HRPT PROPERTIES TRUST
(a Maryland real estate investment trust)
8-3/8% Monthly Income Senior Notes due 2011
PURCHASE AGREEMENT
June 14, 1999
▇▇▇▇▇▇▇ ▇▇▇▇▇ & CO.
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇
INCORPORATED
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ INC.
▇.▇. ▇▇▇▇▇▇▇ & SONS, INC.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, INCORPORATED
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & CO. INCORPORATED
PAINEWEBBER INCORPORATED
PRUDENTIAL SECURITIES INCORPORATED
c/▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ & CO.
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated
World Financial Center - North Tower
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Ladies and Gentlemen:
HRPT Properties Trust, a Maryland real estate investment trust (the
"Company"), confirms its agreement with ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co., ▇▇▇▇▇▇▇ Lynch,
Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated ("▇▇▇▇▇▇▇ ▇▇▇▇▇"), ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
Inc., ▇.▇. ▇▇▇▇▇▇▇ & Sons, Inc., ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, Incorporated, ▇▇▇▇▇▇
▇▇▇▇▇▇▇ & Co. Incorporated, PaineWebber Incorporated and Prudential Securities
Incorporated (collectively, the "Underwriters," which term shall include any
underwriter substituted as hereinafter provided in Section 10 hereof), with
respect to the sale by the Company of $65,000,000 principal amount of the
Company's 8-3/8% Monthly Income Senior Notes due 2011 (the "Notes") and the
purchase by each such Underwriter, severally, of the principal amount of such
Notes set forth opposite the name of each such Underwriter listed in Schedule A
hereto at a purchase price of 97.125% of the principal amount of the Notes and
with respect to the grant by the Company to the Underwriters of the option
described in Section 2 hereof to purchase all or any part of an additional
$9,750,000 aggregate principal amount of such Notes to cover over-allotments.
The aforesaid $65,000,000 principal amount of such Notes (the "Initial Notes"),
together with all or any part of the $9,750,000 additional principal amount
subject to the option described in Section 2 hereof (the
"Option Notes"), are collectively hereinafter called the "Notes". The Notes are
to be issued pursuant to an indenture dated as of July 9, 1997 and a
supplemental indenture dated as of June 17, 1999 (together, the "Indenture"),
each between the Company and State Street Bank and Trust Company (the
"Trustee").
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 (No. 333-56051) for the
registration of debt securities, preferred shares of beneficial interest,
depositary shares, common shares of beneficial interest and warrants under the
Securities Act of 1933, as amended (the "1933 Act"), and has filed such
amendments thereto, if any, as may have been required to the date hereof. Such
registration statement has been declared effective under the 1933 Act. Such
registration statement (as amended, if applicable) and the prospectus
constituting a part thereof, as supplemented by the prospectus supplement
relating to the Notes (including, in each case, all documents incorporated or
deemed to be incorporated by reference therein), as from time to time amended or
supplemented pursuant to the 1933 Act, the Securities Exchange Act of 1934, as
amended (the "1934 Act"), or otherwise, are hereinafter referred to as the
"Registration Statement" and the "Prospectus", respectively. All references in
this Agreement to financial statements and schedules and other information which
is "contained", "included" or "stated" in the Registration Statement or the
Prospectus (and all other references of like import) shall be deemed to mean and
include all such financial statements and schedules and other information which
is or is deemed to be incorporated by reference in the Registration Statement or
in the Prospectus, as the case may be.
Section 1. Representations and Warranties.
(a) The Company represents and warrants to each Underwriter as of the date
hereof as follows:
(i) At the time the Registration Statement became effective, the
Registration Statement complied in all material respects with the
requirements of the 1933 Act and the rules and regulations under the 1933
Act (the "1933 Act Regulations") and did not contain an untrue statement of
a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading. The
Prospectus, at the date hereof (unless the term "Prospectus" refers to a
prospectus which has been provided to the Underwriters by the Company for
use in connection with the offering of the Notes which differs from the
Prospectus on file at the Commission at the date of effectiveness of the
Registration Statement, in which case at the time it is first provided to
the Underwriters for such use) and at the Closing Time referred to in
Section 2 hereof, does not and will not include an untrue statement of a
material fact or omit to state a material fact necessary in order to make
the statements therein, in the light of the circumstances under which they
were made, not misleading; provided, however, that the representations and
warranties in this subsection (i) shall not apply to statements or
omissions in the Registration Statement or the Prospectus made in reliance
upon and in conformity with information furnished to the Company in writing
by any Underwriter through ▇▇▇▇▇▇▇ ▇▇▇▇▇ expressly for use in the
Registration Statement or the Prospectus.
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(ii) The documents incorporated or deemed to be incorporated by
reference in the Prospectus, at the time they were or hereafter are filed
with the Commission, complied and will comply in all material respects with
the requirements of the 1934 Act and the rules and regulations of the
Commission under the 1934 Act (the "1934 Act Regulations"), and, when read
together with the other information in the Prospectus, at the time the
Registration Statement became effective and at Closing Time, did not and
will not include an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.
(iii) The Company is a Maryland real estate investment trust duly
organized, validly existing and in good standing under the laws of the
State of Maryland. Each of its subsidiaries has been duly organized and is
validly existing as a corporation or trust in good standing under the laws
of its jurisdiction of incorporation or organization. Each of the Company
and its subsidiaries has full power and authority (corporate and other) to
carry on its business as described in the Registration Statement and in the
Prospectus and to own, lease and operate its properties. Each of the
Company and its subsidiaries is duly qualified and is in good standing as a
foreign corporation or trust, as the case may be, and is authorized to do
business in each jurisdiction in which the nature of its business or its
ownership or leasing of property requires such qualification, except where
the failure to be so qualified would not have a material adverse effect on
the Company and its subsidiaries, taken as a whole.
(iv) The financial statements of the Company and its subsidiaries,
together with the related schedules and notes thereto, included or
incorporated by reference in the Registration Statement and in the
Prospectus, comply as to form in all material respects with the
requirements of the 1933 Act. Such financial statements of the Company,
together with the related schedules and notes thereto, present fairly the
consolidated financial position, results of operations, shareholders'
equity and changes in financial position of the Company and its
subsidiaries, at the dates or for the periods therein specified and have
been prepared in accordance with generally accepted accounting principles
("GAAP") consistently applied throughout the periods involved. The pro
forma financial statements and other pro forma financial information
(including the notes thereto) included or incorporated by reference in the
Registration Statement and in the Prospectus (i) present fairly the
information shown therein, (ii) have been prepared in accordance with the
Commission's rules and guidelines with respect to pro forma financial
statements and (iii) have been properly compiled on the basis described
therein and the assumptions used in the preparation of such pro forma
financial statements and other pro forma financial information (including
the notes thereto) are reasonable and the adjustments used therein are
appropriate to give effect to the transactions or circumstances referred to
therein. The adjusted pro forma financial statements and other adjusted pro
forma financial information (including the notes thereto) included or
incorporated by reference in the Registration Statement and in the
Prospectus (i) present fairly the information shown therein and (ii) have
been properly compiled on the basis described therein and the assumptions
used in the preparation of such adjusted pro forma financial statements and
other adjusted pro forma financial information (including the
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notes thereto) are reasonable and the adjustments used therein are
appropriate to give effect to the transactions or circumstances referred to
therein.
(v) The accountants who have certified the financial statements of the
Company and its subsidiaries included or incorporated by reference in the
Registration Statement and in the Prospectus are independent certified
public accountants as required by the 1933 Act.
(vi) The Indenture has been duly qualified under the Trust Indenture
Act of 1939 (the "1939 Act") and has been duly authorized, executed and
delivered by the Company and is a valid and binding agreement of the
Company enforceable in accordance with its terms, except as limited by (a)
the effect of bankruptcy, insolvency, reorganization, moratorium,
fraudulent transfer or other similar laws relating to or affecting the
rights or remedies of creditors or (b) the effect of general principles of
equity (regardless of whether enforcement is sought in a proceeding in
equity or at law).
(vii) All of the issued and outstanding indebtedness of the Company is
duly and validly authorized and issued; the Notes have been authorized by
all necessary trust action and, when executed and authenticated in
accordance with the provisions of the Indenture and delivered and paid for
pursuant to this Agreement, will be valid and binding obligations of the
Company enforceable in accordance with their terms, except as limited by
(a) the effect of bankruptcy, insolvency, reorganization, moratorium,
fraudulent transfer or other similar laws relating to or affecting the
rights or remedies of creditors or (b) the effect of general principles of
equity (regardless of whether enforcement is sought in a proceeding in
equity or at law).
(viii) The Notes and the Indenture conform to the descriptions thereof
in the Registration Statement and in the Prospectus.
(ix) The authorized capital of the Company, including the Notes,
conforms as to legal matters to the description thereof contained in the
Prospectus (or the documents incorporated therein by reference).
(x) Since the respective dates as of which information is given in the
Prospectus, and except as otherwise disclosed therein, (i) there has been
no material adverse change in the business, operations, earnings,
prospects, properties or condition (financial or otherwise) of the Company
and its subsidiaries, taken as a whole, whether or not arising in the
ordinary course of business, (ii) there have been no material transactions
entered into by the Company and its subsidiaries, on a consolidated basis,
other than transactions in the ordinary course of business, (iii) neither
the Company nor its subsidiaries has incurred any material liabilities or
obligations, direct or contingent, (iv) the Company and its subsidiaries,
on a consolidated basis, have not, (A) other than regular quarterly
dividends, declared, paid or made a dividend or distribution of any kind on
any class of its shares of beneficial interest (other than dividends or
distributions from wholly owned subsidiaries to the Company), (B) issued
any shares of beneficial interest of the Company or any of its subsidiaries
or any options, warrants, convertible securities or other rights to
purchase the shares of beneficial interest of the Company or any of its
subsidiaries (other
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than the issuance of common shares of beneficial interest ("Common Shares")
upon conversion of certain convertible debentures of the Company or the
issuance of Common Shares to the trustees and officers of the Company
pursuant to the Company's Incentive Share Award Plan) or (C) repurchased or
redeemed shares of beneficial interest, and (v) there has not been (A) any
material decrease in the Company's net worth or (B) any material increase
in the short-term or long-term debt (including capitalized lease
obligations but excluding borrowings under existing bank lines of credit)
of the Company and its subsidiaries, on a consolidated basis.
(xi) The Company and each of its subsidiaries maintains a system of
internal accounting controls sufficient to provide reasonable assurance
that (i) transactions are executed in accordance with management's general
or specific authorizations; (ii) transactions are recorded as necessary to
permit preparation of financial statements in conformity with GAAP and to
maintain asset accountability; (iii) access to assets is permitted only in
accordance with management's general or specific authorization; and (iv)
the recorded accountability for assets is compared with the existing assets
at reasonable intervals and appropriate action is taken with respect to any
differences.
(xii) Neither the Company nor any of its subsidiaries is in violation
of its respective charter or by-laws or other organizational documents or
in default in the performance of any obligation, agreement or condition
contained in any bond, debenture, note or any other evidence of
indebtedness or in any other agreement, indenture or instrument to which
the Company or any of its subsidiaries is a party or by which any of their
respective properties or assets may be bound or affected, except for any
such violation that would not have a material adverse effect on the
condition, financial or otherwise or in the earnings, business affairs or
business prospects of the Company and its subsidiaries, taken as a whole.
The Company is not in violation of any law, ordinance, governmental rule or
regulation or court decree to which it is subject, except for any such
violations that would not, individually or in the aggregate, have a
material adverse effect on the business, operations, earnings, prospects,
properties or condition (financial or otherwise) of any of the Company and
its subsidiaries, taken as a whole.
(xiii) Except as disclosed in the Registration Statement or in the
Prospectus, there is not now pending or, to the knowledge of the Company,
threatened, any litigation, action, suit or proceeding to which the Company
is or will be a party before or by any court or governmental agency or
body, which (A) might result in any material adverse change in the
condition, financial or otherwise, or in the earnings, business affairs or
business prospects of the Company or (B) might materially and adversely
affect the property or assets of the Company or (C) concerns the Company
and is required to be disclosed in the Registration Statement or the
Prospectus, or (D) could adversely affect the consummation of this
Agreement and the issuance, purchase and sale of the Notes. No contract or
other document is required to be described in the Registration Statement or
in the Prospectus or to be filed as an exhibit to the Registration
Statement that is not described therein or filed as required.
(xiv) The execution, delivery and performance by the Company of this
Agreement, the issuance, offering and sale by the Company of the Notes as
contemplated by the
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Registration Statement and by the Prospectus and the consummation of the
transactions contemplated hereby and compliance with the terms and
provisions hereof, will not violate or conflict with or constitute a breach
of any of the terms or provisions of, or a default under, (i) the Amended
and Restated Declaration of Trust (the "Declaration of Trust") or the
By-laws of the Company or the charter or by-laws or other organizational
documents of any subsidiaries of the Company, (ii) any agreement, indenture
or other instrument to which the Company or any of its subsidiaries is a
party or by which the Company or any of its subsidiaries or their
respective properties or assets is bound, or (iii) any laws, administrative
regulations or rulings or decrees to which the Company or any of its
subsidiaries or their respective properties or assets may be subject.
(xv) No consent, approval, authorization or order of, or registration,
filing or qualification with, any governmental body or regulatory agency
having jurisdiction over the Company or any of its subsidiaries or any of
their respective properties or assets is required for the execution,
delivery and performance of this Agreement and the consummation of the
transactions contemplated hereby, including, without limitation, the
issuance, sale and delivery of the Notes pursuant to this Agreement, except
such as have been obtained and such as may be required under foreign and
state securities or "Blue Sky" or real estate syndication laws.
(xvi) Except as otherwise disclosed in the Registration Statement or
in the Prospectus, the Company and each of its subsidiaries has good and
marketable title or ground leases, free and clear of all liens, claims,
encumbrances and restrictions, except liens for taxes not yet due and
payable and other liens and encumbrances which do not, either individually
or in the aggregate, materially and adversely affect the current use or
value thereof, to all property and assets described in the Registration
Statement or in the Prospectus as being owned by them. Except as otherwise
set forth in the Registration Statement or in the Prospectus, all leases to
which the Company and each of its subsidiaries is a party relating to real
property, and all other leases which are material to the business of the
Company and its subsidiaries, taken as a whole, are valid and binding, and
no default (to the Company's knowledge, in the case of leases to which the
Company is a party as lessor, that would, individually or in the aggregate,
have a material adverse effect on the business, operations, earnings,
prospects, properties or condition (financial or otherwise) of the Company
and its subsidiaries, taken as a whole) has occurred and is continuing
thereunder, and the Company and each of its subsidiaries enjoys peaceful
and undisturbed possession under all such leases to which it is a party as
lessee. With respect to all properties owned or leased by the Company and
each of its subsidiaries, the Company or such subsidiary has such
documents, instruments, certificates, opinions and assurances, including
without limitation, fee, leasehold owners or mortgage title insurance
policies (disclosing no encumbrances or title exceptions which are material
to the Company and its subsidiaries considered as a whole, except as
otherwise set forth in the Registration Statement and in the Prospectus),
legal opinions and property insurance policies in each case in form and
substance as are usual and customary in transactions involving the purchase
of similar real estate and are appropriate for the Company or such
subsidiary to have obtained.
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(xvii) The Company and each of its subsidiaries owns, or possesses
adequate rights to use, all patents, trademarks, trade names, service
marks, copyrights, licenses and other rights necessary for the conduct of
their respective businesses as described in the Registration Statement and
in the Prospectus, and neither the Company nor any of its subsidiaries has
received any notice of conflict with, or infringement of, the asserted
rights of others with respect to any such patents, trademarks, trade names,
service marks, copyrights, licenses and other such rights (other than
conflicts or infringements that, if proven, would not have a material
adverse effect on the business, operations, earnings, prospects, properties
or condition (financial or otherwise) of the Company and its subsidiaries,
taken as a whole), and neither the Company nor any of its subsidiaries
knows of any basis therefor.
(xviii) All material tax returns required to be filed by the Company
and each of its subsidiaries in any jurisdiction have been timely filed,
other than those filings being contested in good faith, and all material
taxes, including withholding taxes, penalties and interest, assessments,
fees and other charges due pursuant to such returns or pursuant to any
assessment received by the Company or any of its subsidiaries have been
paid, other than those being contested in good faith and for which adequate
reserves have been provided.
(xix) Except for those matters which in the aggregate do not have a
material adverse effect on the business, operations, earnings, prospects,
properties or condition (financial or otherwise) of the Company and its
subsidiaries taken as a whole, and except for Hazardous Materials (as
defined below) or substances which are handled and/or disposed of in
compliance with all applicable federal, state and local requirements, to
the Company's knowledge, after due investigation, the real property owned,
leased or otherwise operated by the Company and each of its subsidiaries in
connection with the operation of their respective businesses, including,
without limitation, any subsurface soils and ground water (the "Realty"),
is free of contamination from any Hazardous Materials. To the Company's
knowledge, after due investigation, the Realty does not contain any
underground storage or treatment tanks, active or abandoned water, gas or
oil ▇▇▇▇▇, or any other underground improvements or structures, other than
the foundations, footings, or other supports for the improvements located
thereon which, based on present knowledge, could, in their present
condition, reasonably be expected to presently cause a material detriment
to or materially impair the beneficial use thereof by the Company or
constitute or cause a significant health, safety or other environmental
hazard to occupants or users thereof without regard to any special
conditions of such occupants or users. The Company represents that, after
due investigation, it has no knowledge of any material violation, with
respect to the Realty, of any Environmental Law, or of any material
liability on the part of the Company with respect to the Realty, resulting
from the presence, use, release, threatened release, emission, disposal,
pumping, discharge, generation or processing of any Hazardous Materials. As
used herein, "Environmental Law" means any federal, state or local statute,
regulation, judgment, order or authorization relating to emissions,
discharges, releases or threatened releases of Hazardous Materials into
ambient air, surface water, ground water, publicly-owned treatment works,
septic systems or land, or otherwise relating to the pollution or
protection of public health or the environment, and "Hazardous Materials"
means any
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substance, material or waste which is regulated, defined, or listed as a
"hazardous waste", "hazardous substance", "toxic substance", "medical
waste", "infectious waste" or other similar terms in any Environmental Law
or by any federal, state or local government or quasi-government authority,
or any petroleum products, asbestos, lead-based paint, polychlorinated
biphenyls, flammable explosives or radioactive materials.
(xx) Each of the Company and its subsidiaries has such permits,
licenses, franchises and authorizations of governmental or regulatory
authorities (together, "permits"), including, without limitation, under any
applicable Environmental Law, as are necessary to own, lease and operate
its properties and to engage in the business currently conducted by it,
except such licenses and permits as to which the failure to own or possess
will not in the aggregate have a material adverse effect on the business,
operations, earnings, prospects, properties or condition (financial or
otherwise) of the Company, and the Company does not have any reason to
believe that any governmental body or agency is considering limiting,
suspending or revoking any such license, certificate, permit,
authorization, approval, franchise or right; each of the Company and its
subsidiaries has fulfilled and performed all of its material obligations
with respect to such permits, and no event has occurred which allows, or
after notice or lapse of time would allow, revocation or termination
thereof or results in any other material impairment of the rights of the
holder of any such permit; and, except as described in the Registration
Statement and in the Prospectus, such permits contain no restrictions that
are materially burdensome to the Company or any of its subsidiaries.
(xxi) To the knowledge of the Company, no labor problem exists or is
imminent with employees of the Company or any of its subsidiaries that
could have a material adverse effect on the business, operations, earnings,
prospects, properties or condition (financial or otherwise) of the Company
and its subsidiaries, taken as a whole.
(xxii) Neither the Company nor any of its subsidiaries nor, to the
knowledge of the Company, any officer, trustee or director purporting to
act on behalf of the Company or any of its subsidiaries, has at any time:
(i) made any contributions to any candidate for political office, or failed
to disclose fully any such contributions, in violation of law; (ii) made
any payment of funds to, or received or retained any funds from, any state,
federal or foreign governmental officer or official, or other person
charged with similar public or quasi-public duties, other than payments
required or allowed by applicable law; or (iii) engaged in any
transactions, maintained any bank accounts or used any corporate funds
except for transactions, bank accounts and funds, which have been and are
reflected in the normally maintained books and records of the Company and
its subsidiaries.
(xxiii) All of the outstanding shares of beneficial interest of, or
other ownership interests in, each of the Company's subsidiaries have been
duly authorized and validly issued and are fully paid and, except as to
subsidiaries that are partnerships, nonassessable, and, except as disclosed
in the Registration Statement or in the Prospectus, are or will be owned by
the Company free and clear of any security interest, claim, lien,
encumbrance or adverse interest of any nature.
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(xxiv) Except as referred to or described in the Registration
Statement and in the Prospectus, none of the subsidiaries of the Company
owns any shares of stock or any other securities of any corporation or has
any equity interest in any firm, partnership, association or other entity
other than the issued capital shares of its subsidiaries, and the Company
does not own, directly or indirectly, any shares of stock or any other
securities of any corporation or have any equity interest in any firm,
partnership, association or other entity other than the issued capital
shares of its subsidiaries, except in each case for non-controlling
positions acquired in the ordinary course of business.
(xxv) Except as disclosed in the Registration Statement and in the
Prospectus, there are no material outstanding loans or advances or material
guarantees of indebtedness by the Company or any of its subsidiaries to or
for the benefit of any of the officers, trustees or directors of the
Company or any of its subsidiaries or any of the members of the families of
any of them.
(xxvi) The Company and each of its subsidiaries maintains insurance,
duly in force, with insurers of recognized financial responsibility; such
insurance insures against such losses and risks as are adequate in
accordance with customary industry practice to protect the Company and its
subsidiaries and their respective businesses; and neither the Company nor
any such subsidiary has any reason to believe that it will not be able to
renew its existing insurance coverage as and when such coverage expires or
to obtain similar coverage from similar insurers as may be necessary to
continue its business at a cost that would not materially and adversely
affect the business, operations, earnings, prospects, properties or
condition (financial or otherwise) of the Company and its subsidiaries,
taken as a whole, except as disclosed in or contemplated by the
Registration Statement and by the Prospectus.
(xxvii) Neither the Company nor any of its officers and directors (as
defined in the 1933 Act Regulations) has taken or will take, directly or
indirectly, prior to the termination of the offering contemplated by this
Agreement, any action designed to stabilize or manipulate the price of any
security of the Company, or which has caused or resulted in, or which might
in the future reasonably be expected to cause or result in, stabilization
or manipulation of the price of any security of the Company to facilitate
the sale or resale of the Notes.
(xxviii) Neither the Company nor any of its subsidiaries is an
"investment company" or an "affiliated person" of, or "promoter" or
"principal underwriter" for, an "investment company" as such terms are
defined in the Investment Company Act of 1940, as amended (the "1940 Act"),
or an "investment adviser" as such term is defined in the Investment
Advisers Act of 1940, as amended.
(xxix) The Company is organized in conformity with the requirements
for qualification, and, as of the date hereof the Company operates, and as
of Closing Time the Company will operate, in a manner that qualifies the
Company as a "real estate investment trust" under the Internal Revenue Code
of 1986, as amended (the "Code"), and the rules and regulations thereunder,
for 1999 and subsequent years. The Company
9
qualified as a real estate investment trust under the Code for each of its
taxable years from 1987 through 1998.
(xxx) No default exists, and no event has occurred which, with notice
or lapse of time or both, would constitute a default in the due performance
and observance of any term, covenant or condition of any indenture,
mortgage, deed of trust, lease or other agreement or instrument to which
the Company or any of its subsidiaries is a party or by which the Company
or any of its subsidiaries or any of their respective properties is bound
or may be affected, except such defaults which, singly or in the aggregate,
would not have a material adverse effect on the business, operations,
earnings, prospects, properties or condition (financial or otherwise) of
the Company and its subsidiaries, considered as a whole, except as
disclosed in the Registration Statement and in the Prospectus.
(xxxi) Except as otherwise disclosed in the Prospectus, since the
respective dates as of which information is given in the Prospectus, there
has been no material adverse change in the business, operations, earnings,
prospects, properties or condition (financial or otherwise) of REIT
Management & Research, Inc. (the "Advisor"), whether or not arising in the
ordinary course of business, that would have a material adverse effect on
the Company and its subsidiaries, taken as a whole. The Advisory Agreement,
dated as of January 1, 1998 (the "Advisory Agreement"), between the Company
and the Advisor, has been duly authorized, executed and delivered by the
parties thereto and constitutes the valid agreement of the parties thereto,
enforceable in accordance with its terms, except as limited by (a) the
effect of bankruptcy, insolvency, reorganization, moratorium, fraudulent
transfer or other similar laws relating to or affecting the rights or
remedies of creditors or (b) the effect of general principles of equity
(regardless of whether enforcement is sought in a proceeding in equity or
at law).
(b) Any certificate signed by any officer of the Company or any of its
subsidiaries and delivered to the Underwriters or to counsel for the
Underwriters shall be deemed a representation and warranty by the Company to
each Underwriter as to the matters covered thereby.
Section 2. Sale and Delivery to the Underwriters; Closing.
(a) On the basis of the representations and warranties herein contained and
subject to the terms and conditions herein set forth, the Company agrees to sell
to each Underwriter, severally and not jointly, and each Underwriter, severally
and not jointly, agrees to purchase from the Company, the Notes as set forth in
Schedule A.
(b) In addition, on the basis of the representations and warranties herein
included and subject to the terms and conditions herein set forth, the Company
hereby grants an option to the Underwriters, severally and not jointly, to
purchase up to an additional $9,750,000 principal amount of Notes at the
purchase price set forth on the first page of this Agreement. The option hereby
granted will expire 30 days after the date of this Agreement and may be
exercised in whole or in part from time to time only for the purpose of covering
over-allotments which may be made in connection with the offering and
distribution of the Initial Notes upon notice by
10
▇▇▇▇▇▇▇ ▇▇▇▇▇ to the Company setting forth the principal amount of Option Notes
as to which the several Underwriters are then exercising the option and the
time, date and place of payment and delivery for such Option Notes. Any such
time and date of delivery (a "Date of Delivery") shall be determined by ▇▇▇▇▇▇▇
▇▇▇▇▇ but shall not be later than seven full business days, nor earlier than two
full business days, after the exercise of said option, nor in any event prior to
Closing Time, unless otherwise agreed upon by the Underwriters and the Company.
If the option is exercised as to all or any portion of the Option Notes, such
Option Notes shall be purchased by the Underwriters, severally and not jointly,
in proportion to their respective Initial Note underwriting obligations as set
forth in Schedule A.
(c) Payment of the purchase price for and delivery of the Initial Notes
shall be made, subject to Section 9, at the offices of ▇▇▇▇▇▇▇▇ & Worcester LLP,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, or at such other place as
shall be agreed upon by the Underwriters and the Company, at 9:00 A.M. on the
third (fourth, if the pricing occurs after 4:30 P.M. (Eastern time) on any given
day) business day (unless postponed in accordance with the provisions of Section
10 hereof) following the date of this Agreement, or such other time not later
than ten business days after such date as shall be agreed upon by the
Underwriters and the Company (such time and date of payment and delivery being
herein called "Closing Time"). In addition, in the event that the over-allotment
option described in (b) above is exercised by the Underwriters, payment of the
purchase price for and delivery of the Option Notes shall be made at the
above-mentioned office of ▇▇▇▇▇▇▇▇ & Worcester LLP, or at such other place as
shall be agreed upon by ▇▇▇▇▇▇▇ ▇▇▇▇▇ and the Company on each Date of Delivery
as specified in the notice to the Company. Payment shall be made by wire
transfer of immediately available funds payable to the order of the Company
against delivery to the Underwriters of the Notes to be purchased by them. It is
understood that each Underwriter has authorized ▇▇▇▇▇▇▇ ▇▇▇▇▇, for its account,
to accept delivery of, receipt for, and make payment of the purchase price for,
the Notes which it has severally agreed to purchase. ▇▇▇▇▇▇▇ ▇▇▇▇▇, individually
and not as representative of the Underwriters, may (but shall not be obligated
to) make payment of the purchase price for the Notes to be purchased by any
Underwriter whose funds have not been received by the Closing Time or the Date
of Delivery, as the case may be, but such payment shall not relieve such
Underwriter from its obligations hereunder. The Notes shall be in such
authorized denominations and registered in such names as the Underwriters may
request in writing at least one business day before Closing Time or the Date of
Delivery, as the case may be.
Section 3. Covenants of the Company. The Company covenants with each
Underwriter as follows:
(a) Immediately following the execution of this Agreement, the Company will
prepare a Prospectus Supplement setting forth the aggregate principal amount of
Notes covered thereby and their terms not otherwise specified in the Prospectus,
the Underwriters' names, the price at which the Notes are to be purchased by the
Underwriters from the Company, and such other information as the Underwriters
and the Company deem appropriate in connection with the offering of the Notes;
and the Company will promptly transmit copies of the Prospectus Supplement to
the Commission for filing pursuant to Rule 424(b) of the 1933 Act Regulations
and will furnish to the Underwriters as many copies of the Prospectus (including
such Prospectus Supplement) as they shall reasonably request.
11
(b) Until the termination of the initial offering of the Notes, the Company
will notify the Underwriters immediately, and confirm the notice in writing, (i)
of the effectiveness of any amendment to the Registration Statement, (ii) of the
transmittal to the Commission for filing of any supplement or amendment to the
Prospectus or any document to be filed pursuant to the 1934 Act, (iii) of the
receipt of any comments from the Commission with respect to the Notes, (iv) of
any request by the Commission for any amendment to the Registration Statement or
any amendment or supplement to the Prospectus with respect to the Notes or for
additional information relating thereto, and (v) of the issuance by the
Commission of any stop order suspending the effectiveness of the Registration
Statement or the initiation of any proceedings for that purpose. The Company
will make every reasonable effort to prevent the issuance of any such stop order
and, if any stop order is issued, to obtain the lifting thereof at the earliest
possible moment.
(c) The Company will give the Underwriters notice of its intention to file
or prepare any post-effective amendment to the Registration Statement or any
amendment or supplement (including any document to be filed pursuant to the 1934
Act prior to the termination of the initial offering of the Notes) to the
Prospectus (including any revised prospectus which the Company proposes for use
by the Underwriters in connection with the offering of the Notes which differs
from the prospectus on file at the Commission at the time that the Registration
Statement becomes effective, whether or not such revised prospectus is required
to be filed pursuant to Rule 424(b) of the 1933 Act Regulations), will furnish
the Underwriters with copies of any such amendment or supplement a reasonable
amount of time prior to such proposed filing or use, as the case may be, and
will not file any such amendment or supplement or use any such prospectus to
which counsel for the Underwriters shall reasonably object.
(d) The Company will deliver to each of the Underwriters a conformed copy
of the Registration Statement as originally filed and of each amendment thereto
filed prior to the termination of the initial offering of the Notes (including
exhibits filed therewith or incorporated by reference therein and the documents
incorporated by reference into the Prospectus pursuant to Item 12 of Form S-3).
(e) The Company will furnish to the Underwriters, from time to time during
the period when the Prospectus is required to be delivered under the 1933 Act or
the 1934 Act, such number of copies of the Prospectus (as amended or
supplemented) as the Underwriters may reasonably request for the purposes
contemplated by the 1933 Act, the 1933 Act Regulations, the 1934 Act or 1934 Act
Regulations.
(f) If any event shall occur as a result of which it is necessary, in the
opinion of counsel for the Underwriters, to amend or supplement the Prospectus
in order to make the Prospectus not misleading in the light of the circumstances
existing at the time it is delivered, the Company will either (i) forthwith
prepare and furnish to the Underwriters an amendment of or supplement to the
Prospectus or (ii) make an appropriate filing pursuant to Section 13, 14 or 15
of the 1934 Act, in form and substance reasonably satisfactory to counsel for
the Underwriters, which will amend or supplement the Prospectus so that it will
not include an untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements therein, in the light of the
circumstances existing at the time it is delivered, not misleading.
12
(g) The Company will endeavor in good faith, in cooperation with the
Underwriters, to qualify the Notes for offering and sale under the applicable
securities laws and real estate syndication laws of such states and other
jurisdictions of the United States as the Underwriters may designate; provided
that, in connection therewith, the Company shall not be required to qualify as a
foreign corporation or trust or to file any general consent to service of
process. In each jurisdiction in which the Notes have been so qualified the
Company will file such statements and reports as may be required by the laws of
such jurisdiction to continue such qualification in effect for so long as
required for the distribution of the Notes.
(h) The Company will make generally available to its security holders as
soon as reasonably practicable, but not later than 90 days after the close of
the period covered thereby, an earning statement of the Company (in form
complying with the provisions of Rule 158 of the 1933 Act Regulations) covering
a period of at least twelve months beginning not later than the first day of the
Company's fiscal quarter next following the effective date of the Registration
Statement. "Earning statement", "make generally available" and "effective date"
will have the meanings contained in Rule 158 of the 1933 Act Regulations.
(i) The Company will use the net proceeds received by it from the sale of
the Notes in the manner specified in the Prospectus under the caption "Use of
Proceeds" in all material respects.
(j) The Company currently intends to continue to qualify as a "real estate
investment trust" under the Code, and use its best efforts to continue to meet
the requirements to qualify as a "real estate investment trust".
(k) The Company will timely file any document which it is required to file
pursuant to the 1934 Act prior to the termination of the offering of the Notes.
(l) The Company will not, between the date of this Agreement and the
termination of any trading restrictions or Closing Time, whichever is later,
with respect to the Notes, without your prior written consent, offer or sell,
grant any option for the sale of, or enter into any agreement to sell, any debt
securities of the Company with a maturity of more than one year (other than the
Notes which are to be sold pursuant to this Agreement and additional or expanded
commitments to participate in the Company's revolving line of credit) except as
may otherwise be provided in this Agreement.
Section 4. Payment of Expenses. The Company will pay all expenses incident
to the performance of its obligations under this Agreement, including (i) the
preparation and filing of the Registration Statement as originally filed and of
each amendment thereto, (ii) the preparation and filing of this Agreement, (iii)
the preparation, issuance and delivery of the Notes to the Underwriters, (iv)
the fees and disbursements of counsel for the Company, referred to in Section
5(b) hereof, and the Company's accountants, (v) the qualification of the Notes
under securities laws and real estate syndication laws in accordance with the
provisions of Section 3(g) hereof, including filing fees and the fee and
disbursements of counsel for the Company in connection therewith and in
connection with the preparation of any Blue Sky Survey, (vi) the printing and
delivery to the Underwriters of copies of the Registration Statement as
originally filed and of each amendment thereto, and of the Prospectus and any
amendments or supplements thereto,
13
(vii) any fees charged by nationally recognized statistical rating organizations
for the rating of the Notes, (viii) the cost of printing or reproducing and
delivering to the Underwriters copies of any Blue Sky Survey, (ix) the cost of
providing any CUSIP or other identification numbers for the Notes, and (x) the
fees and expenses of any depositary in connection with the Notes.
If this Agreement is terminated by the Underwriters in accordance with the
provisions of Section 5 or Section 9(a)(i), the Company shall reimburse the
Underwriters for all of their out-of-pocket expenses, including the reasonable
fees and disbursements of counsel for the Underwriters.
Section 5. Conditions of the Underwriters' Obligations. The obligations of
the Underwriters hereunder are subject to the accuracy of the representations
and warranties of the Company herein contained, to the performance by the
Company of its obligations hereunder, and to the following further conditions:
(a) At Closing Time no stop order suspending the effectiveness of the
Registration Statement shall have been issued under the 1933 Act or proceedings
therefor initiated or threatened by the Commission. The price of the Notes and
any other information previously omitted from the effective Registration
Statement pursuant to Rule 415 of the 1933 Act Regulations shall have been
transmitted to the Commission for filing pursuant to Rule 424(b) of the 1933 Act
Regulations within the prescribed time period, and prior to Closing Time the
Company shall have provided evidence satisfactory to the Underwriters of such
timely filing, or a post-effective amendment providing such information shall
have been filed and declared effective in accordance with the requirements of
the 1933 Act Regulations.
(b) At Closing Time the Underwriters shall have received the favorable
opinion, dated as of Closing Time, of ▇▇▇▇▇▇▇▇ & Worcester LLP, counsel for the
Company, in form and substance satisfactory to counsel for the Underwriters, to
the effect that:
(i) The Company is a Maryland real estate investment trust duly
organized, validly existing and in good standing under the laws of the
State of Maryland; each of its Significant Subsidiaries (as defined in Rule
1-02 of Regulation S-X under the 1933 Act) has been duly organized, is
validly existing as a corporation or trust in good standing under the laws
of its jurisdiction of incorporation or organization; each of the Company
and its subsidiaries has the trust or corporate (as applicable) power and
authority to carry on its business as described in the Registration
Statement and in the Prospectus and to own, lease and operate its
properties; each of the Company and its subsidiaries is duly qualified and
is in good standing as a foreign corporation or trust, as the case may be,
authorized to do business in each jurisdiction in which its ownership or
leasing of property requires such qualification, except where the failure
to be so qualified would not have a material adverse effect on the Company
and its subsidiaries, taken as a whole.
(ii) All of the issued and outstanding shares of beneficial interest
of, or other ownership interests in, each of the Company's subsidiaries
have been duly authorized and validly issued and are fully paid and, except
as to subsidiaries that are partnerships, non-assessable, and are owned by
the Company free and clear of any security interest or
14
other adverse interest (within the meaning of Article 8 of the
Massachusetts Uniform Commercial Code).
(iii) The Company has the requisite trust power and authority to enter
into and perform this Agreement and to issue and deliver the Notes.
(iv) This Agreement and the Indenture have been duly authorized,
executed and delivered by the Company.
(v) The Indenture is a valid and binding obligation of the Company
enforceable in accordance with its terms, subject to applicable bankruptcy,
insolvency, reorganization, moratorium and similar laws affecting
creditors' rights generally and equitable principles; and the Indenture has
been duly qualified under the 1939 Act.
(vi) The Notes have been duly authorized and, when executed and
authenticated in accordance with the provisions of the Indenture and
delivered and paid for in accordance with the terms of this Agreement, will
be valid and binding obligations of the Company enforceable in accordance
with their terms subject to applicable bankruptcy, insolvency,
reorganization, moratorium and similar laws affecting creditors' rights
generally and equitable principles; and the holders of the Notes are
entitled to the benefit of the Indenture.
(vii) The execution, delivery and performance of this Agreement, and
the consummation of the transactions herein contemplated will not conflict
with or constitute a breach or violation of any of the terms or provisions
of, or constitute a default under, (A) the Declaration of Trust or the
By-laws of the Company or the charter or by-laws or other organizational
documents of any Significant Subsidiary of the Company, (B) except as
disclosed in the Prospectus, any material agreement, indenture or other
instrument to which the Company, or any of its Significant Subsidiaries or
their respective material properties or assets is bound, or (C) any laws,
administrative regulations or rulings or decrees known to such counsel to
which the Company, any of its Significant Subsidiaries or their respective
material properties or assets may be subject.
(viii) No consent, approval, authorization, order, registration,
filing, qualification, license or permit of or with any federal,
Massachusetts or Maryland court or public, governmental or regulatory
agency or body having jurisdiction over the Company or any of its
Significant Subsidiaries or any of their respective material properties or
assets is required for the Company's execution, delivery and performance of
this Agreement and the consummation of the transactions contemplated
hereby, including, without limitation, the issuance, sale and delivery of
the Notes pursuant to this Agreement, except such as have been obtained and
such as may be required under foreign and state securities or "Blue Sky"
laws.
(ix) The Registration Statement has become effective under the 1933
Act, and, to the knowledge of such counsel, no stop order suspending the
effectiveness of the Registration Statement is in effect, and no
proceedings for such purpose are pending before or threatened by the
Commission; and any required filing of the Prospectus
15
pursuant to Rule 424 under the 1933 Act has been made in accordance with
said Rule 424.
(x) To such counsel's knowledge, except as disclosed in the
Registration Statement or in the Prospectus, there is not now pending or
threatened, any litigation, action, suit or proceeding to which the Company
or any of its subsidiaries is or will be a party before or by any court or
governmental agency or body, which (A) might result in any material adverse
change in the condition, financial or otherwise, or in the business,
operations, earnings, prospects or properties of the Company and its
subsidiaries, taken as a whole, or (B) might materially and adversely
affect the property or assets of the Company and its subsidiaries, taken as
a whole, or (C) concerns the Company or any of its subsidiaries and is
required to be disclosed in the Prospectus, or (D) could adversely affect
the consummation of this Agreement and the issuance of the Notes; to such
counsel's knowledge, no contract or other document is required to be
described in the Registration Statement or in the Prospectus or to be filed
as an exhibit to the Registration Statement that is not described therein
or filed as required.
(xi) Except as otherwise disclosed in the Prospectus, to such
counsel's knowledge, neither the Company nor any of its subsidiaries is in
violation of its respective charter or by-laws or other organizational
documents or in default in the performance of any obligation, agreement or
condition contained in any bond, debenture, note or any other evidence of
indebtedness or in any other material agreement, indenture or instrument to
which the Company or any of its subsidiaries is a party or by which any of
their respective properties or assets may be bound or affected, except for
any such violation that would not have a material adverse effect on the
business, operations, earnings, business prospects, properties or condition
(financial or otherwise) of the Company and its subsidiaries taken as a
whole.
(xii) To such counsel's knowledge, each of the Company and its
subsidiaries has such permits, licenses, franchises and authorizations of
governmental or regulatory authorities (together, "permits"), including,
without limitation, under any applicable Environmental Law, as are
necessary to own, lease and operate its properties and to engage in the
business currently conducted by it, except such licenses and permits as to
which the failure to own or possess will not in the aggregate have a
material adverse effect on the business, operations, earnings, business
prospects, properties or condition (financial or otherwise) of the Company
and its subsidiaries, taken as a whole.
(xiii) The Registration Statement and the Prospectus and any
supplements or amendments thereto (except for the financial statements and
the notes thereto and the schedules and other financial and statistical
data included therein, the Excluded Proceedings (as defined in paragraph
(xx) below) and the part of the Registration Statement that constitutes the
Statement of Eligibility (Form T-1) of the Trustee under the 1939 Act, as
to which such counsel need not express any opinion) comply as to form in
all material respects with the requirements of the 1933 Act.
(xiv) Each document incorporated by reference in the Registration
Statement and in the Prospectus (except for the financial statements and
the notes thereto and the schedules
16
and other financial and statistical data included therein and the Excluded
Proceedings, as to which such counsel need not express any opinion)
complied as to form when filed with the Commission in all material respects
with the requirements of the 1934 Act.
(xv) To the extent required to be described therein, the Notes conform
in all material respects to the descriptions in the Registration Statement
and the Prospectus.
(xvi) The statements (a) in the Prospectus under the captions
"Description of Debt Securities", "Description of the Notes", "Description
of Shares", "Redemption; Business Combinations and Control Share
Acquisitions," "Limitation of Liability; Shareholder Liability" and
"Certain Federal Income Tax Considerations" and (b) in Item 1 of the
Company's Annual Report on Form 10-K for the fiscal year ended December 31,
1998 under the captions "Regulation and Reimbursement," "Federal Income Tax
Considerations" and "ERISA Plans, ▇▇▇▇▇ Plans and Individual Retirement
Accounts" in each case insofar as they purport to summarize matters arising
under Massachusetts or Maryland law or the federal law of the United
States, or provisions of documents to which the Company is a party
specifically referred to therein, are accurate summaries of such legal
matters or provisions.
(xvii) The Company has qualified to be taxed as a real estate
investment trust pursuant to Sections 856-860 of the Code for each of the
fiscal years ended December 31, 1987 through December 31, 1998, and the
Company's current anticipated investments and its current plan of operation
will enable it to continue to meet the requirements for qualification and
taxation as a real estate investment trust under the Code; actual
qualification of the Company as a real estate investment trust, however,
will depend upon the Company's continued ability to meet, and its meeting,
through actual annual operating results and distributions, the various
qualification tests imposed under the Code.
(xviii) The Company is not required to register as an "investment
company" within the meaning of the 1940 Act.
(xix) The Advisor (A) is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware, and
(B) has the requisite corporate power and authority to conduct its business
as described in the Prospectus and to own and operate its material
properties.
(xx) The Advisory Agreement has been duly authorized, executed and
delivered by the parties thereto and constitutes the valid agreement of the
parties thereto, enforceable in accordance with its terms, except (a) as
limited by the effect of bankruptcy, insolvency, reorganization, fraudulent
transfer, moratorium or other similar laws relating to or affecting the
rights or remedies of creditors, (b) as limited by the effect of general
principles of equity (regardless of whether enforcement is sought in a
proceeding in equity or at law) and (c) insofar as the enforceability of
the indemnity and contribution provisions contained in such agreement may
be limited by federal or state securities laws and the public policy
underlying such laws.
17
(xxi) Although counsel has not undertaken, except as otherwise
indicated in their opinion, to determine independently, and does not assume
any responsibility for, the accuracy or completeness of the statements in
the Registration Statement, such counsel has participated in the
preparation of the Registration Statement and the Prospectus, including
review and discussion of the contents thereof (including review and
discussion of the contents of all documents incorporated by reference in
the Registration Statement and the Prospectus), and nothing has come to the
attention of such counsel that has caused them to believe that the
Registration Statement (including the documents incorporated by reference
therein) at the time the Registration Statement became effective, or the
Prospectus, as of its date and as of Closing Time, as the case may be,
contained an untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading or that any amendment or supplement to
the Prospectus, as of its respective date, and as of Closing Time, as the
case may be, contained any untrue statement of a material fact or omitted
to state a material fact necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not
misleading (it being understood that such counsel need express no view with
respect to (a) the financial statements and the notes thereto and the
schedules and other financial and statistical data included or incorporated
by reference in the Registration Statement or in the Prospectus or (b) the
proceedings referred to in Item 3 of the Company's Annual Report on Form
10-K for the fiscal year ended December 31, 1998 under the caption "Legal
Proceedings" and any claims related thereto (collectively, the "Excluded
Proceedings"), or (c) the part of the Registration Statement that
constitutes the Statement of Eligibility (Form T-1) of the Trustee under
the 1939 Act.
In rendering their opinion as aforesaid, ▇▇▇▇▇▇▇▇ & Worcester LLP may rely
upon an opinion, dated as of Closing Time, of ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇,
LLP as to matters governed by Maryland law, provided that such reliance is
expressly authorized by such opinion and a copy of such opinion is delivered to
the Underwriters and is, in form and substance, satisfactory to the Underwriters
and counsel for the Underwriters. In addition, in rendering such opinion, such
counsel may state that their opinion as to laws of the State of Delaware is
limited to the Delaware General Corporation Law and that their opinion with
respect to the qualification of the Company and its subsidiaries to do business
in jurisdictions other than their respective jurisdictions of organization is
based solely upon certificates to such effect issued by an appropriate official
of the applicable jurisdictions.
The opinion of ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, LLP described in the
paragraph above shall be rendered to the Underwriters at the request of the
Company and shall so state therein.
In addition, the Underwriters shall have received at Closing Time an
opinion (satisfactory to the Underwriters and counsel for the Underwriters) of
Sherin & Lodgen LLP, special counsel for the Company, dated as of Closing Time,
to the effect that the statements describing the proceedings in Item 3 of the
Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1998
under the caption "Legal Proceedings", insofar as they purport to summarize
legal proceedings, constitute a fair summary of such legal proceedings.
18
(c) The Underwriters shall have received at Closing Time an opinion, dated
as of Closing Time, of ▇▇▇▇▇ & Wood LLP, counsel for the Underwriters, as to the
matters referred to in clauses (iv), (v), (vi), (ix), (xiii), (xv) and (xxi) of
the foregoing paragraph (b). In giving such opinion with respect to the matters
covered by clause (xxi), such counsel may state that their opinion and belief
are based upon their participation in the preparation of the Registration
Statement and the Prospectus and any amendments or supplements thereto and
review and discussion of the contents thereof, but are without independent check
or verification except as specified.
In rendering their opinion as aforesaid, ▇▇▇▇▇ & Wood LLP may rely upon an
opinion, dated as of Closing Time, of ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, LLP as
to matters governed by Maryland law, and the opinion of ▇▇▇▇▇▇▇▇ & Worcester LLP
referred to above as to matters governed by Massachusetts law. In addition, in
rendering such opinion, such counsel may state that their opinion as to laws of
the State of Delaware is limited to the Delaware General Corporation Law.
(d) At Closing Time (i) the Registration Statement and the Prospectus shall
contain all statements which are required to be stated therein in accordance
with the 1933 Act and the 1933 Act Regulations and in all material respects
shall conform to the requirements of the 1933 Act and the 1933 Act Regulations,
and neither the Registration Statement nor the Prospectus shall contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary to make the statements therein not misleading
and no action, suit or proceeding at law or in equity shall be pending or to the
knowledge of the Company threatened against the Company which would be required
to be set forth in the Prospectus other than as set forth therein, (ii) there
shall not have been, since the respective dates as of which information is given
in the Registration Statement and the Prospectus, any material adverse change in
the condition, financial or otherwise, of the Company or in its earnings,
business affairs or business prospects, whether or not arising in the ordinary
course of business from that set forth in the Registration Statement, and (iii)
no proceedings shall be pending or, to the knowledge of the Company, threatened
against the Company before or by any federal, state or other commission, board
or administrative agency wherein an unfavorable decision, ruling or finding
would materially and adversely affect the business, property, financial
condition or income of the Company other than as set forth in the Prospectus;
and the Underwriters shall have received, at Closing Time, a certificate of the
President and Chief Operating Officer and the chief financial officer of the
Company, dated as of Closing Time, evidencing compliance with the provisions of
this subsection (d) and stating that the representations and warranties set
forth in Section 1(a) hereof are accurate as though expressly made at and as of
Closing Time.
(e) At Closing Time, there shall not have been, since the respective dates
as of which information is given in the Registration Statement and the
Prospectus, any material adverse change in the business, operations, earnings,
prospects, properties or condition (financial or otherwise) of the Advisor,
whether or not arising in the ordinary course of business; and the Underwriters
shall have received, at Closing Time, a certificate of the President of the
Advisor evidencing compliance with this subsection (e).
(f) Concurrently with the execution and delivery of this Agreement, and at
Closing Time prior to payment and delivery of the Notes, ▇▇▇▇▇ & Young LLP shall
have furnished to the
19
Underwriters a letter, dated the date of its delivery, addressed to the
Underwriters and in form and substance satisfactory to the Underwriters,
confirming that they are independent accountants with respect to the Company as
required by the 1933 Act and the 1933 Act Regulations and with respect to the
financial and other statistical and numerical information contained in the
Registration Statement and the Prospectus or incorporated by reference therein.
Each such letter shall contain information of the type customarily included in
accountants' comfort letters to underwriters.
(g) At Closing Time counsel for the Underwriters shall have been furnished
with such documents and opinions as they may reasonably require for the purpose
of enabling them to pass upon the issuance and sale of the Notes as herein
contemplated and related proceedings, or in order to evidence the accuracy of
any of the representations or warranties, or the fulfillment of any of the
conditions, herein contained; and all proceedings taken by the Company in
connection with the issuance and sale of the Notes as herein contemplated shall
be reasonably satisfactory in form and substance to the Underwriters and counsel
for the Underwriters.
(h) In the event the Underwriters exercise the option described in Section
2 hereof to purchase all or any portion of the Option Notes, the representations
and warranties of the Company included herein and the statements in any
certificates furnished by the Company hereunder shall be true and correct as of
the Date of Delivery, and the Underwriters shall have received:
(i) A certificate of the President and Chief Executive Officer and the
chief financial officer or chief accounting officer of the Company, dated
such Date of Delivery, confirming that their certificate delivered at
Closing Time pursuant to Section 5(d) hereof remains true as of such Date
of Delivery.
(ii) The favorable opinion of ▇▇▇▇▇▇▇▇ & Worcester LLP, counsel for
the Company, in form and substance satisfactory to counsel for the
Underwriters, dated such Date of Delivery, relating to the Option Notes
and otherwise to the same effect as the opinion required by Section 5(b)
hereof.
(iii) Certificate of the President of the Advisor confirming that his
certificate delivered at Closing Time pursuant to Section 5(e) hereof
remains true as of such Date of Delivery.
(iv) The favorable opinion of ▇▇▇▇▇ & Wood LLP, counsel for the
Underwriters, dated such Date of Delivery, relating to the Option shares
and otherwise to the same effect as the opinion required by Section 5(c)
hereof.
(v) A letter from ▇▇▇▇▇ & Young LLP, dated such Date of Delivery,
substantially the same in scope and substance as the letter furnished to
the Underwriters pursuant to Section 5(f) hereof.
If any condition specified in this Section 5 shall not have been fulfilled
when and as required to be fulfilled, this Agreement may be terminated by the
Underwriters by notice to the Company at any time at or prior to Closing Time,
and such termination shall be without liability of any party to any other party
except as provided in Section 4 hereof.
20
Section 6. Indemnification. (a) The Company hereby agrees to indemnify and
hold harmless each Underwriter and each person, if any, who controls each
Underwriter within the meaning of Section 15 of the 1933 Act as follows:
(1) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, arising out of any untrue statement
or alleged untrue statement of a material fact contained in the
Registration Statement (or any amendment thereto), or the omission or
alleged omission therefrom of a material fact required to be stated
therein or necessary to make the statements therein not misleading or
arising out of any untrue statement or alleged untrue statement of a
material fact included in any preliminary prospectus or the Prospectus
(or any amendment or supplement thereto), or the omission, or alleged
omission therefrom of a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made, not misleading:
(2) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, to the extent of the aggregate amount
paid in settlement of any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or
threatened, or of any claim whatsoever based upon any such untrue
statement or omission, or any such alleged untrue statement or
omission, if such settlement is effected with the written consent of
the Company; and
(3) against any and all expense whatsoever, as incurred
(including, subject to Section 6(c) hereof, the fees and disbursements
of counsel chosen by ▇▇▇▇▇▇▇ ▇▇▇▇▇), reasonably incurred in
investigating, preparing or defending against any litigation, or any
investigation or proceedings by any governmental agency or body,
commenced or threatened, or any claim whatsoever based upon any such
untrue statement or omission, or any such alleged untrue statement or
omission, to the extent that any such expense is not paid under
paragraph (1) or (2) above;
provided, however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Company by any
Underwriter through ▇▇▇▇▇▇▇ ▇▇▇▇▇ expressly for use in the Registration
Statement (or any amendment thereto) or the Prospectus (or any amendment or
supplement thereto); and provided, further, that the foregoing indemnity
agreement with respect to any preliminary prospectus shall not inure to the
benefit of any Underwriter, or the benefit of any person controlling any
Underwriter, if a copy of the Prospectus (as then amended or supplemented if the
Company shall have furnished any amendments or supplements thereto and excluding
documents incorporated or deemed to be incorporated by reference therein) was
not sent or given by or on behalf of such Underwriter to such person asserting
any such losses, claims, damages or liabilities at or prior to the written
confirmation of the sale of such Notes to such person, if required by law so to
have been delivered, and if the Prospectus (as so amended or supplemented) would
have cured the defect giving rise to such loss, claim, damage or expense.
21
(b) Each Underwriter agrees to indemnify and hold harmless the Company,
each of the Company's trustees, each of the Company's officers who signed the
Registration Statement and each person, if any, who controls the Company within
the meaning of Section 15 of the 1933 Act against any and all loss, liability,
claim, damage and expense described in the indemnity contained in subsection (a)
of this Section 6, as incurred, but only with respect to untrue statements or
omissions, or alleged untrue statements or omissions, made in the Registration
Statement (or any amendment thereto) or the Prospectus (or any amendment or
supplement thereto) in reliance upon and in conformity with written information
furnished to the Company by any Underwriter through ▇▇▇▇▇▇▇ ▇▇▇▇▇ expressly for
use in the Registration Statement (or any amendment thereto) or the Prospectus
(or any amendment or supplement thereto).
(c) Each indemnified party shall give notice as promptly as reasonably
practicable to each indemnifying party of any action commenced against it in
respect of which indemnity may be sought hereunder, but failure to so notify an
indemnifying party shall not relieve such indemnifying party from any liability
which it may have otherwise than on account of this indemnity agreement. An
indemnifying party may participate at its own expense in the defense of such
action. In no event shall the indemnifying parties be liable for fees and
expenses of more than one counsel (in addition to any local counsel) separate
from their own counsel for all indemnified parties in connection with any one
action or separate but similar or related actions in the same jurisdiction
arising out of the same general allegations or circumstances.
Section 7. Contribution. In order to provide for just and equitable
contribution in circumstances in which the indemnity agreement provided for in
Section 6 hereof is for any reason held to be unenforceable by the indemnified
parties although applicable in accordance with its terms, the Company and the
Underwriters shall contribute to the aggregate losses, liabilities, claims,
damages and expenses of the nature contemplated by said indemnity agreement
incurred by the Company and the Underwriters, as incurred, (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Company on the one hand and the Underwriters on the other hand from the offering
of the Notes pursuant to this Agreement or (ii) if the allocation provided by
clause (i) is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of the Company on the one hand and of the
Underwriters on the other hand in connection with the statements or omissions
which resulted in such losses, liabilities, claims, damages or expenses, as well
as any other relevant equitable considerations.
The relative benefits received by the Company on the one hand and the
Underwriters on the other hand in connection with the offering of the Notes
pursuant to this Agreement shall be deemed to be in the same respective
proportions as the total net proceeds from the offering of the Notes pursuant to
this Agreement (before deducting expenses) received by the Company and the total
discount received by the Underwriters, bear to the aggregate initial offering
price of the Notes.
The relative fault of the Company on the one hand and the Underwriters on
the other hand shall be determined by reference to, among other things, whether
any such 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 by the Underwriters and the parties' relative
22
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission.
The Company and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this Section 7 were determined by pro rata
allocation or by any other method of allocation which does not take into account
the equitable considerations referred to above in this Section 7. The aggregate
amount of losses, liabilities, claims, damages and expenses incurred by an
indemnified party and referred to above in this Section 7 shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue or alleged untrue
statement or omission or alleged omission.
No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the 1933 Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. Notwithstanding the
provisions of this Section 7, the Underwriters shall not be required to
contribute any amount in excess of the amount by which the total price at which
the Notes purchased from the Company by the Underwriters and distributed to the
public were offered to the public exceeds the amount of any damages which the
Underwriters have otherwise been required to pay in respect of such losses,
liabilities, claims, damages and expenses. For purposes of this Section 7, each
person, if any, who controls any Underwriter within the meaning of Section 15 of
the 1933 Act shall have the same rights to contribution as such Underwriter, and
each trustee of the Company, each officer of the Company who signed the
Registration Statement, and each person, if any, who controls the Company within
the meaning of Section 15 of the 1933 Act shall have the same rights to
contribution as the Company.
Section 8. Representations, Warranties and Agreements to Survive Delivery.
All representations, warranties and agreements contained in this Agreement or in
certificates of officers of the Company submitted pursuant hereto, shall remain
operative and in full force and effect, regardless of any investigation made by
or on behalf of the Underwriters or any controlling person, or by or on behalf
of the Company, and shall survive delivery of the Notes to the Underwriters.
Section 9. Termination of Agreement. (a) The Underwriters may terminate
this Agreement, by notice to the Company, at any time at or prior to Closing
Time (i) if there has been, since the respective dates as of which information
is given in the Registration Statement, any material adverse change in the
condition, financial or otherwise, or in the earnings, business affairs or
business prospects of the Company or the Advisor, whether or not arising in the
ordinary course of business, which would make it, in the Underwriters'
reasonable judgment, impracticable or inadvisable to market the Notes or enforce
contracts for the sale of the Notes, (ii) if there has occurred any material
adverse change in the financial markets in the United States or any outbreak of
hostilities or escalation of existing hostilities or other calamity or crisis
the effect of which on the financial markets of the United States is such as to
make it, in the Underwriters' reasonable judgment, impracticable or inadvisable
to market the Notes or enforce contracts for the sale of the Notes, or (iii) if
trading in the Company's Common Shares has been suspended by the Commission, or
if trading generally on either the New York Stock Exchange or the American Stock
Exchange has been suspended, or minimum or maximum prices for trading
23
have been fixed, or maximum ranges for prices for securities have been required,
by either of said exchanges or by order of the Commission or any other
governmental authority, or if a banking moratorium has been declared by Federal
or New York authorities.
(b) If this Agreement is terminated pursuant to this Section 9, such
termination shall be without liability of any party to any other party except as
provided in Section 4, and provided further that Sections 6 and 7 hereof shall
survive such termination.
Section 10. Default. If one or more of the Underwriters shall fail at
Closing Time to purchase the Notes which it or they are obligated to purchase
under this Agreement (the "Defaulted Notes"), the Underwriters shall have the
right, within 24 hours thereafter, to make arrangements for one or more of the
non-defaulting Underwriters, or any other underwriters, to purchase all, but not
less than all, of the Defaulted Notes in such amounts as may be agreed upon and
upon the terms herein set forth; if, however, the Underwriters shall not have
completed such arrangements within such 24-hour period, then:
(i) if the total principal amount of Defaulted Notes does not exceed
10% of the Initial Notes to be purchased pursuant to this Agreement, the
non-defaulting Underwriters shall be obligated to purchase the full amount
thereof in the proportions that their respective underwriting obligations
hereunder bear to the underwriting obligations of all non-defaulting
Underwriters, or
(ii) if the total principal amount of Defaulted Notes exceeds 10% of
the Initial Notes to be purchased pursuant to this Agreement, this
Agreement shall terminate without liability on the part of any
non-defaulting Underwriter and the Company.
No action taken pursuant to this Section 10 shall relieve any defaulting
Underwriter from liability in respect of its default.
In the event of any such default which does not result in a termination of
this Agreement, either the Underwriters or the Company shall have the right to
postpone Closing Time for a period not exceeding seven days in order to effect
any required changes in the Prospectus or in any other documents or
arrangements.
Section 11. Notices. All notices and other communications hereunder shall
be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the
Underwriters shall be directed to the Underwriters in c/▇ ▇▇▇▇▇▇▇ Lynch, Pierce,
▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated at World Financial Center, North Tower, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇, Attention: Tjarda van ▇. ▇▇▇▇▇▇▇, Director; and
notices to the Company shall be directed to it at ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, President.
Section 12. Parties. This Agreement shall inure to the benefit of and be
binding upon the Underwriters and the Company and their respective successors.
Nothing expressed or mentioned in this Agreement is intended or shall be
construed to give any person, firm or corporation, other than those referred to
in Sections 6 and 7 and their heirs and legal representatives, any legal or
equitable right, remedy or claim under or in respect of this Agreement or any
provision herein contained. This Agreement and all conditions and provisions
24
hereof are intended to be for the sole and exclusive benefit of the parties
hereto and thereto and their respective successors and said controlling persons
and officers, trustees and directors and their heirs and legal representatives,
and for the benefit of no other person, firm or corporation. No purchaser of
Notes from any Underwriter shall be deemed to be a successor by reason merely of
such purchase.
Section 13. Governing Law and Time; Miscellaneous. This Agreement shall be
governed by and construed in accordance with the laws of the State of New York
applicable to agreements made and to be performed in said State. Specified times
of day refer to New York City time.
THE AMENDED AND RESTATED DECLARATION OF TRUST ESTABLISHING THE COMPANY,
DATED JULY 1, 1994, A COPY OF WHICH, TOGETHER WITH ALL AMENDMENTS THERETO (THE
"DECLARATION"), IS DULY FILED IN THE OFFICE OF THE STATE DEPARTMENT OF
ASSESSMENTS AND TAXATION OF MARYLAND, PROVIDES THAT THE NAME "HRPT PROPERTIES
TRUST" REFERS TO THE TRUSTEES UNDER THE DECLARATION COLLECTIVELY AS TRUSTEES,
BUT NOT INDIVIDUALLY OR PERSONALLY, AND THAT NO TRUSTEE, OFFICER, SHAREHOLDER,
EMPLOYEE OR AGENT OF THE COMPANY SHALL BE HELD TO ANY PERSONAL LIABILITY,
JOINTLY OR SEVERALLY, FOR ANY OBLIGATION OF, OR CLAIM AGAINST, THE COMPANY. ALL
PERSONS DEALING WITH THE COMPANY, IN ANY WAY, SHALL LOOK ONLY TO THE ASSETS OF
THE COMPANY FOR THE PAYMENT OF ANY SUM OR THE PERFORMANCE OF ANY OBLIGATION.
25
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us a counterpart hereof, whereupon this
instrument along with all counterparts will become a binding agreement between
the Underwriters and the Company in accordance with its terms.
Very truly yours,
HRPT PROPERTIES TRUST
/s/ ▇▇▇▇ ▇▇▇▇▇
By________________________________________
Name: ▇▇▇▇ ▇▇▇▇▇
Title: Treasurer and Chief Financial Officer
CONFIRMED AND ACCEPTED, as of
the date first above written:
▇▇▇▇▇▇▇ ▇▇▇▇▇ & CO.
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇
INCORPORATED
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ INC.
▇.▇. ▇▇▇▇▇▇▇ & SONS, INC.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, INCORPORATED
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & CO. INCORPORATED
PAINEWEBBER INCORPORATED
PRUDENTIAL SECURITIES INCORPORATED
By: ▇▇▇▇▇▇▇ ▇▇▇▇▇ & CO.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated
/s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
By__________________________________________
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Director
Acting on behalf of themselves and
the other named Underwriters in Schedule A
26
SCHEDULE A
Underwriter Aggregate Principal Amount of
----------- Initial Notes
-------------
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated................................................. $ 9,375,000
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc..................................................... $ 9,375,000
▇.▇. ▇▇▇▇▇▇▇ & Sons, Inc..................................................... $ 9,250,000
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, Incorporated......................................... $ 9,250,000
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated............................................ $ 9,250,000
PaineWebber Incorporated..................................................... $ 9,250,000
Prudential Securities Incorporated........................................... $ 9,250,000
----------
Total........................................................ $65,000,000
==========
