Exhibit 1.1
786,840 Shares
BRANDYWINE REALTY TRUST
Common Shares of Beneficial Interest
UNDERWRITING AGREEMENT
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September 11, 1997
XXXXX XXXXXX INC.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
Brandywine Realty Trust, a Maryland real estate investment trust (the
"Company"), proposes to issue and sell an aggregate of 786,840 shares
(the " Shares") of its common shares of beneficial interest, par value $0.01
per share (the "Common Shares"), to you (the "Underwriter"). The Underwriter
intends to deposit the Shares with the trustee of The Equity Focus Trusts -
REIT Portfolio Series, 1997 (the "Trust") a registered unit investment trust
under the Investment Company Act of 1940, as amended, to which Xxxxx Xxxxxx
Inc. acts as sponsor and depositor, in exchange for units in the Trust.
The Company, directly and through a wholly-owned subsidiary, is the sole
general partner and a limited partner (with an aggregate 98.606% ownership
interest as of the date hereof, without giving effect to the issuance and
sale of any Shares hereunder) of Brandywine Operating Partnership, L.P., a
Delaware limited partnership (the "Operating Partnership"). The Company will
contribute the net proceeds of the sale of the Shares to the Operating
Partnership in exchange for additional partnership interests in the Operating
Partnership. The Company and the Operating Partnership wish to confirm as
follows their agreement with you, in connection with the purchase of the
Shares by the Underwriter.
1. Registration Statement and Prospectus. The Company has prepared and
filed with the Securities and Exchange Commission (the "Commission") in
accordance with the provisions of the Securities Act of 1933, as amended, and
the rules and regulations of the Commission thereunder (collectively, the
"Act"), a registration statement on Form S-3 (Registration No. 333-20991)
under the Act (the "registration statement"), including a prospectus
generally relating to the Shares; and such amendments, if any, to such
registration statement as may have been required prior to the date hereof
have been filed with the Commission, and such amendments, if any, have
been similarly prepared. Such registration statement and any post-effective
amendments thereto have become effective under the Act. The Company also has
filed with the Commission pursuant to Rule 424(b) under the Act, a prospectus
supplement relating to the Shares dated the date hereof.
The term "Registration Statement" as used in this Agreement means the
registration statement (including all financial schedules and exhibits), as
amended at the time it became effective, or, if the registration statement
became effective prior to the execution of this Agreement, as supplemented or
amended prior to the execution of this Agreement, including all information
(if any) deemed to be a part of such registration at the time it became
effective pursuant to Rule 430A under the Act. If it is contemplated, at the
time this Agreement is executed, that a post-effective amendment to the
registration statement will be filed and must be declared effective before
the offering of the Shares may commence, the term "Registration Statement" as
used in this Agreement means the registration statement as amended by said
post-effective amendment. The term "Prospectus" as used in this Agreement
means the base prospectus included in the Registration Statement at the time
it was declared effective, or, if the prospectus included in the Registration
Statement omits information in reliance on Rule 430A under the Act and such
information is included in a prospectus filed with the Commission pursuant to
Rule 424(b) under the Act, the term "Prospectus" as used in this Agreement
means the prospectus in the form included in the Registration Statement as
supplemented by the addition of the Rule 430A information contained in the
prospectus filed with the Commission pursuant to Rule 424(b). The term
"Prepricing Prospectus" as used in this Agreement means the prospectus
subject to completion in the form included in the registration statement at
the time of the initial filing of the registration statement with the
Commission, and as such prospectus shall have been amended or supplemented
from time to time prior to the date of the Prospectus. Any reference in this
Agreement to the registration statement, the Registration Statement, any
Prepricing Prospectus or the Prospectus shall be deemed to refer to and
include the documents incorporated by reference therein pursuant to Item 12
of Form S-3 under the Act, as of the date of the registration statement, the
Registration Statement, such Prepricing Prospectus or the Prospectus, as the
case may be, and any reference to any amendment or supplement to the
registration statement, the Registration Statement, any Prepricing Prospectus
or the Prospectus shall be deemed to refer to and include any documents filed
after such date under the Securities Exchange Act of 1934, as amended (the
"Exchange Act") which, upon filing, are incorporated by reference therein, as
required by paragraph (b) of Item 12 of Form S-3. As used herein, the term
"Incorporated Documents" means the documents that at the time are
incorporated by reference in the registration statement, the Registration
Statement, any Prepricing Prospectus, the Prospectus, or any amendment or
supplement thereto. Capitalized terms used, but not defined, herein shall
have the respective meanings ascribed thereto in the Prospectus.
2. Agreements to Sell and Purchase. The Company hereby agrees, subject
to all the terms and conditions set forth herein, to issue and sell to the
Underwriter and, upon the basis of the representations, warranties and
agreements of the Company and the Operating Partnership herein contained and
subject to all the terms and conditions set forth herein, the Underwriter
agrees to purchase from the Company, at a purchase price of $21.1969 per Share
(the "purchase price per share"), 786,840 Shares.
3. Delivery of the Shares and Payment Therefor. Delivery to the
Underwriter of and payment for the Shares shall be made at the office of
Xxxxx Xxxxxx Inc., 000 Xxxxxxxxx Xxxxxx,
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Xxx Xxxx, XX 00000, at 10:00 A.M., New York City time, on September 16, 1997
(the "Closing Date"). The place of closing for the Shares and the Closing
Date may be varied by agreement between the Underwriter and the Company.
Certificates for the Shares to be purchased hereunder shall be registered
in such names and in such denominations as you shall request prior to 9:30
A.M., New York City time, on the second business day preceding the Closing
Date. Such certificates shall be made available to you in New York City for
inspection and packaging not later than 9:30 A.M., New York City time, on the
business day next preceding the Closing Date. The certificates evidencing
the Shares to be purchased hereunder shall be delivered to you on the Closing
Date against payment of the purchase price therefor by wire transfer of
immediately available funds to the Company.
4. Agreements of the Company and the Operating Partnership. The
Company and the Operating Partnership jointly and severally agree with the
Underwriter as follows:
(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 Company will endeavor to cause the Registration Statement or
such post-effective amendment to become effective as soon as possible and
will advise you promptly and, if requested by you, will confirm such advice
in writing, when the Registration Statement or such post-effective amendment
has become effective.
(b) The Company will advise you promptly and, if requested by you,
will confirm such advice in writing: (i) of any request by the Commission for
amendment of or a supplement to the Registration Statement, any Prepricing
Prospectus or the Prospectus or for additional information; (ii) of the
issuance by the Commission of any stop order suspending the effectiveness of
the Registration Statement or of the suspension of qualification of the
Shares for offering or sale in any jurisdiction or the initiation of any
proceeding for such purpose; and (iii) within the period of time referred to
in paragraph (f) below, of any change in the Company's condition (financial
or other), business, prospects, properties, net worth or results of
operations, or of the happening of any event, which makes any statement of a
material fact made in the Registration Statement or the Prospectus (as then
amended or supplemented) untrue or which requires the making of any additions
to or changes in the Registration Statement or the Prospectus (as then
amended or supplemented) in order to state a material fact required by the
Act or the regulations thereunder to be stated therein or necessary in order
to make the statements therein not misleading, or of the necessity to amend
or supplement the Prospectus (as then amended or supplemented) to comply with
the Act or any other law. If at any time the Commission shall issue any stop
order suspending the effectiveness of the Registration Statement, the Company
will make every reasonable effort to obtain the withdrawal of such order at
the earliest possible time.
(c) The Company will furnish to you, without charge, (i) five
copies of the registration statement as originally filed with the Commission
and of each amendment thereto, including financial statements and all
exhibits to the registration statement, (ii) such number of copies of the
Prepricing Prospectus or Prospectus as you may reasonably request, (iii) such
number of copies of the Incorporated Documents as you may reasonably request,
and (iv) such number of conformed copies of the Registration Statement and of
each amendment thereto, but without exhibits, as you may reasonably request.
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(d) The Company will not file any amendment to the Registration
Statement or make any amendment or supplement to the Prospectus or, prior to
the end of the period of time referred to in the first sentence of subsection
(f) below, file any document which upon filing becomes an Incorporated
Document, of which you shall not previously have been advised or to which,
after you shall have received a copy of the document proposed to be filed,
you shall object.
(e) Prior to the execution and delivery of this Agreement, the
Company has delivered to you, without charge, in such quantities as you have
reasonably requested, copies of each form of the Prepricing Prospectus. The
Company consents to the use, in accordance with the provisions of the Act and
with the securities or Blue Sky or real estate syndication laws of the
jurisdictions in which the Shares are offered by the Underwriter, prior to
the date of the Prospectus, of each Prepricing Prospectus so furnished by the
Company.
(f) As soon after the execution and delivery of this Agreement as
possible and thereafter from time to time for such period as in the opinion
of counsel for the Underwriter a prospectus is required by the Act to be
delivered in connection with sales by the Underwriter or dealer, the Company
will expeditiously deliver to each Underwriter and each dealer, without
charge, as many copies of the Prospectus (and of any amendment or supplement
thereto) as you may request. The Company consents to the use of the
Prospectus (and of any amendment or supplement thereto) in accordance with
the provisions of the Act and with the securities or Blue Sky or real estate
syndication laws of the jurisdictions in which the Shares are offered by the
Underwriter, both in connection with the offering and sale of the Shares and
for such period of time thereafter as the Prospectus is required by the Act
to be delivered in connection with sales by an Underwriter or dealer. If
during such period of time any event shall occur that in the judgment of the
Company or in the opinion of counsel for the Underwriter is required to be
set forth in the Prospectus (as then amended or supplemented) or should be
set forth therein in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading, or if it is
necessary to supplement or amend the Prospectus (or to file under the
Exchange Act any document which, upon filing, becomes an Incorporated
Document) in order to comply with the Act or any other law, the Company will
forthwith prepare and, subject to the provisions of paragraph (d) above, file
with the Commission an appropriate supplement or amendment thereto (or to
such document), and will expeditiously furnish to the Underwriter a
reasonable number of copies thereof. In the event that the Company and you
agree that the Prospectus should be amended or supplemented, the Company, if
requested by you, will promptly issue a press release announcing or
disclosing the matters to be covered by the proposed amendment or supplement.
(g) The Company will cooperate with you and with counsel for the
Underwriter in connection with the registration or qualification of the
Shares for offering and sale by the Underwriter under the securities or Blue
Sky or real estate syndication laws of such jurisdictions as you may
designate and will file such consents to service of process or other
documents necessary or appropriate in order to effect such registration or
qualification; provided that in no event shall the Company be obligated to
qualify to do business in any jurisdiction where it is not now so qualified
or to take any action which would subject it to service of process in suits,
other than those arising out of the offering or sale of the Shares, in any
jurisdiction where it is not now so subject.
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(h) The Company will make generally available to its security
holders a consolidated earnings statement, which need not be audited,
covering a twelve-month period commencing after the effective date of the
Registration Statement and ending not later than 15 months thereafter, as
soon as practicable after the end of such period, which consolidated earnings
statement shall satisfy the provisions of Section 11(a) of the Act.
(i) During the period of five years hereafter, the Company will
furnish to you (i) as soon as available, a copy of each report of the Company
mailed to stockholders or filed with the Commission, and (ii) from time to
time such other information concerning the Company as you may reasonably
request.
(j) If this Agreement shall terminate or shall be terminated after
execution pursuant to any provisions hereof (otherwise than pursuant to
Section 11 hereof or by notice given by you terminating this Agreement
pursuant to Section 11 or Section 12 hereof) or if this Agreement shall be
terminated by the Underwriter because of any failure or refusal on the part
of the Company to comply with the terms or fulfill any of the conditions of
this Agreement, the Company agrees to reimburse you for all out-of-pocket
expenses (including fees and expenses of counsel for the Underwriter)
incurred by you in connection herewith.
(k) The Company will apply the net proceeds from the sale of the
Shares in accordance with the description set forth in the Prospectus.
(l) The Company will timely file with the Commission the Prospectus
pursuant to Rule 424(b) under the Act and will advise you of the time and
manner of such filing.
(m) Except as stated in this Agreement and in any Prepricing
Prospectus and Prospectus, the Company has not taken, nor will it 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.
5. Representations and Warranties of the Company. The Company and the
Operating Partnership, jointly and severally, represent and warrant to the
Underwriter that:
(a) Each Prepricing 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 Act, complied when so filed
in all material respects with the provisions of the Act. The Commission has
not issued any order suspending the effectiveness of the Registration
Statement or any part thereof and no proceeding for that purpose has been
instituted or threatened or, to the best knowledge of the Company,
contemplated by the Commission or the securities authority of any state or
other jurisdiction.
(b) The Company and the transactions contemplated by this Agreement
meet the requirements and conditions for using a registration statement on
Form S-3 under the Act. When any Prepricing Prospectus was filed with the
Commission it (i) contained all statements required to be stated therein in
accordance with, and complied in all material respects with the requirements
of, the Act and the rules and regulations of the Commission thereunder and
(ii) did not include any untrue statement of a material fact or omit to state
any material fact necessary in
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order to make the statements therein, in the light of the circumstances under
which they were made, not misleading. When the Registration Statement or any
amendment thereto was declared effective, and on the Closing Date it (i)
contained or will contain all statements required to be stated therein in
accordance with, and complied or will comply in all material respects with
the requirements of, the Act and the rules and regulations of the Commission
thereunder and (ii) did not or will not include any untrue statement of a
material fact or omit to state any material fact necessary to make the
statements therein not misleading. When the Prospectus or any amendment or
supplement thereto is filed with the Commission pursuant to Rule 424(b) and
at the Closing Date, the Prospectus, as amended or supplemented at any such
time, (i) contained or will contain all statements required to be stated
therein in accordance with, and complied or will comply in all material
respects with the requirements of, the Act and the rules and regulations of
the Commission thereunder and (ii) did not or will not include any 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, not misleading. The representations and warranties in
this paragraph (b) do not apply to statements in or omissions from the
Registration Statement or the Prospectus made in reliance upon and in
conformity with information furnished to the Company in writing by or on
behalf of the Underwriter through you expressly for use therein.
(c) The Incorporated Documents heretofore filed, when they were
filed (or, if any amendment with respect to any such document was filed, when
such amendment was filed), conformed in all material respects with the
requirements of the Exchange Act and the rules and regulations thereunder,
any further Incorporated Documents so filed will, when they are filed,
conform in all material respects with the requirements of the Exchange Act
and the rules and regulations thereunder, no such document when it was filed
(or, if an amendment with respect to any such document was filed, when such
amendment was filed), contained an 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 and no such further
document, when it is filed, will contain an untrue statement of a material
fact or will omit to state a material fact required to be stated therein or
necessary in order to make the statements therein not misleading.
(d) The Company is a real estate investment trust duly formed and
validly existing under and by virtue of the laws of the State of Maryland and
is in good standing with the State Department of Assessments and Taxation of
Maryland, with full trust power and authority to own, lease, and operate its
properties (including certain properties (the "Recent Acquisitions")
described in the Prospectus under the caption "Recent Developments - Recent
Acquisitions" as being subject to certain agreements of sale (the
"Transaction Documents")), and to conduct its business as described in the
Registration Statement and the Prospectus, and is duly registered and
qualified to conduct its business and is in good standing in each
jurisdiction or place where the nature of its properties or the conduct of
its business (after taking into account the purchase of the properties
described under the caption "Recent Developments -Recent Acquisitions")
requires such registration or qualification, except where the failure to be
so registered or qualified would not have a material adverse effect on the
condition (financial or otherwise), business, prospects, properties, net
worth or results of operations of the Company. The Transaction Documents are
listed on Schedule 5(d) hereto.
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(e) Each of the Operating Partnership and the corporations, limited
liability companies, partnerships and limited partnerships listed on Schedule
5(e) hereto (each, a "Subsidiary") is a corporation, limited partnership,
limited liability company or general partnership duly incorporated or formed,
as the case may be, validly existing and in good standing under the laws of
its jurisdiction of incorporation or formation. Each such entity has full
corporate, limited liability company or partnership power and authority, to
own, lease, and operate its properties, and to conduct its business as
described in the Registration Statement and the Prospectus. Each such
Subsidiary is duly registered and qualified to conduct its business and is in
good standing in each jurisdiction or place where the nature of its
properties or the conduct of its business requires such registration or
qualification, except where the failure to be so registered or qualified
would not have a material adverse effect on the condition (financial or
otherwise), business, prospects, properties, net worth or results of
operations of such Subsidiary.
(f) All the outstanding Common Shares of the Company have been duly
authorized and validly issued, are fully paid and nonassessable and are free
of any preemptive or similar rights; the Shares have been duly authorized
and, when issued and delivered to the Underwriter against payment therefor in
accordance with the terms hereof, will be validly issued, fully paid and
nonassessable and free of any preemptive or similar rights that entitle or
will entitle any person or entity to acquire any Shares upon the issuance
thereof by the Company, and the beneficial interest of the Company conforms
to the description thereof in the Registration Statement and the Prospectus.
Except with regard to 1997 compensation of non-employee trustees of the
Company payable in Common Shares, awards under the Company's 1997 Long-Term
Incentive Plan and as disclosed in the Prospectus, there are no outstanding
options, warrants or other rights calling for the issuance of, or any
commitment, plan or arrangement to issue, any beneficial interest of the
Company or any security convertible into or exchangeable for beneficial
interest of the Company.
(g) All of the outstanding Units and shares of capital stock or
partnership interests in each of the Subsidiaries have been duly authorized
and validly issued or created under the documents or agreements forming such
entity, are fully paid and, in the case of Subsidiaries that are
corporations, nonassessable, and will be owned or be held by the persons and
entities in the percentage amounts set forth and in the manner described in
the Prospectus or Schedule 5(g). Except as described in the Prospectus or
Schedule 5(g), all such Units, partnership interests and shares of capital
stock are owned by the Company directly, or indirectly through the Operating
Partnership or one of the other Subsidiaries, free and clear of any lien,
adverse claim, security interest, equity, or other encumbrance, and the
Company's percentage interest and ownership in the Operating Partnership, and
the Company's and the Operating Partnership's percentage interest and
ownership in each of the Subsidiaries, is as set forth on Schedule 5(g)
attached hereto. Except as described in the Registration Statement and the
Prospectus (or any amendment or supplement thereto), there are no outstanding
options, warrants or other rights calling for the issuance of, or any
commitment, plan or arrangement to issue, any equity interests in any
Subsidiary, or any security convertible into, or exchangeable or exercisable
for, any such interests in any such Subsidiary. The terms of the Units
conform in all material respects to statements and descriptions thereof
contained in the Prospectus. The Company is the sole general partner of the
Operating Partnership and has sole voting, management and administrative
control of Brandywine Realty Partners.
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(h) The Company has no direct or indirect subsidiaries other than
the Subsidiaries. Other than the Subsidiaries, neither the Company nor the
Operating Partnership owns, directly or indirectly, more than 2% of the
securities of any corporation, partnership, joint venture, limited liability
company, association or other business association.
(i) There are no actions, suits or proceedings pending or, to the
knowledge of the Company or the Operating Partnership, threatened against or
affecting the Company or any of the Subsidiaries, or any of their respective
partners, directors, trustees or officers in their capacity as such, or to
which the Company or any of the Subsidiaries or any of their respective
partners, directors, trustees or officers in their capacity as such, or to
which any of their respective properties is subject, that are required to be
described in the Registration Statement or the Prospectus but are not
described as required, and there are no agreements, contracts, indentures,
leases or other instruments that are required to be described in the
Registration Statement or the Prospectus or to be filed as an exhibit to the
Registration Statement that are not described or filed as required by the
Act.
(j) Neither the Company nor any of the Subsidiaries is in violation
of its Declaration of Trust, certificate or articles of incorporation or
by-laws, partnership agreement or other organizational documents, or of any
law, ordinance, administrative or governmental rule or regulation applicable
to the Company or any of the Subsidiaries or of any decree of any court or
governmental agency or body having jurisdiction over the Company or any of
the Subsidiaries, or in default in any material respect in the performance of
any obligation, agreement or condition contained in any bond, debenture, note
or any other evidence of indebtedness or in any agreement, indenture, lease
or other instrument to which the Company or any of the Subsidiaries is a
party or by which any of them or any of their respective properties may be
bound.
(k) Neither the issuance and offer, and sale or delivery of the
Shares, the execution, delivery or performance of this Agreement, nor the
consummation of the transactions contemplated hereby or thereby by the
Company or any Subsidiary, as applicable, (i) required or requires any
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 (except such as may be required for the registration
of the Shares under the Act and compliance with the securities or Blue Sky
laws of various jurisdictions, all of which have been or will be effected in
accordance with this Agreement), (ii) conflicted with, conflicts or will
conflict with or constituted, constitutes or will constitute a breach of, or
a default under, the Declaration of Trust, certificate or articles of
incorporation or bylaws, partnership agreement or other organizational
documents, of the Company or any of the Subsidiaries or under any agreement,
indenture, lease or other instrument to which the Company or any of the
Subsidiaries is a party or by which any of them or any of their respective
properties may be bound, (iii) violated, violates or will violate any
statute, law, regulation or filing or judgment, injunction, order or decree
applicable to the Company or any of the Subsidiaries or any of their
respective properties, or (iv) resulted, results or will result in the
creation or imposition of any lien, charge or encumbrance upon any property
or assets of the Company or any of the Subsidiaries pursuant to the terms of
any agreement or instrument to which any of them is a party or by which any
of them may be bound or to which any of the property or assets of any of them
is subject.
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(l) All offers and sales of Units or other partnership interests in
the Operating Partnership, and the offer, sale or issuance by the Company of
Common Shares and Preferred Shares prior to the date hereof have been duly
registered under the Act, or were exempt from the registration requirements
of the Act and state securities and Blue Sky laws.
(m) The accountants, Xxxxxx Xxxxxxxx LLP and Zelenkofske Xxxxxxx &
Company, Ltd., who have audited the financial statements included or
incorporated by reference in the Registration Statement and the Prospectus
(and any amendment or supplement thereto), are independent public accountants
as required by the Act.
(n) The financial statements, together with related schedules and
notes, included or incorporated by reference in the Registration Statement
and the Prospectus (and any amendment or supplement thereto), present fairly
the consolidated financial position, results of operations and changes in
cash flows of the respective entity, entities, property, or properties, as
applicable, at the respective dates or for the respective periods to which
they apply; such statements and related schedules and notes have been
prepared in accordance with generally accepted accounting principles
consistently applied throughout the periods involved, and comply with the
applicable accounting requirements of the Act (including, without limitation,
Rule 3-14 of Regulation S-X promulgated by the Commission). The other
financial and statistical information and data included in the Registration
Statement and the Prospectus (and any amendment or supplement thereto) are
accurately presented and prepared on a basis consistent with such financial
statements and the books and records of the relevant entity, entities,
property or properties, as applicable; any pro forma financial statements of
the Company included or incorporated by reference in the Registration
Statement and the Prospectus comply in all material respects with the
applicable requirements of Rule 11-02 of Regulation S-X of the Commission,
and any pro forma adjustments have been made upon management's reasonable
good faith estimates of the pro forma adjustments and have been properly
applied to the historical amounts in the compilation of such statements.
(o) The Company has all trust power and authority, and the
Operating Partnership has all partnership power and authority, to enter into
this Agreement and each Transaction Document to which it is a party, and, in
the case of the Company, to issue, sell and deliver the Shares to the
Underwriter as provided in the Underwriting Agreement, and each of the
Underwriting Agreement and each Transaction Document has been duly and
validly authorized, executed and delivered by the Company and the Operating
Partnership, as applicable, and, to the knowledge of the Company, each of the
other parties thereto, and is a valid, legal and binding agreement of each of
the Company and the Operating Partnership, as applicable, enforceable against
each of the Company and the Operating Partnership in accordance with its
terms, except as enforcement of rights to indemnity and contribution
hereunder may be limited by Federal or state securities laws or principles of
public policy.
(p) Except as disclosed in the Registration Statement and the
Prospectus (or any amendment or supplement thereto), subsequent to the
respective dates as of which such information is given in the Registration
Statement and the Prospectus (or any amendment or supplement thereto), neither
the Company nor any of the Subsidiaries has incurred any liability or
obligation, direct or contingent, or entered into any transaction, not in the
ordinary course of business, that is material to the Company and the
Subsidiaries taken as a whole, and there has not been any change in the
beneficial interest or capital stock, or material increase in the short-term
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debt or long-term debt, of the Company or any of the Subsidiaries, or any
material adverse change, or any development involving or which may reasonably
be expected to involve, a prospective material adverse change, in the
condition (financial or other), business, prospects, properties, net worth or
results of operations of the Company and the Subsidiaries taken as a whole.
(q) Each of the Company or the Operating Partnership (either
directly or through a Subsidiary) has, and after giving effect to the
transactions described in the Registration Statement and Prospectus will
have, good and marketable and insurable title to all real property described
in the Prospectus as being or to be owned by it, free and clear of all liens,
claims, security interests or other encumbrances except such as are described
in the Registration Statement and the Prospectus or in a document filed as an
exhibit to, or incorporated by reference in, the Registration Statement. All
the property described in the Prospectus as being held under lease by each of
the Company and the Subsidiaries is held by it under valid, subsisting and
enforceable leases, other than those described in the Registration Statement
and the Prospectus and those which do not and will not have a material
adverse effect on the condition (financial or other), business, prospects,
properties, net worth or results of operations of the Company and the
Subsidiaries taken as a whole.
(r) The Company has not distributed and, prior to the later to
occur of (i) the Closing Date and (ii) completion of the distribution of the
Shares, will not distribute any offering material in connection with the
offering and sale of the Shares other than the Registration Statement, the
Prepricing Prospectus, the Prospectus or other materials, if any, permitted
by the Act.
(s) Each of the Company and each of the Subsidiaries has, such
permits, licenses, franchises and authorizations of governmental or
regulatory authorities ("permits") as are necessary to own its respective
properties and to conduct its business in the manner described in the
Prospectus; each of the Company and each of the Subsidiaries has fulfilled
and performed all its material obligations with respect to such permits and
no event has occurred which allows, or after notice or lapse of time would
allow, revocation or termination thereof or results in any other material
impairment of the rights of the holder of any such permit, subject in each
case to such qualification as may be set forth in the Prospectus; and, except
as described in the Prospectus, none of such permits contains any restriction
that is materially burdensome to the Company or any of the Subsidiaries.
(t) The Company together with the Subsidiaries maintains and will
maintain a system of internal accounting controls sufficient to provide
reasonable assurances that (i) transactions are executed in accordance with
management's general or specific authorization; (ii) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles and to maintain
accountability for assets; (iii) access to assets is permitted only in
accordance with management's general or specific authorization; and (iv) the
recorded accountability for assets is compared with existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
(u) Neither the Company nor any of its Subsidiaries nor any
employee or agent of the Company or any Subsidiary has made any payment of
funds of the Company or any
10
Subsidiary or received or retained any funds in violation of any law, rule or
regulation, which payment, receipt or retention of funds is of a character
required to be disclosed in the Prospectus.
(v) The Company and each of the Subsidiaries have filed all tax
returns required to be filed, which returns are complete and correct, and
neither the Company nor any Subsidiary is in default in the payment of any
taxes which were payable pursuant to said returns or any assessments with
respect thereto.
(w) Except as described in the Prospectus, there is no holder of
any security of the Company, or the Operating Partnership or any other person
who has the right, contractual or otherwise, to cause the Company to sell or
otherwise issue to them, or to permit them to underwrite the sale of, the
Shares or the right to have any Common Shares or other securities of the
Company included in the Registration Statement or the right, as a result of
the filing of the registration statement or sale of the Shares as
contemplated by this Agreement, to require registration under the Act of any
Common Shares or other securities of the Company.
(x) The Company and the Subsidiaries own or possess all patents,
trademarks, trademark registrations, service marks, service xxxx
registrations, trade names, copyrights, licenses, inventions, trade secrets
and rights described in the Prospectus as being owned by them or any of them
or necessary for the conduct of their respective businesses, and neither the
Company nor the Operating Partnership is aware of any claim to the contrary
or any challenge by any other person to the rights of the Company and the
Subsidiaries with respect to the foregoing.
(y) None of the Company or any Subsidiary is now, and after sale of
the Shares to be sold by it hereunder and application of the net proceeds
from such sale as described in the Prospectus under the caption "Use of
Proceeds" will be, an "investment company," or entity "controlled" by an
"investment company," within the meaning of the Investment Company Act of
1940, as amended.
(z) The Company has filed in a timely manner each document or
report required to be filed by it pursuant to the Exchange Act and the rules
and regulations thereunder; each such document or report at the time it was
filed conformed to the requirements of the Exchange Act and the rules and
regulations thereunder; and none of such documents or reports contained an
untrue statement of any material fact or omitted to state any material fact
required to be stated therein or necessary to make the statements therein not
misleading.
(aa) The Company and its Subsidiaries are organized and operate in
the manner described in the Registration Statement so that the Company meets
the requirements for qualification as a real estate investment trust under
Sections 856 through 860 of the Code and the rules and regulations thereunder
as currently in effect. Each Subsidiary that is a partnership or limited
liability company will be treated as a partnership, and not as an association
taxable as a corporation or a publicly traded partnership, for federal income
tax purposes.
(bb) The Shares are duly authorized for listing, subject to official
notice of issuance, on the American Stock Exchange.
11
(cc) Except as described in the Prospectus or provided in the Credit
Facility, the mortgages and deeds of trust encumbering the Properties will
not be cross-defaulted or cross-collateralized with any other property not
owned directly or indirectly by the Company or any of the Subsidiaries.
(dd) (1) Each of the Properties, the Company, and each of the
Subsidiaries (i) is, and as of the Closing Date will be, in compliance in all
material respects with any and all applicable foreign, federal, state and
local laws and regulations relating to the protection of human health and
safety, the environment or hazardous or toxic substances or wastes,
pollutants or contaminants ("Environmental Laws"), (ii) has received, or will
have received, as of the Closing Date, as the case may be, all licenses or
other approvals required of them under applicable Environmental Laws to
conduct their respective business, and (iii) is, and will be as of the
Closing Date in material compliance with all terms and conditions of any such
permit, license or approval.
(2) Except as may be specifically disclosed in the Phase I
Environmental Site Assessment reports referred to in the Prospectus (the
"Environmental Reports"), the Company and the Subsidiaries have not at any
time, and, to the knowledge of the Company, no other party has at any time,
handled, buried, stored, retained, refined, transported, processed,
manufactured, generated, produced, spilled, allowed to seep, leak, escape or
xxxxx, or be pumped, poured, emitted, emptied, discharged, injected, dumped,
transferred or otherwise disposed of or dealt with, Hazardous Materials (as
hereinafter defined) on, to or from the Properties. The Company and the
Subsidiaries do not intend to use the Properties or any subsequently acquired
properties for the purpose of handling, burying, storing (except with respect
to cleaning materials reasonably used to operate the Properties in the
ordinary course, in normal quantities and in full compliance with law),
retaining, refining, transporting, processing, manufacturing, generating,
producing, spilling, seeping, leaking, escaping, leaching, pumping, pouring,
emitting, emptying, discharging, injecting, dumping, transferring or
otherwise disposing of or dealing with Hazardous Materials.
(3) Except as disclosed in the Environmental Reports, to the
knowledge of the Company, there has been no seepage, leaking, escape,
leaching, discharge, injection, release, emission, spill, pumping, pouring,
emptying or dumping of Hazardous Materials into waters on or adjacent to the
Properties or onto lands from which such hazardous or toxic waste or
substances might seep, flow or drain into such waters.
(4) Except as disclosed in the Environmental Reports, neither
the Company nor any Subsidiary has received notice of any occurrence or
circumstance which, with notice or passage of time or both, would give rise
to any claim under or pursuant to any Environmental Law pertaining to
hazardous or toxic waste or substances on or originating from the Properties
or arising out of the conduct of any such party.
(5) No environmental engineering firm which prepared the
Environmental Reports (or amendments thereto) or physical condition
(engineering) reports with respect to the Properties was employed for such
purpose on a contingent basis or has any substantial interest in the Company
or any Subsidiary.
As used herein, "Hazardous Material" shall include, without
limitation, any flammable explosives, radioactive materials, hazardous
materials, hazardous wastes, hazardous
12
or toxic substances or related materials, asbestos or any related material as
defined by any Federal, state or local environmental law, ordinance, rule, or
regulation including, without limitation, Environmental Laws such as the
Comprehensive Environmental Response, Compensation, and Liability Act of
1980, as amended (42 U.S.C. Section 9601, et seq.), the Hazardous Materials
Transportation Act, as amended (49 U.S.C. Section 1801, et seq.), the
Resource Conservation and Recovery Act, as amended (42 U.S.C. Section 9601,
et seq.), The New Jersey Industrial Site Recovery Act, N.J.S.A.Section
13:1K-6, et seq. or and in the regulations adopted and publications
promulgated pursuant to each of the foregoing or by any Federal, state or
local Governmental authority having or claiming jurisdiction over the
Properties as described in the Prospectus.
(ee) To the knowledge of the Company, all physical condition
(engineering) reports obtained for the Properties are materially true and
correct. Neither the Company nor any of the Subsidiaries is aware of any
material capital expenditures (other than expenditures for maintenance or
tenant improvements in the ordinary course of business) that will be required
in connection with any of the Properties prior to the fifth anniversary of
this Agreement, except with respect to the renovation of the 0000 Xxxxxxxxx
Xxxxx office building and the development of the Horsham Business Center.
(ff) As of the Closing Date, the Company or the Operating
Partnership, as applicable, will have obtained ALTA Extended Coverage Owner's
Policies of Title Insurance (or its equivalent) from title insurers of
recognized financial responsibility on each of the Properties, in amounts at
least equal to the acquisition price of each such property (or, in the case
of the Property at Delaware Corporate Center I, the leasehold interest) (and
improvements located on each such property), and such insurance shall be in
full force and effect.
(gg) The assets of the Company and the Subsidiaries do not, and as
of the Closing Date will not, constitute "plan assets" under the Employee
Retirement Income Security Act of 1974, as amended.
(hh) Each partnership agreement, agreement of limited partnership,
other organizational or formation agreement, and each amendment thereto, of
each Subsidiary that is a general or limited partnership (the "Organizational
Documents") has been duly and validly authorized, executed and delivered by
the Company and the applicable Subsidiaries party thereto, and each such
Organizational Document constitutes the legal, valid and binding agreement of
each party thereto, enforceable against each such party in accordance with
its terms.
(ii) Each of the agreements disclosed in the Prospectus under the
caption "Recent Developments -- Recent Acquisitions" as having been executed
has been executed and delivered by the seller thereunder and has been duly
and validly authorized, executed and delivered by each of the Company and the
Subsidiaries that is a party thereto, and each such agreement constitutes the
legal, valid and binding agreement of each such party thereto, enforceable
against each such party in accordance with its terms.
(jj) (i) The Company and its Subsidiaries have their respective
principal business operations in the United States or its Territories.
13
(ii) The Company has a class of securities registered pursuant to
Section 12(b) of the Exchange Act.
(iii) The Company (A) since prior to February 14, 1994, has been
subject to the requirements of Section 12 of the Exchange Act and has filed
all the material required to be filed pursuant to Sections 13 and 14 of the
Exchange Act, and (B) since prior to February 14, 1996, has filed in a
timely manner all reports required to be filed under Sections 13 and 14 of
the Exchange Act, and has not used Rule 12b-25(b) under the Exchange Act.
(iv) Neither the Company nor any Subsidiary has, since December
31, 1996, (A) failed to pay any dividend or sinking fund installment on
preferred stock, or (B) defaulted (I) on any installment or installments on
indebtedness for borrowed money, or (II) on any rental on one or more long
term leases.
(v) The aggregate market value of the Company's voting stock held
by non-affiliates of the Company is $100 million or more and the Company
had a trading volume of such stock of 3,000,000 shares or more during the
12 month period ended September 11, 1997.
6. Indemnification and Contribution. (a) The Company and the Operating
Partnership, jointly and severally, agree to indemnify and hold harmless the
Underwriter, the directors, officers, employees and agents of the
Underwriter, and each person, if any, who controls the Underwriter within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act from and
against any and all losses, claims, damages, liabilities and expenses
(including reasonable costs of investigation) arising out of or based upon
any untrue statement or alleged untrue statement of a material fact contained
in any Prepricing Prospectus or in the Registration Statement or the
Prospectus or in any amendment or supplement thereto, or arising out of or
based upon any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, except insofar as such losses, claims, damages, liabilities or
expenses arise out of or are based upon any untrue statement or omission or
alleged untrue statement or omission which has been made therein or omitted
therefrom in reliance upon and in conformity with the information relating to
the Underwriter furnished in writing to the Company by or on behalf of the
Underwriter through you expressly for use in connection therewith (which
information is described in its entirety in Section 13 below); provided,
however, that the indemnification contained in this paragraph (a) with
respect to any Prepricing Prospectus shall not inure to the benefit of any
Underwriter (or to the benefit of any person controlling the Underwriter) on
account of any such loss, claim, damage, liability or expense arising from
the sale of the Shares by the Underwriter to any person if a copy of the
Prospectus shall not have been delivered or sent to such person within the
time required by the Act and the regulations thereunder, and the untrue
statement or alleged untrue statement or omission or alleged omission of a
material fact contained in such Prepricing Prospectus was corrected in the
Prospectus, provided that the Company has delivered the Prospectus to the
Underwriter in requisite quantity on a timely basis to permit such delivery
or sending within the time required by the Act. The foregoing indemnity
agreement shall be in addition to any liability which the Company may
otherwise have.
14
(b) If any action, suit or proceeding shall be brought against the
Underwriter or any person controlling the Underwriter in respect of which
indemnity may be sought against the Company or the Operating Partnership, the
Underwriter or such controlling person shall promptly notify the Company or
the Operating Partnership, and the Company or the Operating Partnership shall
assume the defense thereof, including the employment of counsel and payment
of all fees and expenses. The Underwriter or any such controlling person
shall have the right to employ separate counsel in any such action, suit or
proceeding and to participate in the defense thereof, but the fees and
expenses of such counsel shall be at the expense of the Underwriter or such
controlling person unless (i) the Company and the Operating Partnership have
agreed in writing to pay such fees and expenses, (ii) the Company and the
Operating Partnership have failed to assume the defense and employ counsel,
or (iii) the named parties to any such action, suit or proceeding (including
any impleaded parties) include both the Underwriter or such controlling
person and the Company or the Operating Partnership and the Underwriter or
such controlling person shall have been advised by its counsel that
representation of such indemnified party and the Company or the Operating
Partnership by the same counsel would be inappropriate under applicable
standards of professional conduct (whether or not such representation by the
same counsel has been proposed) due to actual or potential differing
interests between them (in which case the Company and the Operating
Partnership shall not have the right to assume the defense of such action,
suit or proceeding on behalf of such Underwriter or such controlling person).
It is understood, however, that the Company shall, in connection with any
one such action, suit or proceeding or separate but substantially similar or
related actions, suits or proceedings in the same jurisdiction arising out of
the same general allegations or circumstances, be liable for the reasonable
fees and expenses of only one separate firm of attorneys (in addition to any
local counsel) at any time for the Underwriter and controlling persons not
having actual or potential differing interests with you or among themselves,
which firm shall be designated in writing by the Underwriter, and that all
such fees and expenses shall be reimbursed as they are incurred. The Company
and the Operating Partnership shall not be liable for any settlement of any
such action, suit or proceeding effected without its written consent, but if
settled with such written consent, or if there shall be a final judgment for
the plaintiff in any such action, suit or proceeding, the Company and the
Operating Partnership agree to indemnify and hold harmless the Underwriter,
to the extent provided in the preceding paragraph, and any such controlling
person from and against any loss, claim, damage, liability or expense by
reason of such settlement or judgment.
(c) The Underwriter agrees to indemnify and hold harmless the Company, its
trustees and officers who sign the Registration Statement, and any person who
controls the Company within the meaning of Section 15 of the Act or Section 20
of the Exchange Act, to the same extent as the foregoing indemnity from the
Company and the Operating Partnership to the Underwriter, but only with respect
to losses, claims, damages, liabilities and expenses arising out of or based on
information relating to the Underwriter furnished in writing by or on behalf of
the Underwriter through you expressly for use in the Registration Statement, the
Prospectus or any Prepricing Prospectus or any amendment or supplement thereto.
If any action, suit or proceeding shall be brought against the Company, any of
its directors or officers, or any such controlling person based on the
Registration Statement, the Prospectus or any Prepricing Prospectus, or any
amendment or supplement thereto, and in respect of which indemnity may be sought
against the Underwriter pursuant to this paragraph (c), the Underwriter shall
have the rights and duties given to the Company and the Operating Partnership by
paragraph (b) above (except that if the Company or the Operating Partnership
shall have assumed the defense thereof such Underwriter shall not be
15
required to do so, but may employ separate counsel therein and participate in
the defense thereof, but the fees and expenses of such counsel shall be at
the Underwriter's expense), and the Company, its trustees and officers, and
any such controlling person shall have the rights and duties given to the
Underwriter by paragraph (b) above. The foregoing indemnity agreement shall
be in addition to any liability which the Underwriter may otherwise have.
(d) If the indemnification provided for in this Section 6 is unavailable
to an indemnified party under paragraphs (a) or (c) hereof in respect of any
losses, claims, damages, liabilities or expenses referred to therein, then an
indemnifying party, in lieu of indemnifying such indemnified party, shall
contribute to the amount paid or payable by such indemnified party as a
result of such losses, claims, damages, liabilities or expenses (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Company and the Operating Partnership, on the one hand, and the Underwriter,
on the other hand, 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 Company
and the Operating Partnership, on the one hand, and the Underwriter, on the
other, in connection with the statements or omissions that resulted in such
losses, claims, damages, liabilities or expenses, as well as any other
relevant equitable considerations. The relative benefits received by the
Company and the Operating Partnership, on the one hand, and the Underwriter,
on the other, shall be deemed to be in the same proportion as the total net
proceeds from the offering (before deducting expenses) received by the
Company and the Operating Partnership bear to the total underwriting
discounts and commissions received by the Underwriter, in each case as set
forth in the table on the cover page of the Prospectus. The relative fault
of the Company on the one hand and the Underwriter on the other hand shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to
state a material fact relates to information supplied by the Company on the
one hand or by the Underwriter on the other hand and the parties' relative
intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission.
(e) The Company, the Operating Partnership and the Underwriter agree
that it would not be just and equitable if contribution pursuant to this
Section 7 were determined by a pro rata allocation or by any other method of
allocation that does not take account of the equitable considerations
referred to in paragraph (d) above. The amount paid or payable by an
indemnified party as a result of the losses, claims, damages, liabilities and
expenses referred to in paragraph (d) above shall be deemed to include,
subject to the limitations set forth above, any legal or other expenses
reasonably incurred by such indemnified party in connection with
investigating any claim or defending any such action, suit or proceeding.
Notwithstanding the provisions of this Section 7, the Underwriter shall not
be required to contribute any amount in excess of the amount by which the
total price of the Shares underwritten by it exceeds the amount of any
damages which such Underwriter has otherwise been required to pay by reason
of such 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 Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
(f) No indemnifying party shall, without the prior written consent of the
indemnified party, effect any settlement of any pending or threatened action,
suit or proceeding in respect of
16
which any indemnified party is or could have been a party and indemnity could
have been sought hereunder by such indemnified party, unless such settlement
includes an unconditional release of such indemnified party from all
liability on claims that are the subject matter of such action, suit or
proceeding.
(g) Any losses, claims, damages, liabilities or expenses for which an
indemnified party is entitled to indemnification or contribution under this
Section 7 shall be paid by the indemnifying party to the indemnified party as
such losses, claims, damages, liabilities or expenses are incurred. The
indemnity and contribution agreements contained in this Section 7 and the
representations and warranties of the Company and the Operating Partnership
set forth in this Agreement shall remain operative and in full force and
effect, regardless of (i) any investigation made by or on behalf of the
Underwriter or any person controlling the Underwriter, the Company and its
trustees or officers, the Operating Partnership and its officers, or any
person controlling the Company or the Operating Partnership, (ii) acceptance
of any Shares and payment therefor hereunder, and (iii) any termination of
this Agreement. A successor to the Underwriter or any person controlling the
Underwriter, or to the Company and its trustees or officers, the Operating
Partnership and its officers, or any person controlling the Company or the
Operating Partnership, shall be entitled to the benefits of the indemnity,
contribution, and reimbursement agreements contained in this Section 7.
7. Conditions of Underwriter's Obligations. The obligation of the
Underwriter to purchase the Shares hereunder are subject to the following
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 by Rules 424 and 430A under
the Act 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 Company or any Underwriter, threatened by the Commission, and any
request of the Commission for additional information (to be included in the
Registration Statement or the Prospectus or otherwise) shall have been
complied with to your satisfaction.
(b) Subsequent to the effective date of this Agreement, there shall
not have occurred (i) any change, or any development involving a prospective
change, in or affecting the condition (financial or other), business,
prospects, properties, net worth, or results of operations of the Company or
the Subsidiaries not contemplated by the Prospectus, which in your opinion
would materially, adversely affect the market for the Shares, or (ii) any
event or development relating to or involving the Company or any officer or
trustee of the Company or the Operating Partnership which makes any statement
made in the Prospectus untrue or which, in the opinion of the Company and its
counsel or the Underwriter 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 Act or any other law to be stated therein or necessary in
order to make the statements therein, in light of the circumstances in which
they were made, not misleading, if amending or supplementing the
17
Prospectus to reflect such event or development would, in your opinion,
materially, adversely affect the market for the Shares.
(c) You shall have received on the Closing Date, the opinion of
Pepper, Xxxxxxxx & Xxxxxxx LLP, counsel for the Company, the Operating
Partnership and the other Subsidiaries, dated the Closing Date and addressed
to you, in the form set forth on Exhibit 7(c) attached hereto.
In rendering their opinion as aforesaid, such counsel may rely upon
an opinion or opinions, each dated the Closing Date, of other counsel
retained by them or the Company as to laws of any jurisdiction other than the
United States, the State of New York, the Commonwealth of Pennsylvania and
the State of Delaware, provided that (1) each such local counsel is
reasonably acceptable to you, (2) such reliance is expressly authorized by
each opinion so relied upon and a copy of each such opinion is delivered to
you and is, in form and substance, satisfactory to you and your counsel, and
(3) such counsel shall state in their opinion that they believe that they and
the Underwriter are justified in relying thereon.
(d) You shall have received on the Closing Date an opinion of
Xxxxxx Xxxxxxxx LLP, special tax advisor to the Company, satisfactory in form
and substance to you, to the effect that (i) the descriptions of the Federal
income tax conclusions contained in the Prospectus under the caption "Federal
Income Tax Considerations" are correct in all material respects, and the
discussion contained therein fairly summarizes the Federal income tax
considerations that may be material to a holder of the common shares; (ii)
assuming the Company is operated in accordance with the assumptions and
representations of management regarding its activities and intended
activities, the Company will continue to qualify as a REIT under the Code;
and (iii) the Operating Partnership and the Title Holding Partnerships will
be treated for Federal income tax purposes as partnerships and not as
associations taxable as corporations or as publicly-traded partnerships.
(e) You shall have received on the Closing Date an opinion of
Battle Xxxxxx LLP, counsel for the Underwriter, dated the Closing Date and
addressed to you, with respect to the Registration Statement, the Prospectus
and this Agreement and such other related matters as you may request.
(f) You shall have received comfort letters, including, but not
limited to, certain agreed upon procedures, addressed to you and dated the
date hereof and the Closing Date from Xxxxxx Xxxxxxxx LLP and Zelenkofske
Xxxxxxx & Company Ltd., independent public accountants, substantially in the
forms heretofore approved by you. The comfort letters dated the Closing Date
shall include language in scope and substance substantially as set forth on
Exhibit 7(f).
(g) (i) No stop order suspending the effectiveness of the
Registration Statement shall have been issued and no proceedings for that
purpose shall have been taken or, to the knowledge of the Company or the
Underwriter, shall be contemplated by the Commission at or prior to the Closing
Date; (ii) there shall not have been any change in the beneficial interest of
the Company nor any material increase in the short-term or long-term debt of the
Company (other than in the ordinary course of business) from that set forth or
contemplated in the Registration Statement or the Prospectus (or any amendment
or supplement thereto); (iii) there shall not have been, since the respective
dates as of which information is given in the Registration Statement and
18
the Prospectus (or any amendment or supplement thereto), except as may
otherwise be stated in the Registration Statement and Prospectus (or any
amendment or supplement thereto), any material adverse change in the
condition (financial or other), business, prospects, properties, net worth or
results of operations of the Properties or the Company and the Subsidiaries
taken as a whole; (iv) the Company and the Subsidiaries shall not have any
liabilities or obligations, direct or contingent (whether or not in the
ordinary course of business), that are material to the Company and the
Subsidiaries, taken as a whole, other than those reflected in the
Registration Statement or the Prospectus (or any amendment or supplement
thereto); and (v) all the representations and warranties of the Company and
the Operating Partnership contained in this Agreement shall be true and
correct on and as of the date hereof and on and as of the Closing Date as if
made on and as of the Closing Date, and you shall have received a
certificate, dated the Closing Date and signed by the chief executive officer
and the chief financial officer of the Company (or such other officers as are
acceptable to you), to the effect set forth in this Section 7(g) and in
Section 7(h) hereof.
(h) The Company shall not have failed at or prior to the Closing
Date to have performed or complied with any of its agreements herein
contained and required to be performed or complied with by it hereunder at or
prior to the Closing Date.
(i) The Shares shall have been listed or approved for listing upon
notice of issuance on the American Stock Exchange.
(j) The Company and the Operating Partnership shall have furnished
or caused to be furnished to you such further certificates and documents as
you shall have reasonably requested.
All such opinions, certificates, letters and other documents will be in
compliance with the provisions hereof only if they are satisfactory in form
and substance to you and your counsel.
Any certificate or document signed by any officer of the Company and the
Operating Partnership and delivered to you, or to counsel for the
Underwriter, shall be deemed a representation and warranty by the Company or
the Operating Partnership, as applicable, to each Underwriter as to the
statements made therein.
8. Expenses. The Company agrees to pay the following costs and expenses
and all other costs and expenses incident to the performance by it of its
obligations hereunder: (i) the preparation, printing or reproduction, and
filing with the Commission of the Registration Statement (including financial
statements and exhibits thereto), each Prepricing Prospectus, the Prospectus,
and each amendment or supplement to any of them; (ii) the printing (or
reproduction) and delivery (including postage, air freight charges and charges
for counting and packaging) of such copies of the Registration Statement, each
Prepricing Prospectus, the Prospectus, and all amendments or supplements to any
of them as may be reasonably requested for use in connection with the offering
and sale of the Shares; (iii) the preparation, printing, authentication,
issuance and delivery of certificates for the Shares, including any stamp taxes
in connection with the original issuance and sale of the Shares; (iv) if
required, the printing (or reproduction) and delivery of this Agreement, the
preliminary and supplemental Blue Sky Memoranda and all other agreements or
documents printed (or reproduced) and delivered in connection with the offering
of the Shares; (v)
19
the listing of the Shares on the American Stock Exchange; (vi) if required,
the registration or qualification of the Shares for offer and sale under the
securities or Blue Sky laws of the several states as provided in Section 4(g)
hereof (including the reasonable fees, expenses and disbursements of counsel
for the Underwriter relating to the preparation, printing or reproduction,
and delivery of the preliminary and supplemental Blue Sky Memoranda and such
registration and qualification); (vii) if required, the filing fees and the
fees and expenses of counsel for the Underwriter in connection with any
filings required to be made with the National Association of Securities
Dealers, Inc.; (viii) the transportation and other expenses incurred by or on
behalf of Company representatives in connection with presentations to
prospective purchasers of the Shares; and (ix) the fees and expenses of the
Company's accountants and the fees and expenses of counsel (including local
and special counsel) for the Company.
9. Effective Date of Agreement. This Agreement shall become effective:
(i) upon the execution and delivery 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. Until such time as this
Agreement shall have become effective, it may be terminated by the Company,
by notifying you, or by you, by notifying the Company.
10. Default of Underwriter. If the Underwriter shall fail or refuse to
purchase the Shares that it is obligated to purchase hereunder on the Closing
Date, this Agreement will terminate without liability on the part of the
Company. Any action taken under this paragraph shall not relieve the
Underwriter from liability in respect of any such default of the Underwriter
under this Agreement.
Any notice under this Section 10 may be given by telegram, telecopy or
telephone but shall be subsequently confirmed by letter.
11. Termination of Agreement. This Agreement shall be subject to
termination in your absolute discretion, without liability on the part of the
Underwriter to the Company, by notice to the Company, if prior to the Closing
Date or any Option Closing Date (if different from the Closing Date and then
only as to the Additional Shares), as the case may be, (i) trading in
securities generally on the New York Stock Exchange, the American Stock
Exchange or the Nasdaq National Market shall have been suspended or
materially limited, (ii) a general moratorium on commercial banking
activities in New York or Pennsylvania shall have been declared by either
federal or state authorities, or (iii) there shall have occurred any outbreak
or escalation of hostilities or other international or domestic calamity,
crisis or change in political, financial or economic conditions, the effect
of which on the financial markets of the United States is such as to make it,
in your judgment, impracticable or inadvisable (x) to commence or continue
the offering of the units of the Trust to the public, or (y) to enforce
contracts for the sale of the units of the Trust by the Trust. Notice of such
termination may be given to the Company by telegram, telecopy or telephone
and shall be subsequently confirmed by letter.
12. Information Furnished by the Underwriter. The Company and the
Operating Partnership acknowledge and agree that the statements set forth in the
last paragraph on the cover
20
page, the stabilization legend on the inside cover page and the statements in
the first and third paragraphs under the caption "Underwriting" in any
Prepricing Prospectus and in the Prospectus, constitute the only information
furnished by or on behalf of the Underwriter as such information is referred
to in Sections 5(b) and 6 hereof.
13. Miscellaneous. Except as otherwise provided in Sections 5, 10 and
11 hereof, notice given pursuant to any provision of this Agreement shall be
in writing and shall be delivered (i) if to the Company or the Operating
Partnership, at the office of the Company at 00 Xxxxxx Xxxxxxxxx, Xxxxxxx
Xxxxxx, Xxxxxxxxxxxx 00000, Attention: Xxxxxx X. Xxxxxxx, President and
Chief Executive Officer; or (ii) if to you, in care of Xxxxx Xxxxxx Inc., 000
Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Manager, Investment
Banking Division.
This Agreement has been and is made solely for the benefit of the
Underwriter, the Company, its trustees and officers, the Operating
Partnership and the other controlling persons referred to in Section 6 hereof
and their respective successors and assigns, to the extent provided herein,
and no other person shall acquire or have any right under or by virtue of
this Agreement. Neither the term "successor" nor the term "successors and
assigns" as used in this Agreement shall include a purchaser from the
Underwriter of any of the Shares in his status as such purchaser.
14. Applicable Law; Counterparts. This Agreement shall be governed by
and construed in accordance with the laws of the State of New York applicable
to contracts made and to be performed within the State of New York.
This Agreement may be signed in various counterparts which together
constitute one and the same instrument. If signed in counterparts, this
Agreement shall not become effective unless at least one counterpart hereof
shall have been executed and delivered on behalf of each party hereto.
21
Please confirm that the foregoing correctly sets forth the agreement
among the Company, the Operating Partnership and the Underwriter.
Very truly yours,
BRANDYWINE REALTY TRUST
By:/s/ Xxxxxx X. Xxxxxxx
--------------------------------
Xxxxxx X. Xxxxxxx
President and Chief Executive Officer
BRANDYWINE OPERATING PARTNERSHIP, L.P.
By: Brandywine Realty Trust,
its general partner
By:/s/ Xxxxxx X. Xxxxxxx
---------------------------
Xxxxxx X. Xxxxxxx
President and Chief Executive Officer
Confirmed as of the date first
above mentioned.
XXXXX XXXXXX INC.
By:/s/ Xxxxxxx Xxxxxxxx
---------------------------
Name: Xxxxxxx Xxxxxxxx
Title: Director
Schedule 5(d)
Transaction Documents
Identified herein are the documents that constitute the "Transaction
Documents" referenced in this Underwriting Agreement.
1. Agreement of Sale between X'Xxxxx Properties Group, L.P. ("Assignor") and
the Canada Life Assurance Company and the Assignment of Agreement of Sale
with Assignor, relating to 500 and 000 Xxxxxxxx Xxxxxx Xxxxx, Xxxx
Xxxxxxxxxx, XX.
SCHEDULE 5(e)
Subsidiaries of the Company
Brandywine Operating Partnership, a Delaware limited partnership
Fifteen Horsham, L.P., a Pennsylvania limited partnership
C/N Oaklands Limited Partnership I, a Pennsylvania limited partnership
Newtech IV Limited Partnership, a Pennsylvania limited partnership
Newtech III Limited Partnership, a Pennsylvania limited partnership
LC/N Xxxxx Valley Limited Partnership I, a Pennsylvania limited partnership
LC/N Horsham Limited Partnership, a Pennsylvania limited partnership
Xxxxxxx Landsdale Limited Partnership III, a Pennsylvania limited partnership
Xxxxxx Operating Partnership I, L.P., a Delaware limited partnership
C/N Leedom Limited Partnership II, a Pennsylvania limited partnership
C/N Oaklands Limited Partnership III, a Pennsylvania limited partnership
Iron Run Limited Partnership V, a Pennsylvania limited partnership
C/N Iron Run Limited Partnership III, a Pennsylvania limited partnership
Brandywine Realty Partners, a Pennsylvania general partnership
Brandywine Holdings I, Inc., a Pennsylvania corporation
Brandywine Holdings II, Inc., a Pennsylvania corporation
Brandywine Holdings III, Inc., a Pennsylvania corporation
Brandywine Realty Services Corporation, a Pennsylvania corporation
Brandywine Acquisitions, LLC
Brandywine - Main Street, LLC
Brandywine Leasing, LLC
1100 Brandywine, LLC
SCHEDULE 5(g)
Ownership Interests in Subsidiaries
See Attached
SUBSIDIARIES
PARTNERS
PARTNERSHIP SUBSIDIARIES (CAPITAL/PROFITS)
-------------------------------------------------------- --------------------------------------------------------
Brandywine Operating Partnership, a Delaware limited BRT--G.P.--97.888%
partnership BRT--L.P.--.718% (1)
Class A (other than BRT)--L.P.--1.394%
Fifteen Horsham, L.P., a Pennsylvania limited WOP--G.P.--1% (2)
partnership BOP--L.P. 1% (3)
WOP-- L.P.--98%
C/N Oaklands Limited Partnership I, a Pennsylvania WOP--G.P.--88.9% / 98.9%
limited partnership BOP--L.P.--.1% / .1%
TNC--L.P.--11% / 1% (4)
Newtech IV Limited Partnership, a Pennsylvania limited WOP--G.P.--88.9% / 98.9%
partnership BOP--L.P.--.1% / .1%
TNC--L.P.--11% / 1%
Newtech III Limited Partnership, a Pennsylvania limited WOP--G.P.--88.9% / 63.9%
partnership BOP--L.P.--.1% / .1%
TNC--L.P.--11% / 1%
N.E. Leasing--0% / 35% (5)
LC/N Xxxxx Valley Limited Partnership I, a Pennsylvania WOP--G.P.--88.9% / 98.9%
limited partnership BOP--L.P.--.1% / .1%
TNC--L.P.--11% / 1%
LC/N Horsham Limited Partnership, a Pennsylvania limited WOP--G.P.--88.9% / 98.9%
partnership BOP--L.P.--.1% / .1%
TNC--L.P.--11% / 1%
Xxxxxxx Lansdale Limited Partnership III, a Pennsylvania WOP--G.P.--88.9% / 98.9%
limited partnership BOP--L.P.--.1% / .1%
TNC--L.P.--11% / 1%
Xxxxxx Operating Partnership I, L.P., a Delaware limited Brandywine Holdings I, Inc.--G.P.--
partnership 1%/1%
BOP--L.P.--99%/99%
C/N Leedom Limited Partnership II, a Pennsylvania BOP--89% / 99%
limited partnership SSI--L.P.--11% / 1% (6)
C/N Oaklands Limited Partnership III, a Pennsylvania Brandywine Holdings II-G.P.--
limited partnership 2% / 2% (7)
BOP--L.P.--87% / 97%
TNC--L.P.--11% / 1%
Iron Run Limited Partnership V, a Pennsylvania limited Brandywine Holdings III-G.P.--2% / 2%
partnership (7)
BOP--L.P.--87% / 97%
TNC--L.P.--11% / 1%
C/N Iron Run Limited Partnership III, a Pennsylvania BOP--G.P.--2% / 2%
limited partnership BOP--L.P.--87% / 97%
TNC--L.P.--11% / 1%
Brandywine Realty Partners, a Pennsylvania general BOP--G.P.--70% / 98%
partnership Outside partner--30% / 2%
------------------------
1 BRT and Brandywine Holdings I, Inc. (a Pennsylvania corporation and a
wholly-owned subsidiary of BRT) collectively own Class A Units that
constitute the percentage shown above.
2 Brandywine Holdings I, Inc. (a Pennsylvania corp. and a wholly-owned
subsidiary of BRT) is General Partner of WOP with a 1%/1% interest.
3 Brandywine Operating Partnership ("BOP") is a Delaware limited partnership.
4 The Xxxxxxx Company ("TNC") is a Pennsylvania corporation.
5 N. E. Leasing is not an affiliate. N.E. Leasing is entitled to 35% of the
partnership's residual cash flow. "Residual Cash Flow" upon the sale of the
property equals the gross sales price less
26
(i) outstanding indebtedness, (ii) reserves and (iii) repayment of capital
and accrued equity of WOP, BRT Xxxxxx and TNC (estimated to equal
$1,338,468 as of July 1, 1996).
6 Safeguard Scientifics, Inc. ("SSI") is a Pennsylvania corporation.
7 A Pennsylvania corporation and a wholly-owned subsidiary of BRT.
CORPORATE SUBSIDIARIES SHAREHOLDERS
-------------------------------------------------------- --------------------------------------------------------
Brandywine Holdings, I, Inc., a Pennsylvania corporation BRT--100%
Brandywine Holdings II, Inc., a Pennsylvania corporation BRT--100%
Brandywine Holdings III, Inc., a Pennsylvania BRT--100%
corporation
Brandywine Realty Services Corporation, a Pennsylvania BRT--9,473 Preferred Shares 27 Common Shares
corporation BRSP(1)--500 Common Shares
------------------------
1 BRSP is Brandywine Realty Services Partnership.
LIMITED LIABILITY COMPANY SUBSIDIARIES MEMBERS
---------------------------------------------------------------------------------------------------- ------------
Brandywine Acquisitions, LLC ("BA LLC") BOP--100%
Brandywine--Main Street, LLC BOP--99%
BA LLC--1%
1100 Brandywine, LLC BOP--100%
Brandywine Leasing, LLC BOP--100%
27
EXHIBIT 7(c)
Form of Opinion of Pepper, Xxxxxxxx & Xxxxxxx LLP
See Attached
September 16, 1997
XXXXX XXXXXX INC.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re: Brandywine Realty Trust Public Offering of
786,840 Common Shares of Beneficial
Interest, $0.01 par value per share,
pursuant to Registration Statement on
Form S-3 (Registration No. 333-20991)
Ladies and Gentlemen:
We have acted as counsel to Brandywine Realty Trust, a Maryland real
estate investment trust (the "Company"), in connection with the execution and
delivery by the Company of the Underwriting Agreement dated September 11,
1997 (the "Agreement") by and among the Company, Brandywine Operating
Partnership, L.P., a Delaware limited partnership (the "Operating
Partnership"), and Xxxxx Xxxxxx Inc., as underwriter (the "Underwriter"), and
the filing by the Company with the United States Securities and Exchange
Commission pursuant to the Securities Act of 1933, as amended (the "Act"), of
the Company's Registration Statement on Form S-3 (No. 333-20991) (together
with all pre- and post-effective amendments thereto to date, the
"Registration Statement"), relating to the sale by the Company of 786,840
common shares (the "Shares") of beneficial interest, $0.01 par value (the
"Common Shares") of the Company.
This opinion is delivered to you pursuant to Section 7(c) of the
Agreement. Capitalized terms used herein but not otherwise defined herein
have the meanings ascribed to them in the Agreement.
In connection with this opinion, we have examined the Agreement, the
Registration Statement, the Prospectus, originals, or copies reproduced or
certified to our satisfaction, of such trust, corporate, limited liability
and partnership organizational documents, agreements, records and other
documents of the Company and each subsidiary identified on Schedule 5(e) to
XXXXX XXXXXX INC.
Page 2
September 16, 1997
the Agreement (collectively, the "Subsidiaries"), the instruments and
documents delivered at the Closing, and such other documents, records and
instruments as we have deemed necessary to form the basis for the opinions
hereinafter expressed. We have also made such examination of laws, of
certificates of public officials and of certificates of officers of the
Company and the Subsidiaries, and investigations of fact, as we have deemed
necessary to enable us to render this opinion. As to matters of fact
relevant to the opinions herein expressed, we have assumed the accuracy and
completeness of, and have relied solely upon, the representations and
warranties of the Company and the Operating Partnership contained in the
Agreement and in such certificates of officers of the Company or the
Subsidiaries (including, without limitation, the certificate attached hereto
as Exhibit A (the "Officer's Certificate")) and certificates of public
officials.
Where matters are stated to be "to our knowledge" or otherwise known
to us or words of similar import, our knowledge is limited to the actual
knowledge of those attorneys in our office who have directly participated in
the transactions contemplated by the Agreement and the documents listed on
Exhibit B (collectively, the "Transaction Documents"), the review of
documents provided to us by the Company, the Operating Partnership and the
Subsidiaries in connection with such transactions and inquiries of officers
of the Company, the Operating Partnership, and the Subsidiaries, the results
of which are reflected in the Officer's Certificate. We have not
independently verified the accuracy of the matters set forth in the written
statements or certificates upon which we have relied, nor have we undertaken
any lien, intellectual property, suit or judgment searches or searches of
court dockets in any jurisdiction.
We have assumed: (i) the due execution and delivery, pursuant to
due authorization, of the Agreement by the parties thereto other than the
Company and the Operating Partnership, (ii) the genuineness of the signatures
of, and the authority of, persons signing the Agreement on behalf of all
parties thereto other than the Company and the Operating Partnership, (iii)
the genuineness of all signatures and the authenticity and completeness of
all records, certificates, instruments and documents submitted to us as
originals and (iv) the conformity to authentic originals of all records,
certificates, instruments and
XXXXX XXXXXX INC.
Page 3
September 16, 1997
documents submitted to us as certified, conformed, photostatic or facsimile
copies thereof.
No opinion is rendered as to matters not specifically referred to
herein and under no circumstances are you to infer from anything stated or
not stated herein any opinion with respect to which such reference is not
made.
We have further assumed that the consideration required to be paid
for the issuance of the Shares and the outstanding Common Shares pursuant to
resolutions of the Board of Trustees of the Company authorizing the issuance
of those securities has in fact been paid to and received by the Company.
Statements in this opinion as to the legality, validity, binding
effect or enforceability of agreements, instruments and documents are subject
(i) to limitations as to enforceability imposed by bankruptcy,
reorganization, moratorium, fraudulent conveyance, insolvency and other
similar laws and related court decisions of general application relating to
or affecting creditors' rights generally, (ii) to equitable principles
limiting the availability of equitable remedies, and (iii) as to rights to
indemnity and contribution, to limitations that may exist under federal and
state laws or the public policy underlying such laws.
Insofar as, and to the extent, this opinion relates to matters
governed by the laws of the State of Maryland in paragraphs 1, 3, 4, 8, 9,
10, 11 and 16 below, we have relied solely upon, and such opinions are
subject to the limitations and assumptions contained in, the opinion of
Xxxxxxx Xxxxx Xxxxxxx & Ingersoll addressed to you, dated the date hereof, a
copy of which is attached hereto as Exhibit C and is being delivered to you
contemporaneously with this opinion. We believe that both we and you are
justified in relying upon such opinion.
Except as indicated above with respect to Maryland law, this opinion
is limited solely to matters governed by the laws of the Commonwealth of
Pennsylvania, the Delaware General Corporation Law, the Delaware Revised
Uniform Limited Partnership Act and the federal laws of the United States,
without regard to conflict or choice of law principles, and the references
herein to laws, statutes and regulations shall be interpreted consistent
XXXXX XXXXXX INC.
Page 4
September 16, 1997
with such limitation. In rendering our opinion as to the enforceability of
the Agreement in paragraph 8, we have assumed that New York law is the same
as the Delaware General Corporation Law.
Based upon and subject to the foregoing and the qualifications and
limitations set forth below, we are of the opinion that:
1. The Company is a real estate investment trust duly formed and
existing under and by virtue of the laws of the State of Maryland and is in
good standing with the State Department of Assessments and Taxation of Maryland.
The Company has the full trust power and authority to own, lease and operate
its properties and to conduct its business substantially as described in the
Registration Statement and the Prospectus and is duly registered and
qualified to conduct its business and is in good standing in each
jurisdiction or place where the nature of its properties or the conduct of
its business as described in the Registration Statement and the Prospectus
requires such registration or qualification, except where the failure to so
qualify would not have a material adverse effect on the condition (financial
or otherwise), business, prospects, properties, net worth or results of
operations of the Company.
2. Each of the Subsidiaries is a corporation, limited liability
company, limited partnership or general partnership presently subsisting or in
good standing, as the case may be, under the laws of its jurisdiction of
incorporation or formation, with full corporate, limited liability company or
partnership power and authority, as the case may be, to own, lease, and
operate its properties and to conduct its business as described in the
Registration Statement and the Prospectus, and is duly registered and
qualified to conduct its business in each jurisdiction or place where the
nature of its properties or the conduct of its business as described in the
Registration Statement and the Prospectus requires such registration or
qualification, except where the failure to so qualify would not have a
material adverse effect on the condition (financial or otherwise), business,
prospects, properties, net worth or results of operations of such Subsidiary.
XXXXX XXXXXX INC.
Page 5
September 16, 1997
3. The authorized beneficial interest of the Company (including, but
not limited to, any options, warrants or other securities convertible into or
exchangeable shares of beneficial interest of the Company) conforms in all
material respects to the description thereof in the Registration Statement
and the Prospectus and in Exhibit D hereto. All the outstanding shares of
beneficial interest of the Company outstanding prior to the issuance of the
Shares have been duly authorized and validly issued, are fully-paid and
nonassessable, and are free of any preemptive or similar statutory rights
under Maryland law.
4. The Shares have been duly authorized and, when issued and
delivered to the Underwriter against payment therefor in accordance with the
terms of the Agreement, will be validly issued, fully-paid and nonassessable
and free of any preemptive or similar statutory rights under Maryland law.
5. To our knowledge, except as set forth on Exhibit D hereto, there
are no outstanding options, warrants or other written rights calling for the
issuance of, or any written commitment, plan or arrangement to issue, any
shares of beneficial interest of the Company or any security convertible into
or exchangeable or exercisable for shares of beneficial interest of the
Company. To our knowledge, there is no holder of any security of the Company
or any other person who has the right, contractual or otherwise, to cause the
Company to sell or otherwise issue to him, or to permit him to underwrite the
sale of, the Shares or the right to have any Common Shares or other
securities of the Company included in the Registration Statement or the
right, as a result of the filing of the Registration Statement or sale of the
Shares as provided in the Agreement, to require registration under the Act of
any Common Shares or other securities of the Company.
6. All of the outstanding units of limited and general partnership
interests of the Operating Partnership (the "Units"), and the partnership
interests in each of the other Subsidiaries that is a partnership, were
created under the agreements forming the Operating Partnership and such other
Subsidiaries, as the case may be, and all of the issued and outstanding
shares of capital stock of each of the Subsidiaries that is a corporation
have been duly authorized and validly issued, and are fully paid and
nonassessable. To our knowledge,
XXXXX XXXXXX INC.
Page 6
September 16, 1997
except as described in the Registration Statement and the Prospectus (or any
amendment or supplement thereto) or Exhibit E attached hereto, all such
Units, partnership interests and shares of capital stock are owned by the
Company directly, or indirectly through one of the Subsidiaries, free and
clear of any security interest, lien, adverse claim, equity or other
encumbrance, and, to our knowledge, the Company's ownership interest in the
Operating Partnership, and the Company's and the Operating Partnership's
respective ownership interest in each of the Subsidiaries, is as set forth on
Exhibit E attached hereto (without giving effect to the issuance of the
Shares). To our knowledge, except as described in Exhibit D or the
Registration Statement and the Prospectus (or any amendment or supplement
thereto), there are no outstanding options, warrants or other written rights
calling for the issuance of, or any written commitment, plan or arrangement
to issue, any equity interests in any Subsidiary, or any security convertible
into or exchangeable or exercisable for any such interests in any such
Subsidiary. The terms of the Units conform in all material respects to
statements and descriptions thereof contained in the Prospectus dated
November 25, 1996 and incorporated by reference in the Registration Statement
(other than in respect of the number of outstanding GP Units and Class A
Units and the ownership thereof). The Company is the sole general partner of
the Operating Partnership.
7. All offers and sales of Units by the Operating Partnership and
the offers and sales by the Company of Common Shares, in each case prior to the
date of the Prospectus, have been duly registered under the Act, or were
issued in transactions exempt from the registration requirements of the Act.
8. The Company has the full trust power and authority, and the
Operating Partnership has the requisite partnership power and authority, to
enter into the Agreement and each Transaction Document to which it is a party
and, in the case of the Company, to issue, sell and deliver the Shares to the
Underwriter as provided in the Agreement, and each of the Agreement and each
Transaction Document has been duly and validly authorized, executed and
delivered by the Company and the Operating Partnership, as applicable, and is
the legal, valid and binding agreement of each of the Company and the
Operating
XXXXX XXXXXX INC.
Page 7
September 16, 1997
Partnership, as applicable, enforceable against them in accordance with its
terms.
9. The form of certificate representing the Common Shares is in due
and proper form and complies with all applicable Maryland statutory
requirements.
10. To our knowledge, neither the Company nor any of the Subsidiaries
is in violation of its respective Declaration of Trust, certificate or articles
of incorporation or bylaws, partnership agreement or other organizational
documents or is in default in the performance of any material obligation,
agreement or condition contained in any bond, debenture, note or other
evidence of indebtedness.
11. With respect to the Company and the Subsidiaries, neither the
offer, sale or delivery of the Shares, the execution, delivery or performance
of the Agreement, nor the consummation of the transactions contemplated thereby
by the Company or the Subsidiaries, as applicable: (i) required or requires,
with respect to the Company or the Subsidiaries, any 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, or the American Stock Exchange (except (a) such as has been made or
obtained, (b) clearance by the National Association of Securities Dealers,
Inc. in connection with the purchase and sale of the Shares by the
Underwriter (as to which we express no opinion) and (c) as to state
securities or Blue Sky laws, as to which we express no opinion); (ii)
conflicted with, or conflicts with or constituted or constitutes a breach of,
or a default under, the Declaration of Trust, Articles Supplementary,
certificate or articles of incorporation or bylaws, partnership agreement or
other organizational documents, of any of such entities, or under any
material agreement or instrument known to us at the time the Registration
Statement was declared effective, which in each case has been filed as an
exhibit to the Registration Statement to which any of such entities is a
party or by which any of them or any of their respective properties or assets
are bound; (iii) violated or violates any statute, law, regulation or, to our
knowledge, ruling, judgment, injunction, order or decree applicable to any of
such entities or any of their respective properties or assets; or (iv) to our
knowledge, resulted or xxxx
XXXXX BARNEY INC.
Page 8
September 16, 1997
result in the creation or imposition of any material lien, charge or
encumbrance upon the property or assets of any of such entities pursuant to
the terms of any agreement or instrument to which any of them is a party or
by which any of them may be bound or to which any of the property or assets
of any of them is subject.
12. Neither the Company nor any of the Subsidiaries is required to be
registered under the Investment Company Act of 1940, as amended.
13. To our knowledge, (i) there are no proceedings pending or
threatened against the Company or any of the Subsidiaries or any of their
respective trustees, directors or officers in their capacity as such, or to
which the Company or any of the Subsidiaries or any of their respective
trustees, directors or officers in their capacity as such, or any of their
respective properties or assets, is subject, that are of a character which is
required to be described in the Registration Statement or Prospectus (or any
amendment or supplement thereto) and (ii) there are no agreements, contracts,
indentures, leases or other instruments, that are required to be described in
the Registration Statement or the Prospectus (or any amendment or supplement
thereto) or to be filed as an exhibit to the Registration Statement that are
not described or filed as required by the Act.
14. To our knowledge and assuming the application of the net proceeds
of the Offering in a manner consistent with the statements in the Prospectus
under the heading "Use of Proceeds," and except as described in or
contemplated by the Prospectus, none of the Subsidiaries is contractually
prohibited, directly or indirectly, from paying any dividends or
distributions to the Company, from making any other distribution on such
Subsidiary's capital stock or other equity interests, from repaying to the
Company any loans or advances to such Subsidiary from the Company or, subject
to transfer restrictions contained in the loan documents relating to the
Credit Facility and additional secured indebtedness identified in the
Prospectus dated July 22, 1997 relating to an offering of Common Shares by
the Company, from transferring any of such Subsidiary's property or assets to
the Company or any of the other Subsidiaries.
XXXXX XXXXXX INC.
Page 9
September 16, 1997
15. The Registration Statement and the Prospectus and any supplements
or amendments thereto (except for the financial statements and the notes
thereto and the schedules and other financial, accounting and statistical data
included therein or excluded therefrom, as to which we do not express any
opinion) comply as to form in all material respects with the requirements of
the Act, except that we express no opinion, view or belief as to the exhibits
(or form thereof) to the Registration Statement, or to the accuracy,
completeness or fairness of the statements contained in the Registration
Statement except as and to the extent expressly set forth in paragraph 16
hereof.
16. The statements in the Registration Statement and Prospectus set
forth under the headings "Prospectus Supplement Summary - The Company," "The
Company," "Recent Developments," "Description of Shares of Beneficial
Interest" and "Certain Provisions of Maryland Law and of the Company's
Declaration of Trust and Bylaws" in the Prospectus, to the extent they
constitute matters of law or descriptions or summaries of contracts,
agreements or other legal documents, or refer to or constitute statements of
matters of law, descriptions of statutes, rules or regulations, or legal
conclusions, each, respectively, fairly presents in all material respects the
information disclosed therein. The descriptions of agreements that are
summarized in the Prospectus dated November 25, 1996 and incorporated by
reference in the Registration Statement under the headings "Operating
Partnership Agreement" and "BRP General Partnership Agreement" (other than in
respect of the number of outstanding GP Units and Class A Units and the
ownership thereof) conform in all material respects to the provisions of such
agreements and each such description, respectively, fairly presents in all
material respects the information contained therein and required to be
therein disclosed.
We have been advised by the staff of the Commission that the
Registration Statement and all post-effective amendments, if any, have become
effective under the Act as of February 14, 1997 and, to our knowledge after
reasonable inquiry, no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for that purpose
are pending before or contemplated by the Commission, and any required filing
of the Prospectus has been made.
XXXXX XXXXXX INC.
Page 10
September 16, 1997
We have been advised by the American Stock Exchange, Inc. that the
Shares are duly authorized for listing, subject to official notice of
issuance.
In addition, we hereby advise you that we have participated in
conferences with officers and other representatives of the Company, the
Operating Partnership and the other Subsidiaries, representatives of the
Company's independent public accountants and you and your counsel in
connection with the preparation of the Registration Statement at which the
contents of the Registration Statement, the Prospectus therein, and related
matters were reviewed and discussed and, although we have not verified
independently and, therefore, do not assume any responsibility, explicitly or
implicitly, for the accuracy, completeness or fairness of the statements
contained in the Registration Statement or the Prospectus (except as and to
the extent expressly set forth in paragraph 16), on the basis of the
foregoing, nothing has come to our attention that has caused us to believe
that the Registration Statement, at the time the Registration Statement
became effective, 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 not misleading or that the Prospectus (or an amendment
or supplement thereto), as of their respective dates and as of the date
hereof, contained any untrue statement of a material fact or omitted to state
a material fact necessary to make the statements therein, in light of the
circumstances in which they were made, not misleading (it being understood
that no opinion, view or belief is hereby expressed with respect to the
financial statements and the notes thereto and the schedules and other
financial, accounting and statistical data included in or excluded from the
Registration Statement or the Prospectus or as to the exhibits (or the form
thereof) to the Registration Statement).
The opinions expressed in paragraph numbers (1) through (16) above
are subject in all respects to the following additional qualifications:
1. We have assumed that the parties to the Agreement and the
Transaction Documents, other than the Company and the Operating Partnership,
have complied and will continue to comply with all requirements of good
faith, fair dealing and
XXXXX XXXXXX INC.
Page 11
September 16, 1997
conscionability, and have acted and will continue to act in a commercially
reasonable manner, and that there has not been any mutual mistake of fact or
misunderstanding, fraud, duress or undue influence between the parties to the
Agreement or the Transaction Documents.
2. No opinion is given as to the right to exercise remedies upon
the happening of a non-material breach of the Agreement or any of the
Transaction Documents (including material breaches of non-material
provisions).
3. We express no opinion as to the effect of other agreements or
understandings among the parties, written or oral, which are not known to us,
or any usage of trade or course of prior dealing among the parties or
whether, in either case, any of the foregoing would define, supplement or
qualify the terms of the Agreement or any of the Transaction Documents.
4. No opinion is given as to any provision in the Agreement or any
of the Transaction Documents that purports to:
a. Require the payment or reimbursement of any fee, cost,
expense or other item that is unreasonable in nature or amount;
b. Preclude modification of the Agreement or any of the
Transaction Documents through conduct, custom or course of performance,
action or dealing; or
c. Define, waive or set standards for good faith,
reasonableness, commercial reasonableness, fair dealing, diligence or the
like.
This opinion is rendered only to the addressees set forth above and
is solely for the benefit of such addressees and may not be quoted to or
relied upon by any other person or entity
XXXXX XXXXXX INC.
Page 12
September 16, 1997
without the express written prior consent of a partner of this firm.
Very truly yours,
PEPPER, XXXXXXXX & XXXXXXX LLP
By:_______________________
A Partner
Exhibit A
BRANDYWINE REALTY TRUST
OFFICER'S CERTIFICATE
The undersigned, Xxxxxxx X. Xxxxxxx, Xx., Xxxxxx X. Xxxxxxx and Xxxx
X. Xxxxxx, do hereby certify that they are officers of Brandywine Realty
Trust, a Maryland real estate investment trust (the "Company"), and, as such,
are duly authorized to execute this Certificate individually and on behalf of
the Company.
This Certificate is intended for the use and reliance by Xxxxxx
Xxxxxxxx & Xxxxxxx LLP, counsel to the Company, in connection with the
preparation of their opinion (the "Opinion") being delivered pursuant to the
Underwriting Agreement dated September 11, 1997 by and among the Company,
Brandywine Operating Partnership, L.P. and Xxxxx Xxxxxx Inc., as underwriter
(the "Agreement"). All capitalized terms used herein but not otherwise
defined have the meanings ascribed to them in the Agreement.
Each of the undersigned hereby certifies after reasonable inquiry
that:
1. Except as described in the Prospectus, there are no outstanding
options, warrants or other rights calling for the issuance of, and there is
no commitment, plan or arrangement to issue, any shares of beneficial
interest of the Company or any security convertible into or exchangeable or
exercisable for shares of beneficial interest of the Company. Except as
described in the Prospectus, there is no holder of any security of the
Company or any other person who has the right, contractual or otherwise, to
cause the Company to sell or otherwise issue to them, or to permit them to
underwrite the sale of, the Shares or the right to have any Common Shares or
other securities of the Company included in the Registration Statement or the
right, as a result of the filing of the Registration Statement or sale of the
Shares as contemplated by the Agreement, to require registration under the
Act of any Common Shares or other securities of the Company.
2. The Company has received the consideration required to be paid
to it for the issuance of the Shares and all other outstanding shares of
beneficial interest of the Company.
A-1
3. The Company's ownership interest in the Operating Partnership
and the Company's and the Operating Partnership's respective percentage
interest and ownership in each of the Subsidiaries is as set forth on Exhibit
E to the Opinion. Except as described in the Registration Statement and the
Prospectus (or any amendment or supplement thereto), there are no outstanding
options, warrants or other rights calling for the issuance of, or any
commitment, plan or arrangement to issue, any equity interests in any
Subsidiary, or any security convertible into, or exchangeable or exercisable
for, any such interests in any such Subsidiary. The Company is the sole
general partner of the Operating Partnership.
4. Each of the Company and each of the Subsidiaries has all
necessary governmental authorizations, approvals, orders, licenses,
certificates, franchises and permits of and from all governmental regulatory
officials and bodies (except where the failure so to have any such
authorizations, approvals, orders, licenses, certificates, franchises or
permits, individually or in the aggregate, would not have a material adverse
effect on the condition, financial or otherwise, business, properties, net
worth or results of operations of the Company or such Subsidiary,
respectively) to own their respective properties and to conduct their
respective businesses as now being conducted and proposed to be conducted.
5. Neither the Company nor any of the Subsidiaries is in violation
of its respective Declaration of Trust, certificate or articles of
incorporation or bylaws, partnership agreement or other organizational
documents, or, to the best of the undersigned's knowledge, is in default in
the performance of any obligation, agreement or condition contained in any
bond, debenture, note or other evidence of indebtedness.
6. With respect to the Company and the Subsidiaries, neither the
issuance and offer, sale or delivery of the Shares, the execution, delivery
or performance of the Agreement nor the consummation of the transactions
contemplated thereby by the Company or the Subsidiaries, as applicable, (i)
conflicted with, conflicts or will conflict with or constituted, constitutes
or will constitute a breach of, or a default under the partnership agreement
or other organizational documents, of any of such entities, or under any
agreement, indenture, lease or other instrument to which any of such entities
is a party or by which any of them or any of their respective properties may
be bound, or (ii) resulted or will result in the creation or imposition of
any lien, charge or encumbrance upon any property or assets of any of such
entities pursuant to the terms of any agreement or instrument to which any of
them is a party or by which any of
A-2
them may be bound or to which any of the property or assets of any of them is
subject.
7. To the best of the undersigned's knowledge, neither the Company
nor any Subsidiary is in violation of any law, ordinance, administrative or
governmental rule or regulation applicable to the Company or any of the
Subsidiaries or of any decree of any court or governmental agency or body
having jurisdiction over the Company or any of the Subsidiaries.
8. None of the Subsidiaries is currently contractually prohibited,
directly or indirectly, from paying any dividends to the Company, from making
any other distribution on such Subsidiary's capital stock or other equity
interests, from repaying to the Company any loans or advances to such
Subsidiary from the Company or from transferring any of such Subsidiary's
property or assets to the Company or any of the other Subsidiaries, except as
described in or contemplated by the Prospectus.
In addition, the undersigned has participated in conferences in
connection with the preparation of the Registration Statement at which the
contents of the Registration Statement, and the Prospectus therein, and
related matters were reviewed and discussed and nothing has come to the
undersigned's attention that has caused the undersigned to believe that the
Registration Statement, at the time the Registration Statement became
effective, 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 not misleading or that Prospectus or any amendment or
supplement thereto, as of their respective dates, and as of the date hereof,
as the case may be, contained any untrue statement of a material fact or
omitted to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading.
A-3
IN WITNESS WHEREOF, the undersigned has appropriately executed this
Certificate this 16th day of September, 1997.
/s/ Xxxxxxx X. Xxxxxxx, Xx.
------------------------------
Xxxxxxx X. Xxxxxxx, Xx.
Chairman of the Board
/s/ Xxxxxx X. Xxxxxxx
------------------------------
Xxxxxx X. Xxxxxxx
President and Chief Executive Officer
/s/ Xxxx X. Xxxxxx
------------------------------
Xxxx X. Xxxxxx
Chief Financial Officer and Secretary
A-4
Exhibit B
Transaction Documents
Identified herein are the documents that constitute the "Transaction
Documents" referenced in the opinion of which this Exhibit forms a part.
1. Agreement of Sale between X'Xxxxx Properties Group, L.P. ("Assignor") and
the Canada Life Assurance Company and the Assignment of Agreement of Sale
with Assignor, relating to 500 and 000 Xxxxxxxx Xxxxxx Xxxxx, Xxxx
Xxxxxxxxxx, XX.
B-1
Exhibit D
List of Options, Warrants
and Other Convertible Securities
WARRANTS
Name of Holder Number of Underlying
Common Shares
Safeguard Scientifics (Delaware), Inc. 241,560
Xxxxxxx X. Xxxxxxx, Xx. and 16,773
Xxxxxxx Xxxxxxx
Xxxxxxx X. Xxxxxxx, Xx. 40,000
Xxxx X. Xxxxxxxxx 40,000
Xxxxx X. Xxxxxxx 40,000
Xxxxxx X. Xxxxxxx 100,000
Xxxx Xxxxxxx 10,000
Xxxxxxx X. Xxxxxxx, Xx. 5,000
Xxxx Xxxxx 5,000
Xxxxxx Xxxxxx 3,333
Turkey Vulture Fund XIII, Ltd. 80,439
RAI Real Estate Advisors, Inc. 133,333
-------
Total 715,438
-------
-------
OPTIONS
Xxxxxx X. Xxxxxxx 46,666
------
------
Total 46,666
UNITS
The Xxxxxxx Company 2,742
Safeguard Scientifics(Delaware), Inc. 252,387
Additional Limited Partners 17,999
Units reserved for 89/11 arrangement 44,322
-------
Total 317,450
-------
-------
D-2
OTHER
As discussed on page 6 of the Company's Proxy Statement
dated April 7, 1997, one-half of the $10,000 annual trustee
fee is payable in Common Shares
D-3
Exhibit E
SUBSIDIARIES
PARTNERS
PARTNERSHIP SUBSIDIARIES (Capital/Profits)
Brandywine Operating Partnership, a BRT -- G.P. - 97.888%
Delaware limited partnership BRT -- L.P. - .718% (1)
Class A (other than BRT) -
L.P. - 1.394%
Fifteen Horsham, L.P., a Pennsylvania WOP -- G.P. - 1% (2)
limited partnership BOP -- L.P. 1% (3)
WOP -- L.P. - 98%
C/N Oaklands Limited Partnership I, a WOP -- G.P. - 88.9% / 98.9%
Pennsylvania limited partnership BOP -- L.P. - .1% / .1%
TNC -- L.P. - 11% / 1% (4)
Newtech IV Limited Partnership, a WOP -- G.P. - 88.9% / 98.9%
Pennsylvania limited partnership BOP -- L.P. - .1% / .1%
TNC -- L.P. - 11% / 1%
Newtech III Limited Partnership, a WOP -- G.P. - 88.9% / 63.9%
Pennsylvania limited partnership BOP -- L.P. - .1% / .1%
TNC -- L.P. - 11% / 1%
N.E. Leasing -- 0% / 35% (5)
LC/N Xxxxx Valley Limited Partnership I, a WOP -- G.P. - 88.9% / 98.9%
Pennsylvania limited partnership BOP -- L.P. - .1% / .1%
TNC -- L.P. - 11% / 1%
LC/N Horsham Limited Partnership, a WOP -- G.P. - 88.9% / 98.9%
Pennsylvania limited partnership BOP -- L.P. - .1% / .1%
TNC -- L.P. - 11% / 1%
Xxxxxxx Lansdale Limited Partnership III, WOP -- G.P. - 88.9% / 98.9%
a Pennsylvania limited partnership BOP -- L.P. - .1% / .1%
TNC -- L.P. - 11% / 1%
Xxxxxx Operating Partnership I, L.P., a Brandywine Holdings I, Inc.
-- G.P. - 1%/1%
Delaware limited partnership BOP -- L.P. - 99%/99%
C/N Xxxxxx Limited Partnership II, a BOP -- 89% / 99%
Pennsylvania limited partnership SSI -- L.P. - 11% / 1% (6)
C/N Oaklands Limited Partnership III, a Brandywine Holdings II-G.P. --
Pennsylvania limited partnership 2% / 2% (7)
BOP -- L.P. - 87% / 97%
TNC -- L.P. - 11% / 1%
Iron Run Limited Partnership V, a Brandywine Holdings III-G.P. --
Pennsylvania limited partnership 2% / 2% (7)
BOP -- L.P. - 87% / 97%
TNC -- L.P. - 11% / 1%
C/N Iron Run Limited Partnership III, a BOP -- G.P. - 2% / 2%
Pennsylvania limited partnership BOP -- L.P. - 87% / 97%
TNC -- L.P. - 11% / 1%
Brandywine Realty Partners, a Pennsylvania BOP -- G.P. - 70% / 98%
general partnership Outside partner -- 30% / 2%
1. BRT and Brandywine Holdings I, Inc. (a Pennsylvania corporation and a
wholly-owned subsidiary of BRT) collectively own Class A Units that
constitute the percentage shown above.
2. Brandywine Holdings I, Inc. (a Pennsylvania corp. and a wholly-owned
subsidiary of BRT) is General Partner of WOP with a 1%/1% interest.
3. Brandywine Operating Partnership ("BOP") is a Delaware limited
partnership.
4. The Xxxxxxx Company ("TNC") is a Pennsylvania corporation.
E-1
5. N. E. Leasing is not an affiliate. N.E. Leasing is entitled to 35%
of the partnership's residual cash flow. "Residual Cash Flow" upon
the sale of the property equals the gross sales price less
(i) outstanding indebtedness, (ii) reserves and (iii) repayment of
capital and accrued equity of WOP, BRT Xxxxxx and TNC (estimated to
equal $1,338,468 as of July 1, 1996).
6. Safeguard Scientifics, Inc. ("SSI") is a Pennsylvania corporation.
7. A Pennsylvania corporation and a wholly-owned subsidiary of BRT.
CORPORATE SUBSIDIARIES SHAREHOLDERS
Brandywine Holdings, I, Inc., a BRT -- 100%
Pennsylvania corporation
Brandywine Holdings II, Inc., a BRT -- 100%
Pennsylvania corporation
Brandywine Holdings III, Inc., a BRT -- 100%
Pennsylvania corporation
Brandywine Realty Services BRT -- 9,473 Preferred Shares
Corporation, a Pennsylvania 27 Common Shares
corporation BRSP(1) -- 500 Common Shares
1. BRSP is Brandywine Realty Services Partnership.
LIMITED LIABILITY COMPANY SUBSIDIARIES MEMBERS
Brandywine Acquisitions, LLC ("BA BOP -- 100%
LLC")
Brandywine - Main Street, LLC BOP -- 99%
BA LLC -- 1%
1100 Brandywine, LLC BOP -- 100%
Brandywine Leasing, LLC BOP -- 100%
E-2
EXHIBIT 7(f)
Form of Comfort Letter (excerpt)
See Attached
EXHIBIT 7(f)
Additional Text of Closing Date Comfort Letter
d. With respect to the three-month periods ended December 31, 1995 and
1996, we have:
(i) Read the unaudited results of operations -- operating data for
the three-month periods ended December 31, 1995 and 1996, as
set forth on Page S-4 of the Prospectus Supplement dated
February 26, 1997.
(ii) Performed the procedures specified by the American Institute of
Certified Public Accountants for a review of interim financial
information as described in SAS No. 71, Interim Financial
Information, on the attached unaudited consolidated balance
sheets as of December 31, 1995 and 1996 and the unaudited
condensed consolidated statements of operations, beneficiaries'
equity and cash flows for the three-month periods ended
December 31, 1995 and 1996 from which the unaudited amounts
referred to in 7d(i) are derived.
(iii) Inquired of certain officials of the Company who have
responsibility for financial and accounting matters whether
(a) the unaudited results of operations -- operating data
referred to in 7d(i) and the unaudited consolidated
financial statements referred to in 7d(ii) are stated on a
basis substantially consistent with that of the
corresponding amounts in the audited consolidated financial
statements of the Company incorporated by reference in the
Registration Statement and (b) the unaudited results of
operations -- operating data and the unaudited financial
statements referred to in 7d(i) and 7d(ii), respectively,
comply as to form in all material respects with the
applicable accounting requirements of the Act, the Exchange
Act, and the related published rules and regulations.
The foregoing procedures do not constitute an audit conducted in accordance
with generally accepted auditing standards. Also, they would not
necessarily reveal matters of significance with respect to the comments in
the following paragraph. Accordingly, we make no representations regarding
the sufficiency of the foregoing procedures for your purposes.
8. Nothing came to our attention as a result of the foregoing procedures,
however, that caused us to believe that:
(i) Any material modifications should be made to the
unaudited results of operations -- operating data or the
unaudited financial statements described in 7d(i) and
7d(ii), respectively, for them to be in conformity with
generally accepted accounting principles.
(ii) The unaudited results of operations -- operating data
or the unaudited financial statements described in 7d(i)
and 7d(ii), respectively, do not comply as to form in
all material respects with the applicable accounting
requirements of the Act, the Exchange Act, and the
related published rules and regulations.
(iii) At December 31, 1996, there was any change in the
capital stock, increase in long-term debt, or decrease
in consolidated net assets or beneficiaries' equity of
the Company as compared with amounts shown in the
September 30, 1996, unaudited balance sheet
incorporated by reference in the Registration
Statement, or for the period from October 1, 1996 to
December 31, 1996, there were any decreases, as
compared to the corresponding period in the preceding
year, in revenues or in the total or per-share amounts
of income before extraordinary items or of net income,
except in all instances for changes, increases or
decreases that the Registration Statement discloses
have occurred or may occur.
9. Company officials have advised us that no consolidated financial statements
of the Company as of any date or for any period subsequent to December 31,
1996, are available; accordingly, the procedures carried out by us with
respect to changes in financial statement items after December 31, 1996,
have been, of necessity, even more limited than those with respect to the
periods referred to in 7d. We have inquired of certain officials of the
Company who have responsibility for financial and accounting matters
whether (a) at February 21, 1997, there was any change in the capital
stock, increase in long-term debt or any decreases in consolidated total
assets or beneficiaries' equity of the Company as compared with amounts
shown on the December 31, 1996 unaudited consolidated balance sheet
attached to this letter, or (b) for the period from January 1, 1997, to
February 21, 1997, there were any decreases, as compared with the
corresponding period in the preceding year, in revenue or in the total or
per share amounts of income before extraordinary items or of net income.
On the basis of these inquiries and our reading of the minutes, nothing
came to our attention that caused us to believe that there was any such
change, increase, or decrease, except in all instances for changes,
increases, or decreases that the Registration Statement discloses have
occurred or may occur and except (i) for the increase in long-term debt to
$53,530,000 (as a result of the assumption of debt in connection with the
acquisition of the Columbia Properties) as of February 21, 1997 and
(ii) that officials of the Company have informed us that they are unable to
determine whether there were any decreases in the total or per share
amounts of income before extraordinary items or of net income for the
period from January 1, 1997 through February 21, 1997, inclusive, and the
corresponding period in the preceding year, because no complete
consolidated financial statements as of any date or for any period
subsequent to December 31, 1996 are available.
