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 12, 1997
(November 26, 1997)
KRANZCO REALTY TRUST
(Exact Name of Registrant as Specified in Charter)
Maryland 1-11478 23-2691327
(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification No.)
128 Fayette Street, Conshohocken, Pennsylvania 19428
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code (610) 941-9292
(Former Name or Former Address, if Changed Since Last Report)
<PAGE>
Item 5. Other Events
On December 10, 1997, Kranzco Realty Trust, a Maryland real
estate investment trust (the "Company"), entered into an
Underwriting Agreement (the "Underwriting Agreement") with Salomon
Brothers Inc, Donaldson, Lufkin & Jenrette Securities Corporation
and Friedman, Billings, Ramsey & Co., Inc., and representatives of
the several underwriters thereto (collectively, the
"Underwriters"), providing for the purchase by the Underwriters
from the Company of 1,800,000 9-1/2% Series D Cumulative Redeemable
Preferred Shares of Beneficial Interest, par value $0.01 per share
(the "Series D Preferred Shares"), of the Company at a purchase
price of $25.00 per Series D Preferred Share (the "Purchase
Price"). Distributions on the Series D Preferred Shares are
cumulative from the date of original issue and are payable
quarterly commencing on January 20, 1998 at the rate of 9-1/2% per
annum of the $25.00 liquidation preference. The Series D Preferred
Shares were registered as part of the Company's shelf Registration
Statement on Form S-3 (No. 333-32597), which was declared effective
by the Securities and Exchange Commission on August 14, 1997. In
accordance with the terms of the Underwriting Agreement, the
Underwriters also were granted an option to purchase up to an
aggregate of 270,000 additional Series D Preferred Shares at the
Purchase Price to cover any over-allotments.
Item 7. Financial Statements, Pro Forma Financial Statements and
Exhibits.
(a) Financial Statements of Businesses Acquired.
None.
(b) Pro Forma Financial Information.
None.
(c) Exhibits
4.1 Underwriting Agreement, dated as of December 10,
1997, among the Company, Salomon Brothers Inc,
Donaldson, Lufkin & Jenrette Securities Corporation
and Friedman, Billings, Ramsey & Co., Inc., and
representatives of the several underwriters
thereto.
4.2 Articles Supplementary Classifying Series D
Cumulative Redeemable Preferred Shares of
Beneficial Interest.*
4.3 Specimen Certificate evidencing Series D Preferred
Shares.*
* Previously filed as an exhibit to the Registrant's Form
8-A filed with the Securities and Exchange Commission on
December 10, 1997 and incorporated by reference herein.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, as amended, the registrant has duly caused this report to be
signed on its behalf by the undersigned hereunto duly authorized.
Date: December 12, 1997
KRANZCO REALTY TRUST
By:/s/ Robert H. Dennis
-----------------------
Robert H. Dennis
Vice President and
Chief Financial Officer
<PAGE>
EXHIBIT INDEX
4.1 Underwriting Agreement, dated as of December 10, 1997,
among the Company, Salomon Brothers Inc, Donaldson,
Lufkin & Jenrette Securities Corporation and Friedman,
Billings, Ramsey & Co., Inc., and representatives of the
several underwriters thereto.
4.2 Articles Supplementary Classifying Series D Cumulative
Redeemable Preferred Shares of Beneficial Interest.*
4.3 Specimen Certificate evidencing Series D Preferred
Shares.*
__________________________
* Previously filed as an exhibit to the Registrant's Form
8-A filed with the Securities and Exchange Commission on
December 10, 1997 and incorporated by reference herein.
KRANZCO REALTY TRUST
1,800,000 Shares
9 1/2% Series D Cumulative Redeemable Preferred Shares
(Liquidation Preference $25.00 Per Share)
UNDERWRITING AGREEMENT
December 10, 1997
SALOMON BROTHERS INC
DONALDSON, LUFKIN & JENRETTE SECURITIES CORPORATION
FRIEDMAN, BILLINGS RAMSEY & CO., INC.
As Representatives of the Several Underwriters
c/o SALOMON BROTHERS INC
Seven World Trade Center
New York, New York 10048
Ladies and Gentlemen:
Kranzco Realty Trust, a Maryland real estate
investment trust (the "Trust"), proposes to issue and sell
an aggregate of 1,800,000 shares (the "Firm Shares") of the
Trust's 9 1/2% Series D Cumulative Redeemable Preferred
Shares of Beneficial Interest, par value $0.01 per share
(liquidation preference $25.00 per share) (the "Series D
Preferred Shares"), to you and the other underwriters named
in Schedule I hereto (collectively the "Underwriters") for
whom you are acting as Representatives (the
"Representatives"). The Trust also proposes to sell to the
Underwriters, upon the terms and conditions set forth in
Section 2 hereof, up to an additional 270,000 shares (the
"Additional Shares") of Series D Preferred Shares. The Firm
Shares and the Additional Shares are hereinafter
collectively referred to as the "Shares."
The Trust wishes to confirm as follows its
agreement with you and the other several Underwriters on
whose behalf you are acting, in connection with the several
purchases of the Shares by the Underwriters.
1. REGISTRATION STATEMENT AND PROSPECTUS. The
Trust 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. 333-32597) including a prospectus
relating to the registration of the Shares and such other
securities which may be offered from time to time by the
Trust in accordance with Rule 415 under the Act. Such
registration statement (as amended, if applicable) has been
declared effective by the Commission on August 14, 1997.
The Term "Prospectus" as used in this Agreement means the
prospectus in the form included in the registration
statement at the time it was declared effective together
with the Prospectus Supplement relating to the offering of
the Shares under Rule 415 of the Act dated the date hereof
in the form filed with the Commission on or after the date
hereof (the "Prospectus Supplement"). 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 Underwriters by the Trust for use (whether
or not such prospectus supplement is required to be filed
with the Commission by the Trust pursuant to the Act), on
the other hand, including all documents incorporated therein
by reference, as from time to time amended or supplemented
pursuant to the Act, the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the Commission
thereunder (collectively called the "Exchange 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 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 Trust
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. (a) On the
basis of the representations, warranties and agreements of
the Trust herein contained and subject to all the terms and
conditions of this Agreement, the Trust agrees to sell to
the Underwriters and each Underwriter agrees, severally and
not jointly, to purchase from the Trust, at a purchase price
of $24.2125 per share (the "purchase price per share"), the
number of Firm Shares set forth opposite the name of such
Underwriter in Schedule I hereto (or such number of Firm
Shares increased as set forth in Section 10 hereof).
(b) The Trust also agrees, subject to all the
terms and conditions set forth herein, to sell to the
Underwriters, and, upon the basis of the representations,
warranties and agreements of the Trust herein contained and
subject to all the terms and conditions set forth herein,
the Underwriters shall have the right to purchase from the
Trust, at the purchase price per share, pursuant to an
option (the "over-allotment option") which may be exercised
at any time and from time to time prior to 9:00 P.M., New
York City time, on the 30th day after the date of the
Prospectus (or, if such 30th day shall be a Saturday or
Sunday or a holiday, on the next business day thereafter
when the New York Stock Exchange, Inc. (the "NYSE") is open
for trading), up to an aggregate of 270,000 Additional
Shares. Additional Shares may be purchased only for the
purpose of covering over-allotments made in connection with
the offering of the Firm Shares. Upon any exercise of the
over-allotment option, each Underwriter, severally and not
jointly, agrees to purchase from the Trust the number of
Additional Shares (subject to such adjustments as you may
determine in order to avoid fractional shares) which bears
the same proportion to the number of Additional Shares to be
purchased by the Underwriters as the number of Firm Shares
set forth opposite the name of such Underwriter in Schedule
I hereto (or such number of Firm Shares increased as set
forth in Section 10 hereof) bears to the aggregate number of
Firm Shares.
3. TERMS OF PUBLIC OFFERING. The Trust has been
advised by you that the Underwriters propose to make a
public offering of their respective portions of the Shares
as soon after this Agreement has been entered into and, if
necessary, any post-effective amendment to the Registration
Statement (as defined herein), has become effective as in
your reasonable judgment is advisable and initially to offer
the Shares upon the terms set forth in the Prospectus (as
defined herein).
4. DELIVERY OF THE SHARES AND PAYMENT THEREFOR.
Delivery to the Underwriters of and payment for the Firm
Shares shall be made at the office of Salomon Brothers Inc,
Seven World Trade Center, New York, New York 10048, at 10:00
A.M., New York City time, on December 11, 1997 (the "Closing
Date"). The place of closing for the Firm Shares and the
Closing Date may be varied by agreement between you and the
Trust.
Delivery to the Underwriters of and payment for
any Additional Shares to be purchased by the Underwriters
shall be made at the aforementioned office of Salomon
Brothers Inc at such time on such date (the "Option Closing
Date"), which may be the same as the Closing Date but shall
in no event be earlier than the Closing Date nor earlier
than two nor later than ten business days after the giving
of the notice hereinafter referred to, as shall be specified
in a written notice from you on behalf of the Underwriters
to the Trust of the Underwriters' determination to purchase
a number, specified in such notice, of Additional Shares.
The place of closing for any Additional Shares and the
Option Closing Date for such Shares may be varied by
agreement between you and the Trust.
Certificates for the Firm Shares and for any
Additional Shares to be purchased hereunder shall be
registered in such names and in such denominations as you
shall request prior to 1:00 P.M. New York City time, on the
second business day preceding the Closing Date or any Option
Closing Date, as the case may be. 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 or the
Option Closing Date, as the case may be. The certificates
evidencing the Firm Shares and any Additional Shares to be
purchased hereunder shall be delivered to you on the Closing
Date or the Option Closing Date, as the case may be, against
payment of the purchase price therefor in immediately
available funds.
5. REPRESENTATIONS AND WARRANTIES OF THE TRUST.
The Trust represents, warrants and covenants to the
Underwriters as set forth below.
(a) The Registration Statement became effective
on August 14, 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
Trust, 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 Trust,
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
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, 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 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, in light of the circumstances under which
they were made, 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 Trust 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 5(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 Trust by the Underwriter specifically
for inclusion in the Registration Statement or
Prospectus or any amendment or supplement thereto.
(c) The Trust has 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.
(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
6(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 the light
of the circumstances under which they were made, not
misleading. The foregoing representations and
warranties in this Section 5(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 Trust by the Underwriter
specifically for inclusion in the Registration
Statement or Prospectus or any amendment or supplement
thereto.
(e) The financial statements, supporting
schedules and related notes included, or incorporated
by reference, in the Registration Statement and the
Prospectus comply in all material respects with the
requirements of the Act and the Exchange Act, as
applicable, and present fairly the consolidated
financial condition of the entity or entities or group
presented or included therein, as of the respective
dates thereof, and its consolidated results of
operations and cash flows for the respective periods
covered thereby, are all in conformity with generally
accepted accounting principles applied on a consistent
basis throughout the entire period involve, except as
otherwise disclosed in the Prospectus. The financial
information and data included or incorporated by
reference in the Registration Statement and the
Prospectus present fairly the information included or
incorporated by reference therein and have been
prepared on a basis consistent, except as may be noted
therein, with that of the financial statements,
schedules and notes included or incorporated by
reference in the Registration Statement and the
Prospectus and the books and records of the respective
entity or entities or group presented or included
therein. Except as otherwise noted in the Prospectus,
pro forma and/or as adjusted financial information
included in the Prospectus has been prepared in
accordance with the applicable requirements of the Act
and the American Institute of Certified Public
Accountants ("AICPA") guidelines with respect to pro
forma and as adjusted financial information, and
includes all adjustments necessary to present fairly
the pro forma and/or as adjusted financial condition of
the entity or entities or group presented or included
or incorporated by reference therein at the respective
dates indicated and the results of operations and cash
flows for the respective periods specified. The
Trust's ratio of earnings to fixed charges and
preferred dividend requirements included in the
Prospectus and in Exhibit 12 to the Registration
Statement have been calculated in compliance with Item
503(d) of Regulation S-K of the Commission. No other
financial statements (or schedules) of the Trust, or
any predecessor of the Trust are required by the Act or
the Exchange Act to be included in the Registration
Statement or the Prospectus. Arthur Andersen LLP (the
"Accountants") who have reported on such financial
statements, schedules and related notes, are
independent public accountants with respect to the
Trust as required by the Act.
(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 Trust and the Subsidiaries (as
defined below), 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 Trust nor any of the Subsidiaries has
entered into any transaction or agreement (whether or
not in the ordinary course of business) material to the
Trust and the Subsidiaries, taken as a whole.
(g) The Trust has been duly organized and is
validly existing as a business trust and is in good
standing under the laws of the state of Maryland, with
such power and authority to own or lease its properties
and conduct its business as described in the
Prospectus, and is duly qualified as a foreign
corporation 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 Trust and the Subsidiaries (as
defined below), 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") (which
jurisdictions of foreign qualification are identified
in SCHEDULE 5(g) hereto); except for investments in the
Subsidiaries, in short-term investment securities and
in other securities as described in the Registration
Statement or Prospectus, the Trust has no direct or
indirect equity or other interest in any corporation,
partnership, limited liability company, trust, joint
venture, association or other entity; each of the
Trust's subsidiaries (within the meaning of Regulation
S-X under the Act) is identified on SCHEDULE 5(g)
hereto (the "Subsidiaries") and has been duly organized
and is validly existing as a corporation, partnership
or limited liability company, as the case may be, in
good standing under the laws of its jurisdiction of
organization with corporate 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 or foreign
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 (which jurisdictions of
organization and foreign qualification are identified
in SCHEDULE 5(g) hereto); all the outstanding shares of
capital stock of each Subsidiary have been duly
authorized and validly issued and are fully paid and
non-assessable; all the outstanding shares of capital
stock, all partnership interests and all membership
interests of each Subsidiary are owned by the Trust,
directly or indirectly, free and clear of all liens,
encumbrances, security interests and claims.
(h) This Agreement has been duly authorized,
executed and delivered by the Trust; and this Agreement
constitutes the valid and legally binding agreement of
the Trust, enforceable against the Trust in accordance
with its terms, except as rights to indemnity and
contribution hereunder may be limited by federal or
state securities laws and except that the
enforceability of this Agreement may be limited by the
effect of bankruptcy, insolvency, reorganization or
other similar laws now or hereafter in effect relating
to or affecting the rights and remedies of creditors
generally and by general principles of equity, whether
such enforcement is considered in a proceeding in
equity or at law, and by the discretion of the court
before which any proceeding therefor may be brought.
(i) 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
(except that shareholders of the Trust may be subject
to personal liability with respect to certain claims
for torts, contracts, taxes and statutory and other
liabilities in some jurisdictions to the extent such
claims are not satisfied by the Trust) and will not be
subject to any preemptive or similar right and will
have been offered and sold in compliance, in all
material respects, with all applicable laws (including,
without limitation, federal or state securities laws).
The Shares are duly authorized for listing, subject to
official notice of issuance, on the NYSE. The form of
certificate for the Shares will comply with all
applicable legal and NYSE requirements in all material
respects. The holders of outstanding shares of
beneficial interest of the Trust are not entitled to
preemptive or other rights to subscribe for the Shares.
The capital stock of the Trust conforms to the
description thereof in the Registration Statement and
the Prospectus in all material respects. Upon payment
of the purchase price per share and delivery of
certificates representing the Shares in accordance
herewith, each of the Underwriters will receive good,
valid and marketable title to the Shares, free and
clear of all security interests, mortgages, pledges,
liens, encumbrances and claims (other than those
created by the Underwriters).
(j) Neither the Trust nor any of the 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, certificate of incorporation
or partnership agreement, certificate of limited
partnership, operating agreement, or certificate of
formation or other organization document, as the case
may be (in each case as amended to the date of this
Agreement), (2) its by-laws (as amended to the date of
this Agreement) or (3) any indenture, mortgage, deed of
trust, loan agreement, partnership agreement, operating
agreement or other agreement or instrument or
obligation to which the Trust or such Subsidiary 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 the
Trust of all of its 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 the
Trust or any Subsidiary is a party or by which the
Trust or any Subsidiary is bound or to which any of the
property or assets of the Trust or any Subsidiary 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 declaration of trust of the Trust or any
applicable law or statute or any order, rule or
regulation of any court or governmental agency or body
having jurisdiction over the Trust or any of its
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 Trust 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 of which to obtain would
not have a Material Adverse Effect.
(k) Other than as set forth or contemplated in
the Prospectus, there are no legal or governmental
proceedings pending or, to the knowledge of the Trust,
threatened to which the Trust or any of the
Subsidiaries is or may be a party or to which any
property of the Trust or any of the Subsidiaries is or
may be the subject which, if determined adversely to
the Trust, could individually or in the aggregate 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.
(l) The authorized capital stock of the Trust
consists of 100 million shares of beneficial interest,
$.01 par value per share. Additionally, of these
authorized shares of beneficial interest, 10,347,279
common shares (the "Common Shares") are currently
issued and outstanding, and (i) 11,155 shares have been
designated as Series A-1 Increasing Rate Cumulative
Convertible Preferred Shares (Series A-1 Shares"), of
which 11,155 shares are currently issued and
outstanding, (ii) 1,235,000 shares have been designated
as 9.75% Series B-1 Cumulative Convertible Preferred
Shares ("Series B-1 Shares"), of which 274,606 shares
are currently issued and outstanding, (iii) 1,235,000
shares have been designated as 9.75% Series B-2
Cumulative Convertible Preferred Shares ("Series B-2
Shares") of which 908,725 shares are currently issued
and outstanding, (iv) 395,834 shares have been
designated as Series C Cumulative Redeemable Preferred
Shares ("Series C Shares"), of which 222,750 shares are
currently issued and outstanding, and (v) 3,450,000
Shares have been designated as 9 1/2% Series D
Cumulative Redeemable Preferred Shares ("Series D
Shares", collective with Series A-1 Shares, Series B-1
Shares, Series B-2 Shares and Series C Shares hereafter
referred to as the "Preferred Series"), none of which
are presently outstanding. All of the outstanding
Common Shares and Preferred Series have been duly and
validly authorized and issued and are fully paid and
non-assessable (except that shareholders of the Trust
may be subject to personal liability with respect to
certain claims for torts, contracts, taxes and
statutory and other liabilities in some jurisdictions
to the extent such claims are not satisfied by the
Trust) and have been offered and sold in compliance, in
all material respects, with all applicable laws
(including, without limitation, federal and state
securities laws).
(m) The Trust or a Subsidiary 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) referred to in the Prospectus
or (ii) which do not affect or detract from the value
of such Property or interfere with the use made and
proposed to be made of such Property by the Trust and
the Subsidiaries and which individually and in the
aggregate are in an amount which would not have a
Material Adverse Effect.
(n) 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 Trust nor any of the 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 other than where such failure to
comply, either individually or in the aggregate, would
not have a Material Adverse Effect, and neither the
Trust nor any of the 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.
(o) The mortgages and deeds of trust encumbering
the Properties are not (i) cross-defaulted to any
indebtedness other than indebtedness of the Trust or
any of the Subsidiaries or (ii) cross-collateralized to
any property not owned by the Trust or any of the
Subsidiaries.
(p) The Trust and the 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; to the knowledge of the Trust, all policies
of insurance insuring the Trust or the Subsidiaries or
their respective businesses, assets, employees,
officers, trustees and directors, as the case may be,
are in full force and effect; the Trust and the
Subsidiaries are in compliance with the terms of such
policies in all material respects and there are no
claims by the Trust or by the 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.
(q) The Trust has filed all federal, and to the
Trust's knowledge all state and foreign, income tax
returns which have been required to be filed and has
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.
(r) The Trust and each Subsidiary own, possess
and have obtained all material licenses, permits,
certificates, consents, orders, approvals and other
authorizations ("Authorizations") from, and have 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 their properties and
to carry on their 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 Trust or any Subsidiary
has received any notice of any proceeding relating 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 Trust and each Subsidiary 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.
(s) To the Trust's knowledge, the Accountant, who
has audited certain of the financial statements filed
with the Commission as part of, or incorporated by
reference in, the Registration Statement, is an
independent public accountant as required by the Act.
(t) To the Trust's knowledge, no relationship,
direct or indirect, exists between or among the Trust
or the Subsidiaries on the one hand, and the directors,
trustees, officers, stockholders, customers or
suppliers of the Trust or the 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.
(u) The Trust and its Subsidiaries are not now
and after the sale of the Shares to be sold hereunder
and application of the net proceeds from such sale as
described in the Prospectus Supplement under the
caption "Use of Proceeds," none of them will be, an
"investment company", or an entity "controlled" by an
"investment company" as such terms are defined in the
Investment Company Act of 1940, as amended.
(v) The Trust and its Subsidiaries are organized
and operate in a manner so as to qualify as a real
estate investment trust (a "REIT") under Sections 856
through 860 of the Code and the rules and regulations
thereunder as currently in effect, and have elected to
be taxed as a REIT under the Code commencing with the
taxable year ending December 31, 1992. The Trust and
its Subsidiaries intend to continue to qualify as a
REIT for the foreseeable future.
(w) The conditions for the use by the Trust of a
registration statement on Form S-3 set forth in the
General Instructions on Form S-3 have been satisfied in
all material respects and the Trust is entitled to use
such form for the transactions contemplated herein.
(x) Other than as disclosed in the Prospectus,
the Trust has 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 from the Properties as a result of any
construction on or operation and use of the Properties,
which presence or occurrence would individually or in
the aggregate have a Material Adverse Effect.
(y) Other than as disclosed in the Prospectus,
the Trust and the Subsidiaries (i) to the Trust's
knowledge, 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) to the Trust's knowledge,
have received all permits, licenses or other approvals
required of them under 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.
(z) In the ordinary course of its business, the
Trust engages environmental consultants and other
experts to conduct reviews of the effect of
Environmental Laws on the business, operations and
properties of the Trust and the Subsidiaries, in the
course of which the Trust identifies and evaluates
associated costs and liabilities (including, without
limitation, any capital or operating expenditures
required for clean-up, 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 Trust has
reasonably concluded that such associated costs and
liabilities would not, individually or in the
aggregate, have a Material Adverse Effect.
(aa) Subsequent to the respective dates as of
which information is given in the Prospectus, (i) the
Trust has not purchased any of its outstanding shares
of capital stock, or declared, paid or otherwise made
any dividend or distribution of any kind on its shares
of capital stock other than regular periodic dividends
on such shares; and (ii) there has not been any
material change in the shares of capital stock of the
Trust or any material change in the short-term debt or
long-term debt of the Trust and the 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 the Incorporated Documents), there are no
outstanding warrants or options to purchase or rights
to acquire any shares of capital stock of the Trust 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 capital stock of the
Trust pursuant to the Trust's declaration of trust or
by-laws, any agreement or other instrument to which the
Trust is a party or by which the Trust 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 the
Trust. No holders of securities of the Trust or of
securities convertible into or exchangeable for
securities of the Trust have rights to the registration
of such securities of the Trust under the Registration
Statement.
(bb) The Trust has 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 Trust has not distributed and has
agreed 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.
(cc) The Trust maintains 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 the books and records of the Trust 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.
(dd) There is (i) no significant unfair labor
practice complaint pending against the Trust or any of
the Subsidiaries or, to the knowledge of the Trust,
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 the Trust or any of the Subsidiaries or, to the
knowledge of the Trust, threatened against any of them,
and (ii) no significant strike, labor dispute, slowdown
or stoppage pending against the Trust or any of the
Subsidiaries or, to the knowledge of the Trust,
threatened against it or any of the Subsidiaries except
for such actions specified in clause (i) or (ii) above
which singly or in the aggregate could not reasonably
be expected to have a Material Adverse Effect.
(ee) No statement, representation, warranty or
covenant made by the Trust in this Agreement or made in
any certificate or document required by this Agreement
to be delivered to the Underwriters 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 5(ee) with
respect to the Registration Statement or the Prospectus
which are the subject of representations contained in
other paragraphs in this Section 5.
(ff) Any certificate or other document signed by
any officer or authorized representative of the Trust
or any Subsidiary, 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 to the Underwriter as to the
matters covered thereby.
(gg) The Shares will have the following investment
grade rating from Fitch Investors Services, L.P.
("Fitch") ("BB-");
(hh) Each of the documents listed on Schedule
5(hh) hereto (collectively, the "Georgia Acquisition
Documents") has been duly authorized and executed by
the Trust or any Subsidiary, as the case may be, and
each Georgia Acquisition Document, assuming the due
authorization, execution and delivery by the other
party or parties thereto, constitutes a valid and
binding agreement of each such party thereto
enforceable in accordance with its terms, except as the
enforceability thereof may be limited by applicable
bankruptcy, insolvency, moratorium and other laws
affecting the enforceability of creditors' rights and
general principles of equity.
(ii) None of the Trust, any of its Subsidiaries or
any employee or agent of any of them, has made by
payment of funds of the Trust or any Subsidiary or
received or retained any funds in violation of any law,
rule or regulation or of a chapter required to be
disclosed in the Prospectus.
(jj) The assets of the Trust and the Subsidiaries
do not constitute "plan assets" as defined in
Department of Labor Regulations Section 2510-3-101
promulgated under the Employee Retirement Income
Security Act of 1974, as amended ("ERISA").
(kk) The Trust has complied with all provisions of
Florida Statutes, Section 517.075 relating to issuers doing
business with Cuba.
(ll) The relevant purchase agreements included in
the Georgia Acquisition Documents give the Trust
(directly or indirectly) the right (subject only to
customary closing deliveries and other closing
conditions), upon payment of the amounts provided in
such Georgia Acquisition Documents, to acquire
(directly or indirectly) the Georgia Properties (as
defined in the Prospectus Supplement). The Georgia
Acquisition Documents and all deeds, assignments, and
other documents delivered or to be delivered in
connection therewith will be legally sufficient to
effect the sale to a subsidiary of the Trust of all
right, title and interest in and to the Georgia
Properties upon payment of the amounts provided for in
the Georgia Acquisition Documents. Upon the
consummation of the transactions contemplated by the
Georgia Acquisition Documents, the Trust (either
directly or through a subsidiary) will have, good and
marketable title in fee simple to each of the Georgia
Properties free and clear of all liens, charges,
encumbrances, claims, security interests, defects, and
restrictions, other than those described in the
Prospectus Supplement and those which do not and will
not have a Material Adverse Effect.
(mm) To the knowledge of the Trust, all physical
condition (engineering) reports obtained by the Trust
for the Georgia Properties are true and correct in all
material respects.
(nn) The Trust has reasonably investigated the
extent of any pre-existing or recent property damage to
any of the Georgia Properties, including, but not
limited to, the property located in the Village of
Mableton, as well as any personal injuries of which the
Trust has knowledge which may arise out of such
property damage or any of the actions, events or
occurrences which may be related to any such damage or
injury; all known losses (including demolition and
reconstruction costs, liability for personal injury and
the destruction of third-party property and any other
economic losses) arising out of the foregoing will be
either covered by adequate insurance or other proceeds
or borne by existing tenants and their insurers, except
for losses which individually or in the aggregate would
not have a Material Adverse Effect.
(oo) The aggregate market value of the Trust's
voting shares of beneficial interest held by non-
affiliates of the Trust is $150 million or more and the
Trust had a trading volume of such shares of 3,000,000
shares or more during the 12 month period ended the
date hereof.
6. AGREEMENTS OF THE TRUST. The Trust agrees
with the Underwriters as follows:
(a) To file the Prospectus Supplement in a form
approved by you with the Commission within the
applicable time period prescribed for such filing by
Rule 424; and to furnish copies of the Prospectus to
the Underwriters in New York City as soon as
practicable following the execution and delivery of
this Agreement in such quantities as you may reasonably
request and to promptly file this Agreement with the
Commission on Form 8-K following the execution and
delivery of this Agreement.
(b) To deliver to each Representative and counsel
for the Underwriters, at the expense of the Trust, a
copy of the Registration Statement (as originally
filed) and each amendment thereto, including, in each
case, to the extent requested by such Underwriter or
such counsel, exhibits and documents incorporated by
reference therein, which, in the case of copies
delivered to the Representatives shall be conformed and
in the case of copies delivered to counsel for the
Underwriters shall be manually executed and, during the
period mentioned in paragraph (e) below, to each of the
Underwriters as many copies of the Prospectus
(including all amendments and supplements thereto) and
documents incorporated by reference therein as you may
reasonably request, as soon as practicable after their
having been filed with the Commission.
(c) Before filing any amendment or supplement to
the Registration Statement or the Prospectus during the
period referred to in paragraph (e) below, to furnish
to you a copy of any proposed amendment or supplement
to the Registration Statement or the Prospectus, for
your review, and not to file any such proposed
amendment or supplement to which you reasonably object.
(d) To file timely all reports and any definitive
proxy or information statements required to be filed by
the Trust with the Commission pursuant to Section
13(a), 13(c), 14 or 15(d) of the Exchange Act for so
long as the delivery of a prospectus is required in
connection with the offering or sale of the Shares, and
during such same period, to advise you and counsel for
the Underwriters promptly, and to confirm such advice
in writing, (i) when any amendment to the Registration
Statement shall have become effective, (ii) of any
request by the Commission for any amendment to the
Registration Statement or any amendment or supplement
to the Prospectus or for any additional information,
(iii) of the issuance by the Commission of any stop
order suspending the effectiveness of the Registration
Statement or the initiation or threatening of any
proceeding for that purpose, (iv) of the occurrence of
any event, within the period referenced in paragraph
(e) below, 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,
and (v) of the receipt by the Trust of any notification
with respect to any suspension of the qualification of
the Shares for offer and sale in any jurisdiction or
the initiation or threatening of any proceeding for
such purpose; and to use its best efforts to prevent
the issuance of any such stop order or notification
and, if issued, to obtain as soon as possible the
withdrawal thereof.
(e) If, during such period after the first date
of the public offering of the Shares as in the opinion
of counsel for the Underwriters a prospectus relating
to the Shares is required by law to be delivered in
connection with sales by an Underwriter or dealer, any
event shall occur as a result of which it is necessary
to amend or supplement the Prospectus in order to make
the statements therein, in the light of the
circumstances when the Prospectus is delivered to a
purchaser, not misleading, or if it is necessary to
amend or supplement the Prospectus to comply with law,
forthwith to prepare and furnish, at the expense of the
Trust, to the Underwriters and to the dealers (whose
names and addresses you will furnish to the Trust) to
which Shares may have been sold by you on behalf of the
Underwriters and to any other dealers upon request,
such amendments or supplements to the Prospectus as may
be necessary so that the statements in the Prospectus
as so amended or supplemented will not, in the light of
the circumstances when the Prospectus is delivered to a
purchaser, be misleading or so that the Prospectus will
comply with law. The Trust consents to the use of the
Prospectus or any amendment or supplement thereto by
the several Underwriters and by all dealers to whom the
Shares may be sold, both in connection with the
offering or sale of the Shares and for any period of
time thereafter during which the Prospectus is required
by law to be delivered in connection therewith. The
Trust shall not file any document under the Exchange
Act before the termination of the offering of the
Shares by the Underwriters if such document would be
deemed to be incorporated by reference into the
Prospectus which is not approved by the Representatives
after reasonable notice thereof.
(f) To endeavor to qualify the Shares for offer
and sale under the securities or Blue Sky laws of such
jurisdictions as you shall reasonably request and to
continue such qualification in effect so long as
reasonably required for distribution of the Shares;
PROVIDED that the Trust shall not be required to file a
general consent to service of process in any
jurisdiction or to make any undertaking with respect to
the conduct of its business.
(g) To make generally available to its security
holders and to you as soon as practicable but not later
than 15 months after the effective date of the
Registration Statement (as defined in Rule 158(c) of
the Commission promulgated under the Act) an earnings
statement covering a period of at least twelve months
beginning with the first fiscal quarter of the Trust
occurring after the effective date of the Registration
Statement, which shall satisfy the provisions of
Section 11(a) of the Act and Rule 158 of the Commission
promulgated thereunder.
(h) During the period of five years commencing at
the Execution Time, to furnish to you copies of all
reports or other communications (financial or other)
furnished generally to holders of Shares, and copies of
any reports and financial statements furnished to or
filed with the Commission or any national securities
exchange.
(i) To use the net proceeds of the offering of
the Shares in the manner specified in the Prospectus
under "Use of Proceeds."
(j) The Trust will comply with all the provisions
of any undertakings contained in the Registration
Statement.
(k) If this Agreement shall terminate or shall be
terminated after execution pursuant to any provisions
hereof (otherwise than pursuant to the second paragraph
of Section 10 hereof or by notice given by you
terminating this Agreement pursuant to Section 10 or
Section 11 hereof) or if this Agreement shall be
terminated by the Underwriters because of any failure
or refusal on the part of the Trust to comply with the
terms or fulfill any of the conditions of this
Agreement, the Trust agrees to reimburse the
Representatives for all out-of-pocket expenses
(including fees and expenses of counsel for the
Underwriters) reasonably incurred by you in connection
herewith.
(l) The Trust 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 of the
Shares in violation of the Act.
(m) The Trust will use its best efforts to have
the Shares listed, subject to notice of issuance, on
the New York Stock Exchange concurrently with the
execution of this Agreement and to maintain the listing
of the Shares on the NYSE for a period of three years
after the Closing Date provided that the Shares are
issued and outstanding and thereafter the Trust will
use its best efforts to continue to maintain the
listing of the Shares on the NYSE unless the Trust's
Board of Trustees determines that it is no longer in
the best interests of the Trust for the Shares to
continue to be so listed.
(n) The Trust will use its best efforts to
continue to meet the requirements to qualify as a "real
estate investment trust" under the Code, unless the
Trust's Board of Trustees determines that it is no
longer in the best interests of the Trust and its
stockholders to continue to be so qualified.
(o) The Trust has filed the articles
supplementary designating the Series D Preferred Shares
with the State Department of Assessments and Taxation
of Maryland.
7. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The
several obligations of the Underwriters to purchase the Firm
Shares hereunder are subject to the following conditions:
(a) The Prospectus shall have been filed with the
Commission pursuant to Rule 424 within the applicable
time period prescribed for such filing by such Rule; no
stop order suspending the effectiveness of the
Registration Statement shall be in effect, and no
proceedings for such purpose shall be pending before or
threatened by the Commission; and all requests for
additional information on the part of the Commission
shall have been complied with to your reasonable
satisfaction.
(b) Subsequent to the effectiveness 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, properties, net worth, or results of
operations of the Trust and the Subsidiaries taken as a
whole not contemplated by the Prospectus, which in your
opinion, as Representatives of the several
Underwriters, would materially adversely affect the
market for the Shares, or (ii) any event or development
relating to or involving the Trust or any officer or
trustee of the Trust which makes any statement made in
the Prospectus untrue in any material respect or which,
in the opinion of the Trust and its counsel or the
Underwriters and their counsel, requires the making of
any addition to or change in the Prospectus in order to
state a material fact required by the Act or any other
law to be stated therein or necessary in order to make
the statements therein not misleading, if amending or
supplementing the Prospectus to reflect such event or
development would, in your opinion, as Representatives
of the several Underwriters, adversely affect the
market for the Shares.
(c) The Underwriters shall have received
opinions, dated the Closing Date and, with respect to
the Additional Shares, the Option Closing Date, and
reasonably satisfactory in form and substance to
counsel for the Underwriters, from (i) Robinson
Silverman Pearce Aronsohn & Berman LLP, counsel for the
Trust, (ii) Ballard Spahr Andrews & Ingersoll, special
Maryland counsel for the Trust and (iii) Michael P.
Markman, Esq., in his capacity as General Counsel and
Assistant Secretary of the Trust, in the form attached
hereto as Annex 7(c).
In rendering their opinion as aforesaid, counsel
may rely upon an opinion or opinions, each dated the Closing
Date, of other counsel retained by them or the Trust as to
laws of any jurisdiction other than the United States or the
State of New York or the State of Maryland and such opinion
may be subject to the limitations and assumptions with
respect to matters concerning the laws of such jurisdiction
contained in such other counsel's opinion, provided that (1)
each such local counsel is reasonably acceptable to the
Underwriters, (2) such reliance is expressly authorized by
each opinion so relied upon, and a copy of each such opinion
is delivered to the Underwriters and is, in form and
substance, reasonably satisfactory to them and their
counsel, and (3) counsel shall state in their opinion that
they believe that they and the Underwriters are justified in
relying thereon. In addition, in rendering the foregoing
opinion, such counsel may rely, as to matters of fact, to
the extent they deem proper, on certificates of responsible
officers of the Trust and certificates or other written
statements of officers or departments of various
jurisdictions having custody of documents respecting the
existence or good standing of the Trust, provided that
copies of all such opinions, statements or certificates
shall be delivered to Underwriters' counsel.
(d) Subsequent to the execution and delivery of
this Agreement and prior to the Closing Date, there
shall not have occurred any downgrading, nor shall any
notice have been given of (i) any intended or potential
downgrading or (ii) any review or possible change that
does not indicate an improvement, in the rating
accorded any securities of or guaranteed by the Trust
by any "nationally recognized statistical rating
organization," as such term is defined for purposes of
Rule 436(g)(2) under the Act.
(e) The Underwriters shall have received an
opinion, dated the Closing Date and, with respect to
the Additional Shares, the Option Closing Date, from
Battle Fowler LLP, counsel to the Underwriters, with
respect to the Registration Statement, the Prospectus
and this Agreement, which opinion shall be satisfactory
in all respects to the Representatives, and such
counsel shall have been provided by the Trust with such
documents and information as they may reasonably
request to enable them to pass on such matters. In
rendering such opinion, such counsel may rely, as to
matters of Maryland law, on the opinion of Ballard
Spahr Andrews & Ingersoll.
(f) On the date hereof or such other date as the
Underwriters may agree to, Arthur Andersen LLP shall
have furnished to the Underwriters a letter, dated the
date of its delivery, addressed to the Underwriters and
in form and substance satisfactory to the Underwriters
(and to its counsel), confirming that they are
independent public accountants with respect to the
Trust and its Subsidiaries as required by the Act and
with respect to the financial and other statistical and
numerical information contained in the Registration
Statement and containing statements and information of
the type ordinarily included in accountants' "comfort
letters" as set forth in the AICPA's Statement on
Auditing Standards 72. At the Closing Date and, as to
the Additional Shares, at any Option Closing Date,
Arthur Andersen LLP shall have furnished to the
Underwriters 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 its 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 and
the applicable Option Closing Date, as the case may be,
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 and the applicable Option
Closing Date, as the case may be.
(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 Trust,
shall be contemplated by the Commission at or prior to
the Closing Date; (ii) there shall not have been any
material change in the capital stock of the Trust nor
any material increase in the short-term or long-term
debt of the Trust and the Subsidiaries on a
consolidated basis 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
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 Trust and the Subsidiaries taken as a
whole; (iv) the Trust 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 Trust and the
Subsidiaries, taken as a whole, other than those
reflected in the Registration Statement or the
Prospectus (or any amendment or supplement thereto);
(v) no proceedings shall be pending or, to the
knowledge of the Trust, threatened against the Trust 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 (vi) all the representations and warranties
of the Trust contained in this Agreement shall be true
and correct in all material respects 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 Trust (or such other officers
as are acceptable to you on behalf of the Trust), to
the effect set forth in this Section 7(g) and in
Section 7(h) hereof.
(h) The Trust 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 or
thereunder at or prior to the Closing Date.
(i) Prior to the Closing Date, the Shares shall
have been approved for listing, subject to notice of
issuance, on the NYSE.
(j) The Trust shall have furnished or caused to
be furnished to you such further certificates and
documents as you shall have reasonably requested.
(k) Within two days of the date of this
Agreement, the Trust shall have duly filed the articles
supplementary designating the Series D Preferred Shares
with the State Department of Assessments and Taxation
of Maryland.
(l) At the Closing Date, the Shares shall have
the rating accorded by "nationally recognized
statistical organization," as defined by the Commission
for purposes of Rule 436(g)(2) under the Act, as
specified in Section 5(gg) hereto, and the Trust shall
have delivered to Salomon Brothers Inc a letter, dated
as of such date, from such rating organization, or
other evidence satisfactory to Salomon Brothers Inc,
confirming that the Shares have such ratings. Since
the date hereof, there shall not have occurred a
downgrading in the rating assigned to the Shares or any
of the Trust's securities or other securities by any
such rating organization, and no such rating
organization shall have publicly announced that it has
under surveillance or review, with possible negative
implications, its rating of the Shares or any of the
Trust's securities or other securities.
(m) At the Closing Date and, if later, at any
applicable Option Closing Date, counsel for the
Underwriters 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 any of the conditions, herein
contained; and all proceedings taken by the Trust in
connection with the issuance and sale of the Shares as
herein contemplated shall be reasonably satisfactory in
form and substance to the Underwriters and counsel for
the Underwriters.
All such opinions, certificates, letters and other
documents will be in compliance with the provisions hereof
only if they are reasonably satisfactory in form and
substance to you and your counsel.
Any certificate or document signed by any officer
of the Trust and delivered to you, as Representatives of the
Underwriters, or to counsel for the Underwriters, shall be
deemed a representation and warranty by the Trust to each
Underwriter as to the statements made therein.
The several obligations of the Underwriters to
purchase Additional Shares hereunder are subject to the
satisfaction on and as of any Option Closing Date of the
conditions set forth in this Section 7, except that, if any
Option Closing Date is other than the Closing Date, the
certificates, opinions and letters referred to in paragraphs
(c) and (e) through (g) shall be dated the Option Closing
Date in question and the opinions called for by paragraphs
(c) and (e) shall be revised to reflect the sale of
Additional Shares.
8. INDEMNIFICATION AND CONTRIBUTION. (a) The
Trust agrees to indemnify and hold harmless each of you and
each other Underwriter and each person, if any, who controls
any 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 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 such Underwriter
furnished in writing to the Trust by or on behalf of any
Underwriter through you expressly for use in connection
therewith. The foregoing indemnity agreement shall be in
addition to any liability which the Trust may otherwise
have.
(b) If any action, suit or proceeding shall be
brought against any Underwriter or any person controlling
any Underwriter in respect of which indemnity may be sought
against the Trust, such Underwriter or such controlling
person shall promptly notify the Trust and the Trust shall
assume the defense thereof, including the employment of
counsel and payment of all fees and expenses. Such
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 such Underwriter or such controlling person
unless (i) the Trust has agreed in writing to pay such fees
and expenses, (ii) the Trust has 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 such Underwriter or such controlling
person and the Trust and such Underwriter or such
controlling person shall have been advised by its counsel
that representation of such indemnified party and the Trust
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 Trust 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 Trust 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
all such Underwriters and controlling persons not having
actual or potential differing interests with you or among
themselves, which firm shall be designated in writing by
Salomon Brothers Inc, and that all such fees and expenses
shall be reimbursed as they are incurred; provided however,
that the Trust shall be responsible for the reasonable fees
and expenses of only one separate firm of attorneys (in
addition to any local counsel) for such Underwriters and
controlling persons who have actual or potential differing
interests with you or among themselves. The Trust 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 be a final
judgment for the plaintiff in any such action, suit or
proceeding, the Trust agrees to indemnify and hold harmless
any Underwriter, to the extent provided in the preceding
paragraph, any such controlling person from and against any
loss, claim, damage, liability or expense by reason of such
settlement or judgment.
(c) Each Underwriter agrees, severally and not
jointly, to indemnify and hold harmless the Trust, its
trustees, its officers who sign the Registration Statement,
and any person who controls the Trust 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 Trust to
each Underwriter, but only with respect to information
relating to such Underwriter furnished in writing by or on
behalf of such Underwriter through you expressly for use in
the Registration Statement, the Prospectus, or any amendment
or supplement thereto. If any action, suit or proceeding
shall be brought against the Trust, any of its trustees, any
such officer, or any such controlling person based on the
Registration Statement, the Prospectus, or any amendment or
supplement thereto, and in respect of which indemnity may be
sought against any Underwriter pursuant to this paragraph
(c), such Underwriter shall have the rights and duties given
to the Trust by paragraph (b) above (except that if the
Trust shall have assumed the defense thereof such
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 be
at such Underwriter's expense), and the Trust, its trustees,
any such officer, and any such controlling person shall have
the rights and duties given to the Underwriters by paragraph
(b) above. The foregoing indemnity agreement shall be in
addition to any liability which the Underwriters may
otherwise have.
(d) If the indemnification provided for in this
Section 8 is unavailable to an indemnified party under
paragraph (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 indemnifying party, shall contribute to the amount paid
or payable by such indemnifying 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 Trust on the one hand and the
Underwriters 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 Trust on the one hand and the Underwriters 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 Trust
on the one hand and the Underwriters 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 Trust bear to the total underwriting
discounts and commissions received by the Underwriters, in
each case as set forth in the table on the cover page of the
Prospectus. The relative fault of the Trust on the one hand
and the Underwriters 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 Trust on the one hand and the
Underwriters 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 Trust and the Underwriters agree that it
would not be just and equitable if contribution pursuant to
this Section 8 were determined by a pro rata allocation
(even if the Underwriters were treated as one entity for
such purpose) 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 8, no Underwriter shall be required to contribute
any amount in excess of the amount by which the total price
of the Shares underwritten by it and distributed to the
public 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.
The Underwriters' obligations to contribute pursuant to this
Section 8 are several in proportion to the respective
numbers of Firm Shares set forth opposite their names in
Schedule I hereto (or such numbers of Firm Shares increased
as set forth in Section 10 hereof) and not joint.
(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 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 8 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 8 and the representations and
warranties of the Trust 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 any
Underwriter or any person controlling any Underwriter, the
Trust, its directors or officers, or any person controlling
the Trust, (ii) acceptance of any Shares and payments
therefor hereunder, and (iii) any termination of this
Agreement. A successor to any Underwriter or any person
controlling any Underwriter, or to the Trust, its directors
or officers, or any person controlling the Trust, shall be
entitled to the benefits of the indemnity, contribution and
reimbursement agreements contained in this Section 8.
9. EXPENSES. The Trust 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), 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, the Prospectus, the
Incorporated Documents, 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) 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) the registration of the Shares under the
Exchange Act and the listing of the Shares on the NYSE; (vi)
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 6(f) hereof (including
the reasonable fees, expenses and disbursements of counsel
for the Underwriters relating to the preparation, printing
or reproduction, and delivery of the preliminary and
supplemental Blue Sky Memoranda and such registration and
qualification, if any); (viii) the filing fees and the fees
and expenses of counsel for the Underwriters in connection
with any filings required to be made with the National
Association of Securities Dealers, Inc., if any; (ix) the
transportation and other expenses incurred by or on behalf
of Trust representatives in connection with presentations to
prospective purchasers of the Shares; and (x) the fees and
expenses of the Trust's accountants and the fees and
expenses of counsel (including local and special counsel)
for the Trust.
10. 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 a
post-effective amendment to the Registration Statement to be
declared effective before the offering of the Shares may
commence, when notification of the effectiveness of 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 Trust, by
notifying you, or by you, as Representatives of the several
Underwriters, by notifying the Trust.
If any one or more of the Underwriters shall fail
or refuse to purchase Shares which it or they are obligated
to purchase hereunder on the Closing Date, and the aggregate
number of Shares which such defaulting Underwriter or
Underwriters are obligated but fail or refuse to purchase is
not more than one-tenth of the aggregate number of Shares
which the Underwriters are obligated to purchase on the
Closing Date, each non-defaulting Underwriter shall be
obligated, severally, in the proportion which the number of
Firm Shares set forth opposite its name in Schedule I hereto
bears to the aggregate number of Firm Shares set forth
opposite the names of all non-defaulting Underwriters or in
such other proportion as you may specify in accordance with
Section 20 of the Master Agreement Among Underwriters of
Salomon Brothers Inc., to purchase the Shares which such
defaulting Underwriter or Underwriters are obligated, but
fail or refuse, to purchase. If any one or more of the
Underwriters shall fail or refuse to purchase Shares which
it or they are obligated to purchase on the Closing Date and
the aggregate number of Shares with respect to which such
default occurs is more than one-tenth of the aggregate
number of Shares which the Underwriters are obligated to
purchase on the Closing Date and arrangements satisfactory
to you and the Trust for the purchase of such Shares by one
or more non-defaulting Underwriters or other party or
parties approved by you and the Trust are not made within 36
hours after such default, this Agreement will terminate
without liability on the part of any non-defaulting
Underwriter or the Trust. In any such case which does not
result in termination of this Agreement, either you or the
Trust shall have the right to postpone the Closing Date, but
in no event for longer than seven days, in order that the
required changes, if any, in the Registration Statement and
the Prospectus or any other documents or arrangements may be
effected. Any action taken under this paragraph shall not
relieve any defaulting Underwriter from liability in respect
of any such default of any such Underwriter under this
Agreement. The term "Underwriter" as used in this Agreement
includes, for all purposes of this Agreement, any party not
listed in Schedule I hereto who, with your approval and the
approval of the Trust, purchases Shares which a defaulting
Underwriter is obligated but fails or refuses, to purchase.
Any notice under this Section 10 may be given by
telegram, telecopy or telephone but shall be subsequently
confirmed by letter.
11. TRUST EXCULPATION. This Agreement and all
documents, agreements, understandings and arrangements
relating hereto have been entered into or executed on behalf
of the Trust by the undersigned in his capacity as a trustee
or officer of the Trust, which has been formed as a Maryland
real estate investment trust pursuant to a declaration of
trust of the Trust dated as of June 17, 1992, as amended and
restated, and not individually, and neither the trustees,
officers nor shareholders of the Trust shall be bound or
have any personal liability hereunder or thereunder. The
Underwriter shall look solely to the assets of the Trust for
satisfaction of any liability of the Trust with respect to
this Agreement and all documents, agreements, understandings
and arrangements relating hereto and will not seek recourse
or commence any action against any of the trustees, officers
or shareholders of the Trust or any of their personal assets
for the performance or payment of any obligation hereunder
or thereunder.
12. TERMINATION. This Agreement shall be subject
to termination in your absolute discretion, without
liability on the part of any Underwriter to the Trust by
notice to the Trust, 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 NYSE, 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
California 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 to
commence or continue the offering of the Shares at the
offering price to the public set forth on the cover page of
the Prospectus or to enforce contracts for the resale of the
Shares by the Underwriters. Notice of such termination may
be given to the Trust by telegram, telecopy or telephone and
shall be subsequently confirmed by letter.
13. INFORMATION FURNISHED BY THE UNDERWRITERS.
The statements set forth in the last paragraph on the cover
page, the stabilization legend on the inside front cover and
the statements in the first, third, and fifth paragraphs and
the third full sentence of the seventh paragraph and the
eighth paragraph exclusive of the cross reference to "Use of
Proceeds," each under the caption "Underwriting" in the
Prospectus Supplement constitute the only information
furnished by or on behalf of the Underwriters through you as
such information is referred to in Sections 5(b), 5(d) and 8
hereof.
14. MISCELLANEOUS. Except as otherwise provided
in Sections 4, 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 Trust, at the office of the
Trust, Kranzco Realty Trust, 128 Fayette Street,
Conshohocken, Pennsylvania 19428, or (ii) if to you, as
Representatives of the several Underwriters, care of Salomon
Brothers Inc, Seven World Trade Center, New York, New York
10048, Attention: Manager, Investment Banking Division.
This Agreement has been and is made solely for the
benefit of the several Underwriters, the Trust, its trustees
and officers, and the other controlling persons referred to
in Section 8 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 any Underwriter of any of the
Shares in his status as such purchaser.
15. 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.
Please confirm that the foregoing correctly sets
forth the agreement between the Trust and the several
Underwriters.
Very truly yours,
KRANZCO REALTY TRUST
By:_______________________________
Name:
Title:
Confirmed as of the date
first above mentioned on
behalf of themselves and
the other several Underwriters
named in Schedule I hereto.
SALOMON BROTHERS INC
DONALDSON, LUFKIN & JENRETTE SECURITIES CORPORATION
FRIEDMAN, BILLINGS, RAMSEY & CO., INC.
As Representatives of the Several Underwriters
By: SALOMON BROTHERS INC
By:___________________________
Name:
Title:<PAGE>
Schedule I
Underwriter Number of Firm Shares
Salomon Brothers Inc . . . . . . . . . . . . . . . . 600,000
Donaldson, Lufkin & Jenrette
Securities Corporation . . . . . . . . . . . . . . . . . .
600,000
Friedman, Billings, Ramsey & Co., Inc. . . . . . . . 600,000
TOTAL. . . . . . . . . . . . . . . . . .
1,800,000
<PAGE>
SCHEDULE 5(g)
Jurisdictions of Organization and Foreign
Qualification of Trust and Subsidiaries
Kranzco Realty Trust
Maryland*
Connecticut**
New York**
Pennsylvania**
Rhode Island**
KR Tucson, Inc.
Arizona*
KR Bainbridge, Inc.
Georgia*
KR Harrodsburg, Inc.
Kentucky*
KR Flint, Inc.
Michigan*
KR Livonia, Inc.
Michigan*
KR Minnetonka, Inc.
Minnesota*
KR Roseville, Inc.
Minnesota*
KR Brookhaven, Inc.
Mississippi*
KR Columbus, Inc.
Mississippi*
KR Cary, Inc.
North Carolina*
KR Morganton, Inc.
North Carolina*
KR Columbia, Inc.
South Carolina*
* State of organization or formation.
** State where such entity should be qualified to do
business as a foreign corporation or other entity.<PAGE>
KR Spartanburg, Inc.
South Carolina*
KR Richmond, Inc.
Virginia*
Lilac New York Corp.
New York*
KR Parkway Plaza I, Corp.
Connecticut*
KR Wampanoag, Inc.
Rhode Island*
Kranzco Raynham, Inc.
Massachusetts*
KRT Union Corp.
Delaware*
Pennsylvania**
KR Collegetown, Inc.
New Jersey*
KR Hillcrest Mall, Inc.
New Jersey*
KR Manchester, Inc.
Connecticut*
KR Orange, Inc.
Connecticut*
KRT Property Holdings, Inc.
Maryland*
Pennsylvania**
Connecticut**
New York**
KR Trust One, Inc.
Maryland*
KRT Origination Corp.
Delaware*
* State of organization or formation.
** State where such entity should be qualified to do
business as a foreign corporation or other entity.<PAGE>
KR Atlanta, Inc.
Maryland*
KR Holcomb, Inc.
Georgia*
KR Tower Plaza, Inc.
Georgia*
KR North Park, Inc.
Georgia*
KR Mableton, Inc.
Georgia*
KR Park Plaza, Inc.
Georgia*
Parkway Plaza II Corp.
Maryland*
Connecticut** [pending good standing]
Lilac Connecticut Corp.
Connecticut*
KR Barn, L.P.
Pennsylvania*
KR Barn, Inc.
Pennsylvania*
KR Bradford Mall, L.P.
Pennsylvania*
KR Bradford Mall, Inc.
Pennsylvania*
KR Valley Forge, L.P.
Pennsylvania
KR Valley Forge, Inc.
Pennsylvania*
Fox Run Limited Partnership
Alabama*
Maryland**
* State of organization or formation.
** State where such entity should be qualified to do
business as a foreign corporation or other entity.<PAGE>
KR Fox Run, Inc.
Maryland*
Hillcrest Plaza Limited Partnership
Maryland* [application to establish good standing is
presently pending]
KR Hillcrest, Inc.
Maryland*
KR 69th Street L.P.
Pennsylvania*
KR 69th Street, Inc.
Pennsylvania*
KR Best Associates, L.P.
Pennsylvania*
KR Best Associates, Inc.
Pennsylvania*
KR MacArthur Associates, L.P.
Pennsylvania*
KR MacArthur, Inc.
Pennsylvania*
KR Pilgrim, L.P.
Pennsylvania*
KR Pilgrim, Inc.
Pennsylvania*
KR Suburban, L.P.
New Jersey*
KR Suburban, Inc.
New Jersey*
KR Street Associates, L.P.
Pennsylvania*
KR Street, Inc.
Pennsylvania*
Coral Hills Associates Limited Partnership
Maryland*
* State of organization or formation.
** State where such entity should be qualified to do
business as a foreign corporation or other entity.<PAGE>
KR Coral Hills, Inc.
Maryland*
KR Culpeper, Inc.
Maryland*
KR Culpeper II, Inc.
Maryland*
KR Campus, Inc.
Maryland*
KR Campus II, Inc.
Maryland*
KR Marumsco, Inc.
Maryland*
KR Marumsco II, Inc.
Maryland*
KR Development, Inc.
Pennsylvania*
KR Development, L.P.
Pennsylvania*
General Partnership
The States of Maryland and Virginia do not issue
good standing certificates for general partnership entities.
In lieu thereof, we are providing copies of the
organizational documents for each of the following entities:
Culpeper Shopping Center Joint Venture
Maryland*
Virginia*
Campus Village Shopping Center Joint Venture
Prince George County, Maryland*
Marumsco-Jefferson Joint Venture
Prince William County, Virginia*
* State of organization or formation.
** State where such entity should be qualified to do
business as a foreign corporation or other entity.
<PAGE>
Schedule 5(hh)
Georgia Acquisition Documents
1. Agreement between GP Development Corporation and
Kranzco Realty Trust, dated October 30, 1997.
2. Agreement and Plan of Merger among GP Development
Corporation, Kranzco Realty Trust, KR Atlanta, Inc.,
and all of the shareholders of GP Development
Corporation.<PAGE>
Annex 7(c)
Form of Legal Opinions
i. The Trust is a real estate investment trust
duly formed and validly existing in good standing under the
laws of the State of Maryland with full trust power to own,
lease and operate its properties and to conduct its business
substantially as described in the Registration Statement and
the Prospectus (and any amendment or supplement thereto),
each Subsidiary is a corporation, limited liability company
or limited partnership, as the case may be, duly formed and
validly existing in its jurisdiction of organization and
each of the Trust and each 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 so
to register or qualify does not have a material adverse
effect on the condition (financial or other), business,
properties, net worth or results of operations of the Trust
and the Subsidiaries, taken as a whole;
ii. The Trust has no subsidiary and does not
control, directly or indirectly, any corporation, trust,
partnership, limited liability company, joint venture,
association or other business association other than the
Subsidiaries;
iii. The authorized shares of beneficial interest
of the Trust consists of 100 million shares of beneficial
interest, $.01 par value per share. The shares of
beneficial interest of the Trust conform as to legal matters
in all material respects to the description thereof
contained in the Prospectus and the Prospectus Supplement
under the caption "Description of Shares of Beneficial
Interest" and all of the issued and outstanding shares of
beneficial interest of the Trust are duly authorized,
validly issued, fully paid and nonassessable (except that
shareholders may be subject to personal liability with
respect to certain claims for tort, contract, taxes and
statutory liability in some jurisdictions to the extent such
claims are not satisfied by the Trust).
iv. The Trust has (a) 10,347,279 common shares,
par value $.01 per share (the "Common Shares"), currently
issued and outstanding, (b) classified 11,155 shares as
Series A-1 Increasing Rate Cumulative Convertible Preferred
Shares, of which 11,155 shares are currently issued and
outstanding, (c) classified 1,235,000 shares of 9.75%
Series B-1 Cumulative Convertible Preferred Shares, of which
274,606 shares are currently issued and outstanding, (d)
classified 1,235,000 shares as 9.75% Series B-2 Cumulative
Convertible Preferred Shares, of which 908,725 are currently
issued and outstanding, and (e) classified 395,834 shares of
Series C Cumulative Redeemable Preferred Shares, of which
222,750 shares are currently issued and outstanding; and (f)
3,450,000 shares of 9 1/2% Series D Cumulative Redeemable
Preferred Shares, none of which have been issued;
v. The Shares conform in all material respects
to the description thereof in the Prospectus under the
captions "Description of Series D Preferred Stock";
vi. All of the outstanding shares of capital
stock of each Subsidiary which is a corporation have been
duly authorized and validly issued, are fully paid and
nonassessable, and all of such shares of capital stock of
each Subsidiary which is a corporation are owned of record
by the Trust, free and clear of any perfected security
interests or, to our knowledge, any other liens,
encumbrances, security interests and claims; and based
solely on our review of the limited partnership agreements
and operating agreements of each Subsidiary which is a
limited partnership or a limited liability company, as the
case may be, all of the partnership interests or membership
interests, as the case may be, of such Subsidiary which is a
limited partnership or a limited liability company, as the
case may be, are owned by the Trust directly, or indirectly,
free and clear of any perfected security interests or, to
our knowledge, any other liens, encumbrances, security
interests and claims;
vii. The Shares have been duly authorized and,
when issued and delivered to the Underwriters against
payment therefor in accordance with the terms hereof, will
be validly issued, fully paid and nonassessable (except that
shareholders may be subject to personal liability with
respect to certain claims for tort, contract, taxes and
statutory and other liabilities in some jurisdictions) and
free of any preemptive, or to the best knowledge of such
counsel after reasonable inquiry, similar rights that
entitle or will entitle any person to acquire any Common
Shares or Preferred Shares or other securities of the Trust
upon the issuance of the Shares by the Trust;
viii. The Shares have been duly authorized for
listing, subject to official notice of issuance, on the
NYSE. The form of certificate evidencing the Shares is in
due and proper form and complies in all material respects
with all applicable statutory and NYSE requirements;
ix. The form of certificates evidencing the
Shares conforms in all material respects to the requirements
of Title 8 of the Corporations and Associations Article of
the Annotated Code of Maryland;
x. The Registration Statement and all post-
effective amendments, if any, have become effective under
the Act and, to the best knowledge of such counsel after
reasonable inquiry, to our knowledge (based solely on oral
representations of a member of the staff of the Commission
and a certificate of the Trust) 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 pursuant to Rule 424(b) has been made in
accordance with Rule 424(b);
xi. The Trust has full trust power to enter into
this Agreement and to issue, sell and deliver the Shares to
the Underwriters as provided herein, and this Agreement has
been duly authorized, executed and delivered by the Trust
and is a valid, legal and binding agreement of the Trust,
enforceable against the Trust 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 and subject
to the qualification that the enforceability of the Trust's
obligations hereunder may be limited by bankruptcy,
fraudulent conveyance, insolvency, reorganization,
moratorium, and other laws relating to or affecting
creditors' rights generally and by general equitable
principles;
xii. To the best knowledge of such counsel after
reasonably inquiry, neither the Trust nor any Subsidiary is
in violation of its declaration of trust, charter or bylaws,
or other organizational documents, or to the best knowledge
of such counsel after reasonable inquiry, is in default in
the performance of any material obligation, agreement or
condition contained in any bond, debenture, note or other
evidence of indebtedness, except as may be disclosed in the
Prospectus, or the default of which would not have a
material adverse effect on the Trust and the Subsidiaries
taken as a whole;
xiii. Neither the offer, sale or delivery of
the Shares, the execution, delivery or performance of this
Agreement, compliance by the Trust with the provisions
hereof nor consummation by the Trust or any Subsidiary of
the transactions contemplated hereby conflicts or will
conflict with or constitutes or will constitute a breach of,
or a default under, the declaration of trust or bylaws, or
other organizational documents of the Trust and the
Subsidiaries or to the best knowledge of such counsel, any
agreement, indenture, lease or other instrument to which the
Trust or any Subsidiary is a party or by which the Trust or
any Subsidiary or any of their respective properties is
bound that is an exhibit to the Registration Statement or
incorporated by reference thereto, or is known to such
counsel after reasonable inquiry, or will result in the
creation or imposition of any lien, charge or encumbrance
upon any property or assets of the Trust or any Subsidiary,
nor will any such action result in any violation of any
existing law, regulation, ruling (assuming compliance with
all applicable state securities and Blue Sky laws),
judgment, injunction, order or decree known to such counsel
after reasonable inquiry, applicable to the Trust or any
Subsidiary or any of their respective properties, the
default, violation or imposition of which will have a
material adverse effect on the Trust and the Subsidiaries
taken as a whole;
xiv. No consent, approval, authorization or other
order of, or registration or filing with, any court,
regulatory body, administrative agency or other governmental
body, agency or official is required on the part of the
Trust or any Subsidiary (except as have been obtained under
the Act or such as may be required under state securities or
Blue Sky laws governing the purchase and distribution of the
Shares) for the valid issuance and sale of the Shares to the
Underwriters as contemplated by this Agreement;
xv. At the Closing Date, 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 or the exhibits to the Registration Statement, 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 as to the form of exhibits
to the Registration Statement, or to the accuracy,
completeness or fairness of the statements contained in the
Registration Statement (except for the financial statements
and the notes thereto and the schedules and other financial
and statistical data included therein, as to which counsel
need not express any opinion) complies as to form in all
material respects with the Exchange Act and the rules and
regulations of the Commission thereunder;
xvi. To the best knowledge of such counsel after
reasonable inquiry, (A) other than as described or
contemplated in the Prospectus (or any supplement thereto),
there are no legal or governmental proceedings pending or
threatened against the Trust or any Subsidiary, or to which
the Trust or any Subsidiary or any of their respective
property is subject, which are required to be described in
the Registration Statement or Prospectus (or any amendment
or supplement thereto) and (B) 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, as the case may be;
xvii. The statements in the Registration
Statement and Prospectus, insofar as they are descriptions
of contracts, agreements or other legal documents, or refer
to statements of law or legal conclusions, are accurate in
all material respects and present fairly the information
required to be shown;
xviii. The statements set forth under the
headings "Description of Debt Securities," "Description of
Shares of Common Shares," "Description of Preferred Shares"
and "Description of Series D Preferred Shares" in the
Prospectus Supplement, insofar as such statements purport to
summarize certain provisions of the securities of the Trust,
provide a fair summary of such provisions; and the
statements set forth under the headings "Restrictions on
Ownership" and "Federal Income Tax Considerations" in the
Prospectus and "Risk Factors," and "Recent Developments," in
the Prospectus Supplement, insofar as such statements
constitute a summary of the legal matters or legal
conclusions, have been reviewed by them and are correct in
all material respects;
xix. Except as described in the Registration
Statement and the Prospectus or any Incorporated Document
and, to the best of our knowledge, there are no contracts,
agreements or understandings between the Trust and any
person granting such person or entity the right to require
the registration of any shares of Common Stock or any other
securities of the Trust because of the filing of the
Registration Statement or sale of the Shares as contemplated
by the Underwriting Agreement;
xx. The Trust and its Subsidiaries are not now
and after the sale of the Shares to be sold hereunder and
application of the net proceeds from such sale as described
in the Prospectus Supplement under the caption "Use of
Proceeds," none of them will be, an "investment company", or
an entity "controlled by an "investment company" as such
terms are defined in the Investment Company Act of 1940, as
amended;
xxi. Each of the Georgia Acquisition Documents to
which the Trust or any Subsidiary is a party has been duly
authorized and executed by such entity and constitutes a
valid and binding obligation of the parties thereto,
enforceable against each in accordance with the terms
thereof, except as the enforceability thereof may be limited
by applicable bankruptcy, insolvency, moratorium and other
laws affecting the enforceability of creditors' rights and
general principles of equity;
xxii. The Trust satisfied all conditions and
requirements for filing the Registration Statement on Form
S-3 under the Securities Act;
xxiii. The Trust was organized in conformity
with the requirements for qualification as a REIT for
federal income tax purposes, and, based on the facts and
assumptions set forth in the Prospectus, and the Prospectus
Supplement and certain representations by the Trust,
including but not limited to those set forth in the
Officer's Certificate regarding certain federal income tax
matters, its method of operation has enabled it, and its
proposed method of operation will enable it, to meet the
requirements under the Code for qualification and taxation
as a REIT and the Subsidiaries will be treated for Federal
income tax purposes as partnerships and not as associations
taxable as corporations or as publicly-traded partnerships;
xxiv. To the best of our knowledge, except as
described in the Prospectus or the Registration Statement
(or any amendment or supplement thereto) or any Incorporated
Document, 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
capital stock of the Trust or any security convertible into,
or exchangeable for, the capital stock of the Trust.
xxv. To the best knowledge of such counsel, each
of the Trust and the Subsidiaries has the Authorization
necessary to conduct their respective businesses except
where the failure to have any Authorization would not have a
Material Adverse Effect, and to the best of such counsel's
knowledge, no event has occurred (including, without
limitation, the receipt of any notice from any authority or
governing body) which allows, or after notice or lapse of
time or both, would allow, revocation, suspension or
termination of any such Authorization, the occurrence of
such event, singly or in the aggregate, would have a
Material Adverse Effect;
In addition, such counsel shall state that,
although such counsel has not undertaken, except as
otherwise indicated in their opinion, to determine
independently, and does not assume any responsibility for,
the accuracy or completeness of the statements in the
Registration Statement, such counsel has participated in the
preparation of the Registration Statement and the
Prospectus, including review and discussion of the contents
thereof, and nothing has come to the attention of such
counsel that has caused it to believe that the Registration
Statement at the time the Registration Statement became
effective, or the Prospectus and the Prospectus Supplement,
as of their respective dates and as of the Closing Date,
contained an untrue statement of a material fact or omitted
to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading or
that any amendment or supplement to the Prospectus and the
Prospectus Supplement, as of their respective dates and as
of the Closing Date, 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 (it
being understood that such counsel need express no opinion
with respect to the financial statements and the notes
thereto and the schedules and other financial and
statistical data included in the Registration Statement or
the Prospectus).
