EXHIBIT 1.1
HEALTH AND RETIREMENT PROPERTIES TRUST
$70,000,000
7.50% Convertible Subordinated Debentures Due 2003, Series A
UNDERWRITING AGREEMENT
October 2, 1996
NATWEST SECURITIES LIMITED
XXXXXXX LYNCH, PIERCE, XXXXXX &
XXXXX INCORPORATED
as Representatives of the
several Underwriters
c/o Natwest Securities Limited
000 Xxxxxxxxxxx
Xxxxxx XX0X 0XX
Xxxxxxx
Ladies and Gentlemen:
Health and Retirement Properties Trust, a Maryland real estate
investment trust (the "Company"), proposes to issue and sell to the underwriters
named on Schedule I hereto (the "Underwriters") for whom you are acting as
representatives (the "Representatives"), $70,000,000 aggregate principal amount
of 7.50% Convertible Subordinated Debentures due 2003, Series A (the "Firm
Debentures"), which are convertible into common shares of beneficial interest of
the Company, par value $.01 per share (the "Common Shares"), at a conversion
price of $18.00 per Common Share, subject to adjustment under certain
circumstances, and having such other terms as set forth on Schedule III hereto.
In addition, the Company hereby grants to you and the other Underwriters an
option (the "Option") to purchase up to an additional $10,500,000 aggregate
principal amount of 7.50% Convertible Subordinated Debentures due 2003, Series
A, on the terms and conditions and for the purposes set forth in Section 2 (the
"Option Debentures"). The Firm Debentures and, if purchased, the Option
Debentures are hereinafter collectively referred to as the "Debentures." The
issuance and sale of the Debentures is hereinafter referred to as the
"Offering." The Debentures are to be issued pursuant to that certain indenture
dated as of September 20, 1996 (the "Base Indenture") between the Company and
Fleet National Bank (or such other money center bank acceptable to the Company
and the Representatives), as trustee (the "Trustee"), as amended by that certain
First Supplemental Indenture, dated as of October 7, 1996 (the "Supplemental
Indenture"), between the Company and the Trustee (as so amended, the
"Indenture"). The Company will deliver copies of the Base Indenture and
Supplemental Indenture to each of the Underwriters prior to the Initial Closing
(as defined below). The Common Shares issuable upon conversion of the Debentures
are hereinafter collectively referred to as the "Conversion Shares." The
Debentures are to be sold to each Underwriter, acting severally and not jointly,
in such amounts as are listed in Schedule I opposite the name of each
Underwriter. The Debentures are more fully described in the Final Prospectus
referred to below. If the firm or firms listed in Schedule I hereto include only
the firm or firms to which this Agreement is addressed above, then the terms
"Underwriters" and "Representatives," as used herein, each shall be deemed to
refer to such firm or firms.
The Company hereby confirms its agreement with the several Underwriters
as follows:
1. Agreement to Sell and Purchase.
(a) On the basis of the representations and warranties contained
in, and subject to the terms and conditions of, this Agreement, (i) the Company
agrees to issue and sell to each Underwriter the Firm Debentures and (ii) each
Underwriter, severally and not jointly, agrees to purchase from the Company the
Firm Debentures, on the Initial Closing Date (as defined in Section 3) at a
purchase price of 97.6% of the principal amount of the Firm Debentures set forth
opposite such Underwriter's name on Schedule I hereto, plus accrued interest, if
any, from the Initial Closing Date.
(b) The Company hereby grants the Option to the several
Underwriters to purchase, severally and not jointly, the Option Debentures at
the same price per Option Debenture as the Underwriters shall pay for the Firm
Debentures. The Underwriters shall not be under any obligation to purchase any
of the Option Debentures prior to any exercise of such option. The Option may be
exercised only to cover over-allotments in the sale of the Firm Debentures by
the Underwriters and may be exercised in whole or in part at any time and from
time to time on or before the date that is 30 days after the date hereof (or the
next business day if the 30th day is not a business day) upon notice (the
"Option Debentures Notice") in writing or by telephone (confirmed in writing) by
the Representatives to the Company no later than 5:00 p.m., New York City time,
at least two and no more than seven business days before the date specified for
closing in the Option Debentures Notice setting forth the aggregate principal
amount of the Option Debentures to be purchased and the date of each such
purchase (each such date, an "Option Closing Date"). The Initial Closing Date
and Option Closing Dates are sometimes herein referred to respectively as the
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related "Closing Dates". On each Option Closing Date, the Company will issue and
sell to the Underwriters the principal amount of Option Debentures set forth in
the related Option Debentures Notice and, subject to the terms and conditions
and in reliance upon the representations and warranties set forth herein, each
Underwriter, severally and not jointly, will purchase such percentage of the
related Option Debentures as is equal to the percentage of Firm Debentures that
such Underwriter is to purchase on the Initial Closing Date, as adjusted by the
Representatives in such manner as they may agree is advisable to avoid
fractional Debentures.
2. Reserved.
3. Delivery and Payment. The closing for the purchase and sale of the
Firm Debentures shall occur at the offices of Xxxxxxxx & Worcester, Xxx Xxxx
Xxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000, at 10:00 a.m., Boston time, on
October 7, 1996 or at such other time or on such other date as may be agreed
upon by the Company and the Representatives (such date is hereinafter referred
to as the "Initial Closing Date"). The purchase price in respect of the Firm
Debentures will be paid by the several Underwriters through the Representatives
to the Company (to such account as the Company shall, at least two business days
prior thereto, have instructed the Representatives to make payment) on the
Initial Closing Date in same-day funds cleared through the New York Clearing
House Interbank Payments System. Such payment shall be made only against
delivery of the Firm Debentures to the Representatives.
To the extent the Option is exercised, delivery of the Option
Debentures against payment by the Underwriters (in the manner specified above)
will take place at the offices specified above for the Initial Closing Date at
the time and date (which may be the Firm Closing Date) specified in the Option
Debentures Notice.
Certificates evidencing the Debentures shall be in definitive form,
registered in such names and in such denominations as the Representatives may
request not less than two full business days in advance of the Initial Closing
Date or the Option Closing Date, as the case may be.
The Company agrees to have the Debentures available for inspection,
checking and packaging by the Representatives in New York, New York, not later
than 1:00 p.m. on the business day prior to the Initial Closing Date or the
Option Closing Date, as the case may be.
4. Representations and Warranties of the Company. The Company
represents, warrants and covenants as of the date hereof and, as set forth in
Section 8(c) will represent, warrant and covenant as of the Initial Closing Date
and each Option Closing Date, to each Underwriter that:
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(a) The Company and the transaction contemplated hereby meet the
requirements for use of Form S-3 under the Securities Act of 1933, as amended
(the "Securities Act"), and the rules and regulations (the "Securities Act Rules
and Regulations") of the Securities and Exchange Commission (the "Commission")
thereunder, and the Company has filed a registration statement on such Form
(Registration No. 333-02863) which has become effective, for the registration of
the Debentures and the Conversion Shares under the Securities Act and the
Securities Act Rules and Regulations. Such registration statement, as amended at
the date of this Agreement, meets the requirements set forth in Rule 415(a)(1)
of the Securities Act Rules and Regulations and complies in all other material
respects with said Rule. The Company proposes to file with the Commission
pursuant to Rule 424 of the Securities Act Rules and Regulations a supplement to
the form of prospectus included in such registration statement relating to the
Debentures and the Conversion Shares and the plan of distribution of the
Debentures and has previously advised you of all further information (financial
and other) with respect to the Company to be set forth therein. Such
registration statement, including the exhibits thereto, as amended at the date
of this Agreement, is hereinafter called the "Registration Statement"; such
prospectus in the form in which it appears in the Registration Statement is
hereinafter called the "Basic Prospectus"; and such supplemented form of final
prospectus, in the form in which it shall be filed with the Commission pursuant
to Rule 424 (including the Basic Prospectus as so supplemented) is hereinafter
called the "Final Prospectus." Any preliminary form of the Final Prospectus
which has heretofore been filed pursuant to Rule 424 hereinafter is called the
"Preliminary Final Prospectus." Any reference herein to the Registration
Statement, the Basic Prospectus, any Preliminary Final Prospectus or the Final
Prospectus shall be deemed to refer to and include the documents incorporated by
reference therein pursuant to Item 12 of Form S-3 which were filed under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), on or before
the date of this Agreement, or the issue date of the Basic Prospectus, any
Preliminary Final Prospectus or the Final Prospectus, as the case may be (the
"Incorporated Documents"); and any reference herein to the terms "amend,"
"amendment" or "supplement" with respect to the Registration Statement, the
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Basic Prospectus, and the Preliminary Final Prospectus or the Final Prospectus
shall be deemed to refer to and include the filing of any document under the
Exchange Act after the date of this Agreement, or the issue date of the Basic
Prospectus, any Preliminary Final Prospectus or the Final Prospectus, as the
case may be, and deemed to be incorporated therein by reference.
(b) As of each of the following dates or times: (1) the date
hereof, (2) when the Final Prospectus is first filed pursuant to Rule 424 of the
Securities Act Rules and Regulations, (3) when, prior to the Firm Closing Date
(as hereinafter defined) or any Option Closing Date (as hereinafter defined), as
the case may be, any amendment to the Registration Statement becomes effective
(including the filing of any document incorporated by reference in the
Registration Statement), (4) when any supplement to the Final Prospectus is
filed with the Commission, (5) at the Firm Closing Date, and (6) at any Option
Closing Date, (i) the Registration Statement as amended as of any such time, and
the Final Prospectus, as amended or supplemented as of any such time, will
comply in all material respects with the applicable requirements of the
Securities Act, the Securities Act Rules and Regulations, the Exchange Act and
the rules and regulations under the Exchange Act (the "Exchange Act Rules and
Regulations"), (ii) the Registration Statement, as amended as of any such time,
will not contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make the
statements therein not misleading, and (iii) the Final Prospectus, as amended or
supplemented as of any such time, will not contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading; provided, however,
that the Company makes no representations or warranties as to the information
contained in or omitted from the Registration Statement or the Final Prospectus
or any amendment thereof or supplement thereto in reliance upon and in
conformity with information relating to any Underwriter furnished in writing to
the Company by or on behalf of any Underwriter through the Representatives
specifically for use in connection with the preparation of the Registration
Statement and the Final Prospectus.
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(c) The Incorporated Documents heretofore filed, when they were
filed (or, if any amendment with respect to any such document was filed, when
such amendment was filed), conformed in all material respects with the
requirements of the Exchange Act and the Exchange Act Rules and Regulations, any
further Incorporated Documents so filed will, when they are filed, conform in
all material respects with the requirements of the Exchange Act and the Exchange
Act Rules and Regulations; no such document when it was filed (or, if an
amendment with respect to any such document was filed, when such amendment was
filed), contained an untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading; and no such further document, when it is filed, will contain an
untrue statement of a material fact or will omit to state a material fact
required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading.
(d) The Company is a Maryland real estate investment trust in good
standing under the laws of the State of Maryland. Each of its subsidiaries (as
hereinafter defined) has been duly organized, is validly existing as a
corporation 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 the Final 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 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. The only
subsidiaries (as defined in the Securities Act Rules and Regulations) of the
Company which are actively engaged in business are the subsidiaries listed on
Schedule II hereto (the "subsidiaries").
(e) No injunction, stop order, restraining order or order of any
nature by a federal, state or foreign court of competent jurisdiction has been
issued that would prevent or interfere with the issuance of the Debentures
(including, but not limited to, any order suspending the use of the Final
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Prospectus or any Preliminary Final Prospectus or suspending the registration or
qualification of the Conversion Shares); no proceedings with the purpose of
preventing or interfering with the Offering are pending, threatened or, to the
Company's knowledge, contemplated by any securities or other governmental
authority in any jurisdiction (including, without limitation, the Commission);
and no order suspending the qualification or exemption from qualification of the
Debentures or the Conversion Shares under the securities or "Blue Sky" laws of
any jurisdiction is in effect and no proceeding for such purpose is pending
before or threatened or, to the Company's knowledge, contemplated by the
authorities of any such jurisdiction.
(f) The historical and pro forma financial statements of the
Company and its subsidiaries and, to the knowledge of the Company, of Marriott
International, Inc. (the "Operator"), together with the related schedules and
notes thereto, included or incorporated by reference in the Registration
Statement, the Final Prospectus and any Preliminary Final Prospectus comply as
to form in all material respects with the requirements of the Securities Act.
Such historical financial statements present fairly the consolidated financial
position, results of operations, shareholders' equity and changes in financial
position of the Company and its subsidiaries at the respective dates or for the
respective periods therein specified. Such statements have been prepared in
accordance with generally accepted accounting principles consistently applied
throughout the periods involved. The other financial and statistical information
and data of the Company set forth in or incorporated by reference in the
Registration Statement, the Final Prospectus and any Preliminary Final
Prospectus are, in all material respects, accurately presented and prepared on a
basis consistent with such financial statements and the books and records of the
Company and its subsidiaries. Such pro forma financial statements have been
prepared on a basis consistent with such historical statements, except for the
pro forma adjustments specified therein, and give effect to assumptions made on
a reasonable basis and present fairly the pro forma condensed combined financial
position of the Company at the date indicated and the pro forma results of its
operations for the period indicated.
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(g) The accountants who have certified the financial statements of
the Company and, to the Company's knowledge, of the Operator and its
subsidiaries, incorporated by reference into the Registration Statement and the
Final Prospectus are independent certified accountants as required by the
Securities Act and the Securities Act Rules and Regulations. The statements
included in or incorporated by reference in the Registration Statement, the
final Prospectus and any Preliminary Final Prospectus with respect to such
accountants pursuant to Rule 509 of Regulation S-K of the Securities Act Rules
and Regulations are true and correct in all material respects.
(h) Since the respective dates as of which information is given in
the Final 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, or, to the Actual Knowledge (as defined in
Section 4(k) hereof) of the Company, of the Operator (as defined in Section 4(k)
hereof) or the Advisor (as defined in Section 4(k) hereof), in any case 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, or, to the Actual Knowledge of the Company, the Operator or
the Advisor other than transactions in the ordinary course of business, (iii)
neither the Company nor its subsidiaries nor, to the Actual Knowledge of the
Company, the Operator or the Advisor has incurred any material liabilities or
obligations, direct or contingent, (iv) the Company and its subsidiaries, on a
consolidated basis, have not (A) declared, paid or made a dividend or
distribution of any kind on any class of its capital stock, (B) issued any
capital stock of the Company or any of its subsidiaries or any options,
warrants, convertible securities or other rights to purchase the capital stock
of the Company or any of its subsidiaries or (C) repurchased or redeemed capital
stock, 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) of the Company and its subsidiaries,
on a consolidated basis.
(i) 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
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authorizations; (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted
accounting principles 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.
(j) Except as otherwise disclosed in the Final Prospectus, neither
the Company nor any of its subsidiaries nor, to the Actual Knowledge of the
Company, any of the Operator or the Advisor 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 or, to
the Actual Knowledge of the Company, the Operator or the Advisor, 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 respective earnings, business
affairs or business prospects of any of them. Neither the Company nor, to the
Actual Knowledge of the Company, the Operator or the Advisor is 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 condition, financial or
otherwise, or in the respective earnings, business affairs or business prospects
of any of them.
(k) Except as disclosed in the Registration Statement or the Final
Prospectus, there is not now pending or, to the knowledge of the Company,
threatened, any litigation, action, suit or proceeding to which the Company or,
to the Actual Knowledge of the Company without independent inquiry ("Actual
Knowledge"), the Operator or HRPT Advisors, Inc. (the "Advisor") 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, to
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the Actual Knowledge of the Company, of the Operator or the Advisor or (B) might
materially and adversely affect the property or assets of the Company or, to the
Actual Knowledge of the Company, of the Operator or the Advisor, or (C) relates
to environmental matters involving the Company or, to the Actual Knowledge of
the Company, of the Operator or the Advisor, or (D) relates to discrimination on
the basis of age, sex, religion or race, relating to the Company or, to the
Actual Knowledge of the Company, of the Operator or the Advisor, or (E) concerns
the Company or, to the Actual Knowledge of the Company, of the Operator or the
Advisor, and is required to be disclosed in the Final Prospectus, or (F) could
adversely affect the consummation of this Agreement, the Indenture or the
Debentures. No contract or other document is required to be described in the
Registration Statement or the Final Prospectus or to be filed as an exhibit to
the Registration Statement (except for (i) the Supplemental Indenture, (ii) this
Agreement, (iii) the Third Supplemental Indenture to be dated as of October 7,
1996 by and between the Company and the Trustee pursuant to which the Company's
7.25% Convertible Subordinated Debentures due 2001 (the "7.25% Debentures") will
be issued, and (iv) the placement agency agreement dated the date hereof by and
between the Company and National Westminster Bank PLC, New York Branch (the
"Placement Agency Agreement") pursuant to which the 7.25% Debentures will be
placed, copies of which will be filed with the Commission on the date hereof)
that is not described therein or filed as required.
(l) The Company has the requisite power and authority to execute,
deliver and perform its obligations under this Agreement, the Base Indenture,
the Supplemental Indenture and the Debentures, and to issue, sell and deliver
the Debentures and the Conversion Shares in accordance with and upon the terms
and conditions set forth in this Agreement, the Base Indenture, the Supplemental
Indenture and the Debentures, as the case may be. All necessary proceedings of
the Company have been duly taken to authorize the execution, delivery and
performance by the Company of this Agreement and the Base Indenture, the
Supplemental Indenture and the issuance, sale and delivery by the Company of the
Debentures and the Conversion Shares.
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(m) This Agreement has been duly and validly authorized, executed
and delivered by or on behalf of the Company and is a legal, valid and binding
agreement of the Company, enforceable in accordance with its terms (i) subject
to applicable bankruptcy, insolvency, reorganization, fraudulent transfer and
similar laws affecting creditors' rights, generally, (ii) subject to general
principles of equity (regardless of whether enforcement is sought in a
proceeding in equity or at law), and (iii) except insofar as the enforceability
of the indemnity and contribution provisions contained in this Agreement may be
limited by federal or state securities laws and the public policy underlying
such laws.
(n) The Base Indenture and the Supplemental Indenture have been
duly and validly authorized by the Company and on the Initial Closing Date will
have been duly executed and delivered by the Company and (assuming the due
authorization, execution and delivery hereof by the Trustee) each of them will
constitute a valid and legally binding instrument of the Company, enforceable
against the Company in accordance with its terms, subject, as to enforcement, to
bankruptcy, insolvency, reorganization, fraudulent conveyance or similar laws
relating to or affecting the rights of creditors generally and by equitable
principles. The Base Indenture and the Supplemental Indenture will conform to
the description thereof set forth in the Registration Statement and the Final
Prospectus. The Indenture has been duly qualified under the Trust Indenture Act
of 1939, as amended (the "Trust Indenture Act").
(o) The Debentures have been duly and validly authorized and when
the Debentures have been authenticated by the Trustee and issued, executed,
delivered and sold by the Company in accordance with the Indenture, will have
been duly and validly executed, authenticated, issued and delivered and will (i)
constitute valid and legally binding obligations of the Company enforceable
against the Company in accordance with their terms and entitled to the benefits
of the Indenture to bankruptcy, insolvency, reorganization, fraudulent
conveyance or similar laws relating to or affecting the rights of creditors
generally and to equitable principles, and (ii) be convertible into the
Conversion Shares in accordance with the terms thereof and of the Indenture. The
Conversion Shares have been duly and validly authorized and reserved for
issuance upon conversion of the Debentures and, when issued and delivered upon
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such conversion, will be duly and validly issued and outstanding, fully paid and
nonassessable and will not have been issued in violation of or subject to any
preemptive or other similar rights. The Debentures and the Conversion Shares,
when issued, will conform to the respective descriptions thereof set forth in
the Registration Statement and the Final Prospectus.
(p) The execution, delivery and performance by the Company of this
Agreement, the Base Indenture, the Supplemental Indenture and the Debentures,
the issuance, offering and sale by the Company of the Debentures as contemplated
by the Registration Statement and the Final Prospectus, the issuance by the
Company of the Conversion Shares upon exercise of the conversion rights
contained in the Indenture and the Debentures and the consummation of the
transactions contemplated hereby and thereby and compliance with the terms and
provisions hereof and thereof, 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 or Bylaws of the Company or the charter or
bylaws or other organizational documents of any subsidiaries of the Company or,
to the Actual Knowledge of the Company, the respective charter or bylaws or
other organizational documents of the Operator or the Advisor, or (ii) except as
disclosed in the Final Prospectus, any agreement, indenture or other instrument
to which the Company or any of its subsidiaries or, to the Actual Knowledge of
the Company, the Operator or the Advisor is a party or by which the Company or
any of its subsidiaries or, to the Actual Knowledge of the Company, the Operator
or the Advisor or their respective property or assets is bound, or (iii) any
laws, administrative regulations or rulings or decrees applicable to the Company
or any of its subsidiaries or, to the Actual Knowledge of the Company, the
Operator or the Advisor or their respective properties or assets may be subject.
(q) No consent, approval, authorization, order, registration,
filing, qualification, license or permit of or with any court or any public,
governmental or regulatory agency or body 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, the
Indenture and the Debentures and the consummation of the transactions
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contemplated hereby and thereby, including, without limitation, the issuance,
sale and delivery of the Debentures pursuant to this Agreement, except such as
have been obtained and such as may be required under (i) foreign and state
securities or "Blue Sky" laws and (ii) the bylaws and rules of the National
Association of Securities Dealers, Inc. (the "NASD").
(r) Except as otherwise disclosed in the Registration Statement
and the Final Prospectus, the Company 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, adversely affect the
current use or value thereof, to all property and assets described in the
Registration Statement and the Final Prospectus as being owned by it. All leases
to which the Company is a party relating to real property, and all other leases
which are material to the business of the Company, 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) has occurred or is continuing thereunder, and the Company
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, the Company has such documents, instruments, certificates, opinions,
and assurances, including without limitation, fee, leasehold owners or mortgage
title insurance policies (disclosing no material encumbrances or title
exceptions except as otherwise set forth in the Registration Statement and the
Final 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 to have
obtained.
(s) The Company and each of the 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 the Final
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,
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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.
(t) 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.
(u) Except for non-compliance which in the aggregate does not have
a material adverse effect on the condition, financial or otherwise, or the
earnings, business affairs or business prospects of the Company, 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 utilized by the Company in connection with
the operation of its business, 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 xxxxx, 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 presently or
at any time in the future 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
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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 health or the
environment. As used herein, "Hazardous Materials" means any substance, material
or waste which is regulated by any federal, state or local government or
quasi-government authority, and includes, without limitation (a) any substance,
material or waste defined, used or listed as a "hazardous waste", "hazardous
substance", toxic substance", "medical waste", "infectious waste" or other
similar terms as defined or used in any Environmental Law, as such Environmental
Law may from time to time be amended; and (b) any petroleum products, asbestos,
lead-based paint, polychlorinated biphenyls, flammable explosives or radioactive
materials.
(v) Each of the Company, its subsidiaries and, to the Actual
Knowledge of the Company, the Operator and the Advisor has such permits,
licenses, franchises and authorizations of governmental or regulatory
authorities ("permits"), including, without limitation, under any applicable
Environmental Laws, 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 condition, financial or otherwise, or the
earnings, business affairs or business prospects of the Company, or, to the
Actual Knowledge of the Company, the Operator or the Advisor and neither the
Company nor, to the Actual Knowledge of the Company, the Operator or the Advisor
has 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, its
subsidiaries and, to the Actual Knowledge of the Company, the Operator and the
Advisor has fulfilled and performed all of its obligations with respect to such
permits and no event has occurred which allows, or after notice or lapse of
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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 the Final Prospectus, such
permits contain no restrictions that are materially burdensome to the Company,
any of its subsidiaries or, to the Actual Knowledge of the Company, the Operator
or the Advisor.
(w) To the best 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.
(x) Neither the Company nor any of its subsidiaries nor, to the
best of the Company's knowledge, any officer of 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 account 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.
(y) The authorized, issued and outstanding capital stock of the
Company, and the capital stock reserved or committed for issuance, is as set
forth under the captions "Capitalization" and "Description of Capital Stock" in
the Registration Statement and the Final Prospectus. All of the issued and
outstanding indebtedness of the Company and Common Shares are duly and validly
authorized and issued, and all of the issued and outstanding Common Shares are,
and the Conversion Shares when acquired on the terms and conditions specified in
the Debentures and the Indenture will be, fully paid and nonassessable. The
Company has a sufficient number of authorized but unissued Common Shares to
enable the Company to issue, without further stockholder action, all the
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Conversion Shares. There are no preemptive rights or other rights to subscribe
for or to purchase, or any restriction upon the voting or transfer of, any
Common Shares pursuant to the Company's declaration of trust, bylaws or any oral
or written agreement or other instrument to which the Company or any of its
subsidiaries is a party or by which either the Company or any of its
subsidiaries is bound that is not described in the Registration Statement and
the Final Prospectus. Neither the offering and sale of the Debentures, as
contemplated by this Agreement, nor the issuance or delivery of the Conversion
Shares, as contemplated by the Indenture and the Debentures, gives rise to any
rights, other than those which have been, or which will, prior to the Initial
Closing Date, be, waived in writing or satisfied, for or relating to the
registration or offering of any shares of capital stock or other securities of
the Company. The Common Shares of the Company conform and, upon the issuance of
the Conversion Shares in connection with the conversion of the Debentures, the
Conversion Shares will conform, in all material respects to the statements
relating thereto in the Registration Statement and the Final Prospectus.
(z) All of the outstanding shares of capital stock of, or other
ownership interests in, each of the Company's subsidiaries have been duly
authorized and validly issued and are fully paid and non-assessable, and, except
as disclosed in the Registration Statement and the Final Prospectus, are owned
by the Company free and clear of any security interest, claim, lien, encumbrance
or adverse interest of any nature.
(aa) 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 except as referred to or
described in the Registration Statement and the Final Prospectus 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 stock of
its subsidiaries, except in each case for non-controlling positions acquired in
the ordinary course of business.
(ab) Except as disclosed in the Registration Statement and 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
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the benefit of any of the officers or directors of the Company or any of its
subsidiaries or any of the members of the families of any of them.
(ac) 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 the Final Prospectus.
(ad) Neither the Company nor any of its officers and directors (as
defined in the Securities Act Rules and Regulations) has taken or will take,
directly or indirectly, prior to the termination of the Offering contemplated by
this Agreement and the Registration Statement and Final Prospectus 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 Debentures
or the Conversion Shares.
(ae) In connection with the Offering, the Company has not offered
and will not offer Debentures, its Common Shares or any other securities
convertible into or exchangeable or exercisable for Common Shares in a manner in
violation of the Securities Act. The Company has not distributed and will not
distribute any offering material in connection with the Offering other than the
Registration Statement, the Final Prospectus and any Preliminary Final
Prospectus. No securities of the same class as the Debentures have been issued
and sold by the Company within the six-month period immediately prior to the
date hereof.
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(af) 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, or an "investment advisor" as such
term is defined in the Investment Advisors Act of 1940, as amended.
(ag) Any certificate signed by an officer of the Company and
delivered to the Underwriters or to counsel for the Underwriters pursuant to
this Agreement shall be deemed a representation and warranty by the Company to
each Underwriter as to the matters covered thereby.
(ah) The Company has dealt with no broker, finder, commission
agent or other person in connection with the sale of the Debentures and the
transactions contemplated by this Agreement, the Registration Statement and the
Final Prospectus, other than the Underwriters, and the Company is under no
obligation to pay any broker's fee or commission in connection with such
transactions, other than the commission to the Underwriters contemplated hereby.
(ai) Neither the Company nor any affiliate of the Company does
business with the government of Cuba or with any person or affiliate located in
Cuba and the Company and each affiliate thereof has complied, to the extent
necessary, with all provisions of Section 517.075, Florida Statutes, and
applicable rules and regulations thereunder.
(aj) There are no outstanding subscriptions, rights, warrants,
options, calls, convertible securities, commitments of sale or liens related to
or entitling any person to purchase or otherwise to acquire any shares of the
capital stock of, or other ownership interest in, the Company or any subsidiary
thereof except as otherwise disclosed in the Registration Statement and the
Final Prospectus.
(ak) The Company is organized in conformity with the requirements
for qualification, and, as of the date hereof the Company operates, and as of
the Initial Closing Date and any Option Closing Date the Company will operate,
in a manner that qualifies the Company, as a "real estate investment trust" (a
"REIT") under the Internal Revenue Code of 1986, as amended (the "Code"), and
the rules and regulations thereunder, for 1996 and subsequent years. The Company
qualified as a real estate investment trust for its 1987, 1988, 1989, 1990,
1991, 1992, 1993, 1994 and 1995 taxable years.
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(al) 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 in any material adverse respect with regard to property, business or
operations of the Company and its subsidiaries, considered as a whole, except as
disclosed in the Registration Statement and the Final Prospectus.
(am) The Debentures and the Conversion Shares have been approved
for listing on the New York Stock Exchange, subject only to notice of issuance,
and the Company knows of no reason or set of facts which is likely to adversely
affect such approval.
(an) The Advisory Agreement (as defined in the Final Prospectus)
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 or other similar laws relating to or
affecting the rights or remedies of creditors or (b) the effect of general
principles of equity, whether enforcement is considered in a proceeding in
equity or at law, and the discretion of the court before which any proceeding
therefore may be brought.
5. Agreements of the Company. The Company covenants and agrees with
each of the Underwriters as follows:
(a) Prior to the termination of the offering of the Debentures,
the Company will not file any amendment of the Registration Statement or
supplement (including the Final Prospectus) to the Basic Prospectus unless the
Company has furnished you a copy for your review prior to filing and will not
file any such proposed amendment or supplement to which you reasonably object.
Subject to the foregoing sentence, the Company will cause the Final Prospectus
-20-
to be transmitted to the Commission for filing pursuant to Rule 424 by XXXXX and
will cause the Final Prospectus to be filed with the Commission pursuant to said
Rule. The Company will advise the Representatives promptly (i) when the Final
Prospectus shall have been filed pursuant to Rule 424, (ii) when any amendment
to the Registration Statement relating to the Debentures shall have become
effective, (iii) of any request by the Commission for any amendment of the
Registration Statement or amendment of or supplement to the Final Prospectus or
for any additional information, (iv) of the issuance by the Commission of any
stop order suspending the effectiveness of the Registration Statement or the
institution or threatening of any proceeding for that purpose and (v) of the
receipt by the Company of any notification with respect to the suspension of the
qualification of the Debentures for sale in any jurisdiction or the initiation
or threatening of any proceeding for such purpose. The Company will make every
reasonable effort to prevent the issuance of any such stop order and, if issued,
to obtain as soon as possible the withdrawal thereof.
(b) If, at any time when a prospectus relating to the Debentures
is required to be delivered under the Securities Act or the Securities Act Rules
and Regulations in connection with sales by an Underwriter or dealer, any event
occurs as a result of which the Final Prospectus as then amended or supplemented
would include any untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein in light of the
circumstances under which they were made not misleading, or if it shall be
necessary to amend or supplement the Final Prospectus to comply with the
Securities Act, the Securities Act Rules and Regulations, the Exchange Act or
the Exchange Act Rules and Regulations, the Company promptly will prepare and
file with the Commission, subject to the first sentence of subparagraph (a) of
this Section 5, an amendment or supplement which will correct such statement or
omission or an amendment which will effect such compliance.
(c) The Company will make generally available to its security
holders and to the Representatives as soon as practicable after the close of the
period covered thereby, an earnings statement (in form complying with the
provisions of Rule 158 of the Securities Act Rules and Regulations) covering a
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twelve month period beginning not later than the first day of the Company's
fiscal quarter next following the "effective date" (as defined in said Rule 158)
of the Registration Statement.
(d) The Company will furnish to the Representatives and counsel
for the Underwriters, without charge, copies of the Registration Statement
(including exhibits thereto) and each amendment thereto which shall become
effective on or prior to the Initial Closing Date or any Option Closing Date, as
the case may be, and, so long as delivery of a prospectus by an Underwriter or
dealer may be required by the Securities Act or the Securities Act Rules and
Regulations, as many copies of any Preliminary Final Prospectus and the Final
Prospectus and any amendments thereof and supplements thereto as the
Representatives may reasonably request.
(e) The Company will use its reasonable efforts to arrange for the
qualification of the Debentures and the Conversion Shares for offer and sale
under the laws of such jurisdictions as the Representatives may reasonably
designate and will maintain such qualifications in effect so long as required
for the distribution of the Debentures; provided, however, that the Company
shall not be required to qualify to do business in any jurisdiction where it is
not now so qualified or to take any action which would subject it to general or
unlimited service of process of any jurisdiction where it is not now so subject.
(f) The Company will apply the net proceeds from the sale of the
Debentures, the International Debentures (as defined below) and the 7.25%
Debentures as set forth under "Use of Proceeds" in the Final Prospectus.
(g) The Company will not at any time, directly or indirectly, take
any action intended, or which might reasonably be expected, to cause or result,
in, or which will constitute, under the Securities Act or otherwise,
stabilization of the price of any security of the Company to facilitate the sale
or resale of the Debentures.
(h) During the period commencing on the Initial Closing Date and
ending three years from the last Closing Date, the Company will furnish to the
Representatives copies of such financial statements and other periodic and
special reports as the Company may from time to time distribute generally to the
holders of any class of its capital stock or file with the Commission, the New
York Stock Exchange ("NYSE") or any national securities exchange, and will
furnish to each Underwriter who may so request a copy of each annual or other
report it shall be required to file therewith.
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(i) The Company will timely file any document which it is required
to file pursuant to the Exchange Act prior to the termination of the Offering.
(j) The Company currently intends to continue to elect to qualify
as a "real estate investment trust" under the Code and use its best efforts to
continue to meet the requirement to qualify as a REIT.
6. Representations and Warranties of NatWest. NatWest represents and
warrants to the Company and agrees that:
(a) It has (i) not offered or sold and will not, prior to the
expiry of the period six months from the last Closing Date, offer or sell in the
United Kingdom, by means of any document, any Debentures other than to persons
whose ordinary business it is to buy or sell shares or debentures (whether as
principal or agent) or in circumstances which do not constitute an offer to the
public within the meaning of the Public Offers of Securities Regulations 1995;
(ii) complied and will comply with all applicable provisions of the Financial
Services Xxx 0000 with respect to anything done by them in relation to the
Debentures in, from or otherwise involving the United Kingdom; and (iii) issued
or passed on and will issue or pass on to any person in the United Kingdom any
document received by them in connection with the issuance of the Debentures only
if that person is of a kind described in Article 11(3) of the Financial Services
Xxx 0000 (Investment Advertisements) (Exemptions) Order 1996, as amended, or is
a person to whom the document may otherwise lawfully be issued or passed on.
7. Expenses.
(a) Whether or not the transactions contemplated by this Agreement
are consummated or this Agreement is terminated, the Company will pay, or
reimburse if paid by the Representatives with the Company's prior approval, all
costs and expenses incident to the performance of the obligations of the Company
under this Agreement, including but not limited to costs and expenses of or
relating to (i) the preparation and distribution of the Registration Statement,
Preliminary Final Prospectus, the Final Prospectus and any amendments or
supplements thereto, (ii) the preparation, printing, issue, exchange and
delivery of the Registration Statement, the Preliminary Final Prospectus, the
Final Prospectus, the Debentures and the Conversion Shares, (iii) the printing
(or reproduction) and delivery of the Indenture, this Agreement, the preliminary
and supplemental Blue Sky Memoranda and all other agreements or documents
-23-
printed (or reproduced) and delivered in connection with the Offering, (iv)
furnishing (including costs of shipping and mailing) such copies of the
Preliminary Final Prospectus, the Final Prospectus, and all amendments and
supplements thereto, as may be required thereunder, (v) the listing of the
Debentures on the NYSE and the listing of the Conversion Shares issuable upon
conversion of the Debentures on the NYSE, (vi) any filings required to be made
by the Underwriters with the NASD in connection with the Offering, and (vii) all
other costs and expenses incident to the performance of the obligations of the
Company hereunder and under the Indenture which are not otherwise provided for
in this paragraph.
(b) If (i) the sale of the Debentures is not consummated because
any condition to the obligations of the Underwriters set forth in Section 8
hereof is not satisfied, (ii) this Agreement shall be terminated pursuant to any
of the provisions hereof (other then by the Company pursuant to Section 10
hereof or pursuant to Section 12 (iii), (iv) or (v) hereof) or if for any reason
the Company shall be unable to perform its obligations hereunder (other than as
a result of any Underwriter's failure to perform any of its obligations
hereunder), the Company will reimburse the several Underwriters for all
out-of-pocket expenses (including, the fees, disbursements and other charges of
counsel to the Underwriters) reasonably incurred by them in connection herewith.
The Company shall not under any circumstances, including a breach of this
Agreement by the Company, be liable to the Underwriters for the loss of
anticipated profits from the transactions covered by this Agreement.
8. Conditions to Obligations of Underwriters. The obligations of the
Underwriters to purchase the Firm Debentures shall be subject to the accuracy of
the representations and warranties on the part of the Company contained herein
as of the date hereof, as of the date of the effectiveness of any amendment to
the Registration Statement filed prior to the Initial Closing Date (including
the filing of any document incorporated by reference therein) and as of the
Initial Closing Date, to the accuracy of the statements of the Company made in
any certificates pursuant to the provisions hereof, to the performance by the
Company of its obligations hereunder and to the following additional conditions:
(a) No stop order suspending the effectiveness of the Registration
Statement, as amended from time to time, shall have been issued and no
proceedings for that purpose shall have been instituted or threatened by the
-24-
Commission; no order suspending the effectiveness of the Registration Statement
or the qualification or exemption from qualification of the Debentures or the
Conversion Shares under the securities or "Blue Sky" laws of any jurisdiction
shall be in effect and no proceeding for such purpose shall be pending before or
threatened or contemplated by the authorities of any such jurisdiction; any
request for additional information on the part of the staff of the Commission or
such authorities shall have been complied with to the satisfaction of the staff
of the Commission or such authorities; after the date hereof no amendment or
supplement to the Registration Statement, any Preliminary Final Prospectus or
the Final Prospectus shall have been prepared unless a copy thereof was first
submitted to the Representatives and the Representatives shall not have objected
thereto in good faith.
(b) Since the respective dates as of which information is given in
the Registration Statement and the Final Prospectus, except as may otherwise be
stated therein (or in any amendment or supplement thereto), (i) there shall not
have been any 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 from transactions in
the ordinary course of business, and (ii) neither the Company nor any of its
subsidiaries shall have sustained any material loss or interference with its
business or properties from fire, explosion, flood or other casualty, whether or
not covered by insurance, or from any labor dispute or any court or legislative
or other governmental action, order or decree, if in the judgment of the
Representatives any such development makes it impracticable or inadvisable to
consummate the sale and delivery of the Debentures by the Underwriters.
(c) (i) The Company shall have furnished to the Underwriters the
opinion of Xxxxxxxx & Worcester LLP, counsel for the Company, dated the Initial
Closing Date, which opinion shall be in such form as shall be satisfactory to
the Representatives; and (ii) the Company shall have furnished to the
Underwriters the opinion of Sherin & Lodgen, counsel for the Company, dated the
Initial Closing Date, which opinion shall be in such form as shall be
satisfactory to the Representatives. With respect to matters governed by
Maryland law, Xxxxxxxx & Worcester LLP may rely on an opinion, dated as of the
Initial Closing Date, of Piper & Marbury, LLP.
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(d) The Underwriters shall have received the opinion, dated the
related Closing Date, of Stroock & Stroock & Xxxxx, counsel for the
Underwriters, in form and substance reasonably satisfactory to the
Representatives. With respect to matters governed by Maryland law, such counsel
may rely upon an opinion, dated as of the Initial Closing Date, of Piper &
Marbury, LLP.
(e) On the date hereof, the Underwriters shall have received from
the Accountants a "comfort" letter, dated the date of this Agreement, in form
and substance reasonably satisfactory to the Representatives and counsel to the
Underwriters with respect to the financial statements and certain financial
information of the Company and its subsidiaries contained in the Registration
Statement and the Final Prospectus (including the Incorporated Documents), (i)
confirming that they are independent accountants with respect to the Company and
its subsidiaries within the meaning of the Securities Act and the Securities Act
Rules and Regulations, and (ii) stating their conclusions and findings with
respect to specified financial and statistical and numerical information
contained in the Registration Statement and the Final Prospectus. At the Initial
Closing Date and, as to the Option Debentures, each Option Closing Date, the
Accountants shall have furnished to the Underwriters a letter, dated the date of
its delivery, which shall reaffirm such conclusions and findings as of the
related Closing Date on the basis of a review conducted in accordance with the
procedures set forth therein.
(f) At the Initial Closing Date and on each Option Closing Date
the Underwriters shall receive a certificate, dated the date of delivery,
executed on its behalf by the Company's President and Chief Financial Officer,
in form and substance satisfactory to the Representatives, to the effect set
forth in Section 8(b) hereof and to the effect that:
(g) Each of the representations and warranties of the Company
contained in this Agreement were, when originally made, and are, at the time
such certificate is delivered, true and correct;
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(h) Each of the covenants required herein to be performed by the
Company on or prior to the date of such certificate has been duly, timely and
fully performed and each condition herein required to be complied with by the
Company on or prior to the delivery of such certificate has been duly, timely
and fully complied with; and
(i) No stop order has been issued, no proceedings for that purpose
have been instituted or threatened, and no order suspending the effectiveness of
the Registration Statement or the qualification or exemption from qualification
of the Debentures or the Conversion Shares under the securities or "Blue Sky"
laws of any jurisdiction shall be in effect and no proceeding for such purpose
shall be pending before or threatened by the authorities of any such
jurisdiction.
(j) The Debentures and Conversion Shares shall have been accepted
for listing on the NYSE, subject only to notice of issuance.
(k) The Company and the Trustee, shall have entered into the
Indenture and the Representatives shall have received a fully executed original
copy thereof.
(l) The Firm Debentures and the Option Debentures, as the case may
be, shall have been made available for inspection and shall have been delivered
to the Representatives or for the accounts of the Underwriters as set forth
herein.
(m) The Underwriters and counsel for the Underwriters shall have
received such further certificates, documents or other information as they may
have reasonably requested from the Company.
(n) The offering and sale by the Company of the International
Debentures contemplated by that certain subscription agreement of even date
herewith by and between the Company and the several managers named therein, for
whom NatWest and Xxxxxxx Xxxxx International are acting as lead managers, shall
close concurrently with the closing contemplated hereunder.
All opinions, certificates, letters and documents delivered pursuant to
this Agreement will comply with the provisions hereof only if they are
reasonably satisfactory in all material respects to the Representatives and
counsel to the Underwriters. The Company shall furnish to the Underwriters such
conformed copies of such opinions, certificates, letters and documents in such
quantities as the Underwriters and counsel for the Underwriters shall reasonably
request.
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The several obligations of the Underwriters to purchase the Option
Debentures hereunder are subject to the satisfaction on and as of any Option
Closing Date of the conditions set forth in this Section 8, except that, if any
Option Closing Date is other than the Closing Date, the certificates, opinions
and letters referred to herein shall be dated the Option Closing Date in
question and the opinions called for by paragraphs (c) and (d) shall be revised
to reflect the sale of the Option Debentures.
9. Indemnification and Contribution.
(a) The Company will indemnify and hold harmless each Underwriter,
the directors, officers, employees and agents of each Underwriter and each
person, if any, who controls each Underwriter within the meaning of Section 15
of the Securities Act or Section 20 of the Exchange Act, from the against any
and all losses, claims, liabilities, expenses and damages (including any and all
investigative, legal and other expenses reasonably incurred in connection with,
and any amount paid in settlement of, any action, suit or proceeding or any
claim asserted), joint or several, to which they, or any of them, may become
subject insofar as such losses, claims, liabilities, expenses or damages arise
out of or are based on (i) any breach of a representation or warranty made by
the Company in Section 4 of this Agreement, (ii) any untrue statement or alleged
untrue statement of a material fact contained in any Preliminary Final
Prospectus or in the Registration Statement or the Final Prospectus or in any
amendment or supplement thereto, or in any application or other document, any
amendment or supplement thereto, executed by the Company or based upon written
information furnished by or on behalf of the Company filed in any jurisdiction
in order to qualify the Debentures or Conversion Shares under the securities or
"Blue Sky" laws thereof (each, an "Application"), or (iii) any omission or
alleged omission to state in any Preliminary Final Prospectus or the
Registration Statement or the Final Prospectus or any amendment or supplement
thereto, or any Application a material fact required to be stated therein or
necessary in order to make the statements therein not misleading and shall
reimburse to each Underwriter and each such controlling person, as incurred, any
legal and other expenses incurred in investigating or defending or preparing to
defend against or appearing as a third party witness in connection with any such
loss, claim, damage, liability or action; provided, however, that (i) the
Company shall not be liable to any Underwriter in any such case to the extent
that any such loss, claim, liability, expense or damage arises out of, or is
based upon, any untrue statement or alleged untrue statement or omission or
alleged omission made in the Preliminary Final Prospectus or the Final
Prospectus, including any amendment or supplement thereto, in reliance upon and
in conformity with information furnished to the Company by or on behalf of such
Underwriter specifically for inclusion therein, and (ii) such indemnity with
respect to the Basic Prospectus or any Preliminary Final Prospectus shall not
inure to the benefit of any Underwriter (or any person controlling such
Underwriter) from whom the person asserting any such loss, claim, liability,
expense or damage purchased the Debentures which are the subject thereof if such
person did not receive a copy of the Final Prospectus (or the Final Prospectus
as amended or supplemented) excluding documents incorporated therein by
reference at or prior to the confirmation of the sale of such Debentures to such
person in any case where such delivery is required by the Securities Act and the
untrue statement or omission of a material fact contained in the Basic
Prospectus or any Preliminary Final Prospectus was corrected in the Final
Prospectus (or the Final Prospectus as amended or supplemented), unless such
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failure was the result of noncompliance by the Company with Section 5(d) hereof.
This indemnity agreement will be in addition to any liability that the Company
might otherwise have.
(b) Each Underwriter, severally and not jointly, agrees to
indemnify and hold harmless the Company, each of its trustees, each of its
officers and each person, if any, who controls the Company within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act against any
losses, claims, damages or liabilities, joint or several, to the same extent as
the foregoing indemnity from the Company to each Underwriter, but only insofar
as such losses, claims, liabilities, expenses or damages are based solely on any
untrue statement or alleged untrue statement or omission or alleged omission
made in the Preliminary Final Prospectus or the Final Prospectus, including any
amendment or supplement thereto, made in reliance upon and in conformity with
information furnished to the Company by or on behalf of such Underwriter through
the Representatives specifically for inclusion therein. This indemnity shall be
in addition to any liability which such Underwriter may otherwise have. The
Company acknowledges that for all purposes of this Agreement the statements set
forth (i) in the last paragraph of the cover page, (ii) in the stabilization
legend on the inside front cover page, and (iii) in the first, third, sixth and
seventh paragraphs under the heading "Underwriting" in any Preliminary Final
Prospectus or the Final Prospectus constitute the only information furnished in
writing by or on behalf of the several Underwriters for inclusion in the
documents referred to in the foregoing indemnity, and the Underwriters confirm
that such statements are correct.
(c) Any party that proposes to assert the right to be indemnified
under this Section 9 will, promptly after receipt of notice of commencement of
any action against such party in respect of which a claim is to be made against
an indemnifying party or parties under this Section 9, notify each such
indemnifying party of the commencement of such action, enclosing a copy of all
papers served, but the omission so to notify such indemnifying party will not
relieve it from any liability that it may have to any indemnified party under
the foregoing provisions of this Section 9 unless, and only to the extent that,
such omission results in the forfeiture of substantive rights or defenses by the
indemnifying party. If any such action is brought against any indemnified party
and it notifies the indemnifying party of its commencement, the indemnifying
party will be entitled to participate in and, to the extent that it so elects by
delivering written notice to the indemnified party promptly after receiving
notice of the commencement of the action from the indemnified party, jointly
with any other indemnifying party similarly notified, to assume the defense of
any such action, with counsel satisfactory to the indemnified party. After
receipt of such notice by the indemnified party from an indemnifying party, no
indemnifying party will be liable to the indemnified party for any legal or
other expenses except as provided below and except for the reasonable costs of
investigation subsequently incurred by the indemnified party in connection with
the defense of such action.
The indemnified party will have the right to employ its own counsel in
any such action, but the fees, expenses and other charges of such counsel will
be at the expense of such indemnified party unless (i) the employment of such
counsel by the indemnified party has been authorized in writing by the
indemnifying party, (ii) the indemnified party has reasonably concluded (based
on advice of counsel) that there may be legal defenses available to it or other
indemnified parties that are different from or in addition to those available to
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the indemnifying party, (iii) a conflict or potential conflict exists (based on
advice of counsel to the indemnified party) between the indemnified party and
the indemnifying party (in which case the indemnifying party will not have the
right to direct the defense of such action on behalf of the indemnified party),
or (iv) the indemnifying party has not in fact employed counsel to assume the
defense of such action within a reasonable time after receiving notice of the
commencement of the action. In any such case, the reasonable fees, disbursements
and other charges of counsel will be at the expense of the indemnifying party or
parties.
It is understood that in no event shall the indemnifying parties be
liable for the fees, disbursements and other charges of more than one counsel
(in addition to any local 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. All
such fees, disbursements and other charges will be reimbursed by the
indemnifying party promptly as they are incurred and upon receipt of
substantiation of such charges as the indemnifying party may reasonably request.
The Company will not, without the prior written consent of each
Underwriter, settle or compromise or consent to the entry of any judgment in any
pending or threatened claim, action, suit or proceeding in respect of which
indemnification may be sought hereunder (whether or not such Underwriter or any
person who controls such Underwriter within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act is a party to each claim,
action, suit or proceeding), unless such settlement, compromise or consent
includes an unconditional release of each Underwriter and each such controlling
person from all liability arising out of such claim, action, suit or proceeding.
The Company shall not be liable for any settlement of any such action, suit or
proceeding effected without its written consent, but if settled with the written
consent of the Company or if there shall be a final judgment for the plaintiff
in any such action, suit or proceeding, the Company agrees to indemnify and hold
harmless any Underwriter and any such controlling person to the extent set forth
in this Section 9 from and against any loss, claim, damage, liability or expense
by reason of such settlement or judgement. Notwithstanding the immediately
preceding sentence, if in any case where the fees and expenses of counsel are at
the expense of the indemnifying party and an indemnified party shall have
requested the indemnifying party to reimburse the indemnified party for such
fees and expenses of counsel as incurred, such indemnifying party agrees that it
shall be liable for any settlement of any action effected without its written
consent if (i) such settlement is entered into more than ten business days after
the receipt by such indemnifying party of the aforesaid request and (ii) such
indemnifying party shall have failed to reimburse the indemnified party in
accordance with such request for reimbursement prior to the date of such
settlement.
(d) In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in the foregoing
paragraphs of this Section 9 is applicable in accordance with its terms but for
any reason is held to be unavailable from the Company or the Underwriters, the
Company and the Underwriters will contribute to the total losses, claims,
liabilities, expenses and damages (including any investigative, legal, and other
expenses reasonably incurred in connection with, any amount paid in settlement
of, any action, suit or proceeding or any claim asserted, but after deducting
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any contribution received by the Company from persons other than the
Underwriters, such as persons who control the Company within the meaning of the
Securities Act or the Exchange Act, officers and directors of the Company, who
also may be liable for contribution) to which the Company and any one or more of
the Underwriters may be subject in such proportion as shall be appropriate to
reflect the relative benefits received by the Company, on the one hand, and the
Underwriters on the other. The relative benefits received by the Company, on the
one hand, and the Underwriters on the other shall be deemed to be in the same
proportion as the total net proceeds from the Offering (before deducting
expenses) received by the Company bears to the total underwriting discounts and
commissions received by the Underwriters, in each case as set forth in Section 1
hereof. If, but only if, the allocation provided by the foregoing sentences is
not permitted by applicable law, the allocation of contribution shall be made in
such proportion as is appropriate to reflect not only the relative benefits
referred to in the foregoing sentence but also the relative fault of the
Company, on the one hand, and the Underwriters, on the other, with respect to
the statements or omissions which resulted in such loss, claim, liability,
expense or damage, or action in respect thereof, as well as any other relevant
equitable considerations with respect to such Offering. Such relative fault
shall be determined by reference to whether the untrue or alleged untrue
statement of a material fact or omission or alleged omission to state a material
fact relates to information supplied by the Company or the Representatives on
behalf of the Underwriters, the intent of the parties and their relative
knowledge, access to information and opportunity to correct or prevent such
statement or omission.
The Company and the Underwriters agree that it would not be just and
equitable if contributions pursuant to this Section 9(d) were to be determined
by pro rata allocation (even if the Underwriters were treated as one entity for
such purpose) or by any other method of allocation which does not take into
account the equitable considerations referred to herein. The amount paid or
payable by an indemnified party as a result of the loss, claim, liability,
expense or damage, or action in respect thereof, referred to above in this
Section 9(d) shall be deemed to include, for purposes of this Section 9(d), any
legal or other expenses reasonably incurred by such indemnified parry in
connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 9(d), (i) no Underwriter
shall be required to contribute, cumulatively, any amount in excess of the
underwriting discounts and commissions received by it less any amounts paid by
such Underwriter and (ii) no person found guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) will be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations to contribute as provided in
this Section 9(d) are several in proportion to their respective subscription
obligations and not joint. For purposes of this Section 9(d), any person who
controls a party to this Agreement within the meaning of the Securities Act or
the Exchange Act will have the same rights to contribution as that party, and
each director or officer of the Company will have the same rights to
contribution as the Company, subject in each case to the provisions hereof. Any
party entitled to contribution, promptly after receipt of notice of commencement
of any action against such parry in respect of which a claim for contribution
may be made under this Section 9(d), will notify any such parry or parties from
whom contribution may be sought, but the omission so to notify will not relieve
the party or parties from whom contribution may be sought from any other
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obligation it or they may have under this Section 9(d). No party will be liable
for contribution with respect to any action or claim settled without its written
consent (which consent will not be unreasonably withheld).
Any party entitled to contribution will, promptly after receipt of
notice of commencement of any action, suit or proceeding against such party in
respect to which a claim for contribution may be made against another party or
parties under this Section 9(d), notify such party or parties from whom
contribution may be sought, but the omission so to notify such party or parties
shall not relieve the party or parties from whom contribution may be sought from
any other obligation (x) it or they may have hereunder or otherwise than under
this Section 9(d) or (y) to the extent that such party or parties were not
adversely affected by such omission. The contribution agreement set forth above
shall be in addition to any liabilities which any indemnifying party may
otherwise have.
10. Default by an Underwriter. If any one or more Underwriters shall
fail on the Initial Closing Date or, with respect to any Option Debentures, on
the Option Closing Date to purchase and pay for any of the Debentures agreed to
be purchased by such Underwriter or Underwriters hereunder and such failure to
purchase shall constitute a default in the performance of its or their
obligations under this Agreement, the remaining Underwriters shall be obligated
severally to take up and pay for (in the respective proportions which the amount
of Debentures set forth opposite their names in Schedule I hereto bear to the
aggregate amount of Debentures set forth opposite the names of all the remaining
Underwriters) the Debentures which the defaulting Underwriter or Underwriters
agreed but failed to purchase; provided, however, that in the event that the
aggregate amount of Debentures which the defaulting Underwriter or Underwriters
agreed but failed to purchase shall exceed 10% of the aggregate amount of
Debentures set forth in Schedule I hereto, the remaining Underwriters shall have
the right to purchase all, but shall not be under any obligation to purchase
any, of the Debentures, and if such non-defaulting Underwriters do not purchase
all the Debentures, this Agreement will terminate without liability to any
non-defaulting Underwriter or the Company. In the event of a default by any
Underwriter as set forth in this Section 10, the Initial Closing Date or, with
respect to any Option Debentures, the Option Closing Date, shall be postponed
for such period, not exceeding seven days, as the Representatives shall
determine in order that the required changes in the Registration Statement and
the Final Prospectus or in any other documents or arrangements may be effected.
Nothing contained in this Agreement shall relieve any defaulting Underwriter of
its liability, if any, to the Company and any non-defaulting Underwriter for
damages occasioned by its default hereunder.
11. Survival. The respective representations, warranties, agreements,
covenants, indemnities and other statements of the Company, its officers and the
several Underwriters set forth in this Agreement or made by or on behalf of
them, respectively, pursuant to this Agreement shall remain in fill force and
effect, regardless of (i) any investigation made by or on behalf of the Company,
any of its officers or directors, any Underwriters or any controlling person
referred to in Section 9 hereof and (ii) delivery of and payment for the
Debentures. The respective agreements, covenants, indemnities and other
statements set forth in Sections 5 and 9 hereof and this Section 11 shall remain
in full force and effect, regardless of any termination or cancellation of this
Agreement.
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12. Termination. The obligations of the Underwriters under this
Agreement may be terminated at any time prior to the Initial Closing Date or,
with respect to the Option Debentures, on or prior to the related Option Closing
Date, by notice to the Company from the Representatives, without liability on
the part of any Underwriter to the Company, if, prior to delivery and payment
for the Debentures, in the sole discretion of the Underwriters:
(i) the Company shall have failed, refused or been unable to
perform all obligations and satisfy all conditions on its part to be
performed or satisfied hereunder at or prior thereto;
(ii) trading in any equity securities of the Company shall
have been suspended by the Commission or by an exchange that lists the
Common Shares;
(iii) trading in securities generally on the NYSE, the
American Stock Exchange, the Nasdaq Stock Market, the Luxembourg Stock
Exchange or the International Stock Exchange of the United Kingdom and
the Republic of Ireland Limited shall have been suspended or limited or
minimum or maximum prices shall have been generally established on any
such exchange or market, or additional material governmental
restrictions, not in force on the date of this Agreement, shall have
been imposed upon trading in securities generally by any of such
exchanges or markets or by order of the Commission or any court or
other governmental authority;
(iv) a general banking moratorium shall have been declared by
United States federal, New York State, Commonwealth of Massachusetts,
Luxembourg or United Kingdom authorities; or
(v) any material adverse change in the financial or securities
markets in the United States, Luxembourg or the United Kingdom or any
outbreak or escalation of hostilities or declaration by the United
States, Luxembourg or the United Kingdom of a national emergency or war
or other calamity or crisis shall have occurred, the effect of any of
which is such as to make it, in the sole judgment of the
Representatives, impracticable or inadvisable to proceed with the
Offering or the delivery of the Debentures on the terms and in the
manner contemplated by the Final Prospectus.
Any termination pursuant to this Section 11 shall be without liability of any
party to any other party except as provided in sections 7 and 9.
13. Effective Date of Agreement. This Agreement shall become effective:
(i) upon the execution and delivery hereof by the parties hereto; or (ii) if, at
the time this Agreement is executed and delivered, it is necessary for a
post-effective amendment to the registration statement to be declared effective
before the offering of the Debentures may commence, when notification of the
effectiveness of such post-effective amendment has been released by the
Commission. Until such time as this Agreement shall have become effective, it
may be terminated by the Company, by notifying you, or by you, by notifying the
Company.
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14. Notices. All communications hereunder shall be in writing and, if
sent to the Representative shall be mailed or delivered or telecopied and
confirmed in writing to their address set forth on the first page hereof,
Attention: Xxxxxx Xxxx, and if sent to the Company, shall be mailed, delivered
or telecopied and confirmed in writing to the Company at 000 Xxxxxx Xxxxxx,
Xxxxxx, Xxxxxxxxxxxxx 00000, Attention: Chief Operating Officer.
15. Successors. This Agreement shall inure to the benefit of and shall
be binding upon the several Underwriters, the Company and their respective
successors and legal representatives, and nothing expressed or mentioned in this
Agreement is intended or shall be construed to give any other person any legal
or equitable right, remedy or claim under or in respect of this Agreement, or
any provisions herein contained, this Agreement and all conditions and
provisions hereof being intended to be and being for the sole and exclusive
benefit of such persons and for the benefit of no other person except that (i)
the indemnities of the Company contained in Section 9(a) of this Agreement shall
also be for the benefit of any person named therein and (ii) the indemnities of
the Underwriters contained in Section 9(b) of this Agreement shall also be for
the benefit of the persons named therein. No purchaser of Debentures shall be
deemed a successor because of such purchase. This Agreement shall not be
assignable by any party hereto without the prior written consent of the other
party.
16. APPLICABLE LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO
PRINCIPLES OF CONFLICTS OF LAWS.
17. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
18. Waiver of Jury Trial. The Company and the Underwriters each hereby
irrevocably waive any right they may have to a trial by jury in respect of any
claim based upon or arising out of this Agreement or the transactions
contemplated hereby.
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If the foregoing correctly sets forth the agreement among the Company
and the Underwriters, please indicate your acceptance in the space provided for
that purpose below.
Very truly yours,
HEALTH AND RETIREMENT PROPERTIES TRUST
By:
Name:
Title:
ACCEPTED:
NATWEST SECURITIES LIMITED
XXXXXXX XXXXX & CO.
by Natwest Securities Limited
For itself and on behalf of the several Underwriters
By:
Name: Xxxxxx Xxxx
Title: Director, Equity Capital Markets
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SCHEDULE I
Principal Amount
of Firm Debentures
Underwriters to be Purchased
------------ ------------------
Natwest Securities Limited $35,000,000
Xxxxxxx Xxxxx & Co. 35,000,000
-----------
Total $70,000,000
SCHEDULE II
Subsidiaries
1. Church Creek Corporation, a Massachusetts corporation.
2. Hub Properties Trust, a Maryland real estate investment trust.
3. Causeway Holdings, Inc., a Massachusetts corporation.
SCHEDULE III
Term Sheet
