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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
AMENDMENT NO. 1
FORM 10-Q/A
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly period ended September 30, 1997
OR
[_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Commission file number 001-12286
MID-ATLANTIC REALTY TRUST
(Exact name of registrant as specified in its charter)
Maryland 52-1832411
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization Identification No.)
170 West Ridgely Road, Ste. 300
Lutherville, Maryland 21093
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (410) 684-2000
Inapplicable
(Former name, former address and former fiscal year if changed
from last report.)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes x/ No
At November 14 1997 the number of shares outstanding of the registrant's common
stock was 13,800,687.
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The Registrant hereby amends the following items, financial statements,
exhibits, or other portions of its Quarterly Report on Form 10-Q for the quarter
ended September 30, 1997 which was filed with the Commission on November 14,
1997 as set forth below:
Part II, Item 6(a) of the Quarterly Report on Form 10-Q is amended to
reflect the filing, via EDGAR, of Exhibit 1 (Underwriting Agreement).
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this Amendment to be signed on its behalf by the
undersigned, thereto duly authorized.
MID-ATLANTIC REALTY TRUST
Date: November 26, 1997 By: /s/ Paul G. Bollinger
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Paul G. Bollinger
Vice President
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3,500,000 Shares
MID-ATLANTIC REALTY TRUST
Common Shares of Beneficial Interest
UNDERWRITING AGREEMENT
October 13, 1997
LEGG MASON WOOD WALKER, INCORPORATED SALOMON BROTHERS INC WHEAT FIRST BUTCHER
SINGER As Representatives of the several Underwriters c/o Legg Mason Wood
Walker, Incorporated 111 South Calvert Street, 20th Floor Baltimore, MD 21202
Ladies and Gentlemen:
Mid-Atlantic Realty Trust, a real estate investment trust organized
under the laws of the State of Maryland (the "Company") proposes to sell an
aggregate of 3,500,000 shares of the Company's common shares of beneficial
interest, $.01 par value per share (the "Firm Shares"), to you and to the other
underwriters named in Schedule I, acting severally and not jointly
(collectively, the "Underwriters"), for whom you are acting as representatives
(the "Representatives"). The Company has also agreed to grant to you and the
other Underwriters an option (the "Option") to purchase up to an additional
525,000 common shares of beneficial interest (the "Option Shares") as set forth
below. The Firm Shares and the Option Shares are hereinafter collectively
referred to as the "Shares."
The Company is the beneficial owner of seventy-two percent (72%) of the
units of partnership interest (the "Units") in, and is the sole general partner
of, MART Limited Partnership, a Maryland Limited Partnership (the
"Partnership"). The Company and the Partnership currently own, directly or
through their Subsidiaries (as hereafter defined) 26 neighborhood or community
shopping centers, one enclosed regional mall, five additional retail and
commercial properties and seven parcels of undeveloped land (collectively, the
"Properties"), as described in the prospectus (as hereafter defined).
In consideration of the mutual agreements contained herein and of the
interests of the parties in the transactions contemplated hereby, the parties
hereto agree as follows:
1. Agreement to Sell and Purchase.
(a) On the basis of the respective representations, warranties and
agreements of the Company and the Partnership herein contained and subject to
all the terms and conditions of this Agreement, (i) the Company agrees to sell
to the several Underwriters and (ii) each of the Underwriters, severally and not
jointly, agrees to purchase from the Company, at
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the purchase price of $13.00 per share, the number of Firm Shares set forth
opposite the name of such Underwriter in Schedule I, plus such additional number
of Firm Shares which such Underwriter may become obligated to purchase pursuant
to Section 9 hereof.
(b) Subject to all the terms and conditions of this Agreement, the
Company grants the Option to the several Underwriters to purchase, severally and
not jointly, up to 525,000 Option Shares from the Company at the same price per
share as the Underwriters shall pay for the Firm Shares. The Option may be
exercised only to cover over-allotments in the sale of the Firm Shares by the
Underwriters and may be exercised in whole or in part at any time (but not more
than once) on or before the 30th day after the date hereof, upon written or
telegraphic notice (the "Option Shares Notice") by the Representatives to the
Company no later than 12:00 noon, New York City time, at least two and no more
than five business days before the date specified for closing in the Option
Shares Notice (the "Option Closing Date") setting forth the aggregate number of
Option Shares to be purchased and the time and date for such purchase. On the
Option Closing Date, the Company will issue and sell to the Underwriters the
number of Option Shares set forth in the Option Shares Notice, and each
Underwriter will purchase such percentage of the Option Shares as is equal to
the percentage of Firm Shares that such Underwriter is purchasing, as adjusted
by the Representatives in such manner as they deem advisable to avoid fractional
shares.
2. Delivery and Payment. Delivery of the Firm Shares shall be made to
the Representatives for the accounts of the Underwriters at the office of Legg
Mason Wood Walker, Incorporated, 111 South Calvert Street, 20th Floor,
Baltimore, Maryland 21202, against payment of the purchase price therefor by
wire transfer of Federal Funds or similar same day funds to an account which has
been designated in writing by the Company to Legg Mason Wood Walker,
Incorporated at least one business day prior to the Closing Date (as hereinafter
defined). Such payment shall be made at 10:00 A.M., New York City time, on the
third business day after the date on which the first bona fide offering of the
Shares to the public is made by the Underwriters or at such time on such other
date, not later than ten business days after such date, as may be agreed upon by
the Company and the Representatives (such date is hereinafter referred to as the
"Closing Date"). The place of closing for the Firm Shares may also be varied by
agreement between you and the Company.
To the extent the Option is exercised, delivery of the Option
Shares against payment by the Underwriters (in the manner specified above) will
take place at the offices specified above for the Closing Date on the Option
Closing Date.
Certificates evidencing the Shares shall be in definitive form and
shall be registered in such names and in such denominations as the
Representatives shall request at least two business days prior to the Closing
Date or the Option Closing Date, as the case may be, by written notice to the
Company. For the purpose of expediting the checking and packaging of
certificates for the Shares, the Company agrees to make such certificates
available for inspection and packaging not later than 9:30 A.M., New York City
Time, at least 24 hours prior to the Closing Date or the Option Closing Date, as
the case may be.
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The cost of original issue tax stamps, if any, in connection with
the issuance and delivery of the Firm Shares and Option Shares by the Company to
the respective Underwriters shall be borne by the Company. The Company shall pay
and save each Underwriter and any subsequent holder of the Shares harmless from
any and all liabilities with respect to or resulting from any failure or delay
in paying Federal and state stamp and other transfer taxes, if any, which may be
payable or determined to be payable in connection with the original issuance or
sale to such Underwriter of the Firm Shares and Option Shares.
3. Representations and Warranties of the Company and the Partnership.
The Company and the Partnership, jointly and severally, represent, warrant and
covenant to each Underwriter that:
(a) A registration statement (Registration No. 333-20813) on Form
S-3 relating to the Shares, including a prospectus subject to completion and
such amendments to such registration statement as may have been required to the
date of this Agreement, have been prepared by the Company under the provisions
of the Securities Act of 1933, as amended (the "Act"), and the published rules
and regulations (collectively referred to as the "Rules and Regulations") of the
Securities and Exchange Commission (the "Commission") thereunder, and has been
filed with the Commission. The Company has complied with the conditions for the
use of Form S-3. Such registration statement and any post-effective amendment
thereto have become effective under the Act. The Company also has filed, or
proposes to file, with the Commission pursuant to Rule 424(b) under the Act, a
prospectus supplement specifically relating to the Shares (the "prospectus
supplement").
The term "registration statement" as used in this Agreement
means the registration statement (including all financial statements, schedules
and exhibits), as amended at the time it became effective, as supplemented or
amended prior to the execution of the Agreement, including all information (if
any) deemed to be a part of such registration statement at the time it became
effective pursuant to Rule 430A or Rule 424 of the Rules and Regulations under
the Act. If it is contemplated, at the time this Agreement is executed, that a
post-effective amendment to the registration statement will be filed and must be
declared effective before the offering of the Shares may commence, the term
"registration statement" means the registration statement as amended by said
post-effective amendment. The term "prospectus" as used herein means a base
prospectus as contemplated by Rule 430 or Rule 430A of the Rules and Regulations
included at any time as part of the registration statement at the time it became
effective (the "base prospectus") under the Act together with the prospectus
supplement dated October 14, 1997 in the form first filed with the Commission on
or after October 14, 1997 pursuant to Rule 424(b)(2) under the Act. The term
"pre-pricing prospectus supplement" as used herein means the base prospectus
together with any prospectus supplement subject to completion included in the
registration statement as filed with the Commission pursuant to Rule 424(b)
under the Act, and as such pre-pricing prospectus supplement shall have been
amended or supplemented from time to time prior to the date of the prospectus.
Copies of such registration statement and amendments, each related prospectus,
and each prospectus supplement, including the pre-pricing prospectus supplement,
have been delivered to the Representatives. If the Company files a registration
statement to register a portion of the Shares and relies on Rule
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462(b) of the Rules and Regulations for such registration statement to become
effective upon filing with the Commission (the "Rule 462 Registration
Statement"), then any reference to the "registration statement" shall be deemed
to include the Rule 462 registration statement, as amended from time to time.
Any reference herein to any "registration statement," "base prospectus,"
"prospectus," "prospectus supplement" or "pre-pricing prospectus supplement"
shall be deemed to refer to, describe and include the documents incorporated by
reference therein pursuant to Item 12 of Form S-3 under the Act, as of the date
of the registration statement, prospectus or pre-pricing prospectus supplement,
as the case may be, and any reference to any amendment or supplement to the
registration statement, the prospectus or any pre-pricing prospectus supplement
shall be deemed to refer to, describe and include any documents filed after such
date under the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
which, upon filing, are incorporated by reference therein, as required by
paragraph (b) of Item 12 of Form S-3.
(b) No order preventing or suspending the use of any pre-pricing
prospectus supplement or prospectus has been issued and no proceeding for that
purpose has been instituted or threatened by the Commission or the securities
authority of any state or other jurisdiction. 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 threatened by the
Commission or the securities authority of any state or other jurisdiction.
(c) The Company and the transactions contemplated by this Agreement
meet the requirements and conditions for using a registration statement on Form
S-3 under the Act, set forth in the General Instructions to Form S-3. When any
pre-pricing prospectus supplement was filed with the Commission it (i) contained
all statements required to be stated therein in accordance with, and complied in
all material respects with the requirements of, the Act and the rules and
regulations of the Commission thereunder and (ii) did not include any untrue
statement of a material fact or omit to state any material fact necessary in
order to make the statements therein, the in the light of the circumstances
under which they were made, not misleading. When the registration statement or
any amendment thereto was declared effective, and on the Closing Date (or the
Option Closing Date, as the case may be) it (i) contained or will comply in all
material respects with the requirements of, the Act and the rules and
regulations of the Commission thereunder and (ii) did not or will not include
any untrue statement of a material fact or omit to state any material fact
necessary to make the statements therein not misleading. When the prospectus or
any amendment or supplement thereto is filed with the Commission pursuant to
Rule 424(b) and at the Closing Date (or the Option Closing Date, as the case may
be), the prospectus, as amended or supplemented at any such time, (i) contained
or will contain all statements required to be stated therein in accordance with,
and complied or will comply in all material respects with the requirements of,
the Act and the rules and regulations of the Commission thereunder and (ii) did
not or will not include any untrue statement of a material fact or omit to state
any material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading. The
representation and warranty in this paragraph (c) does not apply to statements
in or omissions from the registration statement, pre-pricing prospectus
supplement or the prospectus made in reliance upon and in conformity with
information furnished to the Company
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in writing by or on behalf of any Underwriter through you expressly for use
therein. For all purposes of this Agreement, the list of Underwriters and their
respective allotments appearing under the caption "Underwriting" in the
prospectus and the statements in the first and third paragraphs under the
caption "Underwriting" in the prospectus constitute the only information
relating to any Underwriter furnished in writing to the Company by the
Representatives specifically for inclusion in the pre-pricing prospectus
supplement, the registration statement or the prospectus. The Company has not
distributed any offering material in connection with the offering or sale of the
Shares other than the registration statement, the pre-pricing prospectus
supplement, the prospectus or any other materials, if any, permitted by the Act.
(d) The documents incorporated by reference heretofore filed, when
they were filed (or, if any amendment with respect to any such document was
filed, when such amendment was filed), conformed in all material respects with
the requirements of the Exchange Act and the rules and regulations thereunder,
no such document when it was filed (or, if an amendment with respect to any such
document was filed, when such amendment was filed), contained an untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary in order to make the statements therein not
misleading; and no such further document, when it is filed, will contain an
untrue statement of a material fact or will omit to state a material fact
required to be stated therein or necessary in order to make the statements
therein not misleading.
(e) The Company has been duly organized and is validly existing as
a real estate investment trust ("REIT") of unlimited duration with transferable
common shares of beneficial interest in good standing under the laws of the
State of Maryland with full power and authority to own and lease its properties
and to conduct its business as now conducted. The only direct subsidiaries (as
defined in the Rules and Regulations) of the Company are the subsidiaries listed
on Exhibit A hereto (the "REIT Subsidiaries"). Each of the REIT Subsidiaries is,
and at the Closing Date will be, duly organized and validly existing in good
standing under the laws of its jurisdiction of organization. The Company and
each of the REIT Subsidiaries has, and at the Closing Date will have, full power
and authority to conduct all the activities conducted by it, to own or lease all
the assets and properties, including the Properties, owned or leased by it and
to conduct its business as described in the registration statement and the
prospectus. Each of the Company and the REIT Subsidiaries is, and at the Closing
Date will be, duly licensed or qualified to do business and in good standing (i)
in the jurisdiction in which it has its principal place of business and (ii) in
all other jurisdictions in which the nature of the activities conducted by it or
the character of the assets owned or leased by it makes such licensing or
qualification necessary except where the failure to so license or qualify in any
such other jurisdiction will not have a material adverse effect on the business,
properties, condition (financial or otherwise), or results of operations (a
"Material Adverse Effect") of the Company and the REIT Subsidiaries taken as a
whole. All of the outstanding shares of capital stock, general and limited
partnership interests, or limited liability company interests of the REIT
Subsidiaries, as the case may be, have been duly authorized and validly issued,
and are fully paid and non-assessable and are, except as set forth in Exhibit A
or as disclosed in the registration statement or prospectus, owned by the
Company or a REIT Subsidiary, free and clear of all liens, encumbrances and
claims whatsoever and, except as set forth in Exhibit A or
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as disclosed in the registration statement or prospectus, no options, warrants
or other rights to purchase, agreements or other obligations to issue or other
rights to convert any obligations into any shares of capital stock, partnership
interests or limited liability company interests of any REIT Subsidiary, as the
case may be, are outstanding. Except for the stock, partnership interests or
limited liability company interests, as the case may be, of the Partnership, the
REIT Subsidiaries or the Partnership Subsidiaries (as hereafter defined) or
except as disclosed in Exhibit A or as disclosed in the registration statement
or prospectus, the Company does not own, and at the Closing Date will not own,
directly or indirectly, any shares of stock or any other equity or long-term
debt securities of any corporation or have any equity interest in any firm,
partnership, joint venture, limited liability company, association or other
entity that are required to be described in the registration statement or
prospectus. Complete and correct copies of the Declaration of Trust of the
Company and the certificate of incorporation and the by-laws, certificate of
partnership and partnership agreement or certificate of organization and limited
liability company agreement, as the case may be, of each REIT Subsidiary and all
amendments or supplements thereto have been delivered to the Representatives,
and no changes therein will be made subsequent to the date hereof and prior to
the Closing Date or, if later, the Option Closing Date.
(f) The Partnership has been duly formed and is validly existing as
a limited partnership in good standing under the Maryland Revised Uniform
Limited Partnership Act (the "Maryland Act") with all requisite partnership
power and authority to own and lease its assets and properties, including the
Properties, owned by it, and to conduct its business as now conducted. The only
direct subsidiaries (as defined in the Rules and Regulations) of the Partnership
are the subsidiaries listed on Exhibit B hereto (the "Partnership
Subsidiaries"). Each of the Partnership Subsidiaries is, and at the Closing Date
will be, duly organized and validly existing in good standing under the laws of
its jurisdiction of organization. The Partnership and each of the Partnership
Subsidiaries has, and at the Closing Date will have, full power and authority to
conduct all the activities conducted by it, to own or lease all the assets and
properties, including the Properties, owned or leased by it and to conduct its
business as described in the registration statement and the prospectus. Each of
the Partnership and the Partnership Subsidiaries is, and at the Closing Date
will be, duly licensed or qualified to do business and in good standing (i) in
the jurisdiction in which it has its principal place of business and (ii) in all
other jurisdictions in which the nature of the activities conducted by it or the
character of the assets owned or leased by it makes such licensing or
qualification necessary except where the failure to so license or qualify in any
such other jurisdiction will not have a Material Adverse Effect on the
Partnership and the Partnership Subsidiaries taken as a whole. All of the
outstanding shares of capital stock, general and limited partnership interests,
or limited liability company interests of the Partnership Subsidiaries, as the
case may be, have been duly authorized and validly issued, and are fully paid
and non-assessable and are, except as set forth in Exhibit B or the registration
statement or prospectus, owned by the Partnership or a Partnership Subsidiary
free and clear of all liens, encumbrances and claims whatsoever and, except as
set forth in Exhibit B or the registration statement or prospectus, no options,
warrants or other rights to purchase, agreements or other obligations to issue
or other rights to convert any obligations into any shares of capital stock,
partnership interests or limited liability company interests of any Partnership
Subsidiary, as the case may be, are outstanding. Except for the
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stock, partnership interests or limited liability company interests, as the case
may be, of the Partnership Subsidiaries or as disclosed in Exhibit B or in the
registration statement or prospectus, the Partnership does not own, and at the
Closing Date will not own, directly or indirectly, any shares of stock or any
other equity or long-term debt securities of any corporation or have any equity
interest in any firm, partnership, joint venture, limited liability company,
association or other entity required to be described in the registration
statement or prospectus. Complete and correct copies of the Certificate of
Limited Partnership and Partnership Agreement of the Partnership and the
certificate of incorporation and the by-laws, certificate of partnership and
partnership agreement or certificate of organization and limited liability
company agreement, as the case may be, of each Partnership Subsidiary and all
amendments or supplements thereto have been delivered to the Representatives,
and no changes therein will be made subsequent to the date hereof and prior to
the Closing Date or, if later, the Option Closing Date. The "REIT Subsidiaries"
and the "Partnership Subsidiaries" are collectively referred to herein as the
"Subsidiaries." The Company is the sole general partner of the Partnership and
holds approximately seventy-two percent (72%) of the outstanding Units of the
Partnership. At the Closing Date, following the contribution of the net proceeds
of the Offering to the Partnership, the Company will be the sole general partner
of the Partnership and will be the holder of approximately 80% of the Units in
the Partnership (assuming no exercise of the option to purchase the Option
Shares).
(g) The Company has full corporate right, power and authority to
enter into this Agreement, to issue, sell and deliver the Shares as provided
herein and to consummate the transactions contemplated herein. This Agreement
has been duly authorized, executed and delivered by the Company and constitutes
a valid and binding agreement of the Company, enforceable in accordance with its
terms, except to the extent that enforceability may be limited by bankruptcy,
insolvency, reorganization or other laws of general applicability relating to or
affecting creditors' rights, or by general equity principles and except to the
extent the indemnification and contribution provisions set forth in Section 7 of
this Agreement may be limited by federal or state securities laws or the public
policy underlying such laws.
(h) The Partnership has full partnership right, power and authority
to enter into this Agreement and to consummate the transactions contemplated
herein. This Agreement has been duly authorized, executed and delivered on
behalf of the Partnership by the Company, as the sole general partner of the
Partnership, and constitutes a valid and binding agreement of the Partnership
enforceable in accordance with its terms, except to the extent that
enforceability may be limited by bankruptcy, insolvency, reorganization or other
laws of general applicability relating to or affecting creditors' rights, or by
general equity principles and except to the extent the indemnification and
contribution provisions set forth in Section 7 of this Agreement may be limited
by federal or state securities laws or the public policy underlying such laws.
(i) Each consent, approval, authorization, order, license,
certificate, permit, registration, designation or filing by or with any
governmental agency or body necessary for the valid authorization, issuance,
sale and delivery of the Shares, the execution, delivery and
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performance of this Agreement and the consummation by the Company and the
Partnership of the transactions contemplated hereby has been made or obtained
and is in full force and effect.
(j) Neither the issuance, sale and delivery by the Company of the
Shares, nor the execution, delivery and performance of this Agreement nor the
consummation of the transactions contemplated hereby by the Company or the
Partnership, will conflict with or result in a breach or violation of any of the
terms and provisions of, or (with or without the giving of notice or the passage
of time or both) constitute a default under, the charter, by-laws, Declaration
of Trust, certificate of limited partnership or partnership agreement of the
Company, the Partnership or any Subsidiary, as the case may be; any indenture,
mortgage, deed of trust, loan agreement, note, lease or other agreement or
instrument to which the Company, the Partnership or any Subsidiary is a party or
to which it, they, any of them, or any of their respective properties or other
assets are subject; or any applicable statute, judgment, decree, order, rule or
regulation of any court or governmental agency or body applicable to any
business of the foregoing or any of their respective properties; or result in
the creation or imposition of any lien, charge, claim or encumbrance upon any
property or assets of any of the foregoing.
(k) The Shares to be issued and sold to the Underwriters hereunder
have been validly authorized by the Company. When issued and delivered against
payment therefor as provided in this Agreement, the Shares will be duly and
validly issued, fully paid and nonassessable. No statutory or other preemptive
rights of shareholders exist with respect to any of the Shares. No person or
entity holds a right to require or participate in the registration under the Act
of the Shares pursuant to the registration statement; and, except as set forth
in the registration statement or prospectus, no person holds a right to require
registration under the Act of any shares of beneficial interest of the Company
at any other time. No person or entity has a right of participation or first
refusal with respect to the sale of the Shares by the Company. The form of
certificates evidencing the Shares complies with all applicable requirements of
Maryland law.
(l) The Company's authorized, issued and outstanding shares of
beneficial interest are as disclosed in the prospectus. All of the issued shares
of beneficial interest of the Company have been duly authorized and validly
issued, are fully paid and nonassessable. None of the issued shares of
beneficial interest of the Company has been issued or is owned or held in
violation of any statutory or other preemptive rights of shareholders. Except as
disclosed in the prospectus, there is no outstanding option, warrant or other
right calling for the issuance of, and no commitment, plan or arrangement to
issue, any shares of beneficial interest of the Company or any security
convertible into or exchangeable for shares of beneficial interest of the
Company.
(m) All offers and sales of the Company's capital stock prior to
the date hereof were at all relevant times duly registered under the Act or
exempt from the registration requirements of the Act by reason of Sections 3(b),
4(2) or 4(6) thereof and were duly registered or were issued pursuant to an
available exemption from the registration requirements of the applicable state
securities or blue sky laws.
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(n) All of the issued Units of the Partnership have been duly and
validly authorized and issued and are fully paid and nonassessable. None of the
issued Units have been issued or are owned or held in violation of any
preemptive right. All of the outstanding Units have been issued, offered and
sold in compliance with all applicable laws (including, without limitation,
federal and state securities laws).
(o) The consolidated financial statements of the Company, the
Partnership and the Subsidiaries (together with related notes and schedules)
included in the registration statement and prospectus present fairly the
financial position of the Company as of the dates indicated and the results of
operations and cash flows for the Company for the periods specified, all in
conformity with generally accepted accounting principles applied on a consistent
basis. The various financial statements of certain of the Properties included in
the registration statement and the prospectus present fairly the financial
position for such properties as of the dates indicated and the results of
operations and cash flows for such properties for the periods specified, all in
conformity with generally accepted accounting principles applied on a consistent
basis. The financial statement schedules included in the registration statement
and in the prospectus under the captions "Prospectus Supplement Summary--Summary
Consolidated Financial Data" and "Selected Consolidated Financial Date" fairly
present the information shown therein and have been compiled on a basis
consistent with the financial statements included in the registration statement
and the prospectus. All other financial, operating, statistical and pro forma
information (including the related notes) included in the prospectus or any
pre-pricing prospectus supplement complies as to form in all material respects
to the applicable accounting requirements of the Act and the Rules and
Regulations thereunder, and management of the Company believes that the
assumptions underlying the pro forma adjustments are reasonable. Such pro forma
adjustments have been properly applied to the historical amounts in the
compilation of the information and such information fairly presents with respect
to the Company, the Partnership and the Subsidiaries, on a consolidated basis,
the financial position, results of operations and other information purported to
be shown therein at the respective dates and for the respective periods
specified.
(p) KPMG Peat Marwick LLP, who have examined and are reporting upon
certain audited financial statements and schedules included in the registration
statement, are, and were during the periods covered by their reports included in
the registration statement and the prospectus, independent public accountants
within the meaning of the Act, the Exchange Act and the respective rules and
regulations of the Commission thereunder.
(q) Scheiner, Mister & Grandizio, P.A., who have examined and are
reporting upon certain audited financial statements and schedules included in
the registration statement, are, and were during the periods covered by their
reports included in the registration statement and the prospectus, independent
public accountants within the meaning of the Act, the Exchange Act and the
respective rules and regulations of the Commission thereunder.
(r) None of the Company, the Partnership or any Subsidiary, has
sustained, since December 31, 1996, any material loss or interference with its
business from fire, explosion, flood, hurricane, accident or other calamity,
whether or not covered by
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insurance, or from any labor dispute or arbitrators' or court or governmental
action, order or decree; and, since the respective dates as of which information
is given in the registration statement and the prospectus, and except as
otherwise stated in the registration statement and prospectus, there has not
been (i) any material change in the capital stock, shares of beneficial
interests or partnership interests, as applicable, long-term debt, obligations
under capital leases or short-term borrowings of the Company, the Partnership or
any Subsidiary, (ii) any change, or any development which could reasonably be
seen as involving a prospective change, that could have a Material Adverse
Effect on the Company, the Partnership or any Subsidiary, (iii) any liability or
obligation, direct or contingent, incurred or undertaken by the Company, the
Partnership or any Subsidiary that could have a Material Adverse Effect on such
entity, except for liabilities or obligations incurred in the ordinary course of
business, (iv) ,except as described in the registration statement or prospectus,
any declaration or payment of any dividend or distribution of any kind on or
with respect to the shares of beneficial interest or partnership interests, as
applicable, of the Company, the Partnership or any Subsidiary, or (v) any
transaction that could have a Material Adverse Effect on the Company, the
Partnership or any Subsidiary, except transactions in the ordinary course of
business or as otherwise disclosed in the registration statement and the
prospectus.
(s) The Company, the Partnership and each Subsidiary, as the case
may be, has good and marketable title in fee simple to all real property and the
improvements located thereon owned by it, free and clear of all liens,
encumbrances, claims, security interest, restrictions and defects except such as
are described in the registration statement or prospectus or the title insurance
policies relating to such Properties. The leases to which the Company, the
Partnership or any Subsidiary is a party, as the case may be (the "Leases"), are
valid, subsisting and enforceable leases. The Leases conform in all material
respects to the description thereof, if any, set forth in the registration
statement and prospectus; and no notice has been given or material claim
asserted by anyone adverse to the rights of the lessor under any of the Leases
or affecting the right to the continued possession of the leased Property. The
Company, the Partnership and each Subsidiary, as the case may be, have good
title to all personal property owned by them, free and clear of all liens,
security interests, pledges, charges, encumbrances, mortgages and defects,
except such as are disclosed in the registration statement or prospectus or
could have a Material Adverse Effect on the value of such property and do not
interfere with the use made or proposed to be made of such property by the
Company, the Partnership or any Subsidiary, as the case may be. Except as
disclosed in the registration statement or prospectus, no person has an option
or right of first refusal to purchase all or part of any Property or any
interest therein. Each Property complies with all applicable codes, laws and
regulations (including, without limitation, building and zoning codes, laws and
regulations and laws relating to access to the Properties), except if and to the
extent disclosed in the registration statement or prospectus and except for such
failures to comply that would not individually or in the aggregate have a
Material Adverse Effect on the Company, the Partnership and the Subsidiaries
taken as a whole. None the Company, the Partnership or any Subsidiary has
knowledge of any pending or threatened condemnation proceedings, zoning change,
or other proceeding or action that will in any manner affect the size of, use
of, improvements on, construction on or access to the Properties, except such
proceedings or actions that would not have a Material Adverse Effect on the
Company, the Partnership and the Subsidiaries taken as a whole.
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<PAGE>
(t) None of the Company, the Partnership or any Subsidiary is in
violation of its respective charter, bylaws, declaration of trust, certificate
of limited partnership, partnership agreement, certificate of organization or
limited liability company agreement, as the case may be, and no default exists,
and no event has occurred, nor state of facts exists (which, with notice or
after the lapse of time to cure or both) would constitute a default by the
Company, the Partnership or any Subsidiary, and to the best knowledge of the
Company, no other party thereto is in default, and no event has occurred, nor
state of fact exists (which, with notice or after the lapse of time to cure or
both), would constitute a default, in the due performance and observance of any
obligation, agreement, term, covenant, consideration or condition contained in
any indenture, mortgage, deed of trust, loan agreement, note, lease or other
agreement or instrument to which any such entity is a party or to which any such
entity or any of its properties is subject, except as may be properly described
in the registration statement or prospectus or such as in the aggregate do not
now have or will not in the future have a Material Adverse Effect on each such
entity, respectively. None of the Company, the Partnership or any Subsidiary is
in violation of, or in default with respect to, any statute, rule, regulation,
order, judgment or decree, except as may be properly described in the prospectus
or such as in the aggregate do not now have and will not in the future have a
Material Adverse Effect on any such entity.
(u) There is not pending or, to the best knowledge of the Company,
Partnership or any Subsidiary, threatened, any action, suit, proceeding, inquiry
or investigation against the Company, the Partnership or any Subsidiary or any
of their respective officers and directors, trustees, general partners or
members or to which the properties, assets or rights of any such entity are
subject, before or brought by any court or governmental agency or body or board
of arbitrators, which could result in any Material Adverse Effect on any such
entity or which could adversely affect the consummation of the transactions
contemplated by this Agreement.
(v) The descriptions included in the registration statement and the
prospectus of the contracts, leases and other legal documents therein described
present fairly the information required to be shown, and there are no contracts,
leases, or other documents of a character required to be described in the
registration statement or the prospectus or document incorporated by reference
therein, or to be filed as exhibits to the registration statement or any
document incorporated by reference therein, which are not described or filed as
required. To the best knowledge of the Company, the Partnership and the
Subsidiaries, there are no statutes or regulations applicable to the Company,
the Partnership or any Subsidiary or certificates, permits or other
authorizations from governmental regulatory officials or bodies required to be
obtained or maintained by the Company, the Partnership or any Subsidiary of a
character required to be disclosed in the registration statement or the
prospectus which have not been so disclosed and properly described therein. All
agreements, if any, between the Company, the Partnership and the Subsidiaries,
respectively, on the one hand, and third parties, on the other hand, expressly
referenced in the prospectus are legal, valid and binding obligations of the
Company, the Partnership or a Subsidiary, as the case may be, enforceable in
accordance with their respective terms, except to the extent enforceability may
be limited by bankruptcy,
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<PAGE>
insolvency, reorganization or other laws of general applicability relating to or
affecting creditors' rights and by general equitable principles.
(w) Each of the Company, the Partnership and the Subsidiaries owns
or possesses or has obtained all material permits, licenses, franchises,
certificates, consents, orders, approvals and other authorizations of
governmental or regulatory authorities or other entities as are necessary to own
or lease, as the case may be, and to operate its respective assets and
properties, including the Properties, and to carry on its business as presently
conducted, or as contemplated in the prospectus to be conducted, and none of the
Company, the Partnership or any Subsidiary has received any notice of
proceedings relating to revocation or modification of any such licenses,
permits, franchises, certificates, consents, orders, approvals or authorizations
that could have a Material Adverse Effect.
(x) Each of the Company, the Partnership, and the Subsidiaries owns
or possesses adequate license or other rights to use all trademarks, service
marks, trade names, copyrights, software and design licenses, trade secrets,
other intangible property rights and know-how (collectively "Intangibles")
necessary to entitle the Company, the Partnership or the Subsidiary, as the case
may be, to conduct its respective business now, and as proposed to be conducted
or operated as described in the prospectus, and none the Company, the
Partnership or any Subsidiary has received notice of infringement or of conflict
with (and knows of no such infringement of or conflict with) asserted rights of
others with respect to any Intangibles which could have an Material Adverse
Effect on the Company, the Partnership and the Subsidiaries taken as a whole.
(y) To the best knowledge of the Company, the Partnership and the
Subsidiaries, the Company's, the Partnership's and the Subsidiaries' system of
internal accounting controls taken as a whole is sufficient to meet the broad
objectives of internal accounting control insofar as those objectives pertain to
the prevention or detection of errors or irregularities in amounts that would be
material in relation to the Company's, the Partnership's or the Subsidiaries',
financial statements; and, to the best knowledge of the Company, the Partnership
and the Subsidiaries, none of the Company, the Partnership, the Subsidiaries, or
any employee or agent thereof, has made any payment of funds of the Company, the
Partnership or the Subsidiaries, as the case may be, or received or retained any
funds and no funds of the Company, the Partnership or the Subsidiaries, as the
case may be, have been set aside to be used for any payment, in each case in
violation of any law, rule or regulation.
(z) Each of the Company, the Partnership (to the extent not
consolidated with the Company) and any Subsidiary (to the extent not
consolidated with the Company), have filed on a timely basis all necessary
federal, state, local and foreign income, personal property tax and franchise
tax returns required to be filed through the date hereof and have paid all taxes
shown as due thereon, and no tax deficiency has been asserted against any such
entity, nor does any such entity know of any tax deficiency which is likely to
be asserted against any such entity which if determined adversely to any such
entity, could materially adversely affect the business, prospects, properties,
assets, results of operations or condition
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<PAGE>
(financial or otherwise) of any such entity, respectively. All tax liabilities
are adequately provided for on the respective books of such entities.
(aa) The Company, the Partnership and the Subsidiaries maintain
insurance (issued by insurers of recognized financial responsibility) of the
types and in the amounts generally deemed adequate for their respective
businesses and properties, including the Properties, and, to the best knowledge
of the Company, the Partnership and the Subsidiaries, consistent with insurance
coverage maintained by similar companies in similar businesses, including, but
not limited to, insurance covering real and personal property, including the
Properties, owned or leased by the Company, the Partnership and the Subsidiaries
against theft, damage, destruction, acts of vandalism and all other risks
customarily insured against all of which insurance is in full force and effect.
(bb) The Company, the Partnership and the Subsidiaries are in
compliance in all material respects with all federal, state and local employment
and labor laws, including, but not limited to, laws relating to
non-discrimination in hiring, promotion and pay of employees; no labor dispute
with the employees of the Company, the Partnership or any Subsidiary exists or,
to the knowledge of the Company, the Partnership or any Subsidiary, is imminent
or threatened; and none of the Company, Partnership or any Subsidiary is aware
of any existing, imminent or threatened labor disturbance by the employees of
any of its principal vendors or contractors that could result in a Material
Adverse Effect.
(cc) With respect to each employee benefit plan, program and
arrangement (including, without limitation, any "employee benefit plan" as
defined in Section 3(3) of the Employee Retirement Income Security Act of 1974,
as amended ("ERISA")) maintained or contributed to by the Company, the
Partnership or any Subsidiary, or with respect to which the Company, the
Partnership or any Subsidiary could incur any liability under ERISA
(collectively, the "Benefit Plans"), no event has occurred and, to the best
knowledge of the Company, the Partnership or any Subsidiary, there exists no
condition or set of circumstances, in connection with which the Company, the
Partnership or any Subsidiary could be subject to any liability under the terms
of such Benefit Plan, applicable law (including, without limitation, ERISA and
the Internal Revenue Code of 1986, as amended (the "Code")) or any applicable
agreement that could have a Material Adverse Effect.
(dd) None of the Company, the Partnership or the Subsidiaries, or
their officers, directors or affiliates has taken, directly or indirectly, any
action designed to, or that might reasonably be expected to, cause or result in
or constitute the stabilization or manipulation of any security of the Company
or to facilitate the sale or resale of the Shares.
(ee) The common shares of beneficial interest of the Company are
registered pursuant to Section 12(b) of the Exchange Act and are listed on the
New York Stock Exchange.
(ff) None of the Company, the Partnership and the Subsidiaries have
incurred any liability for a fee, commission or other compensation on account of
the employment
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<PAGE>
of a broker or finder in connection with the transactions contemplated by this
Agreement other than as contemplated hereby or as described in the registration
statement or prospectus.
(gg) Except as disclosed in the registration statement or
prospectus, none of the Company or as specifically disclosed in the
environmental assessment reports regarding the Properties acquired from
affiliates of, or investors with, Jack H Pechter (copies of which have been
provided to the Representatives) (collectively, the "Environmental Reports"),
the Partnership or any Subsidiary (or, to the best knowledge of the Company, or
the Partnership or any Subsidiary, any entity ("Selling Entity") from which the
Company, the Partnership or any Subsidiary, as the case may be, acquired a
Property) has authorized or conducted or has knowledge of the generation,
transportation, storage, presence, use, treatment, disposal, release, or other
handling of any hazardous substance, hazardous waste, hazardous material,
hazardous constituent, toxic substance, pollutant, contaminant, asbestos, radon,
polychlorinated biphenyls ("PCBs"), petroleum product or waste (including crude
oil or any fraction thereof), natural gas, liquefied gas, synthetic gas or other
material defined, regulated, controlled or potentially subject to any
remediation requirement under any environmental law (collectively, "Hazardous
Materials"), on, in, under or affecting any Properties or real property
currently leased or owned (or real property proposed to be leased or owned) or
by any means controlled by the Company, the Partnership or any Subsidiary,
except as in material compliance with applicable laws; except as otherwise
disclosed in the registration statement, the prospectus or as specifically
disclosed in the Environmental Reports, to the best knowledge of the Company,
the Partnership and the Subsidiaries, the Properties and the Company's, the
Partnership's, the Subsidiaries operations with respect to the Properties are in
compliance with all federal, state and local laws, ordinances, rules,
regulations and other governmental requirements relating to pollution, control
of chemicals, management of waste, discharges of materials into the environment,
health, safety, natural resources, and the environment (collectively,
"Environmental Laws"), and the Company, the Partnership and the Subsidiaries
have, and are in compliance with, all licenses, permits, registrations and
government authorizations necessary to operate under all applicable
Environmental Laws. Except as otherwise disclosed in the registration statement,
the prospectus or as specifically disclosed in the Environmental Reports, none
of the Company, the Partnership or any Subsidiary has received any written or
oral notice from any governmental entity or any other person and there is no
pending or, to the best knowledge of the Company, the Partnership or any
Subsidiary, threatened, claim, litigation or any administrative agency
proceeding that: (i) alleges a violation of any Environmental Law by the
Company, the Partnership or any Subsidiary; (ii) alleges that the Company, the
Partnership or any Subsidiary is a liable party or a potentially responsible
party under the Comprehensive Environmental Response, Compensation and Liability
Act, 42 U.S.C. ss.9601, et al., or any state superfund law; (iii) has resulted
in or could result in the attachment of an environmental lien on any Property;
or (iv) alleges that the Company, the Partnership or any Subsidiary is liable
for any contamination of the environment, contamination of any Property, damage
to natural resources, property damage, or personal injury based on their
activities or the activities of their predecessors or third parties (whether at
any Property or elsewhere) involving Hazardous Materials, whether arising under
the Environmental Laws, common law principles, or other legal standards.
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<PAGE>
(hh) The Company is organized in conformity with the requirements
for qualification as a REIT under the Code, and the Company's method of
operation enables it to meet the requirements for taxation as a REIT under the
Code. The Partnership is treated as a partnership for federal income purposes
and not as a corporation or an association taxable as a corporation.
(ii) None of the Company, the Partnership or any Subsidiary will
become as a result of the transactions contemplated hereby, or will conduct
their respective businesses in a manner in which any such entity would become
"an investment company," or a company "controlled" by an "investment company,"
within the meaning of the Investment Company Act of 1940, as amended.
(jj) Neither the Partnership nor any Partnership Subsidiary is
currently prohibited, directly or indirectly, from making distributions to the
Company, from repaying to the Company or any REIT Subsidiary any loans or
advances to the Partnership or Partnership Subsidiary or from transferring any
of the Partnership's or any Partnership Subsidiary's property or assets to the
Company or any REIT Subsidiary, except as described in the prospectus or the
partnership agreement of the Partnership.
(kk) The statements set forth in the prospectus under the captions
"Prospectus Supplement Summary-Recent Developments," "Price Range of Shares and
Distribution Policy-Dividend Reinvestment Plan," "Recent Developments,"
"Management's Discussion and Analysis of Financial Condition and Results of
Operations-Liquidity and Capital Resources," "The Properties," "Description of
the Debt Securities," "Description of Capital Stock," "Certain Provisions of
Maryland Law and of the Company's Declaration of Trust and ByLaws," "Federal
Income Tax Considerations" and "Certain Federal Income Tax Considerations"
insofar as they purport to describe the provisions of the laws and documents
referred to therein, are accurate and complete.
(ll) The Company has complied, and until the completion of the
distribution of the Shares, will comply with all of the provisions of
(including, without limitation, filing all forms required by) Section 517.075 of
the Florida Securities and Investor Protection Act and Regulation 3E-900.001
issued thereunder with respect to the offering and sale of the Shares.
(mm) None of the officers, trustees or 5% or greater shareholders
of the Company have any affiliation with the National Association of Securities
Dealers, Inc. (the "NASD"), except as disclosed in the registration statement.
Any certificate signed by any officer of the Company on behalf
of the Company, the Partnership or any Subsidiary and delivered to you or to
counsel for the Underwriters shall be deemed a representation and warranty by
such entity to each Underwriter as to the matters covered thereby.
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<PAGE>
4. Agreements of the Company. The Company agrees with the several
Underwriters as follows:
(a) 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, the Company
will endeavor to cause such post-effective amendment to become effective as soon
as possible and will advise you promptly and, if requested by you, will confirm
such advice in writing, when such post-effective amendment has become effective.
(b) The Company will advise you promptly and, if requested by you,
will confirm such advice in writing: (i) of any request by the Commission for
amendment of or a supplement to the registration statement, any pre-pricing
prospectus supplement or the prospectus or for additional information; (ii) of
the issuance by the Commission of any stop order suspending the effectiveness of
the registration statement or of the suspension of qualification of the Shares
for offering or sale in any jurisdiction or the initiation of any proceeding for
such purpose; and (iii) within the period of time referred to in paragraph (f)
below, of any change in the Company's, the Partnership's and the Subsidiaries
condition (financial or other), business, prospects, properties, net worth or
results of operations, or of the happening of any event, which makes any
statement of a material fact made in the registration statement or the
prospectus (as then amended or supplemented) untrue or which requires the making
of any additions to or changes in the registration statement or the prospectus
(as then amended or supplemented) in order to state a material fact required by
the Act or the regulations thereunder to be stated therein or necessary in order
to make the statements therein not misleading, or of the necessity to amend or
supplement the prospectus (as then amended or supplemented) to comply with the
Act or any other law. If at any time the Commission shall issue any stop order
suspending the effectiveness of the registration statement, the Company will
make every reasonable effort to obtain the withdrawal of such order at the
earliest possible time.
(c) The Company will furnish to you, without charge, (i) one copy
of the registration statement as originally filed with the Commission and of
each amendment thereto, including financial statements and all exhibits thereto,
(ii) such number of conformed copies of the registration statement as originally
filed and of each amendment thereto, but without exhibits, as you may reasonably
request, (iii) such number of copies of the documents incorporated by reference,
without exhibits, as you may reasonably request, and (iv) five copies of the
exhibits to the documents incorporated by reference.
(d) The Company will not file any amendment to the registration
statement or make any amendment or supplement to the prospectus or, prior to the
end of the period of time referred to in the first sentence in subsection (f)
below, file any document which upon filing, becomes a document incorporated by
reference therein, of which you shall not previously have been advised or to
which, after you shall have received a copy of the document proposed to be
filed, you shall reasonably object.
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<PAGE>
(e) Prior to the execution and delivery of this Agreement, the
Company has delivered to you, without charge, in such quantities as you have
requested, copies of the pre-pricing prospectus supplement. The Company consents
to the use, in accordance with the provisions of the Act and with the securities
or Blue Sky laws of the jurisdictions in which the Shares are offered by the
several Underwriters and by dealers, prior to the date of the prospectus, of
each pre-pricing prospectus supplement so furnished by the Company.
(f) As soon after the execution and delivery of this Agreement as
possible and thereafter from time to time for such period as in the opinion of
counsel for the Underwriters a prospectus is required by the Act to be delivered
in connection with sales by any Underwriter or dealer, the Company will
expeditiously deliver to each Underwriter and each dealer, without charge, as
many copies of the prospectus (and of any amendment or supplement thereto) as
you may reasonably request. Subject to the provisions of subsection (g) below,
the Company consents to the use of the prospectus (and of any amendment or
supplement thereto) in accordance with the provisions of the Act and with the
securities or Blue Sky laws or real estate syndication laws of the jurisdictions
in which the Shares are offered by the several Underwriters and by all dealers
to whom Shares may be sold, both in connection with the offering and sale of the
Shares and for such period of time thereafter as the prospectus is required by
the Act to be delivered in connection with sales by any Underwriter or dealer.
If during such period of time any event shall occur that in the judgment of the
Company or in the opinion of counsel for the Underwriters is required to be set
forth in the prospectus (as then amended or supplemented) or should be set forth
therein in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, or if it is necessary
to supplement or amend the prospectus (or to file under the Exchange Act any
document which, upon filing, becomes a document incorporated by reference
therein) in order to comply with the Act or any other law, the Company will
forthwith prepare and, subject to the provisions of paragraph (d) above, file
with the Commission an appropriate supplement or amendment thereto (or to such
document), and will expeditiously furnish to the Underwriters and dealers a
reasonable number of copies thereof In the event that the Company and you, as
Representatives of the several Underwriters, agree that the prospectus should be
amended or supplemented, the Company, if requested by you, will promptly issue a
press release announcing or disclosing the matters to be covered by the proposed
amendment or supplement.
(g) The Company will cooperate with you and with counsel for the
Underwriters in connection with the registration or qualification of the Shares
for offering and sale by the several Underwriters and by dealers under the
securities or Blue Sky laws or real estate syndication laws of such
jurisdictions as you may designate and will file such consents to service of
process or other documents necessary or appropriate in order to effect such
registration or qualification and continue such qualification in effect so long
as required for distribution of the Shares; provided that in no event shall the
Company be obligated to qualify to do business in any jurisdiction where it is
not now so qualified or to take any action which would subject it to service of
process in suits or taxation, other than those arising out of the offering or
sale of the Shares, in any jurisdiction where it is not now so subject.
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<PAGE>
(h) The Company will make generally available to its shareholders a
consolidated earnings statement, which need not be audited, covering a
twelve-month period commencing after the effective date of the registration
statement and ending not later than 15 months thereafter, as soon as practicable
after the end of such period, which consolidated earnings statement shall
satisfy the provisions of Section 11 (a) of the Act.
(i) The Company will furnish to its shareholders, as soon as
practicable after the end of each respective period, annual reports (including
financial statements audited by independent public accountants) and unaudited
quarterly reports of operations for each of the first three quarters of the
fiscal year, and during the period of three years hereafter, the Company will
furnish to you (i) concurrently with mailing or filing, a copy of each report of
the Company mailed to shareholders or filed with the Commission, and (ii) from
time to time such other information concerning the Company as you may reasonably
request.
(j) Whether or not the transactions contemplated by this Agreement
are consummated or this Agreement is terminated, the Company will pay, or
reimburse if paid by the Representatives, all costs and expenses incident to the
performance of the obligations of the Company under this Agreement, including
but not limited to costs and expenses of or relating to (1) the preparation,
printing and filing of the pre-pricing prospectus supplements and any amendment
or supplement to the registration statement or the prospectus, (2) the
preparation and delivery of certificates representing the Shares, (3) the word
processing, printing and reproduction of this Agreement, the Agreement Among
Underwriters, any Selected Dealer Agreements and any Underwriters'
Questionnaire, (4) furnishing (including costs of shipping, mailing and courier)
such copies of the registration statement, the prospectus and any pre-pricing
prospectus supplement, and all amendments and supplements thereto, as may be
requested for use in connection with the offering and sale of the Shares by the
Underwriters or by dealers to whom Shares may be sold, (5) the listing of the
Shares on the New York Stock Exchange, (6) any filings required to be made by
the Underwriters with the NASD, and the fees, disbursements and other charges of
counsel for the Underwriters in connection therewith, (7) the registration or
qualification of the Shares, if required, and the filing of notices and
materials, for offer and sale under the securities or Blue Sky laws of such
jurisdictions designated pursuant to Section 5(f), including the fees,
disbursements and other charges of counsel to the Underwriters in connection
therewith, and the preparation and printing of preliminary, supplemental and
final Blue Sky memoranda, if any, (8) the Company's counsel, (9) the transfer
agent for the Shares and (10) the Company's accountants.
(k) If this Agreement shall terminate or shall be terminated after
execution pursuant to any provisions hereof (otherwise than pursuant to Section
10 hereof or by notice given by you terminating this Agreement pursuant to
Section 9 or Section 10 hereof) or if this Agreement shall be terminated by the
Underwriters because of any failure or refusal on the part of the Company to
comply with the terms or fulfill any of the conditions of this Agreement to be
complied with or fulfilled by the Company, the Company agrees to reimburse the
Representatives for all reasonable out-of-pocket expenses (including fees and
expenses of counsel for the Underwriters) incurred by you in connection
herewith.
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<PAGE>
(l) The Company will apply the net proceeds from the sale of the
Shares substantially in accordance with the description set forth under the
caption "Use of Proceeds" in the prospectus.
(m) The Company will timely file the prospectus pursuant to Rule
424(b) under the Act and will advise you of the time and manner of such filing.
(n) Except as provided in this Agreement, the Company will not
sell, offer to sell, solicit an offer to buy, contract to sell, grant any option
to purchase (other than options granted pursuant to the Company's Omnibus Share
Plan and 1995 Stock Option Plan), or otherwise transfer or dispose of any shares
of beneficial interest or any other securities convertible into, or exercisable
or exchangeable for shares of beneficial interest for a period of 90 days after
the date of the Prospectus, without the prior written consent of Legg Mason Wood
Walker, Incorporated; provided, however, that the foregoing shall not prohibit
the Company or the Partnership from issuing shares of beneficial interest or
Units or other convertible securities in connection with the acquisition of
properties or issue shares of beneficial interest upon conversion of the
Company's 7.625% convertible subordinated debentures due 2003 (the
"Debentures").
(o) The Company has furnished or will furnish to you "lock-up"
letters in form and substance satisfactory to you, signed by each of its current
executive officers and trustees named in the prospectus.
(p) Except as stated in this Agreement and in any pre-pricing
prospectus supplement and prospectus, the Company has not taken, nor will take,
directly or indirectly, any action designed to or that might reasonably be
expected to cause or result in stabilization or manipulation of the price of the
common shares of beneficial interest of the Company to facilitate the sale or
resale of the Shares.
5. Conditions of Underwriters' Obligations. The several obligations of
the Underwriters to purchase the Firm Shares hereunder are subject to the
following conditions:
(a) 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, such
post-effective amendment shall have become effective not later than 5:30 P.M.,
New York City time, on the date hereof, or at such later date and time as shall
be consented to in writing by you, and all filings, if any, required by Rule 424
under the Act shall have been timely made; no stop order suspending the
effectiveness of the registration statement shall have been issued and no
proceeding for that purpose shall have been instituted or, to the knowledge of
the Company or any Underwriter, threatened by the Commission, and any request of
the Commission for additional information (to be included in the registration
statement or the prospectus or otherwise) shall have been complied with to your
satisfaction.
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<PAGE>
(b) Subsequent to the effective date of this Agreement, there shall
not have occurred (i) any change, or any development involving a prospective
change, in or affecting the condition (financial or other), business,
properties, net worth, or results of operations of the Company, the Partnership
and the Subsidiaries taken as a whole not contemplated by the prospectus, which
in your reasonable opinion, as Representatives of the several Underwriters,
would materially, adversely affect the market for the Shares, (ii) any event or
development relating to or involving the Company, the Partnership or any
Subsidiary or any officer or director of the Company which makes any statement
made in the prospectus untrue or which, in the reasonable opinion of the Company
and its counsel or the Underwriters and their counsel, requires the making of
any addition to or change in the prospectus in order to state 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 reasonable
opinion, as Representatives of the several Underwriters, materially adversely
affect the market for the Shares, or (iii) any suspension of trading in any of
the equity securities of the Company by the Commission, the NASD or the New York
Stock Exchange.
(c) You shall have received on the Closing Date, an opinion of
Gordon, Feinblatt, Rothman, Hoffberger & Hollander, counsel for the Company and
the Partnership, dated the Closing Date and addressed to you, as Representatives
of the several Underwriters, to the effect that:
(i) The Company has been duly organized and is validly existing
as a REIT in good standing under the laws of the State of Maryland with full
power and authority to own and lease its assets and properties, including the
Properties owned by it, and to conduct its business as now conducted as
described in the prospectus; and each of the REIT Subsidiaries is duly organized
and is validly existing and in good standing under the laws of the jurisdiction
of its organization, with power and authority to own or lease its assets and
properties, including the Properties owned by it, and conduct its business as
described in the prospectus. The outstanding shares of capital stock,
partnership interests or limited liability company interests of each REIT
Subsidiary have been duly authorized and validly issued and are fully paid and
nonassessable and, to the extent described in the registration statement or
prospectus, are owned by the Company or a REIT Subsidiary; and, to the best of
such counsel's knowledge, are owned free and clear of all liens, encumbrances
and claims, and no options, warrants or other rights to purchase, agreements or
other obligations to issue or other rights to convert any obligations into
shares of capital stock, partnership interests or limited liability company
interests, as the case may be, in the REIT Subsidiaries are outstanding. The
Company and each REIT Subsidiary are qualified to transact business and are in
good standing (i) in the jurisdiction in which it has its principal place of
business and (ii) in all other jurisdictions in which the nature of the
activities conducted by it or the character of the assets and properties,
including the Properties, owned or leased by it makes such licensing or
qualification necessary except where the failure to so license or qualify in any
such other jurisdiction will not have a Material Adverse Effect on the Company
or such REIT Subsidiary.
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(ii) The Partnership is a limited partnership duly formed and
validly existing under the Maryland Act with the partnership power and authority
to own and lease its properties and to conduct its business as now conducted as
described in the prospectus; and each of the Partnership Subsidiaries is duly
organized and is validly existing and in good standing under the laws of the
jurisdiction of its organization, with power and authority to own or lease its
assets and properties, including the Properties owned by it, and conduct its
business as described in the prospectus. The outstanding shares of capital
stock, partnership interests or limited liability company interests of each
Partnership Subsidiary have been duly authorized and validly issued and are
fully paid and nonassessable and, to the extent described in the registration
statement or prospectus, are owned by the Partnership or a Partnership
Subsidiary; and, to the best of such counsel's knowledge, are owned free and
clear of all liens, encumbrances and claims, and no options, warrants or other
rights to purchase, agreements or other obligations to issue or other rights to
convert any obligations into shares of capital stock, partnership interests or
limited liability company interests, as the case may be, in the Partnership
Subsidiaries are outstanding. The Partnership and each Partnership Subsidiary
are qualified to transact business and are in good standing (i) in the
jurisdiction in which it has its principal place of business and (ii) in all
other jurisdictions in which the nature of the activities conducted by it or the
character of the assets and properties, including the Properties, owned or
leased by it makes such licensing or qualification necessary except where the
failure to so license or qualify in any such other jurisdiction will not have a
Material Adverse Effect on the Partnership or such Partnership Subsidiary. The
Company is the sole general partner of the Partnership.
(iii) The Company has full power and authority to enter into
this Agreement, to issue, sell and deliver the Shares as provided herein and to
consummate the transactions contemplated herein. This Agreement has been duly
authorized by all necessary action and has been executed and delivered by the
Company and, assuming due authorization, execution and delivery by the
Underwriters, constitutes a valid and binding agreement of the Company,
enforceable in accordance with its terms, except to the extent enforceability
may be limited by bankruptcy, insolvency, moratorium, reorganization or other
laws affecting the rights of creditors generally and by principles of equity,
whether considered at law or in equity, and except to the extent that
enforcement of the indemnification and contribution provisions set forth in
Section 8 of this Agreement may be limited by federal or state securities laws
or the public policy underlying such laws.
(iv) The Partnership has the partnership power and authority to
enter into this Agreement and to consummate the transactions contemplated
herein. This Agreement has been duly authorized by all necessary partnership
action and has been executed and delivered on behalf of the Partnership and,
assuming due authorization, execution and delivery by the Underwriters,
constitutes a valid and binding agreement of the Partnership enforceable in
accordance with its terms, except to the extent enforceability may be limited by
bankruptcy, insolvency, moratorium, reorganization or other laws affecting the
rights of creditors generally and by principles of equity, whether considered at
law or in equity, and except to the extent that enforcement of the
indemnification and contribution provisions set forth in Section 8 of this
Agreement may be limited by federal or state securities laws or the public
policy underlying such laws.
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(v) Each consent, approval, authorization, order, license,
certificate, permit, registration, designation or filing by or with any
governmental agency or body necessary for the valid authorization, issuance,
sale and delivery of the Shares, the execution, delivery and performance of this
Agreement and the consummation by the Company and the Partnership of the
transactions contemplated hereby to which either the Company or the Partnership
is a party, has been made or obtained and is in full force and effect, except
such as may be necessary under state securities or real estate syndication laws
or required by the NASD in connection with the purchase and distribution of the
Shares by the Underwriters, as to which such counsel need express no opinion.
(vi) Neither the issuance, sale and delivery by the Company of
the Shares, nor the execution, delivery and performance of this Agreement nor
the consummation of the transactions contemplated hereby, will (a) violate the
declaration of trust, certificate of limited partnership or partnership
agreement, as the case may be, or any such entity, as applicable; (b) constitute
a default under any contract or agreement filed or incorporated by reference as
an exhibit to the registration statement; (c) to such counsel's knowledge,
violate any applicable statute, judgment, decree, order, rule or regulation of
any court or governmental agency or body; or (d) to such counsel's knowledge,
result in the creation or imposition of any lien, charge, claim or encumbrance
upon any property or asset of any of the Company or the Partnership.
(vii) The Shares to be issued and sold to the Underwriters
hereunder have been validly authorized by the Company. When issued and delivered
against payment therefor as provided in this Agreement, such Shares will be
validly issued, fully paid and nonassessable. No preemptive rights of
shareholders exist with respect to any of the Shares. To such counsel's
knowledge, no person or entity holds a right to require or participate in the
registration under the Act of the Shares pursuant to the registration statement;
and, to such counsel's knowledge, except as set forth in the registration
statement or prospectus, no person or entity holds a right to require
registration under the Act of any shares of beneficial interest of the Company
at any other time. To such counsel's knowledge, no person or entity has a right
of participation or first refusal with respect to the sale of the Shares by the
Company. The form of certificates evidencing the Shares complies with all
application requirements of Maryland law.
(viii) The Company has authorized capital securities as set
forth in the prospectus under the caption "Capitalization." All of the issued
shares of beneficial interest of the Company have been duly authorized and
validly issued, are fully paid and nonassessable. None of the issued shares of
beneficial interest of the Company has been issued or is owned or held in
violation of any preemptive rights of shareholders. All sales of the Company's
capital securities prior to the date hereof were at all relevant times duly
registered under the Act or were exempt from the registration requirements of
the Act by reason of Sections 3(b), 4(2) or 4(6) thereof and were duly
registered or were issued pursuant to an available exemption from the
registration requirements of the applicable state securities or blue sky laws,
provided, however, that such counsel need not express any opinion with respect
to the registration or availability of an exemption under applicable state
securities or blue sky laws for shares of beneficial interest issued pursuant to
an underwritten public offering. To the
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knowledge of such counsel, except as included in the prospectus, there is no
outstanding option, warrant or other right calling for the issuance of, and no
commitment, plan or arrangement to issue, any shares of beneficial interest of
the Company or any security convertible or exchangeable for shares of beneficial
interest of the Company other than the Debentures, the issuance of common shares
of beneficial interest of the Company in exchange for Units of the Partnership,
at the option of the Company, pursuant to the partnership agreement, as amended
and restated, of the Partnership, and the issuance of common shares of
beneficial interest of the Company upon exercise of options granted under the
Omnibus Share Plan and 1995 Stock Option Plan of the Company.
(ix) All of the issued Units of the Partnership have been duly
authorized and validly issued and are fully paid and nonassessable. To such
counsel's knowledge, none of the issued Units has been issued or is owned or
held in violation of any preemptive rights. The issuance of the outstanding
Units were exempt from the registration requirements of the Act and any
applicable state securities laws.
(x) To such counsel's knowledge, except as set forth in the
registration statement or prospectus, none of the Company, the Partnership or
any Subsidiary owns or leases any real property.
(xi) To such counsel's knowledge and except as described in the
registration statement or prospectus, there is not pending or threatened, any
action, suit, proceeding, inquiry or investigation against the Company, the
Partnership or any Subsidiary or any of their respective officers, directors,
trustees or general partners or to which the properties, assets or rights of any
such entity are subject, which, if determined adversely to any such entity,
would individually or in the aggregate have a Material Adverse Effect on any
such entity, respectively.
(xii) The descriptions in the registration statement and the
prospectus of the leases and each other document filed as an exhibit with the
Commission present fairly the information required to be shown or described and
there are no contracts, leases or other documents known to such counsel of a
character required to be described in the registration statement or the
prospectus or to be filed as exhibits with the Commission, which are not
described or filed as required. There are no statutes or regulations applicable
to the Company, the Partnership or any Subsidiary or certificates, permits or
other authorizations from governmental regulatory officials or bodies required
to be obtained or maintained by any such entity, known to such counsel, of a
character required to be disclosed in the registration statement or the
prospectus which have not been so disclosed and properly described therein.
(xiii) The Company is organized in conformity with the
requirements for qualification as a REIT pursuant to Sections 856 through 860 of
the Code, and the Company's method of operation enables it to meet the
requirements for qualification and taxation as a REIT under the Code. The
Partnership is treated as a partnership for federal income purposes and not as a
corporation or an association taxable as a corporation.
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<PAGE>
(xiv) The registration statement has become effective under the
Act and, to the knowledge of such counsel, no stop order suspending the
effectiveness of the registration statement has been issued and no proceeding
for that purpose has been instituted or is pending or contemplated under the
Act. Other than financial statements and other financial and operating or
statistical data and schedules contained therein, as to which counsel need
express no opinion, the registration statement, all pre-pricing prospectus
supplement, the prospectus and any amendment or supplement thereto, and each
document incorporated by reference therein, appear on their face to conform as
to form in all material respects with the requirements of the Act or the
Exchange Act, as the case may be, and the respective Rules and Regulations
thereunder promulgated by the Commission.
(xv) Such counsel has no reason to believe that the
registration statement, the prospectus or any document incorporated by reference
therein, or any further amendment thereto made on or prior to the Closing Date,
on its effective date and as of the Closing Date, contained or contains any
untrue statement of a material fact or omitted or omits to state any material
fact required to be stated therein or necessary to make the statements therein
not misleading, or that the pre-pricing prospectus supplement, prospectus, or
any amendment or supplement thereto, or document incorporated by reference
therein on or prior to the Closing Date, as of its issue date and as of the
Closing Date, contained or contains any untrue statement of a material fact or
omitted or omits to state any 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 (provided that such counsel need express no
belief regarding the financial statements and operating and statistical,
operating or pro forma data and related schedules contained in the registration
statement, any document incorporated by reference therein, any amendment
thereto, or the prospectus, or any amendment or supplement thereto).
(xvi) The documents incorporated by reference in the
registration statement, any pre-pricing prospectus supplement and the prospectus
(other than the financial statements and statistical, operating or pro form data
and related schedules therein, as to which such counsel need express no opinion)
when they were filed with the Commission complied on their face as to form in
all material respects with the requirements of the Act, the Exchange Act, and
the Rules and Regulations of the Commission thereunder; and nothing has come to
such counsel's attention which causes them to believe that any of such documents
incorporated by reference (other than the financial statements and statistical,
operating or pro forma data and related schedules therein, as to which such
counsel need express no belief), when such documents were so filed with the
Commission, contained an untrue statement of material factor or omitted to state
a material fact necessary in order to make the statements therein, in light of
the circumstances under which they were made when such documents were so filed,
not misleading.
(xvii) None of the Company, the Partnership and the
Subsidiaries are, or solely as a result of the consummation of the transactions
contemplated hereby will become, an "investment company," or a company
"controlled" by an "investment company, " within the meaning of the Investment
Company Act of 1940, as amended.
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<PAGE>
(xviii) The descriptions of statutes, regulations, legal or
governmental proceedings included in the registration statement and prospectus,
are accurate and present fairly a summary of the information required to be
disclosed under the Act and the Rules and Regulations promulgated by the
Commission. The information in the prospectus under the captions "Prospectus
Supplement Summary-Recent Developments," "Price Range of Shares and Distribution
Policy-Dividend Reinvestment Plan," "Recent Developments," "Management's
Discussion and Analysis of Financial Condition and Results of
Operations-Liquidity and Capital Resources," "The Properties," "Description of
the Debt Securities," "Description of Capital Stock," "Certain Provisions of
Maryland Law and of the Company's Declaration of Trust and ByLaws," "Federal
Income Tax Considerations" and "Certain Federal Income Tax Considerations" to
the extent that it constitutes matters of law or legal conclusions, or
descriptions of documents, has been reviewed by such counsel, is correct and
presents fairly the information required to be disclosed therein under the Act
and the Rules and Regulations promulgated by the Commission.
(xix) To such counsel's knowledge, the conditions for use of a
registration statement on Form S-3 set forth in the General Instructions to Form
S-3 have been satisfied with respect to the Company and the transactions
contemplated by this Agreement and the registration statement.
(xx) Such counsel has been advised that the common shares of
beneficial interest of the Company are listed for trading on the New York Stock
Exchange.
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 Company as to laws of any jurisdiction other than the United
States and jurisdictions in which they are admitted, provided that (1) each such
local counsel is acceptable to the Representatives, (2) such reliance is
expressly authorized by each opinion so relied upon and a copy of each such
opinion is delivered to the Representatives and is, in form and substance
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 to the above opinions, Gordon, Feinblatt Rothman,
Hoffberger & Hollander shall deliver to the Underwriters at the Closing and
Option Closing Dates, as the case may be, a tax opinion, in form and substance
acceptable to the Underwriters, with respect to the qualification of the Company
as a REIT under the provisions of the Code and the other matters set forth under
the captions "Federal Income Tax Considerations" and "Certain Federal Income Tax
Considerations" in the prospectus.
(d) You shall have received on the Closing Date an opinion of
Wilmer, Cutler & Pickering, counsel for the Underwriters, dated the Closing Date
and addressed to you, as Representatives of the several Underwriters, with
respect to the matters referred to in clauses (iii), (vii), (xiv) and (xv) of
the foregoing paragraph (c) and such other related matters as you may request.
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(e) You shall have received letters addressed to you, as
Representatives of the several Underwriters, and dated the date hereof and the
Closing Date from KPMG Peat Marwick LLP, independent certified public
accountants, and Scheiner, Mister & Grandizio, P.A., independent certified
public accountants, substantially in the forms heretofore approved by you.
(f)(i) No stop order suspending the effectiveness of the
registration statement shall have been issued and no proceedings for that
purpose shall have been taken or, to the knowledge of the Company, 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 Company nor any
material increase in the consolidated short-term or long-term debt of the
Company (other than in the ordinary course of business) from that set forth or
contemplated in the registration statement or the prospectus (or any amendment
or supplement thereto); (iii) there shall not have been, since the respective
dates as of which information is given in the registration statement and 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 Company or the Partnership taken as a whole; (iv) the Company and the
Partnership, shall not have any liabilities or obligations, direct or contingent
(whether or not in the ordinary course of business), that are material to the
Company and the Partnership, taken as a whole, other than those reflected in the
registration statement or the prospectus (or any amendment or supplement
thereto); (v) no litigation has been instituted, or to our knowledge, threatened
against the Company of a character required to be disclosed in the registration
statement which is not so disclosed; (vi) no material contract is required to be
filed as an exhibit to the registration statement that has not been filed; and
(vii) all the representations and warranties of the Company and the Partnership
contained in this Agreement shall be true and correct on and as of the date
hereof and on and as of the Closing Date or the Option Closing Date, as the case
may be, as if made on and as of the Closing Date or Option Closing Date, and you
shall have received a certificate, dated the Closing Date or the Option Closing
Date, as the case may be, and signed by the chief executive officer and the
chief financial officer of the Company and similar officers of the Company as
general partner of the Partnership (or such other officers as are acceptable to
you), to the effect set forth in this Sections 5(f), 5(g) and 5(h) hereof.
(g) The Company shall not have failed at or prior to the Closing
Date to have performed or complied with any of its agreements herein contained
and required to be performed or complied with by it hereunder at or prior to the
Closing Date.
(h) The officers of the Company have carefully examined the
registration statement, the pre-pricing prospectus supplement and the prospectus
and, in such officers' opinions, as of the effective date of the registration
statement, the statements contained in the registration statement, including any
document incorporated by reference therein, were true and correct, and such
registration statement and any prospectus or any document incorporated by
reference therein did not omit to state a material fact required to be stated
therein not misleading and, in his opinion, since the effective date of the
registration statement,
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no event has occurred which should have been set forth in a supplement to or an
amendment of the prospectus which has not been so set forth in such supplement
or amendment or incorporated by reference in the prospectus.
(i) The Shares shall have been listed for trading on the New York
Stock Exchange.
(j) The NASD, upon a review of the terms of the public offering of
the Shares, if required, shall not have objected to such offering, such terms or
the Underwriters' participation in the same.
(k) The Company shall have furnished or caused to be furnished to
you such further certificates and documents as you shall have reasonably
requested.
All such opinions, certificates, letters and other documents will
be in compliance with the provisions hereof only if they are satisfactory in
form and substance to you and your counsel in your reasonable discretion.
The several obligations of the Underwriters to purchase Option
Shares hereunder are subject to the satisfaction on and as of any Option Closing
Date of the conditions set forth in this Section 6, except that, if any Option
Closing Date is other than the Closing Date, the certificates, opinions and
letters referred to in paragraphs (c) through (h) shall be dated the Option
Closing Date in question and the opinions called for by paragraphs (c) and (d)
shall be revised to reflect the sale of Option Shares.
6. Conditions of the Obligations of the Company. The obligations of the
Company to sell and deliver the Shares as and when specified in this Agreement
are subject to the conditions that at the Closing Date or the Option Closing
Date, as the case may be, no stop order suspending the effectiveness of the
registration statement shall have been issued and in effect or proceedings
therefor initiated or threatened.
7. Expenses. The Company agrees to pay the following costs and expenses
and all other costs and expenses incident to the performance by it of its
obligations hereunder: (i) the preparation, printing or reproduction, and filing
with the Commission of the registration statement (including financial
statements and exhibits thereto), each pre-pricing prospectus supplement, the
prospectus, and each amendment or supplement to any of them; (ii) the printing
(or reproduction) and delivery (including postage, air freight charges and
charges for counting and packaging) of such copies of the registration
statement, each pre-pricing prospectus supplement, the prospectus, and all
amendment 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 reproduction and delivery of this Agreement, the
preliminary and supplemental Blue Sky Memoranda, if any, and all other
agreements or documents reproduced and delivered in connection with the offering
of the Shares; (v) the listing of the Shares on the New York Stock
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Exchange; (vi) the registration or qualification of the Shares, if required, and
the filing of other notices or materials, for offer and sale under the
securities or Blue Sky laws or real estate syndication laws of the several
states as provided in Section 4(g) hereof (including the reasonable fees,
expenses and disbursements of counsel for the Underwriters relating to the
preparation, reproduction, and delivery of the preliminary and supplemental Blue
Sky Memoranda and such registration and qualification); (vii) the filing fees
and the fees and expenses of counsel for the underwriters in connection with any
filings required to be made with the NASD; (viii) the transportation and other
expenses incurred by or on behalf of Company representatives in connection with
presentations to prospective purchasers of the Shares; (ix) the fees and
expenses of the Company's accountants and the fees and expenses of counsel
(including local and special counsel) for the Company.
8. Indemnification.
(a) The Company and the Partnership, jointly and severally,
indemnify and hold harmless each Underwriter, the directors, officers, employees
and agents of each Underwriter and each person, if any, who controls each
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, liabilities, expenses
and damages (including, without limitation, any and all investigative, legal and
other expenses reasonably incurred in connection with, and any and all amounts
paid in settlement of, any action, suit or proceeding between any of the
indemnified parties and any indemnifying parties or between any indemnified
party and any third party, or otherwise, or any claim asserted, which settlement
has been approved by the indemnifying party), as and when incurred, to which any
Underwriter, or any such person, may become subject under the Act, the Exchange
Act or other Federal or state statutory law or regulation, at common law or
otherwise, insofar as such losses, claims, liabilities, expenses or damages
arise out of or are based on (i) any untrue statement or alleged untrue
statement of a material fact contained in any pre-pricing prospectus supplement,
the registration statement or the prospectus or any amendment or supplement to
the registration statement or the prospectus, or in any application or other
document executed by or on behalf of the Company or based on written information
furnished by or on behalf of the Company filed in any jurisdiction in order to
qualify the Shares under the securities laws thereof or filed with the
Commission, (ii) the omission or alleged omission to state in such document a
material fact required to be stated in it or necessary to make the statements in
it not misleading, or (iii) any act or failure to act by any Underwriter in
connection with, or relating in any manner to, the Shares or the offering
contemplated hereby, and which is included as part of or referred to in any
loss, claim, liability, expense or damage arising out of or based upon matters
covered by clause (i) or (ii) above (provided that the Company shall not be
liable under this clause (iii) to the extent it is finally judicially determined
by a court of competent jurisdiction that such loss, claim, liability, expense
or damage resulted directly from any such acts or failures to act undertaken or
omitted to be taken by such underwriter through its negligence or willful
misconduct), provided that the Company and the Partnership will not be liable to
the extent that such loss, claim, liability, expense or damage arises from the
sale of the Shares in the public offering to any person by an Underwriter and is
based on an untrue statement or omission or alleged untrue statement or omission
made in reliance on and in conformity with information relating to any
Underwriter furnished in writing to the Company
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by the Representatives on behalf of any Underwriter expressly for inclusion in
the registration statement, any pre-pricing prospectus supplement or the
prospectus. This indemnity agreement will be in addition to any liability that
the Company or Partnership might otherwise have to any person who is an
indemnified party hereunder.
(b) Each Underwriter will indemnify and hold harmless the Company,
the Partnership, each person, if any, who controls the Company or the
Partnership within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act, each director of the Company and each officer of the Company who
signs the registration statement to the same extent as the foregoing indemnity
from the Company and the Partnership to each Underwriter, but only insofar as
losses, claims, liabilities, expenses or damages arise out of or are based on
any untrue statement or omission or alleged untrue statement or omission made in
reliance on and in conformity with information relating to any Underwriter
furnished in writing to the Company by the Representatives on behalf of such
Underwriter expressly for use in the registration statement, pre-pricing
prospectus supplement or the prospectus. This indemnity will be in addition to
any liability that each Underwriter might otherwise have; provided, however,
that in no case shall any Underwriter be liable or responsible for any amount in
excess of the underwriting discounts and commissions received by such
Underwriter.
(c) Any party that proposes to assert the right to be indemnified
under this Section 8 will, promptly after receipt of notice of commencement of
any action against such party in respect of which a claim is to be made against
an indemnifying party or parties under this Section 8, notify each such
indemnifying party of the commencement of such action, enclosing a copy of all
papers served, but the omission so to notify such indemnifying party will not
relieve it from any liability that it may have to any indemnified party under
the foregoing provisions of this Section 8 unless, and only to the extent that,
such omission results in the forfeiture of substantive rights or defenses by the
indemnifying party. If any such action is brought against any indemnified party
and it notifies the indemnifying party of its commencement, the indemnifying
party will be entitled to participate in and, to the extent that it elects by
delivering written notice to the indemnified party promptly after receiving
notice of the commencement of the action from the indemnified party, jointly
with any other indemnifying party similarly notified, to assume the defense of
the action, with counsel reasonably satisfactory to the indemnified party, and
after notice from the indemnifying party to the indemnified party of its
election to assume the defense, the indemnifying party will not be liable to the
indemnified party for any legal or other expenses except as provided below and
except for the reasonable costs of investigation subsequently incurred by the
indemnified party in connection with the defense. The indemnified party will
have the right to employ its own counsel in any such action, but the fees,
expenses and other charges of such counsel will be at the expense of such
indemnified party unless (1) the employment of counsel by the indemnified party
has been authorized in writing by the indemnifying party, (2) the indemnified
party has reasonably concluded (based on advice of counsel) that there may be
legal defenses available to it or other indemnified parties that are different
from or in addition to those available to the indemnifying party, (3) a conflict
or potential conflict exists (based on advice of counsel to the indemnified
party) between the indemnified party and the indemnifying party (in which case
the indemnifying party will not have the right to direct the defense of such
action on behalf of the indemnified
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party) or (4) the indemnifying party has not in fact employed counsel to assume
the defense of such action within a reasonable time after receiving notice of
the commencement of the action, in each of which cases the reasonable fees,
disbursements and other charges of counsel will be at the expense of the
indemnifying party or parties. It is understood that the indemnifying party or
parties shall not, in connection with any proceeding or related proceedings in
the same jurisdiction, be liable for the reasonable fees, disbursements and
other charges of more than one separate firm admitted to practice in such
jurisdiction at any one time for all such indemnified party or parties. All such
fees, disbursements and other charges will be reimbursed by the indemnifying
party promptly as they are incurred. An indemnifying party will not be liable
for any settlement of any action or claim effected without its written consent
(which consent will not be unreasonably withheld). No indemnifying party shall,
without the prior written consent of each indemnified party, settle or
compromise or consent to the entry of any judgment in any pending or threatened
claim, action or proceeding relating to the matters contemplated by this Section
8 (whether or not any indemnified party is a party thereto), unless such
settlement, compromise or consent includes an unconditional release of each
indemnified party from all liability arising or that may arise out of such
claim, action or proceeding. Notwithstanding any other provision of this Section
8(c), if at any time an indemnified party shall have requested an indemnifying
party to reimburse the indemnified party for fees and expenses of counsel as
required under this Section 8(c), such indemnifying party agrees that it shall
be liable for any settlement effected without its written consent if (i) such
settlement is entered into more than 45 days after receipt by such indemnifying
party of the aforesaid request, (ii) such indemnifying party shall have received
notice of the terms of such settlement at least 30 days prior to such settlement
being entered into and (iii) such indemnifying party shall not have reimbursed
such indemnified party in accordance with this Section 8(c) or otherwise
provided for such reimbursement prior to the date of such settlement.
(d) In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in the foregoing
paragraphs of this Section 7 is applicable in accordance with its terms but for
any reason is held to be unavailable from the Company, the Partnership or the
Underwriters, the Company, the Partnership and the Underwriters will contribute
to the total losses, claims, liabilities, expenses and damages (including any
investigative, legal and other expenses reasonably incurred in connection with,
and any amount paid consistent with the Agreement in settlement of, any action,
suit or proceeding or any claim asserted, but after deducting any contribution
received by the Company or the Partnership from persons other than the
Underwriters, such as persons who control the Company or the Partnership within
the meaning of the Act, officers of the Company who signed the Registration
Statement and directors of the Company, who also may be liable for contribution)
to which the Company or the Partnership and any one or more of the Underwriters
may be subject in such proportion as shall be appropriate to reflect the
relative benefits received by the Company and Partnership on the one hand and
the Underwriters on the other. The relative benefits received by the Company and
the Partnership 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 Company and the Partnership 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. If,
but only if, the allocation
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<PAGE>
provided by the foregoing sentence is not permitted by applicable law, the
allocation of contribution shall be made in such proportion as is appropriate to
reflect not only the relative benefits referred to in the foregoing sentence but
also the relative fault of the Company and the Partnership, on the one hand, and
the Underwriters, on the other, with respect to the statements or omissions
which resulted in such loss, claim, liability, expense or damage, or action in
respect thereof, as well as any other relevant equitable considerations with
respect to such offering. Such relative fault shall be determined by reference
to whether the untrue or alleged untrue statement of a material fact or omission
or alleged omission to state a material fact relates to information supplied by
the Company or the Representatives on behalf of the Underwriters, the intent of
the parties and their relative knowledge, access to information and opportunity
to correct or prevent such statement or omission. The Company, the Partnership
and the Underwriters agree that it would not be just and equitable if
contributions pursuant to this Section 8(d) were to be determined by pro rata
allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take into account
the equitable considerations referred to herein. The amount paid or payable by
an indemnified party as a result of the loss, claim, liability, expense or
damage, or action in respect thereof, referred to above in this Section 8(d)
shall be deemed to include, for purpose of this Section 8(d), any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 8(d), no Underwriter shall be required to contribute
any amount in excess of the underwriting discounts and commissions received by
it, and no person found guilty of fraudulent misrepresentation (within the
meaning of Section 11 (f) of the Act) will be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation. The
Underwriters' obligations to contribute as provided in this Section 8(d) are
several in proportion to their respective underwriting obligations and not
joint. For purposes of this Section 8(d), any person who controls a party to
this Agreement within the meaning of the Act will have the same rights to
contribution as that party, and each officer of the Company who signed the
registration statement will have the same rights to contribution as the Company,
subject in each case to the provisions hereof. Any party entitled to
contribution, promptly after receipt of notice of commencement of any action
against such party in respect of which a claim for contribution may be made
under this Section 8(d), will notify any such party or parties from whom
contribution may be sought, but the omission so to notify will not relieve the
party or parties from whom contribution may be sought from any other obligation
it or they may have under this Section 8(d). Except for a settlement entered
into pursuant to the last sentence of Section 8(c) hereof, no party will be
liable for contribution with respect to any action or claim settled without its
written consent (which consent will not be unreasonably withheld).
(e) The indemnity and contribution agreements contained in this
Section 8 and the representations and warranties of the Company and the
Partnership contained in this Agreement shall remain operative and in full force
and effect regardless of (i) any investigation made by or on behalf of the
Underwriters, (ii) acceptance of any of the Shares and payment therefor or (iii)
any termination of this Agreement.
9. Termination. The obligations of the several Underwriters under this
Agreement may be terminated at any time prior to the Closing Date (or, with
respect to the
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<PAGE>
Option Shares, on or prior to the Option Closing Date), by notice to the Company
from Legg Mason Wood Walker, Incorporated, without liability on the part of any
Underwriter to the Company, if, prior to delivery and payment for the Shares (or
the Option Shares, as the case may be), in the sole judgment of the
Representatives, (i) trading in securities generally on the New York Stock
Exchange shall have been suspended or limited or minimum or maximum prices shall
have been generally established on such exchange or on The Nasdaq Stock Market,
or additional material governmental restrictions, not in force on the date of
this Agreement, shall have been imposed upon trading in securities generally by
such exchange or by order of the Commission or the NASD or any court or other
governmental authority, (ii) a general banking moratorium shall have been
declared by either Federal or New York State authorities or (iii) any material
adverse change in the financial or securities markets in the United States or in
political, financial or economic conditions in the United States or any outbreak
or escalation of hostilities or declaration by the United States of a national
emergency or war or other calamity or crisis shall have occurred, the effect of
any of which is such as to make it, in the sole judgment of the Representatives,
impracticable or inadvisable to market the Shares on the terms and in the manner
contemplated by the prospectus.
10. Substitution of Underwriters. If any one or more of the
Underwriters shall fail or refuse to purchase any of the Firm Shares which it or
they have agreed to purchase hereunder, and the aggregate number of Firm Shares
which such defaulting Underwriter or Underwriters agreed but failed or refused
to purchase is not more than one-tenth of the aggregate number of Firm Shares,
the other Underwriters shall be obligated, severally, to purchase the Firm
Shares which such defaulting Underwriter or Underwriters agreed but failed or
refused to purchase, in the proportions which the number of Firm Shares which
they have respectively agreed to purchase pursuant to Section 1 bears to the
aggregate number of Firm Shares which all such non-defaulting Underwriters have
so agreed to purchase, or in such other proportions as the Representatives may
specify; provided that in no event shall the maximum number of Firm Shares which
any Underwriter has become obligated to purchase pursuant to Section 1 be
increased pursuant to this Section 10 by more than one-ninth of the number of
Firm Shares agreed to be purchased by such Underwriter without the prior written
consent of such Underwriter. If any Underwriter or Underwriters shall fail or
refuse to purchase any Firm Shares and the aggregate number of Firm Shares which
such defaulting Underwriter or Underwriters agreed but failed or refused to
purchase exceeds one-tenth of the aggregate number of the Firm Shares and
arrangements satisfactory to the Representatives, the Company and the Committee
for the purchase of such Firm Shares are not made within 48 hours after such
default, this Agreement will terminate without liability on the part of any
non-defaulting Underwriter, or the Company or any Selling Shareholder for the
purchase or sale of any Shares under this Agreement. In any such case either the
Representatives or the Company and the Committee 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 in the
Prospectus or in any other documents or arrangements may be effected. Any action
taken pursuant to this Section 10 shall not relieve any defaulting Underwriter
from liability in respect of any default of such Underwriter under this
Agreement.
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<PAGE>
11. Miscellaneous. Notice given pursuant to any of the provisions of
this Agreement shall be in writing and, unless otherwise specified, shall be
mailed or delivered (a) if to the Company, at the office of the Company, 170
West Ridgely Road, Suite 300, Lutherville, Maryland, Attention: F. Patrick
Hughes, President, with a copy to Abba David Poliakoff, Esq., Gordon, Feinblatt,
Rothman, Hoffberger & Hollander, LLC, Garrett Building, 233 East Redwood Street,
Baltimore, Maryland 21202, or (b) if to the Underwriters, to Legg Mason Wood
Walker, Incorporated at the offices of Legg Mason Wood Walker, Incorporated, 111
South Calvert Street, 20th Floor, Baltimore, MD 21202, Attention: Corporate
Finance Department. Any such notice shall be effective only upon receipt. Any
notice hereunder may be made by telex or telephone, but if so made shall be
subsequently confirmed in writing.
This Agreement has been and is made solely for the benefit of the
several Underwriters, the Company and the Partnership and of the controlling
persons, directors and officers referred to in Section 8, and their respective
successors and assigns, and no other person shall acquire or have any right
under or by virtue of this Agreement. The term "successors and assigns" as used
in this Agreement shall not include a purchaser, as such purchaser, of Shares
from any of the several Underwriters.
All representations, warranties and agreements of the Company and
the Partnership contained herein or in certificates or other instruments
delivered pursuant hereto, shall remain operative and in full force and effect
regardless of any investigation made by or on behalf of any Underwriter or any
of their controlling persons and shall survive delivery of and payment for the
Shares hereunder.
Any action required or permitted to be taken by the
Representatives under this Agreement may be taken by them jointly or by Legg
Mason Wood Walker, Incorporated.
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF MARYLAND WITHOUT REGARD TO THE CONFLICT OF LAWS
PRINCIPLES OF SUCH STATE.
This Agreement may be signed in two or more counterparts with the
same effect as if the signatures thereto and hereto were upon the same
instrument.
In case any provision in this Agreement shall be invalid, illegal
or unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.
The Company, the Partnership and the Underwriters each hereby
irrevocably waive any right they may have to a trial by jury in respect of any
claim based upon or arising out of this Agreement or the transactions
contemplated hereby.
This Agreement may not be amended or otherwise modified or any
provision hereof waived except by an instrument in writing signed by Legg Mason
Wood Walker, Incorporated and the Company.
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<PAGE>
UNDERWRITING AGREEMENT SIGNATURE PAGE
Please confirm that the foregoing correctly sets forth the agreement
among the Company and the several Underwriters.
Very truly yours,
MID-ATLANTIC REALTY TRUST
By: /s/ F. Patrick Huges
Name: F. Patrick Hughes
Title: President
MART LIMITED PARTNERSHIP
as General Partner
By: /s/ F. Patrick Hughes
Name: F. Patrick Hughes
Title: President
Confirmed as of the date first above mentioned:
LEGG MASON WOOD WALKER, INCORPORATED SALOMON BROTHERS INC WHEAT FIRST BUTCHER
SINGER Acting on behalf of themselves and as the Representatives of the several
Underwriters named in Schedule I hereof.
By: LEGG MASON WOOD WALKER, INCORPORATED
By:
Authorized Officer
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<PAGE>
SCHEDULE I
UNDERWRITERS
Name of Underwriters Number of Firm Shares Purchased
Legg Mason Wood Walker, Incorporated.....................................760,000
Salomon Brothers Inc.....................................................760,000
Wheat First Butcher Singer...............................................760,000
BT Alex Brown Incorporated................................................60,000
Credit Lyonnais Securities (USA), Inc.....................................60,000
A.G. Edwards & Sons, Inc..................................................60,000
Goldman, Sachs & Co.......................................................60,000
Lehman Brothers Inc.......................................................60,000
Merrill Lynch, Pierce, Fenner & Smith Incorporated........................60,000
Morgan Stanley & Co. Incorporated.........................................60,000
NatWest Securities Corporation............................................60,000
Oppenheimer & Co., Inc....................................................60,000
PaineWebber Incorporated..................................................60,000
Smith Barney Inc..........................................................60,000
Advest, Inc...............................................................40,000
J.C. Bradford & Co........................................................40,000
Branch, Cabell & Company..................................................40,000
EVEREN Securities, Inc....................................................40,000
Ferris, Baker Watts, Inc..................................................40,000
Interstate/Johnson Lane Corporation.......................................40,000
Janney Montgomery Scott Inc...............................................40,000
Johnston, Lemon & Co. Incorporated........................................40,000
McDonald & Company Securities, Inc........................................40,000
Morgan Keegan & Company, Inc..............................................40,000
Piper Jaffrey Inc.........................................................40,000
Raymond James & Associates, Inc...........................................40,000
The Robinson-Humphrey Company, LLC........................................40,000
Scott & Stringfellow, Inc.................................................40,000
Total................................................3,500,000
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<PAGE>
EXHIBIT A
REIT SUBSIDIARIES
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<PAGE>
EXHIBIT 21. PARENT AND SUBSIDIARIES OF REGISTRANT
The subsidiaries of MART are listed below. All are engaged in the
ownership and/or development of commercial real estate in the United States. All
are included in the consolidated financial statements filed as part of this
Annual Report.
<TABLE>
<CAPTION>
State of State of
Incorporation Incorporation
Name or Formation Interest Name or Formation Interest
- ---------------------------------------------------------- --------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
CORPORATIONS:
BTR Arkor, Inc. Maryland 100% New Town Village, Inc. Maryland 100%
BTR Atlanta Daycare, Inc. Maryland 100% North East Station, Inc. Maryland 100%
BTR Business Center, Inc. Maryland 100% Orchard Landing Apartment, Inc. Maryland 100%
BTR Chandler, Inc. Maryland 100% Orchard Landing Limited, Inc. Maryland 100%
BTR East Greenbush, Inc. Maryland 100% Page Plaza Associates, Inc. Maryland 100%
BTR Fallston Corner, Inc. Maryland 100% Park Sedona, Inc. Maryland 100%
BTR Free State Bowls, Inc. Maryland 100% Rolling Road Plaza, Inc. Maryland 100%
BTR Gateway, Inc. Maryland 100% Rosedale Partners, Inc. Maryland 100%
(Formerly Diamond Alley, Inc.) Maryland 100% Rosedale Plaza, Inc. Maryland 100%
BTR Manassas, Inc. Maryland 100% Route 642 Properties, Inc. Maryland 100%
BTR Marigot, Inc. Maryland 100% Sedona Sewer, Inc. Maryland 100%
BTR Marina, Inc. Maryland 100% Southdale Mortgage, Inc. Maryland 100%
BTR McClintock, Inc. Maryland 100% Southwest Development
BTR New Ridge, Inc. Maryland 100% Properties, Inc. Maryland 100%
BTR Northwood Properties, Inc. Maryland 100% Timonium Shopping Center, Inc. Maryland 100%
BTR Odenton Properties, Inc. Maryland 100% Wake Plaza, Inc. Maryland 100%
BTR Ray Road, Inc. Maryland 100% Wyaness, Inc. Maryland 100%
BTR Real Estate Enterprises, Inc. Maryland 100%
BTR Salisbury, Inc. Maryland 100%
BTR Southdale, Inc. Maryland 100% The following are partnerships in which Mid-Atlantic
BTR Union Hills, Inc. Maryland 100% Realty Trust, BTR Realty, Inc. or Financial Associates of
BTR Waldorf Development Maryland have partnership interests:
Corporation Maryland 100%
BTR Waldorf Tire, Inc. Maryland 100% Name or Formation Interest
BTR Yuma, Inc. Maryland 100% --------------------------------------------------------
Burke Town Plaza, Inc. Maryland 100% Arizona & Warner Limited
Brandywine Commons, Inc. Maryland 100% Partnership Maryland 50%
Clinton Development BBG Joint Venture Maryland 93%
Company, Inc. Maryland 100% BBG Properties Limited
Colonie Plaza, Inc. Maryland 100% Partnership Maryland 93%
Columbia Plaza, Inc. Maryland 100% Fredericksburg Plaza Limited
Commonwealth Plaza, Inc. Maryland 100% Partnership Maryland 93%
Concourse Realty Management, Gateway International Limited
Inc. Maryland 100% Partnership Maryland 100%
Davis Ford Properties, Inc. Maryland 100% Harbour Island Associates Maryland 100%
Essanwy, Inc. Maryland 100% Kensington Associates Maryland 93%
Easton Shoppes, Inc. Maryland 100% Northwood Limited Partnership Maryland 67%
Fredericksburg Plaza, Inc. Maryland 100% Rosedale Plaza Limited
Greenbush Residential, Inc. Maryland 100% Partnership Maryland 100%
Harrisonburg Plaza, Inc. Maryland 100% Route 642 Limited Partnership Maryland 93%
Kingston Crossing, Inc. Maryland 100% Scotia Associates Limited
MART Acquisition, Inc. Maryland 100% Partnership Maryland 50%
Southdale Limited Partnership Maryland 50%
Union Hills Limited Partnership Maryland 50%
Wyaness Associates Maryland 100%
</TABLE>
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<PAGE>
EXHIBIT B
PARTNERSHIP SUBSIDIARIES
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<PAGE>
Timonium Shopping Center Associates, LLC
Stonehenge, LLC
Roundhollow, LLC
Yorkway Associates, LLC
Talton, LLC
Radcliffe, LLC
Perry Hall Square, LLC
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<PAGE>
