<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
__________
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): December 18, 1997
BRANDYWINE REALTY TRUST
-----------------------
(Exact name of registrant as specified in its charter)
Maryland 1-9106 23-2413352
(State or Other Jurisdiction (Commission (I.R.S. Employer
of Incorporation) File Number) Identification No.)
16 Campus Boulevard, Newtown Square, Pennsylvania 19073
(Address of principal executive offices)
(610) 325-5600
(Registrant's telephone number, including area code)
Page 1 of 3
<PAGE>
Item 5. Other Events.
Public Offering
On December 18, 1997, Brandywine Realty Trust (the "Company") and
Brandywine Operating Partnership, L.P. entered into an Underwriting Agreement
(the "Underwriting Agreement") with Legg Mason Wood Walker, Incorporated (the
"Underwriter") pursuant to which the Company agreed to sell to the
Underwriter an aggregate of 751,269 common shares of beneficial interest,
$.01 par value per share (the "Common Shares"). The Common Shares are to be
sold pursuant to the Underwriting Agreement at a price to the public of
$24.625 per share ($23.5169 per share after reduction for underwriting
discounts and commissions). The Underwriter intends to deposit the Common
Shares with the trustee of Legg Mason REIT Trust December 1997 Series (the
"Trust"), a registered unit investment trust under the Investment Company Act
of 1940, as amended, in exchange for units of the Trust.
The Underwriter is acting as sponsor and depositor of the Trust, and is
therefor considered an affiliate of the Trust. Walter D'Alessio, a member of
the Company's Board of Trustees, is President of Legg Mason Real Estate
Services, Inc., a subsidiary of Legg Mason Inc., the parent of the
Underwriter. In addition, the Underwriter has engaged, and may in the future
engage, in investment banking activities on behalf of the Company and its
affiliates for which customary compensation will be received.
The net proceeds, less expenses estimated at $75,000, will be
contributed by the Company to the Operating partnership, which will use such
contribution to make additional acquisitions of office or industrial
properties and for working capital purposes. Closing of the offering of
Common Shares pursuant to the Underwriting Agreement is subject to customary
closing conditions.
Property Acquisition
As previously reported in a Current Report on Form 8-K filed with the
Securities and Exchange Commission on December 17, 1997, the Company acquired
an office property in Valley Forge, PA (the "PECO Building") from PECO Energy
for a purchase price of $9.5 million. Mr. D'Alessio, a member of the
Company's Board of Trustees, is a director of PECO Energy. A committee of the
Board of Trustees, of which Mr. D'Alessio is not a participant, made the
decision to purchase the PECO Building and negotiated the terms of the
transaction.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(c) Exhibits.
---------
1.1 Underwriting Agreement among the Company, Brandywine Operating
Partnership, L.P. and Legg Mason Wood Walker, Incorporated
23.1 Consent of Arthur Andersen LLP.
23.2 Consent of Zelenkofske Axelrod & Co., Ltd.
Page 2 of 3
<PAGE>
Signature
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
BRANDYWINE REALTY TRUST
Date: December 18, 1997 By: /s/ Gerard H. Sweeney
---------------------
Gerard H. Sweeney
President and Chief
Executive Officer
(Principal Executive Officer)
Date: December 18, 1997 By: /s/ Mark S. Kripke
-------------------
Mark S. Kripke
Chief Financial Officer and Secretary
(Principal Financial and Accounting
Officer)
Page 3 of 3
<PAGE>
Exhibit 1.1
751,269 Shares
Brandywine Realty Trust
Common Shares of Beneficial Interest
UNDERWRITING AGREEMENT
December 18, 1997
Legg Mason Wood Walker, Incorporated
111 South Calvert Street
P.O. Box 1476
Baltimore, Maryland 21203
Ladies and Gentlemen:
Brandywine Realty Trust, a Maryland real estate investment trust (the
"Company"), proposes to issue and sell common shares of beneficial interest
of the Company, par value $0.01 per share (the "Shares"), to Legg Mason Wood
Walker, Incorporated (you or the "Underwriter"). The common shares of
beneficial interest, par value $0.01 per share, of the Company to be
outstanding after giving effect to the sale contemplated hereby are
hereinafter referred to as the "Common Shares."
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 called
the "Act"), a registration statement on Form S-3 (Registration No. 333-39155)
including a preliminary prospectus relating to the registration of the Shares
and such other securities which may be offered from time to time by the
Company in accordance with Rule 415 under the Act. Such registration
statement (as amended, if applicable) has been declared effective by the
Commission on November 13, 1997. Such registration statement (as amended, if
applicable), on the one hand, and the prospectus constituting a part thereof
and the prospectus supplement relating to the offering of the Shares provided
to the Underwriter by the Company for use (whether or not such prospectus
supplement is required to be filed with the Commission by the Company
pursuant to the Act) (the "Prospectus Supplement"), on the other hand,
including all documents incorporated therein by reference, as from time to
time amended or supplemented pursuant to the Securities Exchange Act of 1934,
as amended, and the rules and regulations of the Commission thereunder
(collectively called the "Exchange Act") and the Act are referred to herein
as the "Registration Statement" and the "Prospectus," respectively; provided,
however, that a prospectus supplement shall be deemed to have supplemented
the
<PAGE>
Prospectus only with respect to the offering of the Shares to which it
relates. Any registration statement (including any amendment or supplement
thereto or information which is deemed part thereof) filed by the Company
under Rule 462(b) of the Act (a "Rule 462(b) Registration Statement") shall
be deemed to be part of the "Registration Statement" as defined herein and
any prospectus or any term sheet as contemplated by Rule 434 of the Act (a
"Term Sheet") (including any amendment or supplement thereto or information
which is deemed part thereof) included in such registration statement shall
be deemed to be part of the "Prospectus," as defined herein. All references
in this Agreement to financial statements and schedules and other information
which is "contained," "included," "described" or "stated" in the Registration
Statement or the Prospectus (and all other references of like import) shall
be deemed to mean and include all such financial statements and schedules and
other information which is or is deemed to be incorporated by reference in
the Registration Statement or Prospectus, as the case may be; and all
references in this Agreement to amendments or supplements to the Registration
Statement or the Prospectus shall be deemed to mean and include, without
limitation, even though not specifically stated, any document filed under the
Exchange Act which is or is deemed to be incorporated by reference in the
Registration Statement or the Prospectus, as the case may be. Capitalized
terms used but not otherwise defined herein shall have the meanings given to
those terms in the Prospectus.
2. Agreements to Sell and Purchase. On the basis of the representations and
warranties contained in this Agreement, and subject to its terms and
conditions, the Company agrees to issue and sell the Shares and the
Underwriter agrees to purchase from the Company at a price per share of
$23.5169 (the "Purchase Price"), the Shares.
3. Terms of the Offering. The Company is advised by the Underwriter that it
proposes (i) to deposit the Shares directly with the Trustee of Legg Mason
REIT Trust, December 1997 Series (the "Trust"), a registered unit investment
trust under the Investment Company Act of 1940, as amended (the "Offering"),
as soon after the execution and delivery hereof as in its judgment is
advisable and (ii) initially to offer the Shares upon the terms set forth in
the Prospectus. The Company further acknowledges that the Underwriter is the
sponsor of the Trust and therefore is considered an affiliate of the Trust.
4. Delivery and Payment. Delivery to the Underwriter of certificates for,
and payment of the Purchase Price for the Shares shall be made, subject to
Section 9, at 10:00 A.M., New York City time, on December 23, 1997, or such
other time not later than ten business days after such date as shall be
agreed upon by the Underwriter and the Company (such time and date of payment
and delivery being herein called the "Closing Date") at such place as you
shall designate. The Closing Date and the location of, delivery of and the
form of payment for the Shares may be varied by agreement between you and the
Company.
Certificates for the Shares shall be registered in such names and issued
in such denominations as you shall request in writing not later than two full
business days prior to the Closing Date. Such certificates shall be made
available to you for inspection not later than 9:30 A.M., New York City time,
on the business day next preceding the Closing Date. Certificates in
definitive form evidencing the Shares shall be delivered to you on the
Closing Date, with any transfer taxes thereon duly paid by the Company, for
the account of the Underwriter, against
2
<PAGE>
payment of the Purchase Price therefor by intra-bank transfer or wire
transfer of same day funds to such account as may be designated by the
Company at least two business days prior to the Closing Date.
5. Agreements of the Transaction Entities. The Company and the Operating
Partnership (collectively, the "Transaction Entities") jointly and severally
agree with you as follows:
(a) In respect of the offering of Shares, the Company will (i) prepare
a Prospectus Supplement setting forth the number of Shares covered thereby
and their terms not otherwise specified in the Prospectus pursuant to which
the Shares are being issued, the name of the Underwriter and the number of
Shares which the Underwriter has agreed to purchase, the price at which the
Shares are to be purchased by the Underwriter from the Company, the initial
offering price, and such other information as the Underwriter and the Company
deem appropriate in connection with the offering of the Shares, and (ii) file
the Prospectus in a form approved by you pursuant to Rule 424(b) under the
Act no later than the Commission's close of business on the second business
day following the date of the determination of the offering price of the
Shares The Company will furnish to the Underwriter and to such dealers as
you shall specify as many copies of the Prospectus as the Underwriter shall
reasonably request for the purposes contemplated by the Act or the Exchange
Act.
(b) At any time when the Prospectus is required to be delivered under
the Act or the Exchange Act in connection with sales of Shares, the
Transaction Entities will advise you promptly and, if requested by you,
confirm such advice in writing, of (i) the effectiveness of any amendment to
the Registration Statement, (ii) the transmittal to the Commission for filing
of any Prospectus or other supplement or amendment to the Prospectus to be
filed pursuant to the Act, (iii) the receipt of any comments from the
Commission relating to the Registration Statement, any preliminary
prospectus, the Prospectus or any of the transactions contemplated by this
Agreement, (iv) any request by the Commission for post-effective amendments
to the Registration Statement or amendments or supplements to the Prospectus
or for additional information, (v) 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 purposes, and (vi)
the happening of any event as a result of which the Prospectus as then
amended or supplemented would include an untrue statement of a material fact
or omit to state any material fact necessary in order to make the statements
therein, in the light of the circumstances when the Prospectus is delivered
to a purchaser, not misleading. Each of the Transaction Entities will make
every reasonable effort to prevent the issuance of any stop order, and if at
any time the Commission shall issue any stop order suspending the
effectiveness of the Registration Statement, each of the Transaction Entities
will make every reasonable effort to obtain the withdrawal or lifting of such
order at the earliest possible time.
(c) The Company will furnish to you without charge, one signed copy of
the Registration Statement as first filed with the Commission and of each
amendment to it, including all exhibits, and furnish to you such number of
conformed copies of the Registration Statement as so filed and of each
amendment to it as you may reasonably request. If applicable, the copies of
the Registration Statement and each amendment thereto furnished to the
3
<PAGE>
Underwriter will be identical to the electronically transmitted copies
thereof filed with the Commission pursuant to EDGAR, except to the extent
permitted by Regulation S-T.
(d) At any time during the period ending 25 days after the date of this
Agreement, the Transaction Entities will not file any amendment to the
Registration Statement or any Rule 462(b) Registration Statement or make any
amendment or supplement to the Prospectus or any Term Sheet, if applicable,
of which you shall not previously have been advised or to which you or your
counsel shall reasonably object, it being understood and agreed that you
shall have no objection to any Prospectus Supplement filed in connection with
any other offering; and the Company will prepare and file with the
Commission, promptly upon your reasonable request, any amendment to the
Registration Statement, Rule 462(b) Registration Statement, Term Sheet, or
amendment or supplement to the Prospectus which, in the opinion of your
counsel, may be necessary in connection with the distribution of the Shares
by you, and will use its best efforts to cause the same to become promptly
effective. If applicable, the Prospectus and any amendments or supplements
thereto furnished to the Underwriter will be identical to the electronically
transmitted copies thereof filed with the Commission pursuant to EDGAR,
except to the extent permitted by Regulation S-T.
(e) If, at any time when the Prospectus is required to be delivered
under the Act or the Exchange Act in connection with sales of Shares, any
event shall occur as a result of which, in the opinion of counsel for the
Underwriter, it becomes necessary to amend or supplement the Prospectus in
order to make the statements therein, in the light of the circumstances
existing when the Prospectus is delivered to a purchaser, not misleading, or
if it is necessary to amend or supplement the Prospectus to comply with any
law, the Company will forthwith prepare and file with the Commission an
appropriate amendment or supplement to the Prospectus (in form and substance
reasonably satisfactory to counsel for the Underwriter) so that the
statements in the Prospectus, as so amended or supplemented, will not contain
an untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances existing when it is so delivered, not misleading, or so that
the Prospectus will comply with any law, and to furnish to the Underwriter
and to such dealers as you shall specify, such number of copies thereof as
the Underwriter or dealers may reasonably request.
(f) Each of the Transaction Entities will use its best efforts, in
cooperation with the Underwriter, to qualify, register or perfect exemptions
for the Shares for offer and sale by the Underwriter under the applicable
state securities or Blue Sky laws and real estate syndication laws of such
jurisdictions as you may reasonably request; provided, however, none of the
Transaction Entities will be required to qualify as a foreign corporation,
file a general consent to service of process in any such jurisdiction,
subject itself to taxation in respect of doing business in any jurisdiction
in which it is not otherwise so subject, or provide any undertaking or make
any change in its charter or by-laws that the Board of Trustees of the
Company reasonably determines to be contrary to the best interests of the
Company and its shareholders. In each jurisdiction in which the Shares have
been so qualified or registered, the Transaction Entities will use all
reasonable efforts to file such statements, reports and other documents as
may be required by the laws of such jurisdiction, to continue such
qualification or registration in effect for so long a period as the
Underwriter may reasonably request for the distribution of the Shares.
4
<PAGE>
(g) To make generally available to the Company's shareholders as soon as
reasonably practicable but not later than sixty (60) days after the close of
the period covered thereby (ninety (90) days in the event the close of such
period is the close of the Company's fiscal year), an earnings statement (in
form complying with the provisions of Rule 158 of the Act) covering a period
of at least twelve months after the effective date of the Registration
Statement (but in no event commencing later than ninety (90) days after such
date) which shall satisfy the provisions of Section 11(a) of the Act, and, if
required by Rule 158 of the Act, to file such statement as an exhibit to the
next periodic report required to be filed by the Company under the Exchange
Act covering the period when such earnings statement is released.
(h) During the period of five years after the date of this Agreement,
to furnish to you as soon as available a copy of each regular and periodic
report, financial statement or other publicly available information of the
Transaction Entities and any of their subsidiaries mailed to the holders of
the Shares or filed with the Commission or any securities exchange, and any
such publicly available information concerning the Transaction Entities or
any of their subsidiaries as you may reasonably request.
(i) During the period when the Prospectus is required to be delivered
under the Act or the Exchange Act in connection with sales of the Shares, to
file all documents required to be filed by it with the Commission pursuant to
Section 13, 14 or 15 of the Exchange Act within the time periods required by
the Exchange Act.
(j) To pay all costs, expenses, fees and taxes incident to (i) the
preparation, printing, filing and distribution under the Act of the
Registration Statement and any amendment thereto (including financial
statements and exhibits), each preliminary prospectus, the Prospectus and all
amendments and supplements to any of them prior to or during the period
specified in Section 5(b), (ii) the printing and delivery of this Agreement
and the Blue Sky Memorandum (including the reasonable disbursements of
counsel for the Underwriter relating to the printing and delivery of the Blue
Sky Memorandum), (iii) the qualification of registration of the Shares for
offer and sale under the securities, Blue Sky laws or real estate syndication
laws of the several states in accordance with Section 5(f) hereof, (iv) the
fee of and the filings and clearance, if any, with the National Association
of Securities Dealers, Inc. (the "NASD") in connection with the Offering, (v)
the fee of and the listing of the Shares on the New York Stock Exchange, Inc.
("NYSE"), (vi) furnishing such copies of the Registration Statement, the
Prospectus and all amendments and supplements thereto as may be requested for
use in connection with the offering or sale of the Shares by the Underwriter,
(vii) the preparation, issuance and delivery of certificates for the Shares
to the Underwriter, (viii) the costs and charges of any transfer agent or
registrar, (ix) any transfer taxes imposed on the sale by the Company of the
Shares to the Underwriter and (x) the fees and disbursements of the Company's
counsel and accountants.
(k) The Transaction Entities will use their best efforts to maintain
the listing of the Shares on the NYSE for a period of three years after the
Closing Date and thereafter unless the Company's Board of Trustees determines
that it is no longer in the best interests of the Company for the Shares to
continue to be so listed.
5
<PAGE>
(l) The Transaction Entities will use their best efforts to do and
perform all things required to be done and performed under this Agreement by
the Transaction Entities prior to the Closing Date and to satisfy all
conditions precedent to the delivery of the Shares.
(m) The Company will use the net proceeds received by it from the sale
of the Shares in the manner specified in the Prospectus Supplement under "Use
of Proceeds."
(n) The Company will prepare and file or transmit for filing with the
Commission in accordance with Rule 424(b) of the Act copies of the Prospectus.
(o) The Transaction Entities will use their best efforts to ensure that
the Company continues to qualify as a "real estate investment trust" ("REIT")
under Sections 856 through 860 of the Internal Revenue Code of 1986, as
amended (the "Code"), for a period of three years after the date of this
Agreement unless the Company's Board of Directors determines that it is no
longer in the best interest of the Company to be so qualified.
(p) The Transaction Entities will not at any time, directly or
indirectly, take any action intended, or which might reasonably be expected,
to cause or result in, or which will constitute, stabilization of the price
of the Shares to facilitate the sale or resale of any Shares in violation of
the Act.
6. Representations and Warranties of the Transaction Entities. Each of the
Transaction Entities jointly and severally represents and warrants to the
Underwriter as of the date hereof and the Closing Date that:
(a) The Registration Statement became effective on November 13, 1997.
No stop order suspending the effectiveness of the Registration Statement or
any part thereof has been issued and no proceeding for that purpose has been
instituted or, to the knowledge of the Transaction Entities, threatened by
the Commission or by the state securities authority of any jurisdiction. No
order preventing or suspending the use of the Prospectus has been issued and
no proceeding for that purpose has been instituted or, to the knowledge of
the Transaction Entities, threatened by the Commission or by the state
securities authority of any jurisdiction.
(b) The Registration Statement and the Prospectus, including the
financial statements, schedules and related notes included in the Prospectus
or incorporated therein by reference and, if applicable, any Term Sheet to
the Prospectus, as of the date hereof and at the time the Registration
Statement became effective, and when any post-effective amendment to the
Registration Statement or Rule 462(b) Registration Statement becomes
effective or any amendment or supplement to the Prospectus is filed with the
Commission, did or will comply in all material respects with all applicable
provisions of the Act and will contain all statements required to be stated
therein in accordance with the Act. The Prospectus, including the financial
statements, schedules and related notes included in the Prospectus or
incorporated therein by reference, and if applicable, any Term Sheet to the
Prospectus, as of the date hereof and at the time the Registration Statement
became effective, and at the Closing Date, and when any post-effective
amendment to the Registration Statement or Rule 462(b) Registration Statement
becomes effective or any amendment or supplement to the Prospectus is filed
with the
6
<PAGE>
Commission, did or will comply in all material respects with all applicable
provisions of the Act and will contain all statements required to be stated
therein in accordance with the Act. On the date the Registration Statement
was declared effective, on the date hereof, on the date of filing of any Rule
462(b) Registration Statement and on the Closing Date, no part of the
Registration Statement or any amendment did or will contain an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary in order to make the statements therein not
misleading. On the date the Registration Statement was declared effective,
on the date hereof, as of its date, on the date of filing of any Rule 462(b)
Registration Statement and at the Closing Date, the Prospectus and the
Prospectus Supplement did not or will not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading. If a Rule 462(b) Registration Statement is filed in
connection with the offering and sale of the Shares, the Company will have
complied or will comply with the requirements of Rule 111 under the Act
relating to the payment of filing fees therefor. The foregoing
representations and warranties in this Section 6(b) do not apply to any
statements or omissions made in reliance on and in conformity with
information relating to the Underwriter furnished in writing to the Company
by the Underwriter specifically for inclusion in the Registration Statement
or Prospectus or any amendment or supplement thereto. The Transaction
Entities have not distributed any offering material in connection with the
offering or sale of the Shares other than the Registration Statement, the
Prospectus or any other materials, if any, permitted by the Act (which were
disclosed to the Underwriter and Underwriter's counsel).
(c) Each 462(b) Registration Statement, if any, complied or will comply
when so filed in all material respects with all applicable provisions of the
Act; did not or will not contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances under which
they were made, not misleading; and the Prospectus delivered to the
Underwriter for use in connection with the offering of the Shares will, at
the time of such delivery, be identical to the electronically transmitted
copies thereof filed with the Commission pursuant to EDGAR, except to the
extent permitted by Regulation S-T
(d) The documents incorporated or deemed to be incorporated by
reference in the Prospectus pursuant to Item 12 of Form S-3 under the Act, at
the time they were, or hereafter are, filed with the Commission, complied and
will comply in all material respects with the requirements of the Exchange
Act, and, when read together with other information in and incorporated by
reference in the Prospectus, at the time the Registration Statement became
effective, and as of the Closing Date, or during the period specified in
Section 5(b) did not and will not include an untrue statement of a material
fact or omit to state a material fact necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading. The foregoing representations and warranties in this Section
6(d) do not apply to any statements or omissions made in reliance on and in
conformity with information relating to the Underwriter furnished in writing
to the Company by the Underwriter specifically for inclusion in the
Registration Statement or Prospectus or any amendment or supplement thereto.
(e) The historical financial statements and the related notes thereto,
included or incorporated by reference in the Registration Statement and the
Prospectus, comply in all
7
<PAGE>
material respects with the requirements of the Act and the Exchange Act, as
applicable, and present fairly the consolidated financial position of the
Transaction Entities and their consolidated subsidiaries as of the dates
indicated and the results of their operations and the changes in their cash
flows for the periods specified; the financial statements with respect to
[the Properties (as defined in the Prospectus) acquired by the Transaction
Entities and their consolidated subsidiaries, together with related notes,
incorporated by reference in the Registration Statement or the Prospectus,
present fairly a summary of gross income and direct operating expenses or a
summary of gross income, as the case may be, of such Properties for the
indicated periods; the foregoing financial statements have been prepared in
conformity with generally accepted accounting principles applied on a
consistent basis, and the supporting schedules included or incorporated by
reference in the Registration Statement present fairly the information
required to be stated therein; the pro forma financial information, and the
related notes thereto, included or incorporated by reference in the
Registration Statement and the Prospectus comply in all material respects
with the applicable requirements of the Act and the Exchange Act, as
applicable; the assumptions used in preparing such pro forma information are
reasonable and the adjustments used therein are appropriate to give effect to
the transactions referred to therein; and the other financial and statistical
information and data set forth in the Registration Statement and the
Prospectus are accurately presented in all material respects and prepared on
a basis consistent with the books and records of the Transaction Entities and
their consolidated subsidiaries.
(f) Since the respective dates as of which information is given in the
Registration Statement and the Prospectus, (i) there has not been any
material adverse change, or any development involving a prospective material
adverse change, in or affecting the condition (financial or otherwise),
business, prospects, properties, net worth or results of operations of the
Transaction Entities and their subsidiaries, taken as a whole, otherwise than
as set forth or contemplated in the Prospectus; and (ii) except as set forth
or contemplated in the Prospectus, neither the Transaction Entities nor any
of their subsidiaries has entered into any transaction or agreement (whether
or not in the ordinary course of business) material to the Transaction
Entities and their subsidiaries, taken as a whole.
(g) The Company has been duly formed and is validly existing as a real
estate investment trust in good standing under the laws of the state of
Maryland, with trust power and authority to own or lease its properties and
to conduct its business as described in the Prospectus, and is duly qualified
as a foreign trust for the transaction of business and is in good standing
under the laws of each other jurisdiction in which it owns or leases
properties, or conducts any business, so as to require such qualification,
other than where the failure to be so qualified or in good standing would not
(1) have a material adverse effect on the condition (financial or otherwise),
business, prospects, properties, net worth or results of operations of the
Transaction Entities and their subsidiaries, taken as a whole, (2) adversely
affect the issuance or validity of the Shares or (3) adversely affect the
consummation of any of the transactions contemplated by this Agreement (each
of (1), (2) and (3) above, a "Material Adverse Effect"); except for
investments in subsidiaries (including any joint ventures), in short-term
investment securities and in other securities as described in the
Registration Statement or Prospectus the Company has no direct or indirect
equity or other interest in any corporation, partnership, trust or other
entity; each of the subsidiaries of the Transaction Entities is defined on
Schedule I
8
<PAGE>
hereto and has been duly organized and is validly existing as a corporation,
limited liability company or general or limited partnership, as the case may
be, in good standing under the laws of its jurisdiction of organization with
corporate, limited liability company or partnership power and authority, as
the case may be, to own or lease its properties and conduct its business as
presently conducted and as described in the Prospectus, and has been duly
qualified as a foreign corporation, foreign limited liability company or
foreign general or limited partnership, as the case may be, for the
transaction of business and is in good standing under the laws of each other
jurisdiction in which it owns or leases properties, or conducts any business,
so as to require such qualification, other than where the failure to be so
qualified or in good standing would not have a Material Adverse Effect; all
the outstanding shares of capital stock of each subsidiary have been duly
authorized and validly issued and are fully paid and nonassessable; except as
disclosed in Schedule I hereto, all the outstanding shares of capital stock
membership interests or all partnership interests of each subsidiary are
owned by the Transaction Entities, directly or indirectly, free and clear of
all liens, encumbrances, security interests and claims.
(h) The Operating Partnership has been duly formed and is validly
existing as a limited partnership in good standing under the laws of the
State of Delaware, is duly qualified to do business as a foreign limited
partnership in each jurisdiction in which its ownership or lease of property
or the conduct of its business requires such qualification (except where the
failure to be so qualified would not have a Material Adverse Effect on the
earnings, assets or business affairs of the Transaction Entities and their
subsidiaries considered as a single enterprise), and has all partnership
power and authority necessary to own or hold its properties, to conduct the
business in which it is engaged and to enter into and perform its obligations
under this Agreement. The Company is the sole general partner of the
Operating Partnership. The Agreement of Limited Partnership of the Operating
Partnership (the "Operating Partnership Agreement") is in full force and
effect, and the aggregate percentage interests of the Company and the limited
partners in the Operating Partnership are as set forth on Schedule T.
(i) This Agreement has been duly authorized, executed and delivered by
the Transaction Entities.
(j) 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. Application
has been made to list the Shares on the NYSE. The form of certificate for
the Shares will comply with all applicable legal and NYSE requirements. The
holders of outstanding shares of beneficial interest of the Company are not
entitled to preemptive or other rights to subscribe for the Shares. The
shares of beneficial interest of the Company conform to the description
thereof in the Registration Statement and the Prospectus.
(k) Neither the Transaction Entities nor any of their subsidiaries is,
or with the giving of notice or lapse of time or both would be, in violation
of or in default under (1) its Declaration of Trust, articles of
incorporation, certificate of incorporation; partnership agreement or other
charter document as the case may be (in each case as amended to the date of
this Agreement), (2) its Bylaws (as amended to the date of this Agreement) or
(3) any indenture, mortgage, deed
9
<PAGE>
of trust, loan agreement, partnership agreement or other agreement or
instrument or obligation to which such Transaction Entity or any of it
subsidiaries is a party or by which it or any of its properties is bound,
except, with respect to clauses (2) and (3), for violations and defaults
which individually or in the aggregate would not have a Material Adverse
Effect; the issue and sale of the Shares and the performance by each of the
Transaction Entities of all of the obligations under this Agreement and the
consummation of the transactions herein contemplated will not conflict with
or result in a breach of any of the terms or provisions of, or constitute a
default under, any indenture, mortgage, deed of trust, loan agreement,
partnership agreement or other material agreement or instrument to which any
of the Transaction Entities or any of its subsidiaries is a party or by which
any of the Transaction Entities or of its subsidiaries is bound or to which
any of the property or assets of the Transaction Entities or any of its
subsidiaries is subject, except for such conflicts, breaches, defaults or
violations which individually or in the aggregate would not have a Material
Adverse Effect, nor will any such action result in any violation of the
provisions of the Articles of Incorporation or the ByLaws of the Company or
any applicable law or statute or any order, rule or regulation of any court
or governmental agency or body having jurisdiction over any of the
Transaction Entities or any of their properties, except for such violations
which individually or in the aggregate would not have a Material Adverse
Effect; and no consent, approval, authorization, order, registration or
qualification of or with any such court or governmental agency or body is
required for the issue and sale of the Shares or the consummation by the
Transaction Entities of the transactions contemplated by this Agreement,
except such consents, approvals, authorizations, orders, registrations or
qualifications (x) as have been obtained under the Act and the Exchange Act,
(y) as may be required under state securities or Blue Sky laws or Sections
2710 and 2720 of the Conduct Rules of the NASD in connection with the
purchase and distribution of the Shares by the Underwriter or (z) the failure
to obtain which would not have a Material Adverse Effect.
(l) Other than as set forth or contemplated in the Prospectus, there are
no legal or governmental proceedings pending or, to the knowledge of any of
the Transaction Entities, threatened to which any of the Transaction Entities
or their subsidiaries is or may be a party or to which any property of any of
the Transaction Entities or their subsidiaries is or may be the subject
which, if determined adversely to the Transaction Entities, could
individually or in the aggregate reasonably be expected to have a Material
Adverse Effect; there are no contracts or other documents of a character
required to be filed as an exhibit to the Registration Statement or required
to be described in the Registration Statement or the Prospectus which are not
filed or described as required; and the descriptions of the terms of all such
contracts and documents contained or incorporated by reference in the
Registration Statement or Prospectus are complete and correct in all material
respects.
(m) The Company has 105,000,000 authorized shares of beneficial
interest, consisting of 100,000,000 Common Shares, and 5,000,000 preferred
shares of beneficial interest, par value $.01 per share. All of the issued
and outstanding shares of beneficial interest of the Company have been duly
and validly authorized and issued and are fully paid and nonassessable.
(n) One of the Transaction Entities or their subsidiaries has good and
marketable title to each Property, in each case free of any lien, mortgage,
pledge, charge or encumbrance of any kind except those (i) described in the
Prospectus or (ii) which do not materially affect or detract
10
<PAGE>
from the value of such Property or interfere with the use made and proposed
to be made of such Property by the Transaction Entities and their
subsidiaries and which individually and in the aggregate are in an amount
which is not material to the Transaction Entities.
(o) Except as disclosed in the Prospectus, each entity identified in the
Prospectus as a tenant of any Property, or a subtenant thereof, has entered
into a lease or a sublease, if applicable, for the possession of such
Property; except as disclosed in the Prospectus, each such lease is in full
force and effect and neither the Transaction Entities nor any of their
subsidiaries has notice of any defense to the obligations of the tenant
thereunder or any claim asserted or threatened by any person or entity, which
claim, if sustained, would have a Material Adverse Effect; and except as
disclosed in the Prospectus, the lessor under each lease has complied with
its obligations under such lease in all material respects and neither the
Transaction Entities nor any of their subsidiaries has notice of any default
by the tenant under such lease which, individually or in the aggregate with
other such defaults, would have a Material Adverse Effect.
(p) The mortgages and deeds of trust encumbering the Properties are not
(i) cross-defaulted to any indebtedness other than indebtedness of the
Transaction Entities or any of their subsidiaries or (ii)
cross-collateralized to any property not owned by any of the Transaction
Entities or their subsidiaries.
(q) Each of the Transaction Entities and their subsidiaries are insured
by insurers of recognized financial responsibility against such losses and
risks and in such amounts as are customary in the business in which they are
engaged and such insurance is adequate for the value of their properties; all
policies of insurance insuring the Transaction Entities or their subsidiaries
or their respective businesses, assets, employees, officers, trustees and
directors, as the case may be, are in full force and effect; each of the
Transaction Entities and their subsidiaries is in compliance with the terms
of such policies in all material respects and there are no claims by any of
the Transaction Entities or by their subsidiaries under any such policy as to
which any insurance company is denying liability or defending under a
reservation of rights clause, other than claims which individually or in the
aggregate would not have a Material Adverse Effect.
(r) Each of the Transaction Entities has filed all federal, state and
foreign income tax returns which have been required to be filed and have paid
all taxes indicated by said returns and all assessments received by it to the
extent that such taxes have become due and are not being contested in good
faith.
(s) Each of the Transaction Entities and each of their subsidiaries
owns, possesses and has obtained all material licenses, permits,
certificates, consents, orders, approvals and other authorizations from, and
has made all material declarations and filings with, all federal, state,
local and other governmental authorities, all self-regulatory organizations
and all courts and other tribunals necessary to own or lease, as the case may
be, and to operate its properties and to carry on its business as conducted
as of the date hereof, except in each case where the failure to obtain
licenses, permits, certificates, consents, orders, approvals and other
authorizations, or to make all declarations and filings, would not have a
Material Adverse Effect, and none of the Transaction Entities or any of its
subsidiaries has received any notice of any proceeding relating
11
<PAGE>
to revocation or modification of any such license, permit, certificate,
consent, order, approval or other authorization, except as described in the
Prospectus and except, in each case, where such revocation or modification
would not have a Material Adverse Effect; and the Transaction Entities and
each of their subsidiaries are in compliance with all laws, rules and
regulations relating to the conduct of their respective businesses as
conducted as of the date hereof, except where noncompliance with such laws,
rules or regulations would not have a Material Adverse Effect.
(t) To the knowledge of the Transaction Entities, their independent
accountants who have certified certain of the financial statements filed with
the Commission as part of, or incorporated by reference in, the Registration
Statement or the Prospectus, are independent public accountants as required
by the Act.
(u) To the knowledge of the Transaction Entities, no relationship,
direct or indirect, exists between or among any of the Transaction Entities
or their subsidiaries on the one hand, and the directors, trustees, officers,
stockholders, customers or suppliers of any of the Transaction Entities or
their subsidiaries on the other hand, which is required by the Act to be
described in the Registration Statement and the Prospectus which is not so
described.
(v) Each of the Transaction Entities has never been, is not now, and
immediately after giving effect to the sale of the Shares under this
Agreement will not be, an "investment company" or entity "controlled" by an
"investment company," within the meaning of the Investment Company Act of
1940, as amended (the "Investment Company Act").
(w) With respect to all tax periods regarding which the Internal Revenue
Service is or will be entitled to assert any claim against any of the
Transaction Entities, the Company has met the requirements for qualification
as a REIT under Sections 856 through 860 of the Code, and the present and
contemplated operations, assets and income of the Transaction Entities and
their subsidiaries, taken as a whole, continue to meet such requirements.
(x) The conditions for the use by the Company of a registration
statement on Form S-3 set forth in the General Instructions to Form S-3 have
been satisfied and the Company is entitled to use such form for the
transactions contemplated herein.
(y) Other than as disclosed in the Prospectus, the Transaction Entities
have no knowledge of (a) the unlawful presence of any hazardous substances,
hazardous materials, toxic substances or waste materials (collectively,
"Hazardous Materials") on any of the Properties or (b) any unlawful spills,
releases, discharges or disposals of Hazardous Materials that have occurred
or are presently occurring on or from the Properties, which presence or
occurrence would individually or in the aggregate have a Material Adverse
Effect.
(z) Other than as disclosed in the Prospectus, the Transaction Entities
and their subsidiaries (i) are in compliance with any and all applicable
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) each
Transaction Entity has received all permits, licenses or other approvals
required of them under
12
<PAGE>
applicable Environmental Laws to conduct their respective businesses and
(iii) are in compliance with all terms and conditions of any such permit,
license or approval, except where such noncompliance with Environmental Laws,
failure to receive required permits, licenses or other approvals or failure
to comply with the terms and conditions of such permits, licenses or
approvals would not individually or in the aggregate have a Material Adverse
Effect.
(aa) The Transaction Entities engage environmental
consultants and other experts to conduct reviews of the effect of
Environmental Laws on the properties of the Transaction Entities and their
subsidiaries, prior to the purchase of such properties in the course of which
the Transaction Entities identify and evaluate associated costs and
liabilities (including, without limitation, any capital or operating
expenditures required for cleanup, closure of properties or compliance with
Environmental Laws or any permit, license or approval, any related
constraints on operating activities and any potential liabilities to third
parties). On the basis of such reviews and other than as described in the
Prospectus, the Transaction Entities have reasonably concluded that such
associated costs and liabilities would not, individually or in the aggregate,
have a Material Adverse Effect.
(bb) Subsequent to the respective dates as of which information is given
in the Prospectus, (i) the Company has not purchased any of its outstanding
shares of beneficial interest, or declared, paid or otherwise made any
dividend or distribution of any kind on its shares of beneficial interest
other than regular periodic dividends on such shares; and (ii) there has not
been any material change in the shares of beneficial interest of the Company
or any material change in the short-term debt or long-term debt of the
Transaction Entities and their subsidiaries on a consolidated basis, except
as described in or contemplated by the Prospectus. Other than as described
in or contemplated by the Prospectus, including documents incorporated
therein by reference, there are no outstanding warrants or options to
purchase or rights to acquire any shares of beneficial interest of the
Company and there are no restrictions upon the voting or transfer of, or the
declaration or payment of any dividend or distribution on, any shares of
beneficial interest of the Company pursuant to the Company's Declaration of
Trust or Bylaws, any agreement or other instrument to which the Transaction
Entities is a party or by which the Transaction Entities is bound, or any
order, law, rule, regulation or determination of any court, governmental
agency or body (including, without limitation, any banking or insurance
regulatory agency or body), or arbitrator having jurisdiction over any of the
Transaction Entities. No holders of securities of the Company or of
securities convertible into or exchangeable for securities of the Company
have rights to the registration of such securities of the Company under the
Registration Statement.
(cc) The Transaction Entities and their subsidiaries and affiliates have
not taken and will not take, directly or indirectly, any action designed to,
or that might be reasonably expected to, cause or result in stabilization or
manipulation of the price of the Shares, and the Transaction Entities and
their subsidiaries and affiliates have not distributed and agree not to
distribute any prospectus or other offering material in connection with the
offering and sale of the Shares other than the Prospectus or other material
permitted by the Act.
(dd) Each of the Transaction Entities maintains a system of internal
accounting controls sufficient to provide reasonable assurances that (i)
transactions are executed in
13
<PAGE>
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.
(ee) There is (i) no significant unfair labor practice complaint pending
against any of the Transaction Entities or their subsidiaries or, to the
knowledge of the Transaction Entities, threatened against any of them, before
the National Labor Relations Board or any state or local labor relations
board, and no significant grievance or more significant arbitration
proceeding arising out of or under any collective bargaining agreement is so
pending against any of the Transaction Entities or their subsidiaries or, to
the knowledge of the Transaction Entities, threatened against any of them,
and (ii) no significant strike, labor dispute, slowdown or stoppage pending
against any of the Transaction Entities or their subsidiaries or, to the
knowledge of the Transaction Entities, threatened against it or any of their
subsidiaries except for such actions specified in clause (i) or (ii) above
which individually or in the aggregate could not reasonably be expected to
have a Material Adverse Effect.
(ff) No statement, representation, warranty or covenant made by any of
the Transaction Entities in this Agreement or made in any certificate or
document required by this Agreement to be delivered to the Underwriter is, or
will be, when made, inaccurate, untrue or incorrect in any material respect;
it being understood that no representation is made under this Section 6(ff)
with respect to the Registration Statement or the Prospectus which are the
subject of representations contained in other paragraphs in this Section 6.
(gg) Any certificate or other document signed by any officer or authorized
representative of any of the Transaction Entities or any of their
subsidiaries, and delivered to the Underwriter or to counsel for the
Underwriter in connection with the sale of the Shares shall be deemed a
representation and warranty by such entity or person, as the case may be, to
the Underwriter as to the matters covered thereby.
7. Indemnification.
(a) Each of the Transaction Entities jointly and severally agrees to
indemnify and hold harmless 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, expenses, liabilities and judgments caused by or resulting from any
untrue statement or alleged untrue statement of a material fact contained in
the Registration Statement or the Prospectus (as amended or supplemented if
the Company shall have furnished any amendments or supplements thereto) or
any preliminary prospectus, or caused by or resulting from 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, expenses, liabilities or judgments
are caused by or result from any such untrue statement or omission or alleged
untrue statement or omission based upon and in conformity with information
relating to the Underwriter furnished in writing to the Company by
14
<PAGE>
or on behalf of the Underwriter through you expressly for use therein,
provided, that this indemnity agreement with respect to any preliminary
prospectus shall not inure to the benefit of the Underwriter from whom the
person asserting any such losses, liabilities, claims, damages or expenses
purchased Shares, or any person controlling the Underwriter, if a copy of the
prospectus (as then amended or supplemented if the Company shall have
furnished any such amendments or supplements thereto) was not sent or given
by or on behalf of the Underwriter to such person, if such is required by
law, at or prior to the written confirmation of the sale of such Shares to
such person and if the Prospectus (as so amended or supplemented) would have
corrected the defect giving rise to such loss, liability, claim, damage or
expense.
(b) In case any action shall be brought against the Underwriter or any
person controlling the Underwriter, based upon any preliminary prospectus,
the Registration Statement or the Prospectus or any amendment or supplement
thereto and with respect to which indemnity may be sought against any of the
Transaction Entities, the Underwriter shall promptly notify the Company in
writing and the Company may, at its election, assume the defense thereof,
including the employment of counsel reasonably satisfactory to such
indemnified party 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 and participate in the defense thereof, but the fees and
expenses of such counsel shall, if any of the Transaction Entities has
assumed the defense as indicated above, be at the expense of the Underwriter
or such controlling person unless (i) the employment of such counsel shall
have been specifically authorized in writing by one of the Transaction
Entities, (ii) one of the Transaction Entities shall have failed to assume
the defense and employ counsel or (iii) the named parties to any such action
(including any impleaded parties) include both the Underwriter or such
controlling person and the Transaction Entities and the Underwriter or such
controlling person shall have been advised by such counsel that there may be
one or more legal defenses available to it which are different from or
additional to those available to the Transaction Entities (in which case the
Transaction Entities shall not have the right to assume the defense of such
action on behalf of the Underwriter or such controlling person, it being
understood, however, that the Transaction Entities shall not, in connection
with any one such action or separate but substantially similar or related
actions in the same jurisdiction arising out of the same general allegations
or circumstances, be liable for the fees and expenses of more than one
separate firm of attorneys (in addition to any local counsel) for the
Underwriter and controlling persons, which firm shall be designated in
writing by the Underwriter and that all such fees and expenses shall be
reimbursed as they are incurred). None of the Transaction Entities shall be
liable for any settlement of any such action effected without its written
consent, but if settled with their written consent, each of the Transaction
Entities agrees to indemnify and hold harmless the Underwriter and any such
controlling person from and against any loss or liability by reason of such
settlement to the extent required by this Section 7. Notwithstanding the
immediately preceding sentence, if in any case where the fees and expenses of
counsel are at the expense of the indemnifying party and an indemnified party
shall have requested the indemnifying party to reimburse the indemnified
party for such fees and expenses of counsel as incurred, such indemnifying
party agrees that it shall be liable for any settlement of any action
effected without its written consent, if (i) such settlement is entered into
more than forty business days after the receipt by such indemnifying party of
the aforesaid request and (ii) such indemnifying party shall have failed to
reimburse the indemnified party in
15
<PAGE>
accordance with such request for reimbursement prior to the date of such
settlement; provided, however, that if it is determined by a final non
appealable order of a court of competent jurisdiction that any of the
Transaction Entities has no indemnification obligation under this Section 7, all
fees and expenses paid by any of the Transaction Entities pursuant to this
sentence shall be returned to them upon demand. No indemnifying party shall,
without the prior written consent of the indemnified party, effect any
settlement of any pending or threatened proceeding in respect of which any
indemnified party is or could have been a party and indemnity could have been
sought hereunder by such indemnified party, unless such settlement includes an
unconditional release of such indemnified party from all liability on claims
that are the subject matter of such proceeding.
(c) The Underwriter agrees to indemnify and hold harmless each of the
Transaction Entities and each of their officers, trustees and directors who
sign the Registration Statement and any person controlling any of the
Transaction Entities 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
each of the Transaction Entities to the Underwriter, but only with reference
to and in conformity with information relating to the Underwriter furnished
in writing by or on behalf of the Underwriter expressly for use in the
Registration Statement, the Prospectus or any preliminary prospectus. In
case any action shall be brought against any of the Transaction Entities, any
of their officers, trustees, directors, or any person controlling any of the
Transaction Entities, based on the Registration Statement, the Prospectus or
any preliminary prospectus and in respect of which indemnity may be sought
against the Underwriter, the Underwriter shall have the rights and duties
given to the Transaction Entities (except that if any of the Transaction
Entities shall have assumed the defense thereof, the Underwriter shall not be
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, except
as otherwise provided herein, be at the expense of the Underwriter), and each
of the Transaction Entities, their officers, trustees, directors, and any
person controlling any of the Transaction Entities shall have the rights and
duties given to the Underwriter, by Section 7(b) hereof.
(d) If the indemnification provided for in this Section 7 is unavailable
to an indemnified party in respect of any losses, claims, damages, expenses,
liabilities or judgments referred to therein, then each 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, expenses, liabilities and judgments (i) in such proportion
as is appropriate to reflect the relative benefits received by the
Transaction Entities 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 Transaction Entities, on the one
hand, and the Underwriter, on the other hand, in connection with the
statements or omissions which resulted in such losses, claims, damages,
expenses, liabilities or judgments, as well as any other relevant equitable
considerations. The relative benefits received by the Transaction Entities,
on the one hand, and the Underwriter, on the other hand, shall be deemed to
be in the same proportion as the total net proceeds from the Offering (before
deducting expenses) received by the Transaction Entities and the total
underwriting discounts and commissions received by the Underwriter, bear to
the
16
<PAGE>
total price to the public of the Shares, in each case as set forth in the
table on the cover page of the Prospectus. The relative fault of the
Transaction Entities, 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 to
state a material fact relates to information supplied by any of the
Transaction Entities or the Underwriter and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.
Each of the Transaction Entities and the Underwriter agree that it
would not be just and equitable if contribution pursuant to this Section 7(d)
were determined by pro rata allocation or by any other method of allocation
which does not take account of the equitable considerations referred to in
the immediately preceding paragraph. The amount paid or payable by an
indemnified party as a result of the losses, claims, damages, expenses,
liabilities or judgments referred to in the immediately preceding paragraph
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 or defending any such action or claim.
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 at which the Shares underwritten by it and distributed to the
public were offered to the public exceeds the amount of any damages which the
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.
(e) The Underwriter confirms and each Transaction Entity acknowledges
that (i) the statements with respect to the public offering of the Shares by
the Underwriter set forth on the cover page of the Prospectus Supplement,
(ii) the legend concerning overallotments on page 2 of the Prospectus
Supplement, (iii) the first and last sentences of the second paragraph under
the caption "Underwriting" in the Prospectus Supplement are correct and
constitute the only information concerning the Underwriter furnished in
writing to the Company by or on behalf of the Underwriter specifically for
inclusion in the Registration Statement and Prospectus.
8. Conditions of Underwriter's Obligations. The obligations of the
Underwriter to purchase the Shares under this Agreement are subject to the
satisfaction of each of the following conditions:
(a) All the representations and warranties of the Transaction Entities
contained in this Agreement shall be true and correct, in all material
respects, on the Closing Date, with the same force and effect as if made on
and as of the Closing Date.
(b) No stop order suspending the effectiveness of the Registration
Statement shall have been issued and no proceedings for that purpose shall
have been commenced or shall be pending before or threatened by the
Commission to the knowledge, after due inquiry, of the Company. No stop order
suspending the effectiveness of the Registration Statement shall have been
issued and no proceedings for that purpose shall have been commenced or shall
be pending
17
<PAGE>
before or threatened by the state securities authority of any jurisdiction,
to the knowledge of the Company.
(c) (i) Since the date of the latest balance sheet included or
incorporated by reference in the Registration Statement and the Prospectus,
there shall not have been any Material Adverse Effect, (ii) other than as set
forth in the Prospectus, no proceedings shall be pending or, to the knowledge
of any of the Transaction Entities, after due inquiry, threatened against any
of the Transaction Entities or any Property before or by any federal, state
or other commission, board or administrative agency, where an unfavorable
decision, ruling or finding could reasonably be expected to result in a
Material Adverse Effect, and on the Closing Date you shall have received a
certificate dated the Closing Date, signed by the Chief Executive Officer and
the Chief Financial Officer of each of the Company and the General Partner,
in their capacities as the Chief Executive Officer and Chief Financial
Officer of each entity and on behalf of each entity, confirming the matters
set forth in paragraphs (a), (b) and (c) of this Section 8.
(d) You shall have received on the Closing Date the opinions, dated the
Closing Date, of Pepper, Hamilton & Sheetz LLP, counsel for the Company, in
the form attached hereto as Annex A and the opinion, dated the Closing Date,
of Arthur Andersen LLP, tax counsel for the Company, in the Form of Annex B.
(e) You shall have received on the Closing Date an opinion, dated the
Closing Date, of Hunton & Williams, counsel for the Underwriter, to the effect
that:
(i) the Shares have been duly authorized, and when issued and
delivered to the Underwriter against payment therefor as provided by
this Agreement, will have been validly issued and will be fully paid
and nonassessable, and the issuance of such Shares is not subject to
any preemptive or similar rights;
(ii) the Registration Statement has become effective under the Act
and, to the knowledge of such counsel, no stop order suspending its
effectiveness has been issued and no proceedings for that purpose are
pending before or threatened by the Commission;
(iii) this Agreement was duly and validly authorized, executed and
delivered by each of the Transaction Entities; and
(iv) the Registration Statement, at the time it became effective, and
the Prospectus, as of the date of the Prospectus Supplement (in each
case, other than documents incorporated therein by reference and the
financial statements and supporting schedules and other financial and
statistical data included or incorporated by reference therein, as to
which no opinion need be rendered) complied as to form in all material
respects with the requirements of the Act.
In addition, Hunton & Williams shall state that they have participated
in conferences with officers and other representatives of the Transaction
Entities and representatives of the independent public accountants for the
Company and representatives of the
18
<PAGE>
Underwriter at which the contents of the Prospectus and related matters were
discussed and, although they are not passing upon and do not assume any
responsibility for the accuracy, completeness or fairness of the statements
contained in the Registration Statement or the Prospectus or the documents
incorporated therein by reference, on the basis of the foregoing (relying as
to materiality to a large extent upon the opinions of officers and other
representatives of the Transaction Entities), no facts have come to the
attention of such counsel which lead them to believe that the Registration
Statement, including the documents incorporated therein by reference, at the
time the Company filed its Annual Report on Form 10-K for the Year Ended
December 31, 1996, or at the date of the Underwriting Agreement, 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, including the documents incorporated
therein by reference, at the time the Prospectus was first provided to the
Underwriter for use in connection with the offering of the Shares or at the
date hereof, contained or contains an untrue statement of a material fact or
omitted or omits 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 (it being understood that such counsel need express no
opinion with respect to the financial statements and schedules and other
financial or statistical data included in the Registration Statement, the
Prospectus or the documents incorporated therein by reference).
(f) On the date hereof, Arthur Andersen LLP and Zelenkofske, Axelrod &
Company, Ltd. shall have furnished to the Underwriter a letter, dated the
date of its delivery, addressed to the Underwriter and in form and substance
satisfactory to the Underwriter (and to its counsel), confirming that they
are independent public accountants with respect to the Transaction Entities
and their subsidiaries as required by the Act and with respect to the
financial and other statistical and numerical information contained in the
Registration Statement. At the Closing Date, Arthur Andersen LLP and
Zelenkofske, Axelrod & Company, Ltd. shall have furnished to the Underwriter
a letter, dated the date of its delivery, which shall confirm, on the basis
of a review in accordance with the procedures set forth in the letter from
it, that nothing has come to their attention during the period from the date
of the letter referred to in the prior sentence to a date (specified in the
letter) not more than five days prior to the Closing Date, which would
require any change in its letter dated the date hereof if it were required to
be dated and delivered at the Closing Date.
(g) At the Closing Date, the Shares shall have been approved for listing
on the NYSE upon official notice of issuance.
(h) Each of the Transaction Entities and their subsidiaries shall not
have failed at or prior to the Closing Date, to perform or comply with any of
the agreements pursuant to Section 5 herein contained and required to be
performed or complied with by the Transaction Entities at or prior to the
Closing Date.
(i) At the Closing Date, Hunton & Williams shall have been furnished
with such documents and opinions as they may reasonably require for the
purpose of enabling them to pass upon the issuance and sale of the Shares, as
herein contemplated and related proceedings, or in order to evidence the
accuracy of any of the representations or warranties, or the fulfillment of
19
<PAGE>
any of the conditions, herein contained; and all proceedings taken by each of
the Transaction Entities in connection with the issuance and sale of the Shares
as herein contemplated shall be reasonably satisfactory in form and substance to
the Underwriter and Hunton & Williams.
9. Effective Date of Agreement and Termination. This Agreement shall become
effective upon the execution of this Agreement.
This Agreement may be terminated at any time prior to the Closing
Date by you by written notice to the Company if any of the following has
occurred: (i) since the respective dates as of which information is given in
the Registration Statement and the Prospectus, there has been a Material
Adverse Effect, (ii) any outbreak or escalation of hostilities or other
national or international calamity or crisis or change in economic conditions
or in the financial markets of the United States or elsewhere that, in your
judgment, is material and adverse and would, in your judgment, make it
impracticable or inadvisable (x) to commence or continue the offering of the
shares to the public or (y) to enforce contracts for the sale of the shares,
(iii) the suspension or material limitation of trading in securities on the
NYSE or the American Stock Exchange or material limitation on prices for
securities on either of such exchanges, (iv) (a) the downgrading of any of
the debt securities of any of the Transaction Entities or any of their
subsidiaries by any "nationally recognized statistical rating organization"
or the announcement by any such organization of an initial rating with
respect to any such securities that is below the ratings of other such
organizations in effect for such securities on the date hereof, or (b) the
public announcement by any such organization that it has under surveillance
or review, with possible negative implications, its rating of any of such
securities, (v) the enactment, publication, decree or other promulgation of
any federal or state statute, regulation, rule or order of any court or other
governmental authority which in your opinion would result in a Material
Adverse Effect, (vi) the declaration of a banking moratorium by either
federal or New York State authorities or (vii) the taking of any action by
any federal, state or local government or agency in respect of its monetary
or fiscal affairs which in your opinion has a material adverse effect on the
financial markets in the United States.
10. Miscellaneous. Notices given pursuant to any provision of this Agreement
shall be addressed as follows: (a) if to the Company, to Brandywine Realty
Trust, 16 Campus Blvd., Suite 150, Newtown Square, Pennsylvania, 19073,
Attention: Gerard H. Sweeney and (b) if to you, to Legg Mason Wood Walker,
Incorporated, Attention: Syndicate Department, 111 South Calvert Street,
Baltimore, Maryland 21202, or in any case to such other address as the person
to be notified may have requested in writing.
No recourse shall be had for any of the obligations of the Company
hereunder or for any claim based thereon or otherwise in respect thereof,
against any past, present or future trustee, shareholder, officer or employee
of the Company, whether by virtue of any statute or rule of law, or by the
enforcement of any assessment or penalty or otherwise, all of such liability
being expressly waived and released by the Underwriter and any such person or
entity who acts through the Underwriter.
The provisions of Sections 5, 6 and 7 shall remain operative and in
full force and effect, and will survive delivery of and payment for the
Shares, regardless of (i) any
20
<PAGE>
investigation, or statement as to the results thereof, made by or on behalf
of the Underwriter or by or on behalf of any of the Transaction Entities, the
officers or directors of any of the Transaction Entities or any controlling
person of any of the Transaction Entities and (ii) acceptance of the Shares
and payment for them hereunder.
In the event of termination of this Agreement, the provisions of
Section 7 shall remain operative and in full force and effect.
If this Agreement shall be terminated by the Underwriter because of
any failure or refusal on the part of any of the Transaction Entities to
comply with the terms or to fulfill any of the conditions of this Agreement,
each of the Transaction Entities, jointly and severally, agrees to reimburse
the Underwriter for all out-of-pocket expenses (including the fees and
documented disbursements of counsel) reasonably incurred by the Underwriter.
Except as otherwise provided, this Agreement has been and is made
solely for the benefit of and shall be binding upon each of the Transaction
Entities and the Underwriter, any controlling persons referred to herein and
their respective successors and assigns, all as and to the extent provided in
this Agreement, and no other person shall acquire or have any right under or
by virtue of this Agreement. The term "successors and assigns" shall not
include a purchaser of any of the Shares from the Underwriter merely because
of such purchase.
This Agreement shall be governed and construed in accordance with
the laws of the State of New York.
This Agreement may be signed in various counterparts which together
shall constitute one and the same instrument.
-21-
<PAGE>
Please confirm that the foregoing correctly sets forth the agreement
among the parties hereto.
Very truly yours,
BRANDYWINE REALTY TRUST
By: /s/ GERARD H. SWEENEY
--------------------------
Name: Gerard H. Sweeney
Title: President and Chief Executive Officer
BRANDYWINE OPERATING PARTNERSHIP, L.P.
By: Brandywine Realty Trust,
Its general partner
By: /s/ GERARD H. SWEENEY
-----------------------
Name: Gerard H. Sweeney
Title: President and Chief Executive Officer
LEGG MASON WOOD WALKER INCORPORATED
By: /s/ EDWARD J. BRADLEY
--------------------------------
Name: Edward J. Bradley
Title: Vice President
22
<PAGE>
SCHEDULE 1
BRANDYWINE REALTY TRUST
SUBSIDIARIES (December 18,1997)
<TABLE>
<CAPTION>
PARTNERS
PARTNERSHIP SUBSIDIARIES (Capital/Profits)
- --------------------------------------- ---------------------------------------------
<S> <C>
Brandywine Operating Partnership, BRT -- G.P. & L.P. - 97.06% (1)
a Delaware limited partnership Class A (other than BRT) - L.P. -2.94%
Fifteen Horsham, L.P., WOP -- G.P. - 1% (2)
a Pennsylvania limited partnership BOP -- L.P. 1% (3)
WOP -- L.P. - 98%
C/N Oaklands Limited Partnership I, WOP -- G.P. - 88.9% / 98.9%
a Pennsylvania limited partnership BOP -- L.P. - .1% / .1%
TNC -- L.P. - 11% / 1% (4)
Newtech IV Limited Partnership, WOP -- G.P. - 88.9% / 98.9%
a Pennsylvania limited partnership BOP -- L.P. - .1% / .1%
TNC -- L.P. - 11% / 1%
Newtech III Limited Partnership, WOP -- G.P. - 88.9% / 63.9%
a Pennsylvania limited partnership BOP -- L.P. - .1% / .1%
TNC -- L.P. - 11% / 1%
N.E. Leasing -- 0% / 35% (5)
LC/N Keith Valley Limited Partnership I, WOP -- G.P. - 88.9% / 98.9%
a Pennsylvania limited partnership BOP -- L.P. - .1% / .1%
TNC -- L.P. - 11% / 1%
LC/N Horsham Limited Partnership, WOP -- G.P. - 88.9% / 98.9%
a Pennsylvania limited partnership BOP -- L.P. - .1% / .1%
TNC -- L.P. - 11% / 1%
Nichols 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%
Witmer Operating Partnership I, L.P., Brandywine Witmer, LLC -- G.P. - 1%/1%
a Delaware limited partnership BOP -- L.P. - 99%/99%
C/N Leedom Limited Partnership II, BOP -- 89% / 99%
a Pennsylvania limited partnership SSI -- L.P. - 11% / 1% (6)
C/N Oaklands Limited Partnership III, BOP -- L.P. - 89% / 99%
a Pennsylvania limited partnership TNC -- L.P. - 11% / 1%
Iron Run Limited Partnership V, BOP -- L.P. - 89% / 99%
a Pennsylvania limited partnership TNC -- L.P. - 11% / 1%
C/N Iron Run Limited Partnership III, BOP -- G.P. - 2% / 2%
a Pennsylvania limited partnership BOP -- L.P. - 87% / 97%
TNC -- L.P. - 11% / 1%
Brandywine Realty Partners, BOP -- G.P. - 70% / 98%
a Pennsylvania general partnership Outside partner -- 30% / 2%
Brandywine TB I, L.P., BRT TB I LLC -- G.P. - 1% (7)
a Pennsylvania limited partnership BOP -- L.P. - 99%
</TABLE>
<PAGE>
<TABLE>
<S> <C>
Brandywine TB II, L.P., BRT TB II LLC -- G.P. - 1% (8)
a Pennsylvania limited partnership BOP -- L.P. - 99%
Brandywine TB III, L.P., BRT TB III LLC -- G.P. - 1% (9)
a Pennsylvania limited partnership BOP -- L.P. - 99%
Brandywine Dominion, L.P., Brandywine Dominion, LLC -- G.P. - 1%
a Pennsylvania limited partnership BOP -- L.P. - 99%
Brandywine P.M., L.P., Brandywine P.M., LLC -- G.P. - 1%
a Pennsylvania limited partnership BOP -- L.P. - 99%
</TABLE>
1. BRT and Brandywine Holdings I, Inc. (a Pennsylvania corporation
and a wholly-owned subsidiary of BRT) collectively own GP Units
and Class A Units that constitute the percentage shown above.
2. Brandywine Witmer, LLC (a Pennsylvania limited liability company
and a wholly-owned subsidiary of BOP) is General Partner of WOP
with a 1%/1% interest.
3. Brandywine Operating Partnership ("BOP") is a Delaware limited
partnership.
4. The Nichols 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
(i) outstanding indebtedness, (ii) reserves and (iii) repayment
of capital and accrued equity of WOP, BRT Witmer and TNC
(estimated to equal $1,338,468 as of July 1, 1996).
6. Safeguard Scientifics, Inc. ("SSI") is a Pennsylvania
corporation.
7. Brandywine TB I, L.L.C. is a Pennsylvania limited liability
company in which BOP is the sole member.
8. Brandywine TB II, L.L.C. is a Pennsylvania limited liability
company in which BOP is the sole member.
9. Brandywine TB III, L.L.C. is a Pennsylvania limited liability
company in which BOP is the sole member.
<TABLE>
<CAPTION>
CORPORATE SUBSIDIARIES SHAREHOLDERS
- --------------------------------------- ---------------------------------------------
<S> <C>
Brandywine Holdings, I, Inc., BRT -- 100%
a Pennsylvania corporation
Brandywine Holdings II, Inc., BRT -- 100%
a Pennsylvania corporation (1)
Brandywine Holdings III, Inc., BRT -- 100%
a Pennsylvania corporation (2)
Brandywine Realty Services Corporation, BOP -- 9,473 Preferred Shares
a Pennsylvania corporation 27 Common Shares
BRSP(3) -- 500 Common Shares
</TABLE>
1. To be dissolved.
2. To be dissolved.
3. BRSP is Brandywine Realty Services Partnership.
2
<PAGE>
<TABLE>
<CAPTION>
LIMITED LIABILITY COMPANY SUBSIDIARIES MEMBERS
- --------------------------------------- ---------------------------------------------
<S> <C>
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%
Brandywine TB I, LLC BOP -- 100%
Brandywine TB II, LLC BOP -- 100%
Brandywine TB III, LLC BOP -- 100%
Brandywine Witmer, LLC BOP -- 100%
Brandywine Dominion, LLC BOP -- 100%
Brandywine P.M., LLC BOP -- 100%
</TABLE>
3
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in the Prospectus Supplement dated December 18, 1997 to the Prospectus
dated November 13, 1997 (the "Prospectus") of Brandywine Realty Trust (the
"Company") of: our report dated February 22, 1997, on the consolidated financial
statements of the Company, included in the Company's Annual Report on Form 10-K
for the year ended December 31, 1996; our reports dated October 31, 1996 on the
combined statements of revenue and certain expenses of Equivest Management Inc.
Acquisition Properties, the Commonwealth of Pennsylvania State Employees'
Retirement System Acquisition Properties, and of Delaware Corporate Center for
the year ended December 31, 1995, included in the Company's Prospectus filed on
November 27, 1996 relating to the Company's Registration Statement on Form S-11
(No. 333-13969) declared effective November 25, 1996; our report dated February
11, 1997 on the combined financial statements of revenue and certain expenses of
Columbia Acquisition Properties for the year ended December 31, 1996, included
in the Company's Form 8-K/A (No.1) dated February 13, 1997 and Form 8-K/A (No.
2) dated February 24, 1997; our report dated January 29, 1997 on the combined
financial statements of revenue and certain expenses of Main Street Properties
for the year ended December 31, 1996, included in the Company's Form 8-K/A (No.
1) dated April 29, 1997; our report dated May 29, 1997 on the combined financial
statements of revenue and certain expenses of TA Properties for the year ended
December 31, 1996, included in the Company's Form 8-K dated June 9, 1997; our
report dated June 3, 1997 on the combined financial statements of revenue and
certain expenses of Emmes Properties for the year ended December 31, 1996,
included in the Company's Form 8-K dated June 9, 1997; our report dated June 23,
1997 on the combined financial statements of revenue and certain expenses of 748
& 855 Springdale Drive for the year ended December 31, 1996 included in the
Company's Form 8-K dated June 26, 1997; our report dated July 21, 1997 on the
combined financial statements of revenue and certain expenses of the Green Hills
Properties for the year ended December 31, 1996 included in the Company's Form
10-Q for the quarter ended June 30, 1997; our report dated July 21, 1997 on the
combined financial statements of revenue and certain expenses of the Berwyn Park
Properties for the year ended December 31, 1996, included in the Company's Form
10-Q for the quarter ended June 30, 1997; our report dated August 21, 1997 on
the combined financial statements of revenue and certain expenses of 500 & 501
Office Center Drive for the year ended December 31, 1996 included in the
Company's Form 8-K dated September 10, 1997; our report dated October 15, 1997
on the combined financial statements of revenue and certain expenses of
Metropolitan Industrial Center for the year ended December 31, 1996, included in
the Company's Form 8-K dated October 30, 1997; our report dated October 27, 1997
on the combined financial statements of revenue and certain expenses of Atrium I
for the year ended December 31, 1996, included in the Company's Form 8-K dated
October 30, 1997; our report dated November 14, 1997 on the combined financial
statements of revenue and certain expenses of Scarborough Properties for the
year ended December 31, 1996, included in the Company's Form 8-K dated December
16, 1997; our report dated December 3, 1997 on the financial statement of
revenue and certain expenses of Bala Pointe Office Centre for the year ended
December 15, 1996, included in the Company's Form 8-K dated December 16, 1997;
and our report dated December 13, 1997 on the combined financial statement of
revenue and certain expenses of GMH Properties for the year ended December 31,
1996, included in the Company's Form 8-K dated December 16, 1997; and to all
references to our Firm included in the Prospectus or Prospectus Supplement.
Philadelphia, Pa., ARTHUR ANDERSEN LLP
December 18, 1997
<PAGE>
EXHIBIT 23.2
INDEPENDENT AUDITORS' CONSENT
We hereby consent to the reference to our firm and our report dated June 19,
1997 with respect to the financial statements of the Greentree Executive Campus
Acquisition Properties under the "Experts" heading of a Prospectus Supplement to
the Prospectus dated November 13, 1997 of Brandywine Realty Trust to be filed
with the Securities and Exchange Commission and consent to the filing of this
Consent as an Exhibit to a Current Report on Form 8-K of Brandywine Realty
Trust.
/s/Zelenkofske,Axelrod& Company, Ltd.
Zelenkofske, Axelrod & Company, Ltd.
Jenkintown, Pennsylvania
December 18, 1997
