1
AMERICAN HEALTH PROPERTIES, INC.
COMMON STOCK
---------------
UNDERWRITING AGREEMENT
February 24, 1998
Xxxx Xxxxx Xxxx Xxxxxx, Incorporated
000 Xxxxx Xxxxxxx Xxxxxx
P.O. Box 1476
Xxxxxxxxx, Xxxxxxxx 00000
Ladies and Gentlemen:
From time to time American Health Properties, Inc., a Delaware
corporation (the "Company"), proposes to enter into one or more Pricing
Agreements (each a "Pricing Agreement") in the form of Annex I hereto, with
such additions and deletions as the parties thereto may determine, and, subject
to the terms and conditions stated herein and therein, to issue and sell to the
firms named in Schedule I to the applicable Pricing Agreement (such firms
constituting the "Underwriters" with respect to such Pricing Agreement and the
securities specified therein) certain shares (the "Shares") of its Common
Stock, par value $.01 per share (the "Common Stock"). The Shares are herein
called the "Securities" and, with respect to a particular Pricing Agreement,
the Shares subject thereto are herein called the "Designated Securities". The
Shares of Common Stock are referred to as the "Firm Shares" with respect to
such Pricing Agreement. Additionally, if specified in such Pricing Agreement,
the Company may grant the Underwriters the right to purchase at their election
an additional number of Shares of Common Stock, specified as provided in such
Pricing Agreement and as provided in Section 3 hereof (the "Optional Shares").
The Firm Shares and the Optional Shares, if any, which the Underwriters elect
to purchase pursuant to Section 3 hereof are herein collectively referred to as
the "Designated Shares" or the "Designated Securities".
The terms and rights of any particular issuance of Designated
Securities shall be as specified in the Pricing Agreement relating thereto.
1. Particular sales of Designated Securities may be made
from time to time to the Underwriters of such Securities, for whom the firms
designated as representatives of the Underwriters of such Securities in the
Pricing Agreement relating thereto will act as representatives (the
"Representatives"). The term "Representatives" also refers to a single firm
acting as sole representative of the Underwriters and to an Underwriter or
Underwriters who act without any firm being designated as its or their
representatives. This Underwriting Agreement shall not be construed as an
obligation of the Company to sell any of the Securities or as an obligation of
any of the Underwriters to purchase the Securities. The obligation of the
Company to issue and sell any of the Securities and the obligation of any of
the Underwriters to purchase any of the Securities shall be evidenced by the
Pricing Agreement with respect to the Designated Securities specified therein.
Each Pricing Agreement shall specify the aggregate number of the Firm Shares,
the maximum number of Optional Shares, if any, the initial public offering
price of such Designated Securities, the purchase price to the Underwriters of
such Designated Securities, the names of the Underwriters of such Designated
Securities, the names of the Representatives of such Underwriters and the
number of such Designated Securities to be purchased by each Underwriter and
shall set
2
forth the date, time and manner of delivery of such Designated Securities and
payment therefor. The Pricing Agreement shall also specify (to the extent not
set forth in the registration statement and prospectus with respect thereto)
the terms of such Designated Securities. A Pricing Agreement shall be in the
form of an executed writing (which may be in counterparts), and may be
evidenced by an exchange of telegraphic communications or any other rapid
transmission device designed to produce a written record of communications
transmitted. The obligations of the Underwriters under this Agreement and each
Pricing Agreement shall be several and not joint.
2. The Company represents and warrants to, and agrees
with, each of the Underwriters that:
(a) A registration statement on Form S-3 (File No.
333-27651) in respect of the Securities (and certain other
securities) has been filed with the Securities and Exchange
Commission (the "Commission"); such registration statement and
any post-effective amendment thereto, each in the form heretofore
delivered or to be delivered to the Representatives and,
excluding exhibits to such registration statement, but including
all documents incorporated by reference in the prospectus
contained therein, to the Representatives for each of the other
Underwriters, have been declared effective by the Commission in
such form; no other document with respect to such registration
statement or document incorporated by reference therein has
heretofore been filed or transmitted for filing with the
Commission (other than prospectuses filed pursuant to Rule 424(b)
of the rules and regulations of the Commission under the
Securities Act of 1933, as amended (the "Act"), or a
post-effective amendment under Section 462(d) of the Act, each in
the form heretofore delivered to the Representatives); and no
stop order suspending the effectiveness of such registration
statement has been issued and no proceeding for that purpose has
been initiated or threatened by the Commission (any preliminary
prospectus included in such registration statement or filed with
the Commission pursuant to Rule 424(b) under the Act and relating
to the Securities, is hereinafter called a "Preliminary
Prospectus"; the various parts of such registration statement,
including all exhibits thereto and the documents incorporated by
reference in the prospectus contained in the registration
statement at the time such part of the registration statement
became effective but excluding Form T-1, each as amended at the
time such part of the registration statement became effective,
are hereinafter collectively called the "Registration Statement";
the prospectus and any prospectus supplement relating to the
Securities, in the form in which it has most recently been filed,
or transmitted for filing, with the Commission on or prior to the
date of this Agreement, being hereinafter called the
"Prospectus"; any reference herein to any Preliminary Prospectus
or the Prospectus shall be deemed to refer to and include the
documents incorporated by reference therein pursuant to the
applicable form under the Act, as of the date of such Preliminary
Prospectus or Prospectus, as the case may be; any reference to
any amendment or supplement to any Preliminary Prospectus or the
Prospectus shall be deemed to refer to and include any documents
filed after the date of such Preliminary Prospectus or
Prospectus, as the case may be, under the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), and incorporated by
reference in such Preliminary Prospectus or Prospectus, as the
case may be; any reference to any amendment to the Registration
Statement shall be deemed to refer to and include any annual
report of the Company filed pursuant to Sections 13(a) or 15(d)
of the Exchange Act after the effective date of the Registration
Statement that is incorporated by reference in the Registration
Statement; and any reference to the Prospectus as amended or
supplemented shall be deemed to refer to the Prospectus as
amended or supplemented in relation to the applicable Designated
Securities in the form in which it is filed with the Commission
pursuant to Rule 424(b) under the Act in accordance with Section
5(a) hereof, including any documents incorporated by reference
therein as of the date of such filing);
-2-
3
(b) The documents incorporated by reference in the
Prospectus, when they became effective or were filed with the
Commission, as the case may be, conformed in all material
respects to the requirements of the Act or the Exchange Act, as
applicable, and the rules and regulations of the Commission
thereunder, and none of such documents 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; and any further documents so filed and
incorporated by reference in the Prospectus or any further
amendment or supplement thereto, when such documents become
effective or are filed with the Commission, as the case may be,
will conform in all material respects to the requirements of the
Act or the Exchange Act, as applicable, and the rules and
regulations of the Commission thereunder and will not contain an
untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the
statements therein not misleading; provided, however, that this
representation and warranty shall not apply to any statements or
omissions made in reliance upon and in conformity with
information furnished in writing to the Company by an Underwriter
of Designated Securities through the Representatives expressly
for use in the Prospectus as amended or supplemented relating to
such Securities;
(c) The Registration Statement and the Prospectus
conform, and any further amendments or supplements to the
Registration Statement or the Prospectus will conform, in all
material respects to the requirements of the Act and the Trust
Indenture Act of 1939, as amended (the "Trust Indenture Act"),
and the rules and regulations of the Commission thereunder and do
not and will not, as of the applicable effective date as to the
Registration Statement and any amendment thereto and as of the
applicable filing date as to the Prospectus and any amendment or
supplement thereto, 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; provided, however, that this representation and
warranty shall not apply to any statements or omissions made in
reliance upon and in conformity with information furnished in
writing to the Company by an Underwriter of Designated Securities
through the Representatives expressly for use in the Prospectus
as amended or supplemented relating to such Securities;
(d) Neither the Company nor any of its subsidiaries
has sustained since the date of the latest audited financial
statements included or incorporated by reference in the
Prospectus any material loss or interference with its business
from fire, explosion, flood or other calamity, whether or not
covered by insurance, or from any labor dispute or court or
governmental action, order or decree, otherwise than as set forth
or contemplated in the Prospectus; neither the Company nor any of
its subsidiaries has incurred any material liabilities or
obligations, direct or contingent, nor entered into any material
transactions not in the ordinary course of business, otherwise
than as set forth in the Prospectus; and, since the respective
dates as of which information is given in the Registration
Statement and the Prospectus, there has not been any material
change in the capital stock or long-term debt of the Company or
any of its subsidiaries or any material adverse change, or any
development involving a prospective material adverse change, in
or affecting the general affairs, management, financial position,
stockholders' equity or results of operations of the Company and
its subsidiaries taken as a whole, otherwise than as set forth or
contemplated in the Prospectus;
(e) The Company and its subsidiaries have good and
marketable title to all real property and good and marketable
title to all personal property owned by them, respectively, in
each case free and clear of all liens, encumbrances and defects
or any conditional sale agreement or other title retention
agreement except such as are described in the Prospectus or such
as do not materially affect the value of such property and do not
interfere with the use made and
- 3 -
4
proposed to be made of such property by the Company and its
subsidiaries; the mortgages which the Company holds on the
properties situated in Katonah, Westchester County, New York,
Saratoga Springs, Saratoga County, New York, and Houston, Texas,
are valid and binding and each constitutes a valid first mortgage
lien for the benefit of the Company on such property and any real
property and buildings held under lease by the Company and its
subsidiaries are held by them under valid, subsisting and
enforceable leases with such exceptions as are not material and
do not interfere with the use made and proposed to be made of
such property and buildings by the Company and its subsidiaries;
(f) The Company has been duly incorporated and is
validly existing as a corporation in good standing under the laws
of the jurisdiction of its incorporation, with power and
authority (corporate and other) to own its properties and conduct
its business as described in the Prospectus, and has been duly
qualified as a foreign corporation for the transaction of
business and is in good standing under the laws of each other
jurisdiction in which it owns or leases properties, or conducts
any business, so as to require such qualification, or is subject
to no material liability or disability by reason of the failure
to be so qualified in any such jurisdiction; the Company and each
of its subsidiaries are in possession of and operating in all
material respects in compliance with all franchises, grants,
authorizations, licenses, permits, easements, consents,
certificates and orders required for the conduct of its business,
all of which are valid and in full force and effect; and each
subsidiary of the Company has been duly organized or incorporated
and is validly existing as a partnership or corporation in good
standing under the laws of its jurisdiction of organization or
incorporation;
(g) The Company has an authorized capitalization as
set forth in the Prospectus, and all of the issued shares of
capital stock of the Company have been duly and validly
authorized and issued and are fully paid and non-assessable;
(h) The Shares included in the Designated
Securities have been duly and validly authorized, and, when the
Firm Shares and Optional Shares, if any, are issued and delivered
pursuant to this Agreement and the Pricing Agreement with respect
to such Designated Securities and, in the case of any Optional
Shares, pursuant to an Over-Allotment Option (as defined in
Section 3 hereof) with respect to such Optional Shares, such
Designated Securities will be duly and validly issued and fully
paid and non- assessable; the Securities conform to the
description thereof contained in the Registration Statement and
the Designated Securities will conform to the description thereof
contained in the Prospectus as amended or supplemented with
respect to such Designated Securities;
(i) The issue and sale of the Securities and the
compliance by the Company with all of the provisions of the
Securities, this Agreement and any Pricing Agreement, and the
consummation of the transactions herein and therein contemplated
will not conflict with or result in a breach or violation of any
of the terms or provisions of, or constitute a default under, any
material indenture, mortgage, deed of trust, loan agreement or
other agreement or instrument to which the Company is a party or
by which the Company is bound or to which any of the property or
assets of the Company or any of its subsidiaries is subject, nor
will such action result in any violation of the provisions of the
Certificate of Incorporation or By-laws of the Company or any
statute or any order, rule or regulation of any court or
governmental agency or body having jurisdiction over the Company
or any of its subsidiaries or any of their properties; and no
consent, approval, authorization, order, registration or
qualification of or with any such court or governmental agency or
body is required for the issue and sale of the Securities or the
consummation by the Company of the transactions contemplated by
this Agreement or any Pricing Agreement, except such as have
been, or will have been prior to
- 4 -
5
each Time of Delivery, obtained under the Act and the Trust
Indenture Act and such consents, approvals, authorizations,
registrations or qualifications as may be required under state
securities or Blue Sky laws in connection with the purchase and
distribution of the Securities by the Underwriters;
(j) The statements set forth in the Prospectus
under the captions "Description of Common Stock and Psychiatric
Group Preferred Stock", insofar as they purport to constitute a
summary of the terms of the Securities, and under the captions
"Certain Federal Income Tax Considerations", "Plan of
Distribution" and "Underwriting", insofar as they purport to
describe the provisions of the laws and documents referred to
therein, are correct in all material respects;
(k) Neither the Company nor any of its subsidiaries
is in violation of its organizational documents or charter or in
default in the performance or observance of any material
obligation, agreement, covenant or condition contained in any
indenture, mortgage, deed of trust, loan agreement, lease or
other agreement or instrument to which it is a party or by which
it or any of its properties may be bound, except for such
defaults that would not have a material adverse effect on the
business, operations, properties, prospects, profits or condition
(financial or other) of the Company and its subsidiaries, taken
as a whole;
(l) Other than as set forth in the Prospectus,
there are no legal or governmental proceedings pending to which
the Company or any of its subsidiaries is a party or of which any
property of the Company or any of its subsidiaries is the subject
that would reasonably be expected, individually or in the
aggregate, to have a material adverse effect on the consolidated
financial position, stockholders' equity or results of operations
of the Company and its subsidiaries, and, to the best of the
Company's knowledge, no such proceedings are threatened or
contemplated by governmental authorities or threatened by others;
neither the Company nor any of its subsidiaries is in violation
of any law, statute, ordinance, rule, regulation, order or decree
of any court, governmental body or regulatory authority or
administrative agency having jurisdiction over the Company or
such subsidiary (including, without limitation, any such law,
statute, ordinance, rule, regulation, order or decree with
respect to environmental protection or the release, handling,
treatment, storage or disposal of hazardous substances or toxic
waste) which violation would be reasonably likely to materially
and adversely affect the business, operations, properties,
prospects, profits or condition (financial or other) of the
Company and its subsidiaries, taken as a whole;
(m) The Company is not and, after giving effect to
the offering and sale of the Securities, will not be an
"investment company" or an entity "controlled" by an "investment
company", as such terms are defined in the Investment Company Act
of 1940, as amended (the "Investment Company Act");
(n) Xxxxxx Xxxxxxxx LLP, who have certified certain
financial statements of the Company and its subsidiaries, are
independent public accountants as required by the Act and the
rules and regulations of the Commission thereunder;
(o) The Company qualified as a "real estate
investment trust" (a "REIT") under Sections 856 through 860 of
the Internal Revenue Code of 1986, as amended (the "Code") for
its taxable year ended December 31, 1996, and for each of its
prior taxable years ended on or after December 31, 1987 that are
open to assessment by the Internal Revenue Service (the
"Service"). The Company is organized and carries on its business
so as to qualify as a REIT under the Code, and no transaction or
other event has occurred which would cause the Company not to
continue to qualify as a REIT for its current taxable year or for
future taxable years; and
- 5 -
6
(p) Neither the Company nor any of its affiliates
does business with the government of Cuba or with any person or
affiliate located in Cuba within the meaning of Section 517.075,
Florida Statutes.
3. Upon the execution of the Pricing Agreement applicable
to any Designated Securities and authorization by the Representatives of the
release of such Designated Securities, or of the Firm Shares, as the case may
be, the several Underwriters propose to offer such Designated Securities or
Firm Shares for sale upon the terms and conditions set forth in the Prospectus
as amended or supplemented.
The Company may specify in the Pricing Agreement
applicable to any Designated Securities that the Company thereby grants to the
Underwriters the right (an "Over-Allotment Option") to purchase at their
election up to the number of Optional Shares set forth in such Pricing
Agreement, on the terms set forth therein, for the sole purpose of covering
over-allotments in the sale of the Firm Shares. Any such election to purchase
Optional Shares may be exercised by written notice from the Representatives to
the Company, given within a period specified in the Pricing Agreement, setting
forth the aggregate number of Optional Shares to be purchased and the date on
which such Optional Shares are to be delivered, as determined by the
Representatives but in no event earlier than the First Time of Delivery (as
defined in Section 4 hereof), or, unless the Representatives and the Company
otherwise agree in writing, earlier than or later than the respective number of
business days after the date of such notice set forth in such Pricing
Agreement.
The number of Optional Shares to be added to the number
of Firm Shares to be purchased by each Underwriter as set forth in Schedule I
to the Pricing Agreement applicable to such Designated Securities shall be, in
each case, the number of Optional Shares which the Company has been advised by
the Representatives have been attributed to such Underwriter; provided that, if
the Company has not been so advised, the number of Optional Shares to be so
added shall be, in each case, that proportion of Optional Shares which the
number of Firm Shares to be purchased by such Underwriter under such Pricing
Agreement bears to the aggregate number of Firm Shares (rounded as the
Representatives may determine to the nearest 100 shares). The total number of
Designated Securities to be purchased by all the Underwriters pursuant to such
Pricing Agreement shall be the aggregate number of Firm Shares set forth in
Schedule I to such Pricing Agreement plus the aggregate number of Optional
Shares which the Underwriters elect to purchase.
4. Certificates for the Firm Shares and the Optional
Shares to be purchased by each Underwriter pursuant to the Pricing Agreement
relating thereto, in the form specified in such Pricing Agreement, and in such
authorized denominations and registered in such names as the Representatives
may request upon at least forty-eight hours' prior notice to the Company, shall
be delivered by or on behalf of the Company to the Representatives for the
account of such Underwriter, against payment by such Underwriter or on its
behalf of the purchase price therefor by certified or official bank check or
checks, payable to the order of the Company, or by wire transfer of funds, in
the funds specified in such Pricing Agreement, (i) with respect to the Firm
Shares, all in the manner and at the place and time and date specified in such
Pricing Agreement or at such other place and time and date as the
Representatives and the Company may agree upon in writing, such time and date
being herein called the "First Time of Delivery" and (ii) with respect to the
Optional Shares, if any, in the manner and at the time and date specified by
the Representatives in the written notice given by the Representatives of the
Underwriters' election to purchase such Optional Shares, or at such other time
and date as the Representatives and the Company may agree upon in writing, such
time and date, if not the First Time of Delivery, herein
- 6 -
7
called the "Second Time of Delivery". Each such time and date for delivery is
herein called a "Time of Delivery".
5. The Company agrees with each of the Underwriters of any
Designated Securities:
(a) To prepare the Prospectus as amended or
supplemented in relation to the applicable Designated Securities
in a form approved by the Representatives and to file such
Prospectus pursuant to Rule 424(b) under the Act not later than
the Commission's close of business on the second business day
following the execution and delivery of the Pricing Agreement
relating to the applicable Designated Securities or, if
applicable, such earlier time as may be required by Rule 424(b);
to make no further amendment or any supplement to the
Registration Statement or Prospectus as amended or supplemented
after the date of the Pricing Agreement relating to such
Securities and prior to the Time of Delivery for such Securities
that shall be disapproved by the Representatives for such
Securities promptly after reasonable notice thereof; to advise
the Representatives promptly of any such amendment or supplement
after such Time of Delivery and furnish the Representatives with
copies thereof; to file promptly all reports and any definitive
proxy or information statements required to be filed by the
Company with the Commission pursuant to Section 13(a), 13(c), 14
or 15(d) of the Exchange Act for so long as the delivery of a
prospectus is required in connection with the offering or sale of
such Securities, and during such same period to advise the
Representatives, promptly after it receives notice thereof, of
the time when any amendment to the Registration Statement has
been filed or becomes effective or any supplement to the
Prospectus or any amended Prospectus has been filed with the
Commission, of the issuance by the Commission of any stop order
or of any order preventing or suspending the use of any
prospectus relating to the Securities, of the suspension of the
qualification of such Securities for offering or sale in any
jurisdiction, of the initiation or threatening of any proceeding
for any such purpose, or of any request by the Commission for the
amending or supplementing of the Registration Statement or
Prospectus or for additional information; and, in the event of
the issuance of any such stop order or of any such order
preventing or suspending the use of any prospectus relating to
the Securities or suspending any such qualification, to promptly
use its best efforts to obtain the withdrawal of such order;
(b) Promptly from time to time to take such action
as the Representatives may reasonably request to qualify such
Securities for offering and sale under the securities laws of
such jurisdictions as the Representatives may request and to
comply with such laws so as to permit the continuance of sales
and dealings therein in such jurisdictions for as long as may be
necessary to complete the distribution of such Securities,
provided that in connection therewith the Company shall not be
required to qualify as a foreign corporation or to file a general
consent to service of process in any jurisdiction;
(c) To furnish the Underwriters with copies of the
Prospectus as amended or supplemented in such quantities as the
Representatives may from time to time reasonably request, and, if
the delivery of a prospectus is required at any time in
connection with the offering or sale of the Securities and if at
such time any event shall have occurred as a result of which the
Prospectus as then amended or supplemented would include an
untrue statement of a material fact or omit to state any material
fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made when such
Prospectus is delivered, not misleading, or, if for any other
reason it shall be necessary during such same period to amend or
supplement the Prospectus or to file under the Exchange Act any
document incorporated by reference in the Prospectus in order to
comply with the Act, the Exchange Act or the Trust Indenture Act,
to notify the Representatives and upon their request to file such
- 7 -
8
document and to prepare and furnish without charge to each
Underwriter and to any dealer in securities as many copies as the
Representatives may from time to time reasonably request of an
amended Prospectus or a supplement to the Prospectus that will
correct such statement or omission or effect such compliance;
(d) To make generally available to its
securityholders as soon as practicable, but in any event not
later than eighteen months after the effective date of the
Registration Statement (as defined in Rule 158(c) under the Act),
an earnings statement of the Company and its subsidiaries (which
need not be audited) complying with Section 11(a) of the Act and
the rules and regulations of the Commission thereunder
(including, at the option of the Company, Rule 158); and
(e) To use its best efforts to list the Designated
Securities on any stock exchange or automated quotation system to
the extent and in the manner set forth in the Prospectus as
amended or supplemented with respect to such Designated
Securities.
6. The Company covenants and agrees with the several
Underwriters that the Company will pay or cause to be paid the following: (i)
the fees, disbursements and expenses of the Company's counsel and accountants
in connection with the registration of the Securities under the Act and all
other expenses in connection with the preparation, printing and filing of the
Registration Statement, any Preliminary Prospectus and the Prospectus and
amendments and supplements thereto and the mailing and delivering of copies
thereof to the Underwriters and dealers; (ii) the cost of printing or producing
any Agreement among Underwriters, this Agreement, any Pricing Agreement, any
Blue Sky and Legal Investment Memoranda, closing documents (including any
compilations thereof) and any other documents in connection with the offering,
purchase, sale and delivery of the Securities; (iii) all expenses in connection
with the qualification of the Securities for offering and sale under state
securities laws as provided in Section 5(b) hereof, including the fees and
disbursements of counsel for the Underwriters in connection with such
qualification and in connection with the Blue Sky and Legal Investment Surveys;
(iv) any fees charged by securities rating services for rating the Securities;
(v) any filing fees incident to, and the fees and disbursements of counsel for
the Underwriters in connection with, any required review by the National
Association of Securities Dealers, Inc. of the terms of the sale of the
Securities; (vi) the cost of preparing the Securities; (vii) the fees and
expenses of any transfer agent in connection with the Securities; (viii) any
fees and expenses in connection with listing the Securities; and (ix) all other
costs and expenses incident to the performance of its obligations hereunder
that are not otherwise specifically provided for in this Section. It is
understood, however, that, except as provided in this Section, and Sections 8
and 11 hereof, the Underwriters will pay all of their own costs and expenses,
including the fees of their counsel, transfer taxes on resale of any of the
Securities by them, and any advertising expenses connected with any offers they
may make.
7. The obligations of the Underwriters of any Designated
Securities under the Pricing Agreement relating to such Designated Securities
shall be subject, in the discretion of the Representatives, to the condition
that all representations and warranties and other statements of the Company
made, or incorporated by reference, in the Pricing Agreement relating to such
Designated Securities are, at and as of each Time of Delivery for such
Designated Securities, true and correct, the condition that the Company shall
have performed all of its obligations hereunder theretofore to be performed,
and the following additional conditions:
(a) The Prospectus as amended or supplemented in
relation to the applicable Designated Securities shall have been
filed with the Commission pursuant to Rule 424(b) within the
applicable time period prescribed for such filing by the rules
and regulations under the Act and in accordance with Section 5(a)
hereof; no stop order suspending the effectiveness of the
- 8 -
9
Registration Statement or any part thereof shall have been issued
and no proceeding for that purpose shall have been initiated or
threatened by the Commission; and all requests for additional
information on the part of the Commission shall have been
complied with to the Representatives' reasonable satisfaction;
(b) Counsel for the Underwriters shall have
furnished to the Representatives such opinion or opinions, dated
the Time of Delivery for such Designated Securities, with respect
to the matters covered in paragraphs (i), (ii) (insofar as it
relates to the Designated Securities),(vi), (viii), and (xv) of
subsection (c) below as well as such other related matters as the
Representatives may reasonably request, and such counsel shall
have received such papers and information as they may reasonably
request to enable them to pass upon such matters;
(c) Xxxxx, Xxxxxx & Xxxxxx LLP, counsel for the
Company, shall have furnished to the Representatives their
written opinion, dated the Time of Delivery for such Designated
Securities, in form and substance satisfactory to the
Representatives, to the effect that:
(i) The Company has been duly incorporated
and is validly existing as a corporation in good
standing under the laws of the jurisdiction of its
incorporation, with corporate power and authority to
own its properties and conduct its business as
described in the Prospectus as amended or supplemented;
(ii) The Company has an authorized
capitalization as set forth in the Prospectus as
amended or supplemented and all of the issued shares of
capital stock of the Company (including the Designated
Securities being delivered at such Time of Delivery)
have been duly and validly authorized and issued and
are fully paid and non-assessable;
(iii) The Company has been duly qualified as
a foreign corporation for the transaction of business
and is in good standing under the laws of each other
jurisdiction in which it owns or leases properties, or
conducts any business, so as to require such
qualification, except where the failure to qualify and
be in good standing would not have a material adverse
effect on the condition, financial or otherwise, or in
the earnings or business affairs of the Company and its
subsidiaries considered as one enterprise or the
consummation of the transactions contemplated by this
Agreement and the Pricing Agreement related to the
Designated Securities (a "Material Adverse Effect")
(such counsel being entitled to rely in respect of the
position in this clause upon opinions of local counsel
and in respect of matters of fact upon certificates of
officers of the Company, provided that such counsel
shall state that they believe that both you and they
are justified in relying upon such opinions and
certificates);
(iv) Each Material Subsidiary (as defined
below) of the Company has been duly organized or
incorporated and is validly existing as a partnership
or corporation, as the case may be, in good standing
under the laws of its jurisdiction of organization or
incorporation; and except as set forth in the
Prospectus as amended or supplemented, and except for
other non- material exceptions, all of the issued
shares of capital stock of each such Material
Subsidiary have been duly and validly authorized and
issued, are fully paid and non-assessable, and are
owned directly or indirectly by the Company, and all
partnership interests of each such subsidiary are owned
directly or indirectly by the Company, in each case
free and clear of any perfected security interest and,
to the knowledge of such counsel, any other liens,
encumbrances, equities or claims (such counsel being
entitled to rely in respect of the opinion in this
clause upon opinions of local counsel and in respect of
matters of fact upon certificates of officers of the
Company or its subsidiaries, provided that such counsel
shall state that they believe that both you and they
are justified in relying upon such opinions and
certificates). The term "Material
- 9 -
10
Subsidiary" shall mean any subsidiary of the Company
that holds ten percent (10%) or more of the Company's
assets on a consolidated basis;
(v) To such counsel's knowledge and other
than as set forth in the Prospectus as amended or
supplemented, there are no legal or governmental
proceedings pending to which the Company or any of its
subsidiaries is a party or of which any property of the
Company or any of its subsidiaries is the subject that
would reasonably be expected, individually or in the
aggregate, to have a Material Adverse Effect; and, to
such counsel's knowledge, no such proceedings are
threatened or contemplated by governmental authorities
or threatened by others;
(vi) This Agreement and the Pricing
Agreement with respect to the Designated Securities
have been duly authorized, executed and delivered by
the Company;
(vii) [RESERVED.]
(viii) [RESERVED.]
(ix) The issue and sale of the Designated
Securities and the compliance by the Company with all
of the provisions of the Designated Securities, this
Agreement and the Pricing Agreement with respect to the
Designated Securities and the consummation of the
transactions herein and therein contemplated will not
conflict with or result in a breach or violation of any
of the terms or provisions of, or constitute a default
under, any material indenture, mortgage, deed of trust,
loan agreement or other agreement or instrument known
to such counsel to which the Company is a party or by
which the Company is bound or to which any of the
property or assets of the Company is subject, except
for such conflicts, breaches, violations or defaults
that would not have a Material Adverse Effect, nor will
such actions result in any violation of the provisions
of the Certificate of Incorporation or By-laws of the
Company or any statute or any order, rule or regulation
known to such counsel of any court or governmental
agency or body having jurisdiction over the Company or
any of its properties;
(x) No consent, approval, authorization,
order, registration or qualification of or with any
such court or governmental agency or body is required
for the issue and sale of the Designated Securities or
the consummation by the Company of the transactions
contemplated by this Agreement or such Pricing
Agreement, except such as have been obtained under the
Act and such consents, approvals, authorizations,
orders, registrations or qualifications as may be
required under state securities or Blue Sky laws in
connection with the purchase and distribution of the
Designated Securities by the Underwriters;
(xi) Neither the Company nor any of its
subsidiaries is in violation of its charter and by-laws
or other organizational documents;
(xii) The statements set forth in the
Prospectus as supplemented or amended under the
captions "Description of Common Stock and Psychiatric
Group Preferred Stock" and "Certain Federal Income Tax
Considerations" insofar as they purport to constitute a
summary of the terms of the Securities, or insofar as
they purport to describe the provisions of the laws and
documents referred to therein, are correct in all
material respects;
(xiii) The Company is not an "investment
company" or an entity "controlled" by an "investment
company", as such terms are defined in the Investment
Company Act of 1940, as amended;
- 10 -
11
(xiv) The documents incorporated by
reference in the Prospectus as amended or supplemented
(other than the financial statements and related
schedules and other financial and statistical data
included or incorporated by reference therein, as to
which such counsel need express no opinion), when they
became effective or were filed with the Commission, as
the case may be, complied as to form in all material
respects with the requirements of the Act or the
Exchange Act, as applicable, and the rules and
regulations of the Commission thereunder; and nothing
has come to such counsel's attention that would lead it
to believe that any of such documents, when they became
effective or were so filed, as the case may be,
contained, in the case of a registration statement
which became effective under the Act, 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, in the case of other documents which
were filed under the Act or the Exchange Act with the
Commission, an 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 when such
documents were so filed, not misleading; and
(xv) The Registration Statement and the
Prospectus as amended or supplemented and any further
amendments and supplements thereto made by the Company
prior to such Time of Delivery for the Designated
Securities (other than the financial statements and
related schedules and other financial or statistical
data included or incorporated by reference therein, as
to which such counsel need express no opinion) comply
as to form in all material respects with the
requirements of the Act and the rules and regulations
thereunder; although they do not assume any
responsibility for the accuracy, completeness or
fairness of the statements contained in the
Registration Statement or the Prospectus, except for
those referred to in the opinion in subsection (xii) of
this Section 7(c), nothing has come to such counsel's
attention that would lead it to believe that, as of its
effective date, the Registration Statement or any
further amendment thereto made by the Company prior to
such Time of Delivery (other than the financial
statements and related schedules and other financial or
statistical data included or incorporated by reference
therein, as to which such counsel need express no
opinion) 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, as of its date, the
Prospectus as amended or supplemented or any further
amendment or supplement thereto made by the Company
prior to such Time of Delivery (other than the
financial statements and related schedules and other
financial or statistical data included or incorporated
by reference therein, as to which such counsel need
express no opinion) contained an untrue statement of a
material fact or omitted to state a material fact
necessary to make the statements therein, in the light
of the circumstances under which they were made, not
misleading or that, as of such Time of Delivery, either
the Registration Statement or the Prospectus as amended
or supplemented or any further amendment or supplement
thereto made by the Company prior to such Time of
Delivery (other than the financial statements and
related schedules and other financial or statistical
data included or incorporated by reference therein, as
to which such counsel need express no opinion) contains
an untrue statement of a material fact or omits to
state a material fact necessary to make the statements
therein, in the light of the circumstances under which
they were made, not misleading; and they do not know of
any amendment to the Registration Statement required to
be filed or any contracts or other documents of a
character required to be filed as an exhibit to the
Registration Statement or required to be incorporated
by reference into the Prospectus as amended or
supplemented or required
- 11 -
12
to be described in the Registration Statement or the
Prospectus as amended or supplemented, in each case in
accordance with the Act or the Exchange Act, that are
not filed or incorporated by reference or described as
required;
(d) Xxxxx, Xxxxxx & Xxxxxx LLP, counsel to the
Company, shall have furnished to you their written opinion dated
such Time of Delivery, substantially in the form of Annex II
hereto, with respect to certain tax matters;
(e) On the date of the Pricing Agreement for such
Designated Securities at a time prior to the execution of the
Pricing Agreement with respect to such Designated Securities and
at each Time of Delivery for such Designated Securities, the
independent accountants of the Company who have certified the
financial statements of the Company and its subsidiaries included
or incorporated by reference in the Registration Statement shall
have furnished to the Representatives a letter, dated the
effective date of the Registration Statement or the date of the
most recent report filed with the Commission containing financial
statements and incorporated by reference in the Registration
Statement, if the date of such report is later than such
effective date, and a letter dated such Time of Delivery,
respectively, to the effect set forth in Annex III hereto, and
with respect to such letter dated such Time of Delivery, as to
such other matters as the Representatives may reasonably request
and in form and substance satisfactory to the Representatives;
(f) (i) Neither the Company nor any of its
subsidiaries shall have sustained since the date of the latest
audited financial statements included or incorporated by
reference in the Prospectus as amended or supplemented prior to
the date of the Pricing Agreement relating to the Designated
Securities any loss or interference with its business from fire,
explosion, flood or other calamity, whether or not covered by
insurance, or from any labor dispute or court or governmental
action, order or decree, otherwise than as set forth or
contemplated in the Prospectus as amended or supplemented prior
to the date of the Pricing Agreement relating to the Designated
Securities, and (ii) since the respective dates as of which
information is given in the Prospectus as amended or supplemented
prior to the date of the Pricing Agreement relating to the
Designated Securities there shall not have been any change in the
capital stock or long-term debt of the Company or any of its
subsidiaries or any change, or any development involving a
prospective change, in or affecting the general affairs,
management, financial position, stockholders' equity or results
of operations of the Company and its subsidiaries, otherwise than
as set forth or contemplated in the Prospectus as amended or
supplemented prior to the date of the Pricing Agreement relating
to the Designated Securities, the effect of which, in any such
case described in Clause (i) or (ii), is in the judgment of the
Representatives so material and adverse as to make it
impracticable or inadvisable to proceed with the public offering
or the delivery of the Designated Securities on the terms and in
the manner contemplated in the Prospectus as first amended or
supplemented relating to the Designated Securities;
(g) On or after the date of the Pricing Agreement
relating to the Designated Securities (i) no downgrading shall
have occurred in the rating accorded the Company's debt
securities or preferred stock (excluding the Company's
Psychiatric Group Preferred Stock) by any "nationally recognized
statistical rating organization", as that term is defined by the
Commission for purposes of Rule 436(g)(2) under the Act, and (ii)
no such organization shall have publicly announced that it has
under surveillance or review, with possible negative
implications, its rating of any of the Company's debt securities
or preferred stock (excluding the Company's Psychiatric Group
Preferred Stock);
- 12 -
13
(h) On or after the date of the Pricing Agreement
relating to the Designated Securities there shall not have
occurred any of the following: (i) a suspension or material
limitation in trading in securities generally on the New York
Stock Exchange; (ii) a suspension or material limitation in
trading in the Company's securities on the New York Stock
Exchange; (iii) a general moratorium on commercial banking
activities declared by either Federal or New York State
authorities; or (iv) the outbreak or escalation of hostilities
involving the United States or the declaration by the United
States of a national emergency or war, if the effect of any such
event specified in this Clause (iv) in the judgment of the
Representatives makes it impracticable or inadvisable to proceed
with the public offering or the delivery of the Designated
Securities on the terms and in the manner contemplated in the
Prospectus as first amended or supplemented relating to the
Designated Securities;
(i) The Company shall have furnished or caused to
be furnished to the Representatives at each Time of Delivery for
the Designated Securities a certificate or certificates of
officers of the Company satisfactory to the Representatives as to
the accuracy of the representations and warranties of the Company
herein at and as of such Time of Delivery, as to the performance
by the Company of all of its obligations hereunder to be
performed at or prior to such Time of Delivery, as to the matters
set forth in subsections (a) and (f) of this Section and as to
such other matters as the Representatives may reasonably request;
(j) The Company shall have furnished to you an
officers' certificate, in form and substance satisfactory to you,
to the effect that the Company and its subsidiaries have good and
marketable title to all real property owned by them, in each case
free and clear of all liens, encumbrances and defects except such
as are described in the Prospectus or such as do not materially
affect the value of such property and do not interfere with the
use made and proposed to be made of such property by the Company
and its subsidiaries; the mortgages which the Company holds on
the properties situated in Katonah, Westchester County, New York,
Saratoga Springs, Saratoga County, New York, and Houston, Texas,
are valid and binding and each constitutes a valid first mortgage
lien for the benefit of the Company on such property; and any
real property and buildings held under lease by the Company and
its subsidiaries are held by them under valid, subsisting and
enforceable leases with such exceptions as are not material and
do not interfere with the use made and proposed to be made of
such property and buildings by the Company and its subsidiaries;
and
(k) The Company shall have furnished or caused to
be furnished to the Representatives at each Time of Delivery for
the Designated Securities evidence satisfactory to the
Representatives (i) that all required consents specified in
Section 5(f) have been obtained and (ii) that, to the extent
necessary before such Time of Delivery, procedures for the
listing of the Designated Securities as provided in Section 5(g)
have been duly undertaken.
8. (a) The Company will indemnify and hold
harmless each Underwriter against any losses, claims, damages or
liabilities, joint or several, to which such Underwriter may
become subject, under the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon an untrue statement or
alleged untrue statement of a material fact contained in any
Preliminary Prospectus, any preliminary prospectus supplement,
the Registration Statement, the Prospectus as amended or
supplemented and any other prospectus relating to the Securities,
or any amendment or supplement thereto, or arise out of or are
based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make
the statements therein not misleading, and will reimburse each
Underwriter for any legal or other expenses reasonably incurred
by such Underwriter in connection with investigating or defending
any such
- 13 -
14
action or claim as such expenses are incurred; provided, however,
that the Company shall not be liable in any such case to the
extent that any such loss, claim, damage or liability arises out
of or is based upon an untrue statement or alleged untrue
statement or omission or alleged omission made in any Preliminary
Prospectus, any preliminary prospectus supplement, the
Registration Statement, the Prospectus as amended or supplemented
and any other prospectus relating to the Securities, or any such
amendment or supplement thereto, in reliance upon and in
conformity with written information furnished to the Company by
any Underwriter of Designated Securities through the
Representatives expressly for use in the Prospectus as amended or
supplemented relating to such Securities.
(b) Each Underwriter will indemnify and hold
harmless the Company against any losses, claims, damages or
liabilities to which the Company may become subject, under the
Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are
based upon an untrue statement or alleged untrue statement of a
material fact contained in any Preliminary Prospectus, any
preliminary prospectus supplement, the Registration Statement,
the Prospectus as amended or supplemented and any other
prospectus relating to the Securities, or any amendment or
supplement thereto, or arise out of or are based upon the
omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements
therein not misleading, in each case to the extent, but only to
the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in any
Preliminary Prospectus, any preliminary prospectus supplement,
the Registration Statement, the Prospectus as amended or
supplemented and any other prospectus relating to the Securities,
or any such amendment or supplement thereto, in reliance upon and
in conformity with written information furnished to the Company
by such Underwriter through the Representatives expressly for use
therein; and will reimburse the Company for any legal or other
expenses reasonably incurred by the Company in connection with
investigating or defending any such action or claim as such
expenses are incurred.
(c) Promptly after receipt by an indemnified party
under subsection (a) or (b) above of notice of the commencement
of any action, such indemnified party shall, if a claim in
respect thereof is to be made against the indemnifying party
under such subsection, notify the indemnifying party in writing
of the commencement thereof; but the omission so to notify the
indemnifying party shall not relieve it from any liability that
it may have to any indemnified party otherwise than under such
subsection. In case any such action shall be brought against any
indemnified party and it shall notify the indemnifying party of
the commencement thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it shall
wish, jointly with any other indemnifying party similarly
notified, to assume the defense thereof, with counsel
satisfactory to such indemnified party (who shall not, except
with the consent of the indemnified party, be counsel to the
indemnifying party), and, after notice from the indemnifying
party to such indemnified party of its election so to assume the
defense thereof, the indemnifying party shall not be liable to
such indemnified party under such subsection for any legal
expenses of other counsel or any other expenses, in each case
subsequently incurred by such indemnified party, in connection
with the defense thereof other than reasonable costs of
investigation. No indemnifying party shall, without the written
consent of the indemnified party, effect the settlement or
compromise of, or consent to the entry of any judgment with
respect to, any pending or threatened action or claim in respect
of which indemnification or contribution may be sought hereunder
(whether or not the indemnified party is an actual or potential
party to such action or claim) unless such settlement, compromise
or judgment (i) includes an unconditional release of the
indemnified party from all liability arising out of such
- 14 -
15
action or claim and (ii) does not include a statement as to or an
admission of fault, culpability or a failure to act, by or on
behalf of any indemnified party.
(d) If the indemnification provided for in this
Section 8 is unavailable to or insufficient to hold harmless an
indemnified party under subsection (a) or (b) above in respect of
any losses, claims, damages or liabilities (or actions in respect
thereof) referred to therein, then each indemnifying party shall
contribute to the amount paid or payable by such indemnified
party as a result of such losses, claims, damages or liabilities
(or actions in respect thereof) in such proportion as is
appropriate to reflect the relative benefits received by the
Company on the one hand and the Underwriters of the Designated
Securities on the other from the offering of the Designated
Securities to which such loss, claim, damage or liability (or
action in respect thereof) relates. If, however, the allocation
provided by the immediately preceding sentence is not permitted
by applicable law or if the indemnified party failed to give the
notice required under subsection (c) above, then each
indemnifying party shall contribute to such amount paid or
payable by such indemnified party in such proportion as is
appropriate to reflect not only such relative benefits but also
the relative fault of the Company on the one hand and the
Underwriters of the Designated Securities on the other in
connection with the statements or omissions that resulted in such
losses, claims, damages or liabilities (or actions in respect
thereof), as well as any other relevant equitable considerations.
The relative benefits received by the Company on the one hand and
such Underwriters on the other shall be deemed to be in the same
proportion as the total net proceeds from such offering (before
deducting expenses) received by the Company bear to the total
underwriting discounts and commissions received by such
Underwriters. The relative fault shall be determined by
reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied
by the Company on the one hand or such Underwriters on the other
and the parties' relative 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
subsection (d) were determined by pro rata allocation (even if
the Underwriters were treated as one entity for such purpose) or
by any other method of allocation that does not take account of
the equitable considerations referred to above in this subsection
(d). The amount paid or payable by an indemnified party as a
result of the losses, claims, damages or liabilities (or actions
in respect thereof) referred to above in this subsection (d)
shall be deemed to include 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 subsection (d), no
Underwriter shall be required to contribute any amount in excess
of the amount by which the total price at which the applicable
Designated Securities underwritten by it and distributed to the
public were offered to the public exceeds the amount of any
damages that such Underwriter has otherwise been required to pay
by reason of such untrue or alleged untrue statement or omission
or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the
Act) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation. The obligations
of the Underwriters of Designated Securities in this subsection
(d) to contribute are several in proportion to their respective
underwriting obligations with respect to such Securities and not
joint.
(e) The obligations of the Company under this
Section 8 shall be in addition to any liability that the Company
may otherwise have and shall extend, upon the same terms and
conditions, to each person, if any, who controls any Underwriter
within the meaning of the Act; and the obligations of the
Underwriters under this Section 8 shall be in addition to any
liability that the
- 15 -
16
respective Underwriters may otherwise have and shall extend, upon
the same terms and conditions, to each officer and director of
the Company and to each person, if any, who controls the Company
within the meaning of the Act.
9. (a) If any Underwriter shall default in its
obligation to purchase the Firm Shares or Optional Shares that it
has agreed to purchase under the Pricing Agreement relating to
such Designated Securities, the Representatives may in their
discretion arrange for themselves or another party or other
parties to purchase such Designated Securities on the terms
contained herein. If within thirty-six hours after such default
by any Underwriter the Representatives do not arrange for the
purchase of such Designated Securities, then the Company shall be
entitled to a further period of thirty-six hours within which to
procure another party or other parties satisfactory to the
Representatives to purchase such Designated Securities on such
terms. In the event that, within the respective prescribed
period, the Representatives notify the Company that they have so
arranged for the purchase of such Designated Securities, or the
Company notifies the Representatives that it has so arranged for
the purchase of such Designated Securities, the Representatives
or the Company shall have the right to postpone the Time of
Delivery for such Designated Securities for a period of not more
than seven days, in order to effect whatever changes may thereby
be made necessary in the Registration Statement or the Prospectus
as amended or supplemented, or in any other documents or
arrangements, and the Company agrees to file promptly any
amendments or supplements to the Registration Statement or the
Prospectus that in the opinion of the Representatives may thereby
be made necessary. The term "Underwriter" as used in this
Agreement shall include any person substituted under this Section
with like effect as if such person had originally been a party to
the Pricing Agreement with respect to such Designated Securities.
(b) If, after giving effect to any arrangements for
the purchase of the Firm Shares or Optional Shares of a
defaulting Underwriter or Underwriters by the Representatives and
the Company as provided in subsection (a) above, the aggregate
principal amount of such Designated Securities that remains
unpurchased does not exceed one-eleventh of the aggregate
principal amount of the Designated Securities, then the Company
shall have the right to require each non-defaulting Underwriter
to purchase the number of Designated Securities that such
Underwriter agreed to purchase under the Pricing Agreement
relating to such Designated Securities and, in addition, to
require each non-defaulting Underwriter to purchase its pro rata
share (based on the principal amount of Designated Securities
that such Underwriter agreed to purchase under such Pricing
Agreement) of the Designated Securities of such defaulting
Underwriter or Underwriters for which such arrangements have not
been made; but nothing herein shall relieve a defaulting
Underwriter from liability for its default.
(c) If, after giving effect to any arrangements for
the purchase of the Firm Shares or Optional Shares of a
defaulting Underwriter or Underwriters by the Representatives and
the Company as provided in subsection (a) above, the aggregate
number of Designated Securities that remains unpurchased exceeds
one-eleventh of the aggregate principal amount of the Designated
Securities, as referred to in subsection (b) above, or if the
Company shall not exercise the right described in subsection (b)
above to require non-defaulting Underwriters to purchase
Designated Securities of a defaulting Underwriter or
Underwriters, then the Pricing Agreement relating to such Firm
Shares or the Over-Allotment Option relating to such Optional
Shares, as the case may be, shall thereupon terminate, without
liability on the part of any non-defaulting Underwriter or the
Company, except for the expenses to be borne by the Company and
the Underwriters as provided in Section 6 hereof and the
indemnity and contribution agreements in Section 8 hereof; but
nothing herein shall relieve a defaulting Underwriter from
liability for its default.
- 16 -
17
10. The respective indemnities, agreements,
representations, warranties and other statements of the Company and the several
Underwriters, as set forth in this Agreement or made by or on behalf of them,
respectively, pursuant to this Agreement, shall remain in full force and
effect, regardless of any investigation (or any statement as to the results
thereof) made by or on behalf of any Underwriter or any controlling person of
any Underwriter, or the Company, or any officer or director or controlling
person of the Company, and shall survive delivery of and payment for the
Securities.
11. If any Pricing Agreement or Over-Allotment Option shall
be terminated pursuant to Section 9 hereof, the Company shall not then be under
any liability to any Underwriter with respect to the Firm Shares or Optional
Shares covered by such Pricing Agreement or Over-Allotment Option except as
provided in Sections 6 and 8 hereof; but, if for any other reason Designated
Securities are not delivered by or on behalf of the Company as provided herein,
the Company will reimburse the Underwriters through the Representatives for all
out-of-pocket expenses approved in writing by the Representatives, including
fees and disbursements of counsel, reasonably incurred by the Underwriters in
making preparations for the purchase, sale and delivery of such Designated
Securities, but the Company shall then be under no further liability to any
Underwriter with respect to such Designated Securities except as provided in
Sections 6 and 8 hereof.
12. In all dealings hereunder, the Representatives of the
Underwriters of Designated Securities shall act on behalf of each of such
Underwriters, and the parties hereto shall be entitled to act and rely upon any
statement, request, notice or agreement on behalf of any Underwriter made or
given by such Representatives jointly or by such of the Representatives, if
any, as may be designated for such purpose in the Pricing Agreement.
All statements, requests, notices and agreements hereunder shall
be in writing, and if to the Underwriters shall be delivered or sent by mail,
telex or facsimile transmission to the address of the Representatives as set
forth in the Pricing Agreement; and if to the Company shall be delivered or
sent by mail, telex or facsimile transmission to the address of the Company set
forth in the Registration Statement: Attention: Secretary; provided, however,
that any notice to an Underwriter pursuant to Section 8(c) hereof shall be
delivered or sent by mail, telex or facsimile transmission to such Underwriter
at its address set forth in its Underwriters' Questionnaire, or telex
constituting such Questionnaire, which address will be supplied to the Company
by the Representatives upon request. Any such statements, requests, notices or
agreements shall take effect upon receipt thereof.
13. This Agreement and each Pricing Agreement shall be
binding upon, and inure solely to the benefit of, the Underwriters, the Company
and, to the extent provided in Sections 8 and 10 hereof, the officers and
directors of the Company and each person who controls the Company or any
Underwriter, and their respective heirs, executors, administrators, successors
and assigns, and no other person shall acquire or have any right under or by
virtue of this Agreement or any such Pricing Agreement. No purchaser of any of
the Securities from any Underwriter shall be deemed a successor or assign by
reason merely of such purchase.
14. Time shall be of the essence of each Pricing Agreement.
As used herein, "business day" shall mean any day when the Commission's office
in Washington, D.C. is open for business.
15. THIS AGREEMENT AND EACH PRICING AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
16. This Agreement and each Pricing Agreement may be
executed by any one or more of the parties hereto and thereto in any number of
counterparts, each of which shall be deemed to be an original, but all such
respective counterparts shall together constitute one and the same instrument.
- 17 -
18
If the foregoing is in accordance with your understanding, please
sign and return to us six counterparts hereof.
Very truly yours,
American Health Properties, Inc.
By: /s/ Xxxxxxx X. XxXxx
---------------------------------------
Name: Xxxxxxx X. XxXxx
Title: Senior Vice President and
Chief Financial Officer
Accepted as of the date hereof:
Xxxx Xxxxx Xxxx Xxxxxx, Incorporated
By: /s/ Xxxxx X. Xxxxxxx, Xx.
----------------------------------------------
Name: Xxxxx X. Xxxxxxx, Xx.
Title: Vice President
- 18 -
19
ANNEX I
PRICING AGREEMENT
Xxxx Xxxxx Xxxx Xxxxxx, Incorporated
000 Xxxxx Xxxxxxx Xxxxxx
X.X. Xxx 0000
Xxxxxxxxx, Xxxxxxxx 00000
February , 1998
Ladies and Gentlemen:
American Health Properties, Inc., a Delaware corporation (the
"Company"), proposes, subject to the terms and conditions stated herein and in
the Underwriting Agreement, dated February 24, 1998 (the "Underwriting
Agreement"), between the Company on the one hand and you on the other hand, to
issue and sell to the Underwriters named in Schedule I hereto (the
"Underwriters") the Securities specified in Schedule II hereto (the "Designated
Securities"). Each of the provisions of the Underwriting Agreement is
incorporated herein by reference in its entirety, and shall be deemed to be a
part of this Agreement to the same extent as if such provision had been set
forth in full herein; and each of the representations and warranties set forth
therein shall be deemed to have been made at and as of the date of this Pricing
Agreement, except that each representation and warranty that refers to the
Prospectus in Section 2 of the Underwriting Agreement shall be deemed to be a
representation or warranty as of the date of the Underwriting Agreement in
relation to the Prospectus (as therein defined), and also a representation and
warranty as of the date of this Pricing Agreement in relation to the Prospectus
as amended or supplemented relating to the Designated Securities that are the
subject of this Pricing Agreement. Each reference to the Representatives herein
and in the provisions of the Underwriting Agreement so incorporated by reference
shall be deemed to refer to you. Unless otherwise defined herein, terms defined
in the Underwriting Agreement are used herein as therein defined. The
Representatives designated to act on behalf of the Representatives and on behalf
of each of the Underwriters of the Designated Securities pursuant to Section 12
of the Underwriting Agreement and the address of the Representatives referred to
in such Section 12 are set forth at the end of Schedule II hereto.
An amendment to the Registration Statement, or a supplement to the
Prospectus, as the case may be, relating to the Designated Securities, in the
form heretofore delivered to you is now proposed to be filed with the
Commission.
Subject to the terms and conditions set forth herein and in the
Underwriting Agreement incorporated herein by reference, the Company agrees to
issue and sell to each of the Underwriters, and each of the Underwriters agrees,
severally and not jointly, to purchase from the Company, at the time and place
and at the purchase price to the Underwriters set forth in Schedule II hereto,
the principal amount of Designated Securities set forth opposite the name of
such Underwriter in Schedule I hereto.
20
If the foregoing is in accordance with your understanding, please sign
and return to us six counterparts hereof, and upon acceptance hereof by you,
this letter and such acceptance hereof, including the provisions of the
Underwriting Agreement incorporated herein by reference, shall constitute a
binding agreement between you and the Company.
Very truly yours,
American Health Properties, Inc.
By:
------------------------------------
Name: Xxxxxxx X. XxXxx
Title: Senior Vice President
and Chief Financial Officer
Accepted as of the date hereof:
Xxxx Xxxxx Xxxx Xxxxxx, Incorporated
By:
---------------------------------
Name:
Title:
I-2
21
SCHEDULE I
NUMBER OF
SHARES OF
COMMON
STOCK TO BE
UNDERWRITER PURCHASED
------------- -------------------
-------------------
Total
-------------------- ===================
I-3
22
SCHEDULE II
TITLE OF DESIGNATED SECURITIES:
Common Stock, $.01 par value
AGGREGATE NUMBER OF DESIGNATED SECURITIES:
Shares
(These are all Firm Shares and there are no Optional Shares in this
transaction.)
PRICE TO PUBLIC:
$ per Share
PURCHASE PRICE BY UNDERWRITERS:
$ per Share
FORM OF DESIGNATED SECURITIES:
Book-entry only form represented by one or more global securities
deposited with The Depository Trust Company ("DTC") or its designated
custodian, to be made available for checking by the Representatives at
least twenty-four hours prior to the Time of Delivery at the office of
DTC or its designated custodian.
SPECIFIED FUNDS FOR PAYMENT OF PURCHASE PRICE:
Immediately available funds
TIME OF DELIVERY:
10:00 a.m. (New York City time), on February , 1998
TRANSFER AGENT:
ChaseMellon Shareholder Services, L.L.C.
CLOSING LOCATION FOR DELIVERY OF DESIGNATED SECURITIES:
The Closing will take place at Hunton & Xxxxxxxx, Richmond, Virginia.
The Designated Securities will be delivered to DTC or its designated custodian.
I-4
23
NAMES AND ADDRESSES OF REPRESENTATIVES:
Designated Representatives, as referred to in Section 12 of the
Underwriting Agreement:
Xxxx Xxxxx Xxxx Xxxxxx, Incorporated
Address for Notices, etc.:
Xxxx Xxxxx Xxxx Xxxxxx, Incorporated
000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
I-5
24
ANNEX II
FORM OF XXXXX, XXXXXX & XXXXXX TAX OPINION
25
ANNEX III
Pursuant to Section 7(e) of the Underwriting Agreement, the
accountants shall furnish letters to the Underwriters to the effect that:
(i) They are independent certified public
accountants with respect to the Company and its subsidiaries
within the meaning of the Act and the applicable published rules
and regulations thereunder;
(ii) In their opinion, the financial statements and
any supplementary financial information and schedules audited
(and, if applicable, financial forecasts and/or pro forma
financial information) examined by them and included or
incorporated by reference in the Registration Statement or the
Prospectus comply as to form in all material respects with the
applicable accounting requirements of the Act or the Exchange
Act, as applicable, and the related published rules and
regulations thereunder; and, if applicable, they have made a
review in accordance with standards established by the American
Institute of Certified Public Accountants of the consolidated
interim financial statements, selected financial data, pro forma
financial information, financial forecasts and/or condensed
financial statements derived from audited financial statements of
the Company for the periods specified in such letter, as
indicated in their reports thereon, copies of which have been
separately furnished to the representative or representatives of
the Underwriters (the "Representatives") such term to include an
Underwriter or Underwriters who act without any firm being
designated as its or their representatives;
(iii) They have made a review in accordance with
standards established by the American Institute of Certified
Public Accountants of the unaudited condensed consolidated
statements of income, consolidated balance sheets and
consolidated statements of cash flows included in the Prospectus
and/or included in the Company's quarterly report on Form 10-Q
incorporated by reference into the Prospectus as indicated in
their reports thereon copies of which have been separately
furnished to the Representatives; and on the basis of specified
procedures including inquiries of officials of the Company who
have responsibility for financial and accounting matters
regarding whether the unaudited condensed consolidated financial
statements referred to in paragraph (v)(A)(i) below comply as to
form in all material respects with the applicable accounting
requirements of the Act and the Exchange Act and the related
published rules and regulations, nothing came to their attention
that caused them to believe that the unaudited condensed
consolidated financial statements do not comply as to form in all
material respects with the applicable accounting requirements of
the Act and the Exchange Act and the related published rules and
regulations;
(iv) They have compared the information in the
Prospectus under selected captions with the disclosure
requirements of Regulation S-K and on the basis of limited
procedures specified in such letter nothing came to their
attention as a result of the foregoing procedures that caused
them to believe that this information does not conform in all
material respects with the disclosure requirements of Items 301,
302, 402 and 503(d), respectively, of Regulation S-K;
(v) On the basis of limited procedures, not
constituting an examination in accordance with generally accepted
auditing standards, consisting of a reading of the unaudited
financial statements and other information referred to below, a
reading of the latest available interim financial statements of
the Company and its subsidiaries, inspection of the minute books
of the Company and its subsidiaries since the date of the latest
audited financial statements included or incorporated by
reference in the Prospectus, inquiries of officials of the
Company and its subsidiaries responsible for financial and
accounting matters and such other inquiries and procedures as may
be specified in such letter, nothing came to their attention that
caused them to believe that:
III-1
26
(A) (i) the unaudited condensed
consolidated statements of income, consolidated balance
sheets and consolidated statements of cash flows
included in the Prospectus and/or included or
incorporated by reference in the Company's Quarterly
Reports on Form 10-Q incorporated by reference in the
Prospectus do not comply as to form in all material
respects with the applicable accounting requirements of
the Exchange Act and the related published rules and
regulations, or (ii) any material modifications should
be made to the unaudited condensed consolidated
statements of income, consolidated balance sheets and
consolidated statements of cash flows included in the
Prospectus or included in the Company's Quarterly
Reports on Form 10- Q incorporated by reference in the
Prospectus for them to be in conformity with generally
accepted accounting principles;
(B) any unaudited pro forma consolidated
condensed financial statements included or incorporated
by reference in the Prospectus do not comply as to form
in all material respects with the applicable accounting
requirements of the Act and the published rules and
regulations thereunder or the pro forma adjustments
have not been properly applied to the historical
amounts in the compilation of those statements;
(C) as of a specified date not more than
five days prior to the date of such letter, there have
been any changes in the consolidated capital stock
(other than issuances of capital stock upon exercise of
options and stock appreciation rights, upon earn-outs
of performance shares and upon conversions of
convertible securities, in each case which were
outstanding on the date of the latest balance sheet
included or incorporated by reference in the
Prospectus) or any increase in the consolidated
long-term debt of the Company and its subsidiaries, or
any decreases in consolidated net assets or
stockholders' equity or other items specified by the
Representatives, or any increases in any items
specified by the Representatives, in each case as
compared with amounts shown in the latest balance sheet
included or incorporated by reference in the
Prospectus, except in each case for changes, increases
or decreases which the Prospectus discloses have
occurred or may occur or which are described in such
letter; and
(D) for the period from the date of the
latest financial statements included or incorporated by
reference in the Prospectus to the specified date
referred to in Clause (C) there were any decreases in
consolidated net revenues or the total or per share
amounts of consolidated net income or other items
specified by the Representatives, or any increases in
any items specified by the Representatives, in each
case as compared with the comparable period of the
preceding year and with any other period of
corresponding length specified by the Representatives,
except in each case for increases or decreases which
the Prospectus discloses have occurred or may occur or
which are described in such letter; and
(vi) In addition to the audit referred to in their
report(s) included or incorporated by reference in the Prospectus
and the limited procedures, inspection of minute books, inquiries
and other procedures referred to in paragraphs (iii) and (v)
above, they have carried out certain specified procedures, not
constituting an audit in accordance with generally accepted
auditing standards, with respect to certain amounts, percentages
and
III-2
27
financial information specified by the Representatives which are
derived from the general accounting records of the Company and
its subsidiaries, which appear in the Prospectus (excluding
documents incorporated by reference), or in Part II of, or in
exhibits and schedules to, the Registration Statement specified
by the Representatives or in documents incorporated by reference
in the Prospectus specified by the Representatives, and have
compared certain of such amounts, percentages and financial
information with the accounting records of the Company and its
subsidiaries and have found them to be in agreement.
All references in this Annex II to the Prospectus shall be deemed
to refer to the Prospectus (including the documents incorporated by reference
therein) as defined in the Underwriting Agreement as of the date of the letter
delivered on the date of the Pricing Agreement for purposes of such letter and
to the Prospectus as amended or supplemented (including the documents
incorporated by reference therein) in relation to the applicable Designated
Securities for purposes of the letter delivered at each Time of Delivery for
such Designated Securities.
III-3