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Exhibit 1
_______________ SHARES
LIBERTY PROPERTY TRUST
Common Shares of Beneficial Interest
UNDERWRITING AGREEMENT
____________, 199__
[UNDERWRITERS]
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 [NAMES OF
UNDERWRITERS], as the representatives (the "Representatives") of the several
underwriters named in Schedule 1 (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
_________________ shares (the "Firm Shares") of the Company's common shares of
beneficial interest, par value $.001 per share (the "Common Shares"). In
addition, the Company proposes to grant to the Underwriters an option to
purchase up to an additional _________________ 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. ____________), and any
amendments thereto, with respect to the Shares have (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 statements and any amendments thereto have been delivered by
the Company to you. 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 each 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
Representatives pursuant to Rule 424(a) of the Rules and Regulations;
"Registration Statement" means such registration statement, as amended at the
Effective Time, including any documents incorporated by reference therein at
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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 ("XXXXX").
(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 XXXXX, 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 through the Representatives 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 XXXXX, 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
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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) The Company has an authorized capitalization as set forth in the
Prospectus under the caption "Capitalization," and all of the issued shares of
beneficial interest of the 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.
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(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
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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 xecution, 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
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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.
(q) 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.
(r) 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.
(s) 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 (actual and, if any, pro forma) included in the Prospectus under the
captions "Ratios of Earnings to Fixed Charges" 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.
(t) 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.
(u) (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
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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.
(v) 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.
(w) 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, n 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.
(x) 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
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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.
(y) 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.
(z) Each Transaction Entity owns or possesses adequate rights to use
all material patents, patent applications, trademarks, service marks, trade
names, trademark registrations, service xxxx 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 to the
best knowledge of the Transaction Entities, no such proceedings are threatened
or contemplated by governmental authorities or threatened by others.
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(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 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.
(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, (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
10
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) The Shares will be listed on the New York Stock Exchange on the
First Delivery Date.
(nn) 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.
(oo) 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 _________ Firm Shares,
to the several Underwriters and
11
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 Representatives may determine.
In addition, the Company grants to the Underwriters an option to
purchase up to _________ 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 Representatives so that no
Underwriter shall be obligated to purchase Option Shares other than in 100-share
amounts. The price of both the Firm Shares and any Option Shares shall be
$_______ 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. Upon authorization by the
Representatives of the release of the Firm Shares, the several Underwriters
propose to offer the Firm Shares for sale upon the terms and conditions set
forth in the Prospectus.
4. DELIVERY OF AND PAYMENT FOR THE SHARES. Delivery of and payment for the Firm
Shares shall be made at the office of _____________________________, at _____
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 Representatives 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 Representatives 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 Representatives
shall request in writing not less than two full business days prior to the First
Delivery Date. For the purpose of expediting the checking and packaging of the
certificates for the Firm Shares, the Company shall make the certificates
representing the Firm Shares available for inspection by the Representatives in
New York, New York, not later than 2:00 P.M., New York City time, on the
business day prior to the First Delivery Date.
At any time on or before the thirtieth day after the date of this
Agreement, the option granted in Section 2 may be exercised in whole or in part
by written notice being given to the Company by the Representatives. Such notice
shall set forth the aggregate number of Option Shares as to which the option is
being exercised, the names in which the Option Shares are to be registered, the
denominations in which the Option Shares are to be issued and the date and time,
as determined by the Representatives, when the Option Shares are to be
delivered; provided, however, that this date and time shall not be earlier than
the First Delivery Date nor earlier than the second business day after the date
on which the option shall have been exercised nor later
12
than the fifth business day after the date on which the option shall have been
exercised. The date and time the Option Shares are delivered are sometimes
referred to as the "Second Delivery Date" and the First Delivery Date and the
Second Delivery Date are sometimes each referred to as a "Delivery Date."
Delivery of and payment for the Option Shares shall be made at the
place specified in the first sentence of the first paragraph of this Section 4
(or at such other place as shall be determined by agreement between the
Representatives and the 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
Representatives 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
Representatives shall request in the aforesaid written notice. For the purpose
of expediting the checking and packaging of the certificates for the Option
Shares, the Company shall make the certificates representing the Option Shares
available for inspection by the Representatives in New York, New York, not later
than 2:00 P.M., New York City time, on the business day prior to the Second
Delivery Date.
5. FURTHER AGREEMENTS OF THE TRANSACTION ENTITIES. Each of the
Transaction Entities jointly and severally agrees:
(a) To prepare the Prospectus in a form approved by the Representatives
and to file such Prospectus pursuant to Rule 424(b) under the Securities Act not
later than 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
Representatives, promptly after it receives notice thereof, of the time when any
amendment to the Registration Statement has been filed or becomes effective or
any supplement to the Prospectus or any amended Prospectus has been filed and to
furnish the Representatives with copies thereof; to advise the Representatives,
promptly after it receives notice thereof, of the issuance by the Commission of
any stop order or of any order preventing or suspending the use of any
Preliminary Prospectus or the Prospectus, of the suspension of the qualification
of the Shares for offering or sale in any jurisdiction, of the initiation or
threatening of any proceeding for any such purpose, or of any request by the
Commission for the amending or supplementing of the Registration Statement or
the Prospectus or for additional information; and, in the event of the issuance
of any stop order or of any order preventing or suspending the use of any
Preliminary Prospectus or the Prospectus or suspending any such qualification,
to use promptly its best efforts to obtain its withdrawal;
(b) To furnish promptly to the Representatives and to counsel for the
Underwriters 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 Representatives such number of the
following documents as the Representatives shall reasonably request: (i)
conformed copies of the
13
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 Representatives 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 XXXXX, 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
Representatives 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 Representatives 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
Representatives 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 Representatives may request and to comply with such laws so
as to permit the continuance of sales and dealings therein in such jurisdictions
for as long as may be necessary to complete the distribution of the Shares,
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;
14
(i) For a period of 90 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 _______________; and to cause ___________________________, 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 90 days from the date of the Prospectus,
without the prior written consent of ________________________________;
(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
15
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
16
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, Xxxxxx and Xxxxx-Xxxxx LLP shall have furnished to
the Representatives 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 Representatives, 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
17
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 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
18
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
19
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 "The Properties," "Management," "Federal Income Tax Considerations for
Shareholders," "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.
20
Such counsel shall state that ___________________, counsel for the
Agents, 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 Xxxxxxxx & 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 Representatives, 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.
(B) Xxxxxxxx & Green LLC shall have furnished to the Representatives
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 Representatives, 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) The Company has an authorized capitalization as set forth
in the Prospectus under the caption "Capitalization," and all of the issued
shares of beneficial interest of the Company (other than the Shares) have been
duly and validly authorized and issued, are
21
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 _________________, counsel for the Underwriters,
may rely on its opinion.
(e) The Representatives shall have received from ________________,
counsel for the Underwriters, such opinion or opinions, dated such Delivery
Date, with respect to the issuance
22
and sale of the Shares, the Registration Statement, the Prospectus and other
related matters as the Representatives may reasonably require, and the Company
shall have furnished to such counsel such documents as they reasonably request
for the purpose of enabling them to pass upon such matters.
(f) At the time of execution of this Agreement, the Representatives
shall have received from Ernst & Young LLP a letter, in form and substance
satisfactory to the Representatives, addressed to the Underwriters and dated the
date hereof (i) confirming that they are independent public accountants within
the meaning of the Securities Act and are in compliance with the applicable
requirements relating to the qualification of accountants under Rule 2-01 of
Regulation S-X of the Commission, and (ii) stating, as of the date hereof (or,
with respect to matters involving changes or developments since the respective
dates as of which specified financial information is given in, or incorporated
by reference in, the Prospectus, as of a date not more than five days prior to
the date hereof), the conclusions and findings of such firm with respect to the
financial information and other matters ordinarily covered by accountants'
"comfort letters" to underwriters in connection with registered public
offerings.
(g) With respect to the letter of Ernst & Young LLP referred to in the
preceding paragraph and delivered to the Representatives concurrently with the
execution of this Agreement (the "initial letter"), the Company shall have
furnished to the Representatives a letter (the "bring-down letter") of such
accountants, addressed to the Underwriters and dated such Delivery Date (i)
confirming that they are independent public accountants within the meaning of
the Securities Act and are in compliance with the applicable requirements
relating to the qualification of accountants under Rule 2-01 of Regulation S-X
of the Commission, (ii) stating, as of the date of the bring-down letter (or,
with respect to matters involving changes or developments since the respective
dates as of which specified financial information is given in the Prospectus, as
of a date not more than five days prior to the date of the bring-down letter),
the conclusions and findings of such firm with respect to the financial
information and other matters covered by the initial letter and (iii) confirming
in all material respects the conclusions and findings set forth in the initial
letter.
(h) The Transaction Entities shall have furnished to the
Representatives 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.
(i) (i) None of the Transaction Entities or their subsidiaries or any
Property shall have sustained since the date of the latest audited financial
statements included in the Prospectus
23
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 Representatives, so material and adverse as to
make it impracticable or inadvisable to proceed with the public offering or the
delivery of the Shares being delivered on such Delivery Date on the terms and in
the manner contemplated in the Prospectus.
(j) Subsequent to the execution and delivery of this Agreement there
shall not have occurred any of the following: (i) trading in securities
generally on the New York Stock Exchange or the American Stock Exchange or in
the over-the-counter market, or trading in any securities of the Company on any
exchange or in the over-the-counter market, shall have been suspended or minimum
prices shall have been established on any such exchange or such market by the
Commission, by such exchange or by any other regulatory body or governmental
authority having jurisdiction, (ii) a banking moratorium shall have been
declared by Federal or state authorities, (iii) the United States shall have
become engaged in hostilities, there shall have been an escalation in
hostilities involving the United States or there shall have been a declaration
of a national emergency or war by the United States or (iv) there shall have
occurred such a material adverse change in general economic, political or
financial conditions (or the effect of international conditions on the financial
markets in the United States shall be such) as to make it, in the judgment of a
majority in interest of the several Underwriters, impracticable or inadvisable
to proceed with the public offering or delivery of the Shares being delivered on
such Delivery Date on the terms and in the manner contemplated in the
Prospectus.
(k) The New York Stock Exchange, Inc. shall have approved the Shares
for listing, subject only to official notice of issuance.
(l) 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.
(m) 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.
(n) The Representatives shall have been furnished with the written
agreements referred to in Section 5(i) hereof.
(o) The Company shall have furnished or caused to be furnished to the
Representatives such further certificates and documents as the Underwriters
shall have reasonably requested.
24
(p) 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, Xxxxxx and
Xxxxx-Xxxxx LLP, counsel for the Transaction Entities, and Xxxxxxxx & 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 _________________, 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.
25
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 Representatives
who so agree, shall have the right, but shall not be obligated, to purchase, in
such proportion as may be agreed upon among them, all the Shares to be purchased
on such Delivery Date. If the remaining Underwriters or other underwriters
satisfactory to the Representatives do not elect to purchase the Shares which
the defaulting Underwriter or Underwriters agreed but failed to purchase on such
Delivery Date, this Agreement (or, with respect to the Second Delivery Date, the
obligation of the Underwriters to purchase, and of the 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 Representatives 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.
(a) The Transaction Entities jointly and severally, shall indemnify and
hold harmless each Underwriter, its officers and employees and each person, if
any, who controls any Underwriter within the meaning of the Securities Act, from
and against any loss, claim, damage or liability, joint or several, or any
action in respect thereof (including, but not limited to, any loss, claim,
damage, liability or action relating to purchases and sales of 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
26
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 Representatives by or on behalf of any
Underwriter specifically for inclusion therein. The foregoing indemnity
agreement is in addition to any liability which the Transaction Entities may
otherwise have to any Underwriter or to any officer, employee or controlling
person of that Underwriter.
(b) Each Underwriter, severally and not jointly, shall indemnify and
hold harmless each Transaction Entity, its officers and employees, each of its
trustees, and each person, if any, who controls each Transaction Entity within
the meaning of the Securities Act, from and against any loss, claim, damage or
liability, joint or several, or any action in respect thereof, to which each
Transaction Entity or any such trustee, officer or controlling person may become
subject, under the Securities Act or otherwise, insofar as such loss, claim,
damage, liability or action arises out of, or is based upon, (i) any untrue
statement or alleged untrue statement of a material fact contained (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 Representatives 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.
27
(c) Promptly after receipt by an indemnified party under this Section
10 of notice of any claim or the commencement of any action, the indemnified
party shall, if a claim in respect thereof is to be made against the
indemnifying party under this Section 10, notify the indemnifying party in
writing of the claim or the commencement of that action; provided, however, that
the failure to notify the indemnifying party shall not relieve it from any
liability which it may have under this Section 10 except to the extent it has
been materially prejudiced by such failure and, provided further, that the
failure to notify the indemnifying party shall not relieve it from any liability
which it may have to an indemnified party otherwise than under this Section 10.
If any such claim or action shall be brought against an indemnified party, and
it shall notify the indemnifying party thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it wishes, jointly with
any other similarly notified indemnifying party, to assume the defense thereof
with counsel reasonably satisfactory to the indemnified party. After notice from
the indemnifying party to the indemnified party of its election to assume the
defense of such claim or action, the indemnifying party shall not be liable to
the indemnified party under this Section 10 for any legal or other expenses
subsequently incurred by 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 Representatives, it is
advisable for the Underwriters and those officers, employees and controlling
persons to be jointly represented by separate counsel, and in that event the
fees and expenses of such separate counsel shall be paid by the Transaction
Entities. No indemnifying party shall (i) without the prior written consent of
the indemnified parties (which consent shall not be unreasonably withheld),
settle or compromise or consent to the entry of any judgment with respect to any
pending or threatened claim, action, suit or proceeding in respect of which
indemnification or contribution may be sought hereunder (whether or not the
indemnified parties are actual or potential parties to such claim or action)
unless such settlement, compromise or consent includes an unconditional release
of each indemnified party from all liability arising out of such claim, action,
suit or proceeding, or (ii) be liable for any settlement of any such action
effected without its written consent (which consent shall not be unreasonably
withheld), but if settled with the consent of the indemnifying party or if there
be a final judgment of the plaintiff in any such action, the indemnifying party
agrees to indemnify and hold harmless any indemnified party from and against any
loss or liability by reason of such settlement or judgment.
(d) If the indemnification provided for in this Section 10 shall for
any reason be unavailable to or insufficient to hold harmless an indemnified
party under Section 10(a) or 10(c) in respect of any loss, claim, damage or
liability, or any action in respect thereof, referred to therein, then each
indemnifying party shall, in lieu of indemnifying such indemnified party,
contribute to the amount paid or payable by such indemnified party as a result
of such loss, claim, damage or liability, or action in respect thereof, (i) in
such proportion as shall be appropriate to reflect the relative benefits
received by the Transaction Entities on the one hand and the Underwriters on the
other from the offering of the 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
28
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.
(e) 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 Representatives 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
29
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 Representatives. If this Agreement is terminated pursuant
to Section 9 by reason of the default of one or more Underwriters, the
Transaction Entities shall not be obligated to reimburse any defaulting
Underwriter on account of those expenses.
13. NOTICES, etc. All statements, requests, notices and agreements hereunder
shall be in writing, and:
(a) if to the Underwriters, shall be delivered or sent by mail, telex
or facsimile transmission to ____________________________________;
(b) if to the Transaction Entities shall be delivered or sent by mail,
telex or facsimile transmission to the Company, 00 Xxxxxx Xxxxxx Xxxxxxx,
Xxxxxxx, XX 00000, Attention:
General Counsel (Fax: 000-000-0000);
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
Representatives, which address will be supplied to any other party hereto by the
Representatives upon request. Any such statements, requests, notices or
agreements shall take effect at the time of receipt thereof. The 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 _________________.
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.
30
17. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of New York.
18. COUNTERPARTS. This Agreement may be executed in one or more counterparts
and, if executed in more than one counterpart, the executed counterparts shall
each be deemed to be an original but all such counterparts shall together
constitute one and the same instrument.
19. HEADINGS. The headings herein are inserted for convenience of reference only
and are not intended to be part of, or to affect the meaning or interpretation
of, this Agreement.
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:
------------------------------
Name:
Title:
LIBERTY PROPERTY LIMITED PARTNERSHIP
By: Liberty Property Trust,
its sole general partner
By:
------------------------------
Name:
Title:
Accepted:
[NAMES OF UNDERWRITERS]
For themselves and as Representatives
of the several Underwriters named
in Schedule 1 hereto
By:
31
By:
------------------------------
Authorized Representative
32
SCHEDULE 1
Underwriters Number of Shares
----------------- -----------------------
[NAMES OF UNDERWRITERS]
Total
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