or
currency unit (the "Indexed Currency")] pursuant to the Distribution
Agreement, dated January 12, 1998, as it may be amended (the
"Distribution Agreement"), the following additions and modifications
shall be made to the Distribution Agreement. The additions and
modifications adopted hereby shall be of the same effect for the sale
under the Distribution Agreement of all Notes denominated in the
Applicable Foreign Currency and indexed to the Indexed Currency, whether
offered on an agency or principal basis, but shall be of no effect with
respect to Notes denominated in any currency or currency unit other than
the Applicable Foreign Currency.
Except as otherwise expressly provided herein, all terms used herein
which are defined in the Distribution Agreement shall have the same
meanings as in the Distribution Agreement. The terms Agent or Agents,
as used in the Distribution Agreement, shall be deemed to refer only to
the undersigned Agents for purposes of this Amendment.
[Insert appropriate additions and modifications to the Distribution
Agreement, for example, to opinions of counsel, conditions to
obligations and settlement procedures, etc.]
, 199
LIBERTY PROPERTY LIMITED PARTNERSHIP
BY:
NAME:
TITLE:
CONFIRMED AND ACCEPTED: _____________, 199__
[NAME(S) OF AGENT(S) PARTICIPATING
IN THE OFFERING OF NOTES IN THE APPLICABLE FOREIGN CURRENCY]
By:
Name:
Title:
EXHIBIT 10.2
2,300,000 Shares
LIBERTY PROPERTY TRUST
Common Shares of Beneficial Interest
UNDERWRITING AGREEMENT
January 14, 1998
SALOMON SMITH BARNEY
Smith Barney Inc.
A.G. EDWARDS & SONS, INC.
c/o Smith Barney Inc.
388 Greenwich Street
New York, New York 10013
Dear Sirs:
Liberty Property Trust, a Maryland real estate investment trust (the
"Company"), and Liberty Property Limited Partnership, a Pennsylvania
limited partnership (the "Operating Partnership" and, together with the
Company, the "Transaction Entities"), each wish to confirm as follows
its agreement with Smith Barney Inc. and A.G. Edwards & Sons, Inc., as
the underwriters (the "Underwriters," which term shall also include any
underwriter substituted as hereinafter provided in Section 9 of this
Agreement), with respect to the sale by the Company and the purchase by
the Underwriters, acting severally and not jointly, of an aggregate of
2,300,000 shares (the "Firm Shares") of the Company's common shares of
beneficial interest, par value $0.001 per share (the "Common Shares").
In addition, the Company proposes to grant to the Underwriters an option
to purchase up to an additional 345,000 Common Shares on the terms and
for the purposes set forth in Section 2 (the "Option Shares"). The Firm
Shares and the Option Shares, if purchased, are hereinafter collectively
called the "Shares."
Capitalized terms used but not otherwise defined herein shall have the
meanings given to those terms in the Prospectus (as defined below).
1) REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF THE TRANSACTION
ENTITIES. Each of the Transaction Entities, jointly and severally,
represents, warrants and agrees that, as of the date hereof:
a) A registration statement on Form S-3 (No. 333-22211), and any
amendments thereto, with respect to the Shares has (i) been prepared by
the Company in conformity with the requirements of the United States
Securities Act of 1933, as amended (the "Securities Act") and the rules
and regulations (the "Rules and Regulations") of the United States
Securities and Exchange Commission (the "Commission") thereunder, (ii)
been filed with the Commission under the Securities Act and (iii) become
effective under the Securities Act. Copies of such registration
statement and any amendments thereto have been delivered by the Company
to the Underwriters. As used in this Agreement, "Effective Time" means
the date and the time as of which such registration statement, or the
most recent post-effective amendment thereto, if any, was declared
effective by the Commission; "Effective Date" means the date of the
Effective Time; "Preliminary Prospectus" means each prospectus included
in such registration statement, or amendments thereto, before it became
effective under the Securities Act and any prospectus filed with the
Commission by the Company with the consent of the Underwriters pursuant
to Rule 424(a) of the Rules and Regulations; "Registration Statement"
means such registration statement, as amended at the Effective Time,
including any documents incorporated by reference therein at such time
and all information contained in the final prospectus filed with the
Commission pursuant to Rule 424(b) of the Rules and Regulations and
deemed to be a part of such registration statement as of the 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 Rule
424(b) of the Rules and Regulations. Any reference herein to the
Registration Statement, the Prospectus or a Preliminary Prospectus shall
be deemed to include the documents incorporated or deemed to be
incorporated by reference therein which were filed under the Securities
and Exchange Act of 1934, as amended (the "Exchange Act"). For purposes
of this Agreement, all references to the Registration Statement, any
Preliminary Prospectus or the Prospectus or any amendment or supplement
to any of the foregoing shall be deemed to include the copy filed with
the Commission pursuant to its Electronic Data Gathering, Analysis and
Retrieval system ("EDGAR").
b) Each Preliminary Prospectus 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 each Preliminary Prospectus
delivered to the Underwriters for use in connection with this offering
was identical to the electronically transmitted copies thereof filed
with the Commission pursuant to EDGAR, except to the extent permitted by
Regulation S-T.
c) The Registration Statement conforms in all material respects,
and the Prospectus and any further amendments or supplements to the
Registration Statement or the Prospectus will, when they become
effective or are filed with the Commission, as the case may be, conform
in all material respects to the requirements of the Securities Act and
the Rules and Regulations, and do not and will not, as of the Effective
Date (as to the Registration Statement and any amendment thereto) and as
of the applicable filing date and at the First Delivery Date (as defined
below) (as to the Prospectus and any amendment or supplement thereto)
contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading (with respect to the Prospectus, in
light of the circumstances under which they were made); provided that no
representation or warranty is made as to information contained in or
omitted from the Registration Statement or the Prospectus in reliance
upon and in conformity with written information furnished to the Company
by or on behalf of any Underwriter specifically for inclusion therein.
The Prospectus delivered to the Underwriters for use in connection with
this offering was identical to the electronically transmitted copies
thereof filed with the Commission pursuant to EDGAR, except to the
extent permitted by Regulation S-T.
d) The documents incorporated or deemed to be incorporated by
reference in the Registration Statement as of the Effective Date, the
Prospectus as of its date or any Preliminary Prospectus as of its date,
complied in all material respects with the Exchange Act and the rules
and regulations thereunder, and none of such documents, at such dates,
contained an untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they
were made, not misleading.
e) No stop order suspending the effectiveness of the Registration
Statement or any part thereof has been issued and no proceeding for that
purpose has been instituted or, to the knowledge of either of the
Transaction Entities, threatened by the Commission or by the state
securities authority of any jurisdiction. No order preventing or
suspending the use of any Preliminary Prospectus or the Prospectus has
been issued and no proceeding for that purpose has been instituted or,
to the knowledge of either of the Transaction Entities, after due
inquiry of the Commission, threatened by the Commission or by the state
securities authority of any jurisdiction.
f) The Company has been duly formed and is validly existing as a
real estate investment trust in good standing under the laws of the
State of Maryland, is duly qualified to do business and is in good
standing in each jurisdiction in which its ownership or lease of
property or the conduct of its business requires such qualification, and
has all power and authority necessary to own or hold its properties, to
conduct the business in which it is engaged and to enter into and
perform its obligations under this Agreement. None of the subsidiaries
of the Company (other than the Operating Partnership, Liberty Property
Development Corp. ("Development Corp."), Liberty Property Development
Corp.-II ("Development-II") and Liberty Special Purpose Corp. ("SP
Corp.")) is a "significant subsidiary," as such term is defined in Rule
405 of the Rules and Regulations. Except as described in the Prospectus
and other than the Property Affiliates (as defined below) and the
Operating Partnership, Development Corp., Development-II and SP Corp.,
the Company owns no direct or indirect equity interest in any entity,
except for such interests as, in the aggregate, are not material to the
condition, financial or otherwise, or the earnings, assets, business
affairs or business prospects of the Company and its subsidiaries
considered as a single enterprise.
g) All of the issued shares of beneficial interest of the Company
have been duly and validly authorized and issued, are fully paid and
non-assessable and conform to the description thereof contained in the
Prospectus. Except as disclosed in the Prospectus, 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 the Operating Partnership's Exchangeable Subordinated Debentures due
2001, there are no outstanding securities convertible into or
exchangeable for any shares of beneficial interest of the Company.
Except for transactions described in the Prospectus and transactions in
connection with stock option and other benefit plans, there are no
outstanding options, rights (preemptive or otherwise) or warrants to
purchase or subscribe for shares of beneficial interest or any other
securities of the Company.
h) The Operating Partnership has been duly formed and is validly
existing as a limited partnership in good standing under the laws of the
Commonwealth of Pennsylvania, is duly qualified to do business and is in
good standing as a foreign limited partnership in each jurisdiction in
which its ownership or lease of property or the conduct of its business
requires such qualification, and has all partnership power and authority
necessary to own or hold its properties, to conduct the business in
which it is engaged and to enter into and perform its obligations under
this Agreement. The Company is the sole general partner of the
Operating Partnership. The agreement of limited partnership of the
Operating Partnership, as amended to date (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; provided that to the
extent any portion of the over-allotment option described in Section 2
hereof is exercised at the First Delivery Date, the percentage interest
of such partners in the Operating Partnership will be adjusted
accordingly. Additionally, to the extent any portion of such over-
allotment option is exercised subsequent to the First Delivery Date, the
Company will contribute the proceeds from the sale of the Option Shares
to the Operating Partnership in exchange for an increase in the
Company's interest in the Operating Partnership consistent with the
number of Option Shares issued.
i) Development Corp. has been duly organized and is validly
existing as a corporation in good standing under the laws of the
Commonwealth of Pennsylvania, is duly qualified to do business and is in
good standing in each jurisdiction in which its ownership or lease of
property or the conduct of its business requires such qualification, and
has all corporate power and authority necessary to own or hold its
properties and to conduct the business in which it is engaged. All of
the issued and outstanding capital stock of Development Corp. has been
duly authorized and validly issued and is fully paid and non-assessable,
has been offered and sold in compliance with all applicable laws
(including, without limitation, federal or state securities laws) and
all of the capital stock of Development Corp. owned by the Operating
Partnership, as described in the Prospectus, is owned free and clear of
any security interest, mortgage, pledge, lien, encumbrance, claim,
restriction or equities. No shares of capital stock of Development
Corp. are reserved for any purpose, and there are no outstanding
securities convertible into or exchangeable for any capital stock of
Development Corp., and no outstanding options, rights (preemptive or
otherwise) or warrants to purchase or to subscribe for shares of such
capital stock or any other securities of Development Corp.
j) Development-II has been duly organized and is validly existing
as a corporation in good standing under the laws of the Commonwealth of
Pennsylvania, is duly qualified to do business and is in good standing
in each jurisdiction in which its ownership or lease of property or the
conduct of its business requires such qualification, and has all
corporate power and authority necessary to own or hold its properties
and to conduct the business in which it is engaged. All of the issued
and outstanding capital stock of Development-II has been duly authorized
and validly issued and is fully paid and non-assessable, has been
offered and sold in compliance with all applicable laws (including,
without limitation, federal or state securities laws) and all of the
capital stock of Development-II owned by the Operating Partnership, as
described in the Prospectus, is owned free and clear of any security
interest, mortgage, pledge, lien, encumbrance, claim, restriction or
equities. No shares of capital stock of Development-II are reserved for
any purpose, and there are no outstanding securities convertible into or
exchangeable for any capital stock of Development-II, and no outstanding
options, rights (preemptive or otherwise) or warrants to purchase or to
subscribe for shares of such capital stock or any other securities of
Development-II.
k) SP Corp. has been duly organized and is validly existing as a
corporation in good standing under the laws of the Commonwealth of
Pennsylvania, is duly qualified to do business and is in good standing
as a foreign corporation in each jurisdiction in which its ownership or
lease of property or the conduct of its business requires such
qualification, and has all corporate power and authority necessary to
own or hold its properties and to conduct the business in which it is
engaged. All of the issued and outstanding capital stock of SP Corp.
has been duly authorized and validly issued and is fully paid and non-
assessable, has been offered and sold in compliance with all applicable
laws (including, without limitation, federal or state securities laws)
and all of the capital stock of SP Corp. is owned by the Company free
and clear of any security interest, mortgage, pledge, lien, encumbrance,
claim, restriction or equities. No shares of capital stock of SP Corp.
are reserved for any purpose, and there are no outstanding securities
convertible into or exchangeable for any capital stock of SP Corp. and
no outstanding options, rights (preemptive or otherwise) or warrants to
purchase or to subscribe for shares of such capital stock or any other
securities of SP Corp.
l) Each of those certain partnerships, limited liability
companies or other entities holding title to one or more of the
Properties (the "Property Affiliates") are the only entities other than
the Operating Partnership 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 in good standing
under the laws of the jurisdiction in which it is organized, is duly
qualified to do business and is in good standing as a foreign entity in
each jurisdiction in which its ownership or lease of property or the
conduct of its business requires such qualification, and has all power
and authority necessary to own or hold its properties and to conduct the
business in which it is engaged. Except as set forth in the Prospectus,
all of the ownership interests of each Property Affiliate have been duly
and validly authorized and issued, are fully paid and non-assessable and
all of the ownership interests owned directly or indirectly by the
Company and the Operating Partnership, as described in the Prospectus,
are owned free and clear of any security interest, mortgage, pledge,
lien, encumbrance, claim, restriction or equities.
m) The Shares have been duly and validly authorized and, when
issued and delivered against payment therefor as provided herein, will
be duly and validly issued, fully paid and non-assessable. Upon payment
of the purchase price and delivery of the Shares in accordance herewith,
each of the Underwriters will receive good, valid and marketable title
to the Shares, free and clear of all security interests, mortgages,
pledges, liens, encumbrances, claims, restrictions and equities. The
terms of the Shares conform in substance to all statements and
descriptions related thereto contained in the Prospectus. The form of
the certificates to be used to evidence the Shares will at the First
Delivery Date be in due and proper form and will comply with all
applicable legal requirements. The issuance of the Shares is not
subject to any preemptive or other similar rights.
n) (A) This Agreement has been duly and validly authorized,
executed and delivered by each of the Transaction Entities, and assuming
due authorization, execution and delivery by the Underwriters, is a
valid and binding agreement of each of the Transaction Entities,
enforceable against the Transaction Entities in accordance with its
terms; and (B) the Operating Partnership Agreement and the partnership
agreement of each Property Affiliate, has been duly and validly
authorized, executed and delivered by the parties thereto and is a valid
and binding agreement of the parties thereto, enforceable against such
parties in accordance with its terms.
o) The execution, delivery and performance of this Agreement by
each of the Transaction Entities and the consummation of the
transactions contemplated hereby will not conflict with or result in a
breach or violation of any of the terms or provisions of, or constitute
a default under, any indenture, mortgage, deed of trust, loan agreement
or other agreement or instrument to which either of the Transaction
Entities is a party or by which either of the Transaction Entities is
bound or to which any of the Properties or other assets of either of the
Transaction Entities is subject, nor will such actions result in any
violation of the provisions of the charter, by-laws, certificate of
limited partnership or agreement of limited partnership of either of the
Transaction Entities, or any statute or any order, rule or regulation of
any court or governmental agency or body having jurisdiction over either
of the Transaction Entities or any of their properties or assets; and
except for the registration of the Shares under the Securities Act and
such consents, approvals, authorizations, registrations or
qualifications as may be required under the Exchange Act and applicable
state securities laws in connection with the purchase and distribution
of the Shares by the Underwriters, no consent, approval, authorization
or order of, or filing or registration with, any such court or
governmental agency or body is required for the execution, delivery and
performance of this Agreement by the Transaction Entities and the
consummation of the transactions contemplated hereby.
p) Other than as described in the Prospectus and other than
rights of persons whose securities are already registered under the
Securities Act, there are no contracts, agreements or understandings
between the Company 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 the Company owned or to
be owned by such person or to require the Company to include such
securities in the securities registered pursuant to the Registration
Statement or in any securities being registered pursuant to any other
registration statement filed by the Company under the Securities Act.
(i) Except as described or contemplated in the Prospectus,
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 under, or Regulations D or S of, the
Securities Act.
q) Neither of the Transaction Entities nor any of the Properties
has sustained, since the date of the latest audited financial statements
included in the Prospectus, any material loss or interference with its
business from fire, explosion, flood or other calamity, whether or not
covered by insurance, or from any labor dispute or court or governmental
action, order or decree, other than as set forth or contemplated in the
Prospectus; and, since such date, there has not been any material change
in the capital stock or long-term debt of either of the Transaction
Entities or any material adverse change, or any development involving a
prospective material adverse change, in or affecting any of 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.
r) The financial statements (including the related notes and
supporting schedules) 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 and of
earnings to combined fixed charges and preferred share dividends(actual
and, if any, pro forma) included in the Prospectus under the captions
"Certain Ratios" and in Exhibit 12.1 to the Registration Statement have
been calculated in compliance with Item 503(d) of Regulation S-K of the
Commission. Pro forma financial information included in or incorporated
by reference in the Registration Statement and the Prospectus has been
prepared in accordance with the applicable requirements of the
Securities Act, the Rules and Regulations and AICPA guidelines with
respect to pro forma financial information and includes all adjustments
necessary to present fairly the pro forma financial position of the
Company at the respective dates indicated and the results of operations
for the respective periods specified.
s) Ernst & Young LLP, who have certified certain financial
statements of the Company, whose reports appear in the Prospectus or are
incorporated by reference therein and who have delivered the initial
letter referred to in Section 7(f) hereof, are independent public
accountants as required by the Securities Act and the Rules and
Regulations.
t) (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 or those which are not material
in amount or those which would not have a material adverse effect on the
business, operations, use or value of any of the Properties; (B) all
liens, charges, encumbrances, claims or restrictions on or affecting any
of the Properties and the assets of any Transaction Entity which are
required to be disclosed in the Prospectus are disclosed therein;
(C) except as otherwise described in the Prospectus, neither Transaction
Entity and, to the knowledge of the Transaction Entities, no tenant of
any of the Properties is in default under (i) any space leases (as
lessor or lessee, as the case may be) relating to the Properties, or
(ii) any of the mortgages or other security documents or other
agreements encumbering or otherwise recorded against the Properties,
which individually or in the aggregate would have a material adverse
effect on the Company and its subsidiaries taken together as a whole,
and neither Transaction Entity knows of any event which, but for the
passage of time or the giving of notice, or both, would constitute such
a default under any of such documents or agreements; (D) each of the
Properties complies with all applicable codes, laws and regulations
(including, without limitation, building and zoning codes, laws and
regulations and laws relating to access to the Properties), except for
such failures to comply that would not have a material adverse effect on
the business operations, use or value of such Property; and (E) neither
Transaction Entity has knowledge of any pending or threatened
condemnation proceedings, zoning change or other proceeding or action
that will in any material manner adversely affect the size of, use of,
improvements on, construction on or access to the Properties.
u) Except as described in the Prospectus, 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.
v) Except as described in the Prospectus, the Operating
Partnership and the Property Affiliates have obtained title insurance on
the fee or leasehold interests in each of the Properties, in an amount
at least equal to the greater of (A) the mortgage indebtedness of each
such Property or (B) the purchase price of each such Property.
w) Except as disclosed in the Prospectus and except such as in
each case would not have a material adverse effect on any Property,
Property Affiliate, or Transaction Entity or any of their subsidiaries,
taken together as a whole; (A) to the knowledge of the Transaction
Entities, after due inquiry, the operations of the Company, the
Operating Partnership, Development Corp., Development-II, SP Corp., and
the Properties are in compliance with all Environmental Laws (as defined
below) and all requirements of applicable permits, licenses, approvals
and other authorizations issued pursuant to Environmental Laws; (B) to
the knowledge of the Transaction Entities, after due inquiry, none of
the Transaction Entities, the Property Affiliates or any Property has
caused or suffered to occur any Release (as defined below) of any
Hazardous Substance (as defined below) into the Environment (as defined
below) on, in, under or from any Property, and no condition exists on,
in, under or adjacent to any Property that could result in the
incurrence of liabilities under, or any violations of, any Environmental
Law or give rise to the imposition of any Lien (as defined below), under
any Environmental Law; (C) none of the Transaction Entities or Property
Affiliates has received any written notice of a claim under or pursuant
to any Environmental Law or under common law pertaining to Hazardous
Substances on, in, under or originating from any Property; (D) neither
of the Transaction Entities has actual knowledge of, or received any
written notice from any Governmental Authority (as defined below)
claiming, any violation of any Environmental Law or a determination to
undertake and/or request the investigation, remediation, clean-up or
removal of any Hazardous Substance released into the Environment on, in,
under or from any Property; and (E) no Property is included or, to the
knowledge of the Transaction Entities, after due inquiry, proposed for
inclusion on the National Priorities List issued pursuant to CERCLA (as
defined below) by the United States Environmental Protection Agency (the
"EPA") or on the Comprehensive Environmental Response, Compensation, and
Liability Information System database maintained by the EPA, and neither
of the Transaction Entities has actual knowledge that any Property has
otherwise been identified in a published writing by the EPA as a
potential CERCLA removal, remedial or response site or, to the knowledge
of the Transaction Entities, is included on any similar list of
potentially contaminated sites pursuant to any other Environmental Law.
As used herein, "Hazardous Substance" shall include any hazardous
substance, hazardous waste, toxic substance, pollutant or hazardous
material, including, without limitation, oil, petroleum or any
petroleum-derived substance or waste, asbestos or asbestos-containing
materials, PCBs, pesticides, explosives, radioactive materials, dioxins,
urea formaldehyde insulation or any constituent of any such substance,
pollutant or waste which is subject to 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. 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. 9601 et seq.) ("CERCLA"),
the Resource Conservation and Recovery Act of 1976, as amended (42
U.S.C. 6901, et seq.), the Clean Air Act, as amended (42 U.S.C. 7401,
et seq.), the Clean Water Act, as amended (33 U.S.C. 1251, et seq.),
the Toxic Substances Control Act, as amended (15 U.S.C. 2601, et seq.),
the Occupational Safety and Health Act of 1970, as amended (29 U.S.C.
651, et seq.), the Hazardous Materials Transportation Act, as amended
(49 U.S.C. 1801, et seq.), and all other federal, state and local laws,
ordinances, regulations, rules and orders relating to the protection of
the Environment or of human health from environmental effects;
"Governmental Authority" shall mean any federal, state or local
governmental office, agency or authority having the duty or authority to
promulgate, implement or enforce any Environmental Law; "Lien" shall
mean, with respect to any Property, any lien, encumbrance, penalty,
fine, charge, assessment, judgment or other liability in, on or
affecting such Property; and "Release" shall mean any spilling, leaking,
pumping, pouring, emitting, emptying, discharging, injecting, escaping,
leaching, dumping, emanating or disposing of any Hazardous Substance
into the Environment, including, without limitation, the abandonment or
discard of barrels, containers, tanks (including, without limitation,
underground storage tanks) or other receptacles containing or previously
containing any Hazardous Substance.
x) Each Transaction Entity and their subsidiaries, and each
Property carries, or is covered by, insurance in such amounts and
covering such risks as is adequate for the conduct of its business and
the value of such Property and as is customary for companies engaged in
similar businesses in similar industries.
y) 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.
z) Except as described in the Prospectus, there are no legal or
governmental proceedings pending to which either Transaction Entity or
their subsidiaries is a party or of which any property or assets of
either Transaction Entity or their subsidiaries is the subject which, if
determined adversely to such Transaction Entity or subsidiary, could
reasonably be expected to have a material adverse effect on the
consolidated financial position, shareholders' equity, results of
operations, business or prospects of the Company; and to the best
knowledge of the Transaction Entities, no such proceedings are
threatened or contemplated by governmental authorities or threatened by
others.
aa) 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.
bb) No relationship, direct or indirect, exists between or among
either of the Transaction Entities on the one hand, and the trustees,
officers, shareholders, customers or suppliers of the Transaction
Entities on the other hand, that is required to be described in the
Prospectus that is not so described.
cc) No labor disturbance by the employees of either Transaction
Entity exists or, to the knowledge of the Transaction Entities, is
imminent which might be expected to have a material adverse effect on
the consolidated financial position, shareholders' equity, results of
operations, business or prospects of such Transaction Entity.
dd) Each Transaction Entity is in compliance in all material
respects with all presently applicable provisions of the Employee
Retirement Income Security Act of 1974, as amended, including the
regulations and published interpretations thereunder ("ERISA"); no
"reportable event" (as defined in ERISA) has occurred with respect to
any "pension plan" (as defined in ERISA) for which either Transaction
Entity would have any liability; neither Transaction Entity has incurred
or expects to incur liability under (i) Title IV of ERISA with respect
to termination of, or withdrawal from, any "pension plan" or (ii)
sections 412 or 4971 of the Internal Revenue Code of 1986, as amended,
including the regulations and published interpretations thereunder (the
"Code"); and each "pension plan" for which either Transaction Entity
would have any liability that is intended to be qualified under section
401(a) of the Code is so qualified in all material respects and nothing
has occurred, whether by action or by failure to act, which would cause
the loss of such qualification.
ee) Each Transaction Entity and their subsidiaries has filed all
federal, state and local income and franchise tax returns required to be
filed through the date hereof and has paid all taxes due thereon, and no
material tax deficiency has been determined adversely to either
Transaction Entity or their subsidiaries which has had (nor does either
Transaction Entity have any knowledge of any tax deficiency which, if
determined adversely to it might have) a material adverse effect on the
financial position, shareholders' equity, results of operations,
business or prospects of such Transaction Entity or subsidiary.
ff) At all times since June 16, 1994 or, with respect to
Development-II, ____________, 1997, the Company, the Operating
Partnership, Development Corp., Development-II and SP Corp. have been
and, upon the sale of the Shares, will continue to be, organized and
operated in conformity with the requirements for qualification of the
Company as a real estate investment trust under the Code and the
proposed method of operation of the Company, the Operating Partnership,
Development Corp., Development-II and SP Corp. will enable the Company
to continue to meet the requirements for qualification and taxation as a
real estate investment trust under the Code.
gg) Since the date as of which information is given in the
Prospectus through the date hereof, and except as may otherwise be
disclosed or contemplated in the Prospectus, neither Transaction Entity
has (i) issued or granted any securities, (ii) incurred any liability or
obligation, direct or contingent, other than liabilities and obligations
which were incurred in the ordinary course of business, (iii) entered
into any transaction not in the ordinary course of business nor (iv)
declared or paid any dividend on its capital stock (other than regular
quarterly dividends).
hh) Each Transaction Entity and their subsidiaries (i) makes and
keeps accurate books and records and (ii) maintains internal accounting
controls which provide reasonable assurance that (A) transactions are
executed in accordance with management's authorization, (B) transactions
are recorded as necessary to permit preparation of its financial
statements and to maintain accountability for its assets, (C) access to
its assets is permitted only in accordance with management's
authorization and (D) the reported accountability for its assets is
compared with existing assets at reasonable intervals.
ii) No Transaction Entity or any of their subsidiaries (i) is in
violation of its charter, by-laws, certificate of limited partnership,
agreement of limited partnership or other similar organizational
document, (ii) is in default in any material respect, and no event has
occurred which, with notice or lapse of time or both, would constitute
such a default, in the due performance or observance of any term,
covenant or condition contained in any material indenture, mortgage,
deed of trust, loan agreement or other agreement or instrument to which
it is a party or by which it is bound or to which any of the Properties
or any of its other properties or assets is subject or (iii) is in
violation in any material respect of any law, ordinance, governmental
rule, regulation or court decree to which it or the Properties or any of
its other properties or assets may be subject or has failed to obtain
any material license, permit, certificate, franchise or other
governmental authorization or permit necessary to the ownership of the
Properties or any of its other properties or assets or to the conduct of
its business.
jj) Neither Transaction Entity, nor any trustee, officer, agent,
employee or other person associated with or acting on behalf of either
Transaction Entity, has used any corporate funds for any unlawful
contribution, gift, entertainment or other unlawful expense relating to
political activity; made any direct or indirect unlawful payment to any
foreign or domestic government official or employee from corporate
funds; violated or is in violation of any provision of the Foreign
Corrupt Practices Act of 1977; or made any bribe, rebate, payoff,
influence payment, kickback or other unlawful payment.
kk) Neither Transaction Entity or any of their subsidiaries is an
"investment company" within the meaning of such term under the
Investment Company Act of 1940 and the rules and regulations of the
Commission thereunder.
ll) The Firm Shares will be listed and the Option Shares will be
reserved for listing on the New York Stock Exchange on the First
Delivery Date.
mm) Other than this Agreement and as set forth in the Prospectus
under the heading "Underwriting," there are no contracts, agreements or
understandings between either Transaction Entity and any person that
would give rise to a valid claim against either Transaction Entity or
any Underwriter for a brokerage commission, finder's fee or other like
payment with respect to the consummation of the transactions
contemplated by this Agreement.
nn) Each Transaction Entity has complied with all applicable
provisions of Florida Statutes 517.075, relating to issuers doing
business with Cuba.
2. PURCHASE OF THE SHARES BY THE UNDERWRITERS. On the basis of the
representations and warranties contained in, and subject to the terms
and conditions of, this Agreement, the Company agrees to sell 2,300,000
Firm Shares, to the Underwriters and each of the Underwriters, severally
and not jointly, agrees to purchase the number of Firm Shares set forth
opposite that Underwriter's name in Schedule 1 hereto. The respective
purchase obligations of the Underwriters with respect to the Firm Shares
shall be rounded among the Underwriters to avoid fractional shares, as
the Underwriters may determine.
In addition, the Company grants to the Underwriters an option to
purchase up to 345,000 Option Shares. Such option is granted solely for
the purpose of covering over-allotments in the sale of Firm Shares and
is exercisable as provided in Section 4 hereof. Option Shares shall be
purchased severally for the account of the Underwriters in proportion to
the number of Firm Shares set forth opposite the names of such
Underwriters in Schedule 1 hereto. The respective purchase obligations
of each Underwriter with respect to the Option Shares shall be adjusted
by the Underwriters so that no Underwriter shall be obligated to
purchase Option Shares other than in 100-share amounts. The price of
both the Firm Shares and any Option Shares shall be $26.29 per share.
The Company shall not be obligated to deliver any of the Shares to be
delivered on the First Delivery Date or the Second Delivery Date (as
defined below), as the case may be, except upon payment for all the
Shares to be purchased on such Delivery Date as provided herein.
3. OFFERING OF SHARES BY THE UNDERWRITERS. The Underwriters propose to
offer the Firm Shares for sale upon the terms and conditions set forth
in the Prospectus.
4. DELIVERY OF AND PAYMENT FOR THE SHARES. Delivery of and payment for
the Firm Shares shall be made at the office of Rogers & Wells, 200 Park
Avenue, New York, New York 10166, at 10:00 A.M., New York City time, on
the third full business day following the date of this Agreement or on
the fourth full business day if this Agreement is executed after the
daily closing time of the New York Stock Exchange (unless postponed in
accordance with the provisions of Section 9 hereof), or at such other
date or place as shall be determined by agreement between the
Underwriters and the Company. This date and time are sometimes referred
to as the "First Delivery Date." On the First Delivery Date, the
Company shall deliver or cause to be delivered certificates representing
the Firm Shares to the Underwriters for the account of each Underwriter
against payment to or upon the order of the Company of the purchase
price by certified or official bank check or checks payable in same day
funds or, at the discretion of the Company, by wire transfer in same day
funds. Time shall be of the essence, and delivery at the time and place
specified pursuant to this Agreement is a further condition of the
obligation of each Underwriter hereunder. Upon delivery, the Firm
Shares shall be registered in such names and in such denominations as
the Underwriters shall request in writing not less than two full
business days prior to the First Delivery Date. For the purpose of
expediting the checking and packaging of the certificates for the Firm
Shares, the Company shall make the certificates representing the Firm
Shares available for inspection by the Underwriters in New York, New
York, not later than 2:00 P.M., New York City time, on the business day
prior to the First Delivery Date.
At any time on or before the thirtieth day after the date of this
Agreement, the option granted in Section 2 may be exercised in whole or
in part by written notice being given to the Company by the
Underwriters. Such notice shall set forth the aggregate number of
Option Shares as to which the option is being exercised, the names in
which the Option Shares are to be registered, the denominations in which
the Option Shares are to be issued and the date and time, as determined
by the Underwriters, when the Option Shares are to be delivered;
provided, however, that this date and time shall not be earlier than the
First Delivery Date nor earlier than the second business day after the
date on which the option shall have been exercised nor later than the
fifth business day after the date on which the option shall have been
exercised. The date and time the Option Shares are delivered are
sometimes referred to as the "Second Delivery Date" and the First
Delivery Date and the Second Delivery Date are sometimes each referred
to as a "Delivery Date."
Delivery of and payment for the Option Shares shall be made at the place
specified in the first sentence of the first paragraph of this Section 4
(or at such other place as shall be determined by agreement between the
Underwriters and the Company) at 10:00 A.M., New York City time, on the
Second Delivery Date. On the Second Delivery Date, the Company shall
deliver or cause to be delivered the certificates representing the
Option Shares to the Underwriters for the account of each Underwriter
against payment to or upon the order of the Company of the purchase
price by certified or official bank check or checks payable in same day
funds or, at the discretion of the Company, by wire transfer in same day
funds. Time shall be of the essence, and delivery at the time and place
specified pursuant to this Agreement is a further condition of the
obligation of each Underwriter hereunder. Upon delivery, the Option
Shares shall be registered in such names and in such denominations as
the Underwriters shall request in the aforesaid written notice. For the
purpose of expediting the checking and packaging of the certificates for
the Option Shares, the Company shall make the certificates representing
the Option Shares available for inspection by the Underwriters in New
York, New York, not later than 2:00 P.M., New York City time, on the
business day prior to the Second Delivery Date.
5. FURTHER AGREEMENTS OF THE TRANSACTION ENTITIES. Each of the
Transaction Entities jointly and severally agrees:
a) To prepare the Prospectus in a form approved by the
Underwriters and to file such Prospectus pursuant to Rule 424(b) under
the Securities Act not later than the Commission's close of business on
the second business day following the execution and delivery of this
Agreement or, if applicable, such earlier time as may be required by
Rule 430A(a)(3) under the Securities Act; to make no further amendment
or any supplement to the Registration Statement or to the Prospectus
except in accordance with Section 5(e) hereof; to advise the
Underwriters, promptly after it receives notice thereof, of the time
when any amendment to the Registration Statement has been filed or
becomes effective or any supplement to the Prospectus or any amended
Prospectus has been filed and to furnish the Underwriters with copies
thereof; to advise the Underwriters, promptly after it receives notice
thereof, of the issuance by the Commission of any stop order or of any
order preventing or suspending the use of any Preliminary Prospectus or
the Prospectus, of the suspension of the qualification of the Shares for
offering or sale in any jurisdiction, of the initiation or threatening
of any proceeding for any such purpose, or of any request by the
Commission for the amending or supplementing of the Registration
Statement or the Prospectus or for additional information; and, in the
event of the issuance of any stop order or of any order preventing or
suspending the use of any Preliminary Prospectus or the Prospectus or
suspending any such qualification, to use promptly its best efforts to
obtain its withdrawal;
b) To furnish promptly to the Underwriters and to counsel for the
Underwriters such number of conformed copies as the Underwriters shall
reasonably request of the Registration Statement as originally filed
with the Commission, and each amendment thereto filed with the
Commission, including all consents and exhibits filed therewith or
incorporated by reference therein and all documents incorporated by
reference therein;
c) To deliver promptly to the Underwriters such number of the
following documents as the Underwriters shall reasonably request: (i)
conformed copies of the Registration Statement as originally filed with
the Commission and each amendment thereto (in each case excluding
exhibits other than this Agreement) and (ii) each Preliminary
Prospectus, the Prospectus and any amended or supplemented Prospectus;
and, if the delivery of a prospectus is required at any time after the
Effective Time in connection with the offering or sale of the Shares or
any other securities relating thereto and if at such time any events
shall have occurred as a result of which the Prospectus as then amended
or supplemented would include an untrue statement of a material fact or
omit to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made when such Prospectus is delivered, not misleading, or, if for
any other reason it shall be necessary to amend or supplement the
Prospectus in order to comply with the Securities Act or the Exchange
Act, to notify the Underwriters and, upon their request, to file such
document and to prepare and furnish without charge to each Underwriter
and to any dealer in securities as many copies as the Underwriters may
from time to time reasonably request of an amended or supplemented
Prospectus which will correct such statement or omission or effect such
compliance. The aforementioned documents furnished to the Underwriters
will be identical to the electronically transmitted copies thereof filed
with the Commission pursuant to EDGAR, except to the extent permitted by
Regulation S-T.
d) To file promptly with the Commission any amendment to the
Registration Statement or the Prospectus or any supplement to the
Prospectus that 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 Company will make generally available to its security
holders as soon as practicable but no later than 60 days after the close
of the period covered thereby an earnings statement (in form complying
with the provisions of Section 11(a) of the Securities Act and Rule 158
of the Rules and Regulations), which need not be certified by
independent certified public accountants unless required by the
Securities Act or the Rules and Regulations, covering a twelve-month
period commencing after the "effective date" (as defined in said Rule
158) of the Registration Statement;
g) For a period of five years following the Effective Date, to
furnish to the Underwriters copies of all materials furnished by the
Company to its shareholders and all public reports and all reports and
financial statements furnished by the Company to the principal national
securities exchange upon which the Common Shares may be listed pursuant
to requirements of or agreements with such exchange or to the Commission
pursuant to the Exchange Act or any rule or regulation of the Commission
thereunder;
h) Promptly from time to time to take such action as the
Underwriters may reasonably request to qualify the Shares for offering
and sale under the securities, real estate syndication or Blue Sky laws
of such jurisdictions as the Underwriters may request and to comply with
such laws so as to permit the continuance of sales and dealings therein
in such jurisdictions for as long as may be necessary to complete the
distribution of the Shares, except that the Company shall not be
required in connection therewith to qualify as a foreign corporation or
to execute a consent to service of process in any jurisdiction;
i) For a period of 30 days from the date of the Prospectus, the
Company will not, directly or indirectly, (1) offer for sale, contract
to sell, sell, pledge or otherwise dispose of (or enter into any
transaction or device which is designed to, or could be expected to,
result in the disposition by any person at any time in the future of)
any Common Shares or securities convertible into or exercisable or
exchangeable for Common Shares in an underwritten offering to the public
(other than the Shares and any Units or Common Shares that may be issued
in connection with any acquisition of a property or pursuant to
customary compensation arrangements and employee benefit plans), or sell
or grant options, rights or warrants with respect to any Common Shares
or securities convertible into or exercisable or exchangeable for Common
Shares (except pursuant to customary compensation arrangements and
employee benefit plans), or (2) enter into any swap or other derivatives
transaction that transfers to another, in whole or in part, any of the
economic benefits or risks of ownership of such Common Shares, whether
any such transaction described in clause (1) or (2) above is to be
settled by delivery of Common Shares or other securities, in cash or
otherwise, in each case without the prior written consent of Smith
Barney Inc.; and to cause Willard G. Rouse III, Joseph P. Denny, George
J. Alburger, Jr., George F. Congdon and Robert E. Fenza, who each own
Units or Common Shares, to furnish to the Underwriters, prior to the
First Delivery Date, a letter or letters, in form and substance
satisfactory to counsel for the Underwriters, pursuant to which each
such person shall agree not to, directly or indirectly, (1) offer for
sale, sell, pledge, contract to sell or otherwise dispose of (or enter
into any transaction or device which is designed to, or could be
expected to, result in the disposition by any person at any time in the
future of) any Units or Common Shares or securities convertible into or
exercisable or exchangeable for Common Shares or (2) enter into any swap
or other derivatives transaction that transfers to another, in whole or
in part, any of the economic benefits or risks of ownership of such
Units or Common Shares, whether any such transaction described in clause
(1) or (2) above is to be settled by delivery of Units, Common Shares or
other securities, in cash or otherwise, in each case for a period of 30
days from the date of the Prospectus, without the prior written consent
of Smith Barney Inc.;
j) The Company will file with the New York Stock Exchange, Inc.
all documents and notices required by such exchange of companies that
have securities listed on such exchange and will use its best efforts to
maintain the listing of the Shares thereon;
k) To apply the net proceeds from the sale of the Shares in
accordance with the description set forth in the Prospectus under the
caption "Use of Proceeds";
l) To take such steps as shall be necessary to ensure that
neither the Company nor any of its subsidiaries shall become an
"investment company" within the meaning of such term under the
Investment Company Act of 1940 and the rules and regulations of the
Commission thereunder;
m) Except as stated in this Agreement and in the Preliminary
Prospectus and Prospectus, neither Transaction Entity has taken, nor
will take, directly or indirectly, any action designed to or that might
reasonably be expected to cause or result in stabilization or
manipulation of the price of the Common Shares to facilitate the sale or
resale of the Shares;
n) 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
o) If this Agreement shall be terminated by the Underwriters
because of any failure or refusal on the part of the Transaction
Entities to comply with the terms or fulfill any of the conditions of
this Agreement, the Transaction Entities jointly and severally agree to
reimburse the Underwriters for all reasonable out-of-pocket expenses
(including fees and expenses of counsel for the Underwriters) incurred
by the Underwriters in connection herewith.
6. EXPENSES. The Transaction Entities jointly and severally agree to
pay (a) the costs incident to the authorization, issuance, sale and
delivery of the Shares and any taxes payable in that connection; (b) the
costs incident to the preparation, printing and filing under the
Securities Act of the Registration Statement and any amendments and
exhibits thereto; (c) the costs of distributing the Registration
Statement as originally filed and each amendment thereto and any post-
effective amendments thereof (including, in each case, exhibits), any
Preliminary Prospectus, the Prospectus and any amendment or supplement
to the Prospectus, 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 Shares; (f) the filing fees incident to securing any required
review by the National Association of Securities Dealers, Inc. of the
terms of sale of the Shares; (g) any applicable listing or other fees;
(h) the fees and expenses of qualifying the Shares 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); and (j) all
other costs and expenses incident to the performance of the obligations
of the Transaction Entities under this Agreement; provided that, except
as provided in this Section 6 and in Section 12, the Underwriters shall
pay their own costs and expenses, including the costs and expenses of
their counsel, any transfer taxes on the Shares which they may sell and
the expenses of advertising any offering of the Shares made by the
Underwriters.
7. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The respective obligations
of the Underwriters hereunder are subject to the accuracy, when made and
on each Delivery Date, of the representations and warranties of the
Transaction Entities contained herein, to the performance by each
Transaction Entity of its obligations hereunder, and to each of the
following additional terms and conditions:
a) If, at the time this Agreement is executed and delivered, it
is necessary for the Registration Statement or a post-effective
amendment thereto to be declared effective before the offering of the
Shares may commence, the Registration Statement or such post-effective
amendment shall have become effective not later than 5:30 P.M., New York
City time, on the date hereof, or at such later date and time as shall
be consented to in writing by you, and all filings, if any, required to
have been made by such time by Rules 424 and 430A under the Rules and
Regulations shall have been timely made; no stop order suspending the
effectiveness of the Registration Statement shall have been issued and
no proceeding for that purpose shall have been instituted or, to the
knowledge of the Transaction Entities or any Underwriter, threatened by
the Commission, and any request of the Commission for additional
information (to be included in the Registration Statement or the
Prospectus or otherwise) shall have been complied with to the
satisfaction of the Underwriters.
b) Subsequent to the effective date of this Agreement, there
shall not have occurred (i) any change, or any development involving a
prospective change, in or affecting the condition, financial or
otherwise, business, properties, net worth, or results of operations of
either Transaction Entity or any of their subsidiaries or any Property
not contemplated by the Prospectus, which in the opinion of the
Underwriters, would materially adversely affect the market for the
Shares, 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 opinion of the Company
and its counsel or the Underwriters and their counsel, requires the
making of any addition to or change in the Prospectus in order to state
a material fact required by the Securities Act or any other law to be
stated therein or necessary in order to make the statements therein not
misleading, if amending or supplementing the Prospectus to reflect such
event or development would, in your opinion, materially adversely affect
the market for the Shares.
c) All corporate proceedings and other legal matters incident to
the authorization, form and validity of this Agreement, the Shares, the
Registration Statement and the Prospectus, and all other legal matters
relating to this Agreement and the transactions contemplated hereby
shall be reasonably satisfactory in all material respects to counsel for
the Underwriters, and the Company shall have furnished to such counsel
all documents and information that they may reasonably request to enable
them to pass upon such matters.
d) (A) Wolf, Block, 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 Delivery Date, in
form and substance reasonably satisfactory to the Underwriters, to the
effect that:
(i) The Company is in good standing as a foreign trust or
corporation in those jurisdictions listed in such opinion.
(ii) The Operating Partnership has been duly formed and is
validly existing as a limited partnership under the laws of the
Commonwealth of Pennsylvania, is duly qualified to do business as a
foreign limited partnership in Delaware, Florida, Maryland, Michigan,
Minnesota, New Jersey, North Carolina, South Carolina, Tennessee, Texas
and Virginia, and has all partnership power and authority necessary to
own or hold its properties, to conduct the business in which it is
engaged as described in the Registration Statement and the Prospectus,
and to enter into and perform its obligations under this Agreement. The
Company is the sole general partner of the Operating Partnership. The
Operating Partnership Agreement is in full force and effect, and the
aggregate percentage interests of the Company and the limited partners
in the Operating Partnership are as set forth in the Prospectus.
(iii) Development Corp. has been duly formed and is validly
existing as a corporation in good standing under the laws of the
Commonwealth of Pennsylvania, is duly qualified to do business and is in
good standing as a foreign corporation in Delaware, Florida, Maryland,
New Jersey and North Carolina, and has all corporate power and authority
necessary to own or hold its properties and to conduct the business in
which it is engaged as described in the Registration Statement and the
Prospectus. All of the issued and outstanding capital stock of
Development Corp. has been duly authorized and validly issued and is
fully paid and non-assessable, has been offered and sold in compliance
with all applicable laws (including, without limitation, federal or
state securities laws) and all of the capital stock of Development Corp.
owned by the Operating Partnership, as described in the Prospectus, is
owned free and clear of any security interest, mortgage, pledge, lien,
encumbrance, claim, restriction or equities.
(iv) Development-II has been duly formed and is validly
existing as a corporation in good standing under the laws of the
Commonwealth of Pennsylvania, and has all corporate power and authority
necessary to own or hold its properties and to conduct the business in
which it is engaged as described in the Registration Statement and the
Prospectus. All of the issued and outstanding capital stock of
Development-II has been duly authorized and validly issued and is fully
paid and non-assessable, has been offered and sold in compliance with
all applicable laws (including, without limitation, federal or state
securities laws) and all of the capital stock of Development-II owned
by the Operating Partnership, as described in the Prospectus, is owned
free and clear of any security interest, mortgage, pledge, lien,
encumbrance, claim, restriction or equities.
(v) SP Corp. has been duly formed and is validly existing
as a corporation in good standing under the laws of the Commonwealth of
Pennsylvania and has all corporate and authority necessary to own or
hold its properties and to conduct the business in which it is engaged
as described in the Registration Statement and the Prospectus. All of
the issued and outstanding capital stock of SP Corp. has been duly
authorized and validly issued and is fully paid and non-assessable, is
owned by the Company free and clear of any security interest, mortgage,
pledge, lien, encumbrance, claim, restriction or equities and has been
offered and sold in compliance with all applicable laws (including,
without limitation, federal or state securities laws).
(vi) Each of the Property Affiliates has been duly
organized and is validly existing as a limited partnership, limited
liability company or other entity in good standing under the laws of the
jurisdiction in which it is organized, and has all power and authority
necessary to own or hold its properties and to conduct the business in
which it is engaged. Except as set forth in the Prospectus, all of the
partnership interests, membership interests or other equity interests,
as the case may be, of each Property Affiliate have been duly and
validly authorized and issued, are fully paid and non-assessable and all
of such interests owned directly or indirectly by the Company and the
Operating Partnership, as described in the Prospectus, are owned free
and clear of any security interest, mortgage, pledge, lien, encumbrance,
claim, restriction or equities.
(vii) (A) This Agreement has been duly and validly
authorized, executed and delivered by the Operating Partnership, and has
been duly and validly executed and delivered by the Company, and
assuming due authorization, execution and delivery by the Underwriters
and due authorization by the Company, is a valid and binding agreement
of the Operating Partnership; and (B) the partnership agreement, limited
liability company agreement or similar such document of each Property
Affiliate has been duly and validly authorized, executed and delivered
by the Operating Partnership, and each such agreement and the Operating
Partnership Agreement have been duly and validly executed and delivered
by the Company, and assuming due authorization by the Company, each such
agreement is a valid and binding agreement of the parties thereto,
enforceable against such parties in accordance with its terms.
(viii) To the knowledge of such counsel, the execution,
delivery and performance of this Agreement by each of the Transaction
Entities and the consummation of the transactions contemplated hereby
will not (i) conflict with or result in a breach or violation of any of
the terms or provisions of, or constitute a default under, any
indenture, mortgage, deed of trust, loan agreement or other agreement or
instrument to which either of the Transaction Entities or their
subsidiaries is a party or by which either of the Transaction Entities
or their subsidiaries is bound or to which any of the Properties or
other assets of either of the Transaction Entities or their subsidiaries
is subject, or (ii) conflict with or result in any violation of the
provisions of any statute or any order, rule or regulation of any court
or governmental agency or body having jurisdiction over either of the
Transaction Entities or their subsidiaries or any of their properties or
assets; and except for the registration of the Shares under the
Securities Act and such consents, approvals, authorizations,
registrations or qualifications as may be required under the Exchange
Act and applicable state securities laws in connection with the purchase
and distribution of the Shares by the Underwriters, no consent,
approval, authorization or order of, or filing or registration with, any
such court or governmental agency or body is required for the execution,
delivery and performance of this Agreement by the Transaction Entities
and the consummation of the transactions contemplated hereby.
(ix) The execution, delivery and performance of this
Agreement by each of the Transaction Entities and the consummation of
the transactions contemplated hereby will not conflict with or result in
any violation of the provisions of the charter, by-laws, certificate of
limited partnership or agreement of limited partnership of either of the
Transaction Entities or their subsidiaries.
(x) To the knowledge of such counsel, other than as set
forth in the Prospectus and other than rights of persons whose
securities are already registered under the Securities Act, there are no
contracts, agreements or understandings between the Company 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 the Company owned or to be owned by such person or to
require the Company to include such securities in the securities
registered pursuant to the Registration Statement or in any securities
being registered pursuant to any other registration statement filed by
the Company under the Securities Act.
(xi) To the knowledge of such counsel, there are no legal
or governmental proceedings pending to which either Transaction Entity
or their subsidiaries is a party or of which any property or assets of
either Transaction Entity or their subsidiaries is the subject which are
not disclosed in the Prospectus and which, if determined adversely to
such Transaction Entity or subsidiary, might reasonably be expected to
have a material adverse effect on the consolidated financial position,
shareholders' equity, results of operations, business or prospects of
the Company; and to the knowledge of such counsel no such proceedings
are threatened or contemplated by governmental authorities or threatened
by others.
(xii) 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.
(xiii) To the knowledge of such counsel, no relationship,
direct or indirect, exists between or among either of the Transaction
Entities on the one hand, and the trustees, officers, shareholders,
customers or suppliers of the Transaction Entities on the other hand,
which is required to be described in the Prospectus which is not so
described.
(xiv) To the knowledge of such counsel, each Transaction
Entity is in compliance in all material respects with all presently
applicable provisions of ERISA; to the knowledge of such counsel, no
"reportable event" (as defined in ERISA) has occurred with respect to
any "pension plan" (as defined in ERISA) for which either Transaction
Entity would have any liability; neither Transaction Entity has incurred
or to the knowledge of such counsel, expects to incur, liability under
(i) Title IV of ERISA with respect to termination of, or withdrawal
from, any "pension plan" or (ii) section 412 or 4971 of the Code; and
each "pension plan" for which either Transaction Entity would have any
liability that is intended to be qualified under section 401(a) of the
Code is so qualified in all material respects and nothing has occurred,
whether by action or by failure to act, which would cause the loss of
such qualification.
(xv) To the knowledge of such counsel, no Transaction
Entity or Property Affiliate is in violation of its charter, by-laws,
certificate of limited partnership, agreement of limited partnership, or
other similar organizational document, or, to the knowledge of such
counsel, has a default been asserted in any respect, and it has not been
asserted that any event has occurred which, with notice or lapse of time
or both, would constitute such a default, in the due performance or
observance of any term, covenant or condition contained in any material
indenture, mortgage, deed of trust, loan agreement or other material
agreement or instrument to which it is a party or by which it is bound
or to which any of the Properties or any of its other properties or
assets is subject.
(xvi) No consent, approval, authorization or other order
of, or registration or filing with, any court, regulatory body,
administrative agency or other governmental body, agency, or official is
required on the part of the Company (except as have been obtained or
made under the Securities Act and the Exchange Act or such as may be
required under state securities, real estate syndication or Blue Sky
laws governing the purchase and distribution of the Shares) for the
valid issuance and sale of the Shares to the Underwriters as
contemplated by this Agreement.
(xvii) Neither Transaction Entity or their subsidiaries is
an "investment company" within the meaning of such term under the
Investment Company Act of 1940 and the rules and regulations of the
Commission thereunder. The Shares have been approved for listing on the
New York Stock Exchange upon notice of issuance.
(xviii) 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 as to form in all material respects with
the requirements of the Exchange Act and the rules and regulations
thereunder.
(xix) The Registration Statement was declared effective
under the Securities Act as of the date and time specified in such
opinion, the Prospectus was filed with the Commission pursuant to the
subparagraph of Rule 424(b) of the Rules and Regulations specified in
such opinion on the date specified therein and, to the knowledge of such
counsel, no stop order suspending the effectiveness of the Registration
Statement has been issued and, to the knowledge of such counsel, no
proceeding for that purpose is pending or threatened by the Commission.
(xx) The Registration Statement and the Prospectus and any
further amendments or supplements thereto made by the Company prior to
such Delivery Date (other than the financial statements and related
schedules and other financial and statistical data included therein, as
to which such counsel need express no opinion) comply as to form in all
material respects with the requirements of the Securities Act and the
Rules and Regulations.
(xxi) The statements contained in the Prospectus under the
captions "Risk Factors," "Description of Debt Securities," "Description
of Preferred Shares," "Description of Warrants," and "Federal Income Tax
Considerations with Respect to the Trust and the Operating Partnership,"
insofar as those statements are descriptions of contracts, agreements or
other legal documents, or they describe federal statutes, rules and
regulations, and except to the extent such statements are statistics or
calculations constitute a fair summary thereof.
e) Such counsel shall state that Rogers & Wells, counsel for the
Underwriters, may rely on its opinion in Section 7(d)(A)(ii) with regard
to the formation of the Operating Partnership for the purpose of
rendering its opinion as required by Section 7(e).
In rendering such opinion, such counsel may (i) state that its opinion
is limited to matters governed by the Federal laws of the United States
of America, the laws of the Commonwealth of Pennsylvania and the laws of
the State of Maryland; (ii) as to matters of Maryland law, state that
its opinion is given solely in reliance upon the opinion of Weinberg &
Green LLC; (iii) state that its opinion does not address (A) Federal
Reserve Board margin regulations; (B) Federal or state antitrust and
unfair competition laws and regulations; (C) Local Laws (as defined in
The Legal Opinion Accord of the ABA Section of Business Law (1991); (D)
compliance with fiduciary duty requirements; (E) Federal and state
racketeering laws and regulations; (F) Federal and state health and
safety laws and regulations; and (G) Federal and state laws, regulations
and policies concerning (x) national and local emergency, (y) possible
judicial deference to acts of foreign states, and (z) criminal and civil
forfeiture laws; and (iv) in giving the opinion referred to in subclause
(B) in Section 7(d)(A)(vii), state that such opinion with respect to the
enforceability of such documents may be limited by bankruptcy,
fraudulent conveyance, insolvency, reorganization, moratorium, and other
laws relating to or affecting creditors' rights generally and by general
equitable principles. Such counsel shall also have furnished to the
Underwriters a written statement, addressed to the Underwriters and
dated such Delivery Date, in form and substance satisfactory to the
Underwriters, to the effect that (x) such counsel has acted as counsel
to the Company in connection with the preparation of the Registration
Statement and the Prospectus, and (y) based on the foregoing, no facts
have come to the attention of such counsel which lead it to believe that
the Registration Statement, as of the Effective Date, contained any
untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary in order to make the
statements therein not misleading, or that the Prospectus contains any
untrue statement of a material fact or omits to state a material fact
required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were
made, not misleading. The foregoing opinion and statement may be
qualified by a statement to the effect that such counsel does not assume
any responsibility for the accuracy, completeness or fairness of the
statements contained in the Registration Statement or the Prospectus
except to the extent of the opinion contained in Section 7(d)(A)(xx),
and may state that such counsel expresses no belief with respect to the
financial statements and notes thereto and other financial and
statistical data included or incorporated by reference in, or omitted
from, the Registration Statement or the Prospectus.
f) (B) Weinberg & Green LLC shall have furnished to the
Underwriters its written opinion, as Maryland counsel to the Company,
addressed to the Underwriters and dated such Delivery Date, in form and
substance reasonably satisfactory to the Underwriters, to the effect
that:
(i) The Company has been duly formed and is validly
existing as a real estate investment trust in good standing under and by
virtue of the laws of the State of Maryland, and has all trust power and
authority necessary to own or hold its properties and to conduct the
business in which it is engaged as described in the Registration
Statement and the Prospectus, and to enter into and perform its
obligations under this Agreement.
(ii) All of the issued shares of beneficial interest of the
Company (other than the Shares) have been duly and validly authorized
and issued, are fully paid and non-assessable and conform in all
material respects to the description thereof contained in the
Prospectus.
(iii) The Shares have been duly and validly authorized and,
when issued and delivered against payment therefor as provided herein,
will be duly and validly issued, fully paid and non-assessable. Upon
payment of the purchase price and delivery of the Shares in accordance
herewith, each of the Underwriters will receive good, valid and, subject
to the excess share restrictions set forth in Article VII of the
Company's Declaration of Trust, marketable title to the Shares, free and
clear of all security interests, mortgages, pledges, liens,
encumbrances, claims, restrictions and equities. The terms of the
Shares conform in all material respects to all statements and
descriptions related thereto contained in the Prospectus. The form of
the certificates to be used to evidence the Shares are in due and proper
form and comply with all applicable legal requirements. The issuance of
the Shares is not subject to any preemptive or other similar rights
arising under the Declaration of Trust or by-laws of the Company, Title
8 of the Corporations and Associations Article of the Annotated Code of
Maryland, as amended, or any agreement or other instrument to which the
Company is a party known to such counsel.
(iv) This Agreement has been duly and validly authorized,
executed and delivered by the Company, and assuming due authorization,
execution and delivery by the Underwriters and the Operating
Partnership, is a valid and binding agreement of the Company.
(v) 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.
(vi) 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.
(vii) 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
knowledge of such counsel no such proceedings are threatened or
contemplated by governmental authorities or threatened by others.
(viii) No consent, approval, authorization or other order
of, or registration or filing with, any court, regulatory body,
administrative agency or other governmental body, agency, or official in
the State of Maryland is required on the part of the Company (except as
may be required under state securities laws) for the valid issuance and
sale of the Shares to the Underwriters as contemplated by this
Agreement.
Such counsel shall state that Rogers & Wells, counsel for the
Underwriters, may rely on its opinion.
g) The Underwriters shall have received from Rogers & Wells,
counsel for the Underwriters, such opinion or opinions, dated such
Delivery Date, with respect to the issuance and sale of the Shares, the
Registration Statement, the Prospectus and other related matters as the
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.
h) At the time of execution of this Agreement, the Underwriters
shall have received from Ernst & Young LLP a letter, in form and
substance satisfactory to the Underwriters, addressed to the
Underwriters and dated the date hereof (i) confirming that they are
independent public accountants within the meaning of the Securities Act
and are in compliance with the applicable requirements relating to the
qualification of accountants under Rule 2-01 of Regulation S-X of the
Commission, and (ii) stating, as of the date hereof (or, with respect to
matters involving changes or developments since the respective dates as
of which specified financial information is given in, or incorporated by
reference in, the Prospectus, as of a date not more than five days prior
to the date hereof), the conclusions and findings of such firm with
respect to the financial information and other matters ordinarily
covered by accountants' "comfort letters" to underwriters in connection
with registered public offerings.
i) 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 Company
shall have furnished to the Underwriters a letter (the "bring-down
letter") of such accountants, addressed to the Underwriters and dated
such Delivery Date (i) confirming that they are independent public
accountants within the meaning of the Securities Act and are in
compliance with the applicable requirements relating to the
qualification of accountants under Rule 2-01 of Regulation S-X of the
Commission, (ii) stating, as of the date of the bring-down letter (or,
with respect to matters involving changes or developments since the
respective dates as of which specified financial information is given in
the Prospectus, as of a date not more than five days prior to the date
of the bring-down letter), the conclusions and findings of such 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.
j) The Transaction Entities shall have furnished to the
Underwriters a certificate, dated such Delivery Date, of the Chairman of
the Board, Chief Executive Officer, President or a Vice President of the
Company and the chief financial officer of the Company (in each case,
for the Company and for the Company as general partner of the Operating
Partnership) stating that:
i) The representations, warranties and agreements of the
Transaction Entities in Section 1 are true and correct as of such
Delivery Date; the Transaction Entities complied with all of their
agreements contained herein; and the conditions set forth in
Sections 7(a) and 7(i) have been fulfilled; and
ii) They have carefully examined the Registration Statement
and the Prospectus and, in their opinion (A) as of the 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.
k) (i) None of the Transaction Entities or their subsidiaries or
any Property shall have sustained since the date of the latest audited
financial statements included in the Prospectus any loss or interference
with its business from fire, explosion, flood or other calamity, whether
or not covered by insurance, or from any labor dispute or court or
governmental action, order or decree, otherwise than as set forth or
contemplated in the Prospectus or (ii) since such date there shall not
have been any change in the capital stock or long-term debt of either
Transaction Entity or any change, or any development involving a
prospective change, in or affecting any Property Affiliate or Property
or the general affairs, management, financial position, shareholders'
equity or results of operations of either Transaction Entity, otherwise
than as set forth or contemplated in the Prospectus, the effect of
which, in any such case described in clause (i) or (ii), is, in the
judgment of the Underwriters, so material and adverse as to make it
impracticable or inadvisable to proceed with the public offering or the
delivery of the Shares being delivered on such Delivery Date on the
terms and in the manner contemplated in the Prospectus.
l) Subsequent to the execution and delivery of this Agreement
there shall not have occurred any of the following: (i) trading in
securities generally on the New York Stock Exchange or the American
Stock Exchange or in the over-the-counter market, or trading in any
securities of the Company on any exchange or in the over-the-counter
market, shall have been suspended or minimum prices shall have been
established on any such exchange or such market by the Commission, by
such exchange or by any other regulatory body or governmental authority
having jurisdiction, (ii) a banking moratorium shall have been declared
by Federal or state authorities, (iii) the United States shall have
become engaged in hostilities, there shall have been an escalation in
hostilities involving the United States or there shall have been a
declaration of a national emergency or war by the United States or (iv)
there shall have occurred such a material adverse change in general
economic, political or financial conditions (or the effect of
international conditions on the financial markets in the United States
shall be such) as to make it, in the judgment of a majority in interest
of the several Underwriters, impracticable or inadvisable to commence or
continue the offering of the Shares at the offering price to the public
set forth on the cover page of the Prospectus by the Underwriters.
m) The New York Stock Exchange, Inc. shall have approved the
Shares for listing, subject only to official notice of issuance.
n) The Transaction Entities shall not have failed at or prior to
such Delivery Date to have performed or complied with any of their
agreements herein contained and required to be performed or complied
with by them hereunder at or prior to such Delivery Date.
o) On the First Delivery Date, counsel for the Underwriters shall
have been furnished with such documents and opinions as they may require
for the purpose of enabling them to pass upon the issuance and sale of
the Shares 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 Shares as herein contemplated shall be
satisfactory in form and substance to the Underwriters and counsel for
the Underwriters.
p) The Underwriters shall have been furnished with the written
agreements referred to in Section 5(i) hereof.
q) The Company shall have furnished or caused to be furnished to
the Underwriters such further certificates and documents as the
Underwriters shall have reasonably requested.
r) In the event that the Underwriters exercise their option
provided in Section 2 hereof to purchase all or any portion of the
Option Shares, the representations and warranties of the Transaction
Entities contained herein and the statements in any certificates
furnished by the Transaction Entities hereunder shall be true and
correct as of each Date of Delivery and, at the relevant Date of
Delivery, the Underwriters shall have received:
i) A certificate, dated such Date of Delivery, of the
Chairman of the Board, Chief Executive Officer, President or a Vice
President of the Company and of the chief financial officer of the
Company (in each case, for the Company and for the Company as the
general partner of the Operating Partnership) confirming that the
certificate delivered on the First Delivery Date pursuant to Section
7(h) hereof remains true and correct as of such Date of Delivery.
ii) The favorable opinions of Wolf, Block, Schorr and
Solis-Cohen LLP, counsel for the Transaction Entities, and Weinberg &
Green LLC, Maryland counsel for the Company, in form and substance
satisfactory to counsel for the Underwriters, dated such Date of
Delivery, relating to the Option Shares to be purchased on such Date of
Delivery and otherwise to the same effect as the opinions required by
Section 7(d) hereof.
iii) The favorable opinion of Rogers & Wells, counsel for
the Underwriters, dated such Date of Delivery, relating to the Option
Shares to be purchased on such Date of Delivery and otherwise to the
same effect as the opinion required by Section (e) hereof.
iv) A letter from Ernst & Young LLP, in form and substance
satisfactory to the Underwriters and dated such Date of Delivery,
substantially the same in form and substance as the letters furnished to
the Underwriters pursuant to Section 7(f) hereof.
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.
The several obligations of the Underwriters to purchase Option Shares
hereunder are subject to the satisfaction on and as of any Date of
Delivery of the conditions set forth in this Section 7, except that, if
any Date of Delivery is other than the First Delivery Date, the
certificates, opinions and letters referred to in Sections 7(d) through
7(h) hereof shall be dated the Date of Delivery in question and the
opinions called for by Sections 7(d) and 7(e) hereof shall be revised to
reflect the sale of Option Shares.
8. EFFECTIVE DATE OF AGREEMENT. This Agreement shall become effective:
(i) upon the execution hereof by the parties hereto; or (ii) if, at the
time this Agreement is executed and delivered, it is necessary for the
Registration Statement or a post-effective amendment thereto to be
declared effective before the offering of the Shares may commence, when
notification of the effectiveness of the Registration Statement or such
post-effective amendment has been released by the Commission.
9. DEFAULT BY ONE OR MORE OF THE UNDERWRITERS. If, on either Delivery
Date, any Underwriter defaults in the performance of its obligations
under this Agreement, the remaining non-defaulting Underwriters shall be
obligated to purchase the Shares which the defaulting Underwriter agreed
but failed to purchase on such Delivery Date in the respective
proportions which the number of Firm Shares set forth opposite the name
of each remaining non-defaulting Underwriter in Schedule 1 hereto bears
to the total number of Firm Shares set forth opposite the names of all
the remaining non-defaulting Underwriters in Schedule 1 hereto;
provided, however, that the remaining non-defaulting Underwriters shall
not be obligated to purchase any of the Shares on such Delivery Date if
the total number of Shares which the defaulting Underwriter or
Underwriters agreed but failed to purchase on such date exceeds 9.09% of
the total number of Shares to be purchased on such Delivery Date, and
any remaining non-defaulting Underwriter shall not be obligated to
purchase more than 110% of the number of Shares which it agreed to
purchase on such Delivery Date pursuant to the terms of Section 2. If
the foregoing maximums are exceeded, the remaining non-defaulting
Underwriters, or those other underwriters satisfactory to the
Underwriters who so agree, shall have the right, but shall not be
obligated, to purchase, in such proportion as may be agreed upon among
them, all the Shares to be purchased on such Delivery Date. If the
remaining Underwriters or other underwriters satisfactory to the
Underwriters do not elect to purchase the Shares which the defaulting
Underwriter or Underwriters agreed but failed to purchase on such
Delivery Date, this Agreement (or, with respect to the Second Delivery
Date, the obligation of the Underwriters to purchase, and of the Company
to sell, the Option Shares) shall terminate without liability on the
part of any non-defaulting Underwriter or the Transaction Entities,
except that the Transaction Entities will continue to be liable for the
payment of expenses to the extent set forth in Sections 6 and 12. As
used in this Agreement, the term "Underwriter" includes, for all
purposes of this Agreement unless the context requires otherwise, any
party not listed in Schedule 1 hereto who, pursuant to this Section 9,
purchases Initial Shares which a defaulting Underwriter agreed but
failed to purchase.
Nothing contained herein shall relieve a defaulting Underwriter of any
liability it may have to the Transaction Entities for damages caused by
its default. If other underwriters are obligated or agree to purchase
the Shares of a defaulting or withdrawing Underwriter, either the
Underwriters or the Company may postpone the Delivery Date for up to
seven full business days in order to effect any changes that in the
opinion of counsel for the Company or counsel for the Underwriters may
be necessary in the Registration Statement, the Prospectus or in any
other document or arrangement.
10. INDEMNIFICATION AND CONTRIBUTION.
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 Shares), to which that Underwriter, officer,
employee or controlling person may become subject, under the Securities
Act or otherwise, insofar as such loss, claim, damage, liability or
action arises out of, or is based upon, (i) any untrue statement or
alleged untrue statement of a material fact contained (A) in any
Preliminary Prospectus, the Registration Statement or the Prospectus or
in any amendment or supplement thereto or (B) in any blue sky
application or other document prepared or executed by the Company (or
based upon any written information furnished by the Company)
specifically for the purpose of qualifying any or all of the Shares
under the securities laws of any state or other jurisdiction (any such
application, document or information being hereinafter called a "Blue
Sky Application"), (ii) the omission or alleged omission to state in any
Preliminary Prospectus, the Registration Statement or the Prospectus, or
in any amendment or supplement thereto, or in any Blue Sky Application
any material fact required to be stated therein or necessary to make the
statements therein not misleading (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 Shares
or the offering contemplated hereby, and which is included as part of or
referred to in any loss, claim, damage, liability or action arising out
of or based upon matters covered by clause (i) or (ii) above (provided
that the Transaction Entities shall not be liable under this clause
(iii) to the extent that it is determined in a final judgment by a court
of competent jurisdiction that such loss, claim, damage, liability or
action resulted directly from any such acts or failures to act
undertaken or omitted to be taken by such Underwriter through its gross
negligence or willful misconduct), and shall reimburse each Underwriter
and each such officer, employee or controlling person for any legal or
other expenses reasonably incurred by that Underwriter, officer,
employee or controlling person in connection with investigating or
defending or preparing to defend against any such loss, claim, damage,
liability or action as such expenses are incurred; provided, however,
that the Transaction Entities shall not be liable in any such case to
the extent that any such loss, claim, damage, liability or action arises
out of, or is based upon, any untrue statement or alleged untrue
statement or omission or alleged omission made in any Preliminary
Prospectus, the Registration Statement or the Prospectus, or in any such
amendment or supplement, or in any Blue Sky Application, in reliance
upon and in conformity with written information concerning such
Underwriter furnished to the Company through the Underwriters 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.
Each Underwriter, severally and not jointly, shall indemnify and hold
harmless each Transaction Entity, its officers and employees, each of
its trustees, and each person, if any, who controls each Transaction
Entity within the meaning of the Securities Act, from and against any
loss, claim, damage or liability, joint or several, or any action in
respect thereof, to which each Transaction Entity or any such trustee,
officer or controlling person may become subject, under the Securities
Act or otherwise, insofar as such loss, claim, damage, liability or
action arises out of, or is based upon, (i) any untrue statement or
alleged untrue statement of a material fact contained (A) in any
Preliminary Prospectus, the Registration Statement or the Prospectus or
in any amendment or supplement thereto, or (B) in any Blue Sky
Application or (ii) the omission or alleged omission to state in any
Preliminary Prospectus, the Registration Statement or the Prospectus, or
in any amendment or supplement thereto, or in any Blue Sky Application
any material fact required to be stated therein or necessary to make the
statements therein not misleading, but in each case only to the extent
that the untrue statement or alleged untrue statement or omission or
alleged omission was made in reliance upon and in conformity with
written information concerning such Underwriter furnished to the Company
through the Underwriters by or on behalf of that Underwriter
specifically for inclusion therein, and shall reimburse each Transaction
Entity and any such trustee, officer or controlling person for any legal
or other expenses reasonably incurred by each Transaction Entity or any
such trustee, officer or controlling person in connection with
investigating or defending or preparing to defend against any such loss,
claim, damage, liability or action as such expenses are incurred. The
foregoing indemnity agreement is in addition to any liability which any
Underwriter may otherwise have to each Transaction Entity or any such
trustee, officer, employee or controlling person.
Promptly after receipt by an indemnified party under this Section 10 of
notice of any claim or the commencement of any action, the indemnified
party shall, if a claim in respect thereof is to be made against the
indemnifying party under this Section 10, notify the indemnifying party
in writing of the claim or the commencement of that action; provided,
however, that the failure to notify the indemnifying party shall not
relieve it from any liability which it may have under this Section 10
except to the extent it has been materially prejudiced by such failure
and, provided further, that the failure to notify the indemnifying party
shall not relieve it from any liability which it may have to an
indemnified party otherwise than under this Section 10. If any such
claim or action shall be brought against an indemnified party, and it
shall notify the indemnifying party thereof, the indemnifying party
shall be entitled to participate therein and, to the extent that it
wishes, jointly with any other similarly notified indemnifying party, to
assume the defense thereof with counsel reasonably satisfactory to the
indemnified party. After notice from the indemnifying party to the
indemnified party of its election to assume the defense of such claim or
action, the indemnifying party shall not be liable to the indemnified
party under this Section 10 for any legal or other expenses subsequently
incurred by the indemnified party in connection with the defense thereof
other than reasonable costs of investigation; provided, however, that
the indemnified party shall have the right to employ its own counsel,
with such counsel, in the case of the Underwriters, to represent jointly
the Underwriters and their respective officers, employees and
controlling persons who may be subject to liability arising out of any
claim in respect of which indemnity may be sought by the Underwriters
against the Transaction Entities under this Section 10 if, in the
reasonable judgment of the Underwriters, it is advisable for the
Underwriters and those officers, employees and controlling persons to be
jointly represented by separate counsel, and in that event the fees and
expenses of such separate counsel shall be paid by the Transaction
Entities. No indemnifying party shall (i) without the prior written
consent of the indemnified parties (which consent shall not be
unreasonably withheld), settle or compromise or consent to the entry of
any judgment with respect to any pending or threatened claim, action,
suit or proceeding in respect of which indemnification or contribution
may be sought hereunder (whether or not the indemnified parties are
actual or potential parties to such claim or action) unless such
settlement, compromise or consent includes an unconditional release of
each indemnified party from all liability arising out of such claim,
action, suit or proceeding, or (ii) be liable for any settlement of any
such action 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.
If the indemnification provided for in this Section 10 shall for any
reason be unavailable to or insufficient to hold harmless an indemnified
party under Section 10(a) or 10(c) in respect of any loss, claim, damage
or liability, or any action in respect thereof, referred to therein,
then each indemnifying party shall, in lieu of indemnifying such
indemnified party, contribute to the amount paid or payable by such
indemnified party as a result of such loss, claim, damage or liability,
or action in respect thereof, (i) in such proportion as shall be
appropriate to reflect the relative benefits received by the Transaction
Entities on the one hand and the Underwriters on the other from the
offering of the Shares or (ii) if the allocation provided by clause (i)
above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in
clause (i) above but also the relative fault of the Transaction Entities
on the one hand and the Underwriters on the other with respect to the
statements or omissions which resulted in such loss, claim, damage or
liability, or action in respect thereof, as well as any other relevant
equitable considerations. The relative benefits received by the
Transaction Entities on the one hand and the Underwriters on the other
with respect to such offering shall be deemed to be in the same
proportion as the total net proceeds from the offering of the Shares
purchased under this Agreement (before deducting expenses) received by
the Transaction Entities, on the one hand, and the total underwriting
discounts and commissions received by the Underwriters with respect to
the Shares purchased under this Agreement, on the other hand, bear to
the total gross proceeds from the offering of the Shares under this
Agreement, in each case as set forth in the table on the cover page of
the Prospectus. The relative fault shall be determined by reference to
whether the untrue or alleged untrue statement of a material fact or
omission or alleged omission to state a material fact relates to
information supplied by the Transaction Entities or the Underwriters,
the intent of the parties and their relative knowledge, access to
information and opportunity to correct or prevent such statement or
omission. The Transaction Entities and the Underwriters agree that it
would not be just and equitable if contributions pursuant to this
Section were to be determined by pro rata allocation (even if the
Underwriters were treated as one entity for such purpose) or by any
other method of allocation which does not take into account the
equitable considerations referred to herein. The amount paid or payable
by an indemnified party as a result of the loss, claim, damage or
liability, or action in respect thereof, referred to above in this
Section shall be deemed to include, for purposes of this Section 10(d),
any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any such action or
claim. Notwithstanding the provisions of this Section 10(d), no
Underwriter shall be required to contribute any amount in excess of the
amount by which the total price at which the Shares underwritten by it
and distributed to the public was offered to the public exceeds the
amount of any damages which such Underwriter has otherwise paid or
become liable to pay by reason of any untrue or alleged untrue statement
or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of section 11(f) of the Securities
Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The Underwriters'
obligations to contribute as provided in this Section 10(d) are several
in proportion to their respective underwriting obligations and not
joint.
The Underwriters severally confirm and each Transaction Entity
acknowledges that the statements with respect to the public offering of
the Shares by the Underwriters set forth on the cover page of, the
legend concerning stabilization on the inside front cover of, the
concession and reallowance figures appearing under the caption
"Underwriting" and, pursuant to Item 508 of Regulation S-K of the
Securities Act, the seventh, eighth and ninth paragraphs of the section
captioned "Plan of Distribution" in, the Preliminary Prospectus and the
comparable material in the Prospectus are correct and constitute the
only information concerning such Underwriters furnished in writing to
the Company by or on behalf of the Underwriters specifically for
inclusion in the Registration Statement, the Preliminary Prospectus and
the Prospectus.
11. TERMINATION. The obligations of the Underwriters hereunder may be
terminated by the Underwriters by notice given to and received by the
Company prior to delivery of and payment for the Firm Shares if, prior
to that time, any of the events described in Sections 7(i), 7(j) or
7(l), shall have occurred or if the Underwriters shall decline to
purchase the Shares for any reason permitted under this Agreement.
12. REIMBURSEMENT OF UNDERWRITERS' EXPENSES. If the Company shall fail
to tender the Shares for delivery to the Underwriters by reason of any
failure, refusal or inability on the part of the Transaction Entities to
perform any agreement on their part to be performed, or because any
other condition of the Underwriters' obligations hereunder required to
be fulfilled by the Transaction Entities is not fulfilled, the
Transaction Entities will reimburse the Underwriters for all reasonable
out-of-pocket expenses (including fees and disbursements of counsel)
incurred by the Underwriters in connection with this Agreement and the
proposed purchase of the Shares, and upon demand the Transaction
Entities shall pay the full amount thereof to the Underwriters. If this
Agreement is terminated pursuant to Section 9 by reason of the default
of one or more Underwriters, the Transaction Entities shall not be
obligated to reimburse any defaulting Underwriter on account of those
expenses.
13. NOTICES, ETC. All statements, requests, notices and agreements
hereunder shall be in writing, and:
if to the Underwriters, shall be delivered or sent by mail, telex
or facsimile transmission to Smith Barney Inc., 388 Greenwich Street,
New York, New York 10013, Attention: Manager, Investment Banking
Division, with a copy, in the case of any notice pursuant to Section
10(c), to Rogers & Wells, 200 Park Avenue, New York, New York 10166,
Attention of Robert E. King, Jr.;
if to the Transaction Entities shall be delivered or sent by mail,
telex or facsimile transmission to the Company, 65 Valley Stream
Parkway, Malvern, PA 19355, Attention: General Counsel (Fax: 610-644-
2175);
provided, however, that any notice to an Underwriter pursuant to Section
10(c) shall be delivered or sent by mail, telex or facsimile
transmission to such Underwriter at its address set forth in its
acceptance telex to the Underwriters, which address will be supplied to
any other party hereto by the Underwriters upon request. Any such
statements, requests, notices or agreements shall take effect at the
time of receipt thereof. The Transaction Entities shall be entitled to
act and rely upon any request, consent, notice or agreement given or
made on behalf of the Underwriters by Smith Barney Inc.
14. PERSONS ENTITLED TO BENEFIT OF AGREEMENT. This Agreement shall
inure to the benefit of and be binding upon the Underwriters, the
Transaction Entities and their respective personal representatives and
successors. This Agreement and the terms and provisions hereof are for
the sole benefit of only those persons, except that (A) the
representations, warranties, indemnities and agreements of the
Transaction Entities contained in this Agreement shall also be deemed to
be for the benefit of the person or persons, if any, who control any
Underwriter within the meaning of Section 15 of the Securities Act and
(B) the indemnity agreement of the Underwriters contained in Section
10(b) of this Agreement shall be deemed to be for the benefit of
trustees of the Company, officers of the Company who have signed the
Registration Statement and any person controlling the Transaction
Entities within the meaning of section 15 of the Securities Act.
Nothing in this Agreement is intended or shall be construed to give any
person, other than the persons referred to in this Section 14, any legal
or equitable right, remedy or claim under or in respect of this
Agreement or any provision contained herein.
15. SURVIVAL. The respective indemnities, representations, warranties
and agreements of the Transaction Entities and the Underwriters
contained in this Agreement or made by or on behalf on them,
respectively, pursuant to this Agreement, shall survive the delivery of
and payment for the Shares and shall remain in full force and effect,
regardless of any investigation made by or on behalf of any of them or
any person controlling any of them.
16. DEFINITION OF THE TERMS "BUSINESS DAY" AND "SUBSIDIARY". For
purposes of this Agreement, (a) "business day" means any day on which
the New York Stock Exchange, Inc. is open for trading and (b)
"subsidiary" has the meaning set forth in Rule 405 of the Rules and
Regulations.
17. GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the laws of New York applicable to contracts made and
to be performed within the state of New York.
18. COUNTERPARTS. This Agreement may be executed in one or more
counterparts and, if executed in more than one counterpart, the executed
counterparts shall each be deemed to be an original but all such
counterparts shall together constitute one and the same instrument.
19. HEADINGS. The headings herein are inserted for convenience of
reference only and are not intended to be part of, or to affect the
meaning or interpretation of, this Agreement.
If the foregoing correctly sets forth the agreement between the Company
and the Underwriters, please indicate your acceptance in the space
provided for that purpose below.
Very truly yours,
LIBERTY PROPERTY TRUST
By /s/ Willard G. Rouse III
- ---------------------------------------
Name: Willard G. Rouse III
Title: Chairman of the Board and Chief Executive Officer
LIBERTY PROPERTY LIMITED PARTNERSHIP
By: Liberty Property Trust,
its sole general partner
By /s/ Willard G. Rouse III
- ---------------------------------------
Name: Willard G. Rouse III
Title: Chairman of the Board and Chief Executive Officer
Accepted:
SMITH BARNEY INC.
By /s/ John R. Barber
- ---------------------------------------
Authorized Representative
For itself and on behalf
of the Underwriters
SCHEDULE 1
Number of
Underwriters Shares
Smith Barney Inc. 1,150,000
A.G. Edwards & Sons, Inc. 1,150,000
Total 2,300,000