ELDERTRUST
(a Maryland real estate investment trust)
1,210,000 Common Shares of Beneficial Interest
(Par Value $.01 Per Share)
INTERNATIONAL PURCHASE AGREEMENT
*, 1998
XXXXXXX XXXXX INTERNATIONAL
BT ALEX. XXXXX INTERNATIONAL
XXXXXXX SACHS INTERNATIONAL
as Lead Managers of the several
International Managers
c/o Merrill Xxxxx International
Xxxxxxxxx Xxxxx
Xxxxxxxxx Xxxxxx
Xxxxxx XX0X 0XX
Xxxxxxx
Ladies and Gentlemen:
ElderTrust, a Maryland real estate investment trust (the "Company") and
ElderTrust Operating Limited Partnership, a Delaware limited partnership (the
"Operating Partnership"), each confirms its agreement with Xxxxxxx Xxxxx
International ("Xxxxxxx Xxxxx"), BT Xxxx. Xxxxx International (ABT Alex. Xxxxx@)
and Xxxxxxx Xxxxx International (AGoldman Sachs@) and each of the other
international underwriters named in Schedule A hereto (collectively, the
"International Managers", which term shall also include any underwriter
substituted as hereinafter provided in Section 10 hereof), for whom Xxxxxxx
Xxxxx, XX Xxxx. Xxxxx and Xxxxxxx Xxxxx are acting as representatives (in such
capacity, the "Lead Managers"), with respect to the issue and sale by the
Company and the purchase by the International Managers, acting severally and not
jointly, of the respective numbers of common shares of beneficial interest, par
value $.01 per share, of the Company ("Common Shares") set forth in said
Schedule A, and with respect to the grant by the Company to the International
Managers, acting severally and not jointly, of the option described in Section
2(b) hereof to purchase all or any part of 181,500 additional Common Shares to
cover over-allotments, if any. The aforesaid 1,210,000 Common Shares (the
"Initial U.S. Securities") to be purchased by the International Managers and all
or any part of the 181,500 Common Shares subject to the option described in
Section 2(b) hereof (the "International Option Securities") are hereinafter
called, collectively, the "International Securities".
It is understood that the Company and the Operating Partnership are
concurrently entering into an agreement dated the date hereof (the "U.S.
Purchase Agreement") providing for the offering by the Company of an aggregate
of 4,840,000 Common Shares (the "Initial U.S. Securities") through arrangements
with certain underwriters inside the United States and Canada (the "U.S.
Underwriters") for which Xxxxxxx Xxxxx & Co., Xxxxxxx Lynch, Pierce, Xxxxxx &
Xxxxx Incorporated, BT Alex. Xxxxx Incorporated and Xxxxxxx, Sachs & Co., are
acting as representatives (the "U.S. Representatives") and the grant by the
Company to the International Managers, acting severally and not jointly, of an
option to purchase all or any part of the International Managers' pro rata
portion of up to 726,000 additional Common Shares solely to cover
overallotments, if any (the "International Option Securities" and, together with
the U.S. Option Securities, the "Option Securities"). The Initial U.S.
Securities and the U.S. Option Securities are hereinafter called the
"International Securities". It is understood that the Company is not obligated
to sell and the International Managers are not obligated to purchase, any
Initial International Securities unless all of the Initial U.S. Securities are
contemporaneously purchased by the U.S. Underwriters.
The U.S. Underwriters and the International Managers are hereinafter
collectively called the "Underwriters", the Initial U.S. Securities and the
Initial International Securities are hereinafter collectively called the
"Initial Securities", and the U.S. Securities and the International Securities
are hereinafter collectively called the "Securities".
The Underwriters will concurrently enter into an Intersyndicate
Agreement of even date herewith (the "Intersyndicate Agreement") providing for
the coordination of certain transactions among the Underwriters under the
direction of Xxxxxxx Xxxxx & Co., Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated (in such capacity, the "Global Coordinator").
The Company and the Operating Partnership each understands that the
International Managers propose to make a public offering of the International
Securities as soon as the Lead Managers deem advisable after this Agreement has
been executed and delivered.
The Company and the International Managers agree that up to 121,000
shares of the Initial International Securities to be purchased by the
International Managers and that up to 484,000 shares of the Initial U.S.
Securities to be purchased by the U.S. Underwriters (collectively, the "Reserved
Securities") shall be reserved for sale by the Underwriters to certain eligible
employees and persons having business relationships with the Company, as part of
the distribution of the Securities by the Underwriters, subject to the terms of
this Agreement, the applicable rules, regulations and interpretations of the
National Association of Securities Dealers, Inc. and all other applicable laws,
rules and regulations. To the extent that such Reserved Securities are not
orally confirmed for purchase by such eligible employees and persons having
business relationships with the Company by the end of the first business day
after the date of this Agreement, such Reserved Securities may be offered to the
public as part of the public offering contemplated hereby.
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The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-11 (No. 333-37451) covering the
registration of the Securities under the Securities Act of 1933, as amended (the
"1933 Act"), including the related preliminary prospectus or prospectuses.
Promptly after execution and delivery of this Agreement, the Company will either
(i) prepare and file a prospectus in accordance with the provisions of Rule 430A
("Rule 430A") of the rules and regulations of the Commission under the 1933 Act
(the "1933 Act Regulations") and paragraph (b) of Rule 424 ("Rule 424(b)") of
the 1933 Act Regulations or (ii) if the Company has elected to rely upon Rule
434 ("Rule 434") of the 1933 Act Regulations, prepare and file a term sheet (a
"Term Sheet") in accordance with the provisions of Rule 434 and Rule 424(b). Two
forms of prospectus are to be used in connection with the offering and sale of
the Securities: one relating to the U.S. Securities (the "Form of U.S.
Prospectus") and one relating to the International Securities (the "Form of
International Prospectus"). The Form of International Prospectus is identical to
the Form of U.S. Prospectus, except for the front cover and back cover pages and
the information under the caption "Underwriting". The information included in
any such prospectus or in any such Term Sheet, as the case may be, that was
omitted from such registration statement at the time it became effective but
that is deemed to be part of such registration statement at the time it became
effective (a) pursuant to paragraph (b) of Rule 430A is referred to as "Rule
430A Information" or (b) pursuant to paragraph (d) of Rule 434 is referred to as
"Rule 434 Information." Each Form of U.S. Prospectus and Form of International
Prospectus used before such registration statement became effective, and any
prospectus that omitted, as applicable, the Rule 430A Information or the Rule
434 Information, that was used after such effectiveness and prior to the
execution and delivery of this Agreement, is herein called a "preliminary
prospectus." Such registration statement, including the exhibits thereto and
schedules thereto at the time it became effective and including the Rule 430A
Information and the Rule 434 Information, as applicable, is herein called the
"Registration Statement." Any registration statement filed pursuant to Rule
462(b) of the 1933 Act Regulations is herein referred to as the "Rule 462(b)
Registration Statement," and after such filing the term "Registration Statement"
shall include the Rule 462(b) Registration Statement. The final Form of U.S.
Prospectus and the final Form of International Prospectus in the forms first
furnished to the Underwriters for use in connection with the offering of the
Securities are herein called the "U.S. Prospectus" and the "International
Prospectus," respectively, and collectively, the "Prospectuses." If Rule 434 is
relied on, the terms "U.S. Prospectus" and "International Prospectus" shall
refer to the preliminary U.S. Prospectus dated _____, 1998 and preliminary
International Prospectus dated ____, 1998, respectively, each together with the
applicable Term Sheet and all references in this Agreement to the date of such
Prospectuses shall mean the date of the applicable Term Sheet. For purposes of
this Agreement, all references to the Registration Statement, any preliminary
prospectus, the U.S. Prospectus, the International Prospectus or any Term Sheet
or any amendment or supplement to any of the foregoing shall be deemed to
include the copy filed with the Commission pursuant to its Electronic Data
Gathering, Analysis and Retrieval system ("XXXXX").
At or prior to Closing Time (as hereinafter defined), the Company will
complete a series of transactions (the "Formation Transactions") described in
the Prospectuses under the caption "Structure and Formation of the Company C
Formation of the Company."
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1. SECTION REPRESENTATIONS AND WARRANTIES.
(a) Representations and Warranties by the Company and the Operating
Partnership. The Company and the Operating Partnership each severally represents
and warrants to each Lead Manager as of each Date of Delivery (if any) referred
to in Section 2(b), hereof and agrees with each Lead Manager, as follows:
(i) COMPLIANCE WITH REGISTRATION REQUIREMENTS. The Company
meets the requirements for the use of Form S-11 under the 1933 Act.
Each of the Registration Statement and any Rule 462(b) Registration
Statement has become effective under the 1933 Act and no stop order
suspending the effectiveness of the Registration Statement or any Rule
462(b) Registration Statement has been issued under the 1933 Act and no
proceedings for that purpose have been instituted or are pending or, to
the knowledge of the Company, are contemplated by the Commission, and
any request on the part of the Commission for additional information
has been complied with.
At the respective times the Registration Statement, any Rule
462(b) Registration Statement and any post-effective amendments thereto
became effective and at the Closing Time (and, if any International
Option Securities are purchased, at the Date of Delivery), the
Registration Statement, the Rule 462(b) Registration Statement and any
amendments and supplements thereto complied and will comply in all
material respects with the requirements of the 1933 Act and the 1933
Act Regulations and did not and will not contain an untrue statement of
a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading, and
the Prospectuses, any preliminary prospectuses and any supplements
thereto or prospectus wrapper prepared in connection therewith, at
their respective times of issuance and at the Closing Time, complied
and will comply in all material respects with any applicable laws or
regulations of foreign jurisdictions in which the Prospectuses and such
preliminary prospectuses, as amended or supplemented, if applicable,
are distributed in connection with the offer and sale of Reserved
Securities. Neither of the Prospectuses nor any amendments or
supplements thereto (including any prospectus wrapper), at the time the
Prospectuses or any amendments or supplements thereto were issued and
at the Closing Time (and, if any International Option Securities are
purchased, at the Date of Delivery), included or will include an untrue
statement of a material fact or omitted or will omit to state a
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading.
If Rule 434 is used, the Company will comply with the requirements of
Rule 434 and the Prospectuses shall not be "materially different", as
such term is used in Rule 434, from the prospectuses included in the
Registration Statement at the time it became effective. The
representations and warranties in this subsection shall not apply to
statements in or omissions from the Registration Statement or the
International Prospectus made in reliance upon and in conformity with
information furnished to the Company in writing by any International
Manager through the Lead Managers expressly for use in the Registration
Statement or the International Prospectus.
Each preliminary prospectus and the prospectuses filed as part
of the Registration Statement as originally filed or as part of any
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amendment thereto, or filed pursuant to Rule 424 under the 1933 Act,
complied when so filed in all material respects with the 1933 Act
Regulations and each preliminary prospectus and the Prospectuses
delivered to the Underwriters for use in connection with this offering
was identical to the electronically transmitted copies thereof filed
with the Commission pursuant to XXXXX, except to the extent permitted
by Regulation S-T.
(ii) INDEPENDENT ACCOUNTANTS. The accountants who certified
the financial statements included in the Registration Statement are
independent public accountants as required by the 1933 Act and the 1933
Act Regulations.
(iii) FINANCIAL STATEMENTS. The historical balance sheet of
the Company included in the Registration Statement and the
Prospectuses, together with the related notes, presents fairly in
accordance with generally accepted accounting principles ("GAAP") the
financial position of the Company at the date indicated. The selected
historical financial data and the summary financial information
included in the Prospectuses present fairly the information shown
therein and have been compiled on a basis consistent with that of the
audited balance sheet included in the Registration Statement. The
unaudited pro forma balance sheet and statements of operations and the
related notes thereto included in the Registration Statement and the
Prospectuses present fairly the information shown therein, have been
prepared in accordance with the Commission's rules and guidelines with
respect to pro forma balance sheets and statements of operations
expenses and have been properly compiled on the bases described
therein, and the assumptions used in the preparation thereof are
reasonable and the adjustments used therein are appropriate to give
effect to the transactions and circumstances referred to therein.
(iv) NO MATERIAL ADVERSE CHANGE IN BUSINESS. Since the
respective dates as of which information is given in the Registration
Statement and the Prospectuses, except as otherwise stated therein, (A)
there has been no material adverse change in the condition, financial
or otherwise, or in the earnings, business affairs or business
prospects of the Company, the Operating Partnership, its Subsidiaries
(as defined below) and the Initial Investments (as defined in the
Registration Statement), considered as one enterprise, whether or not
arising in the ordinary course of business (a "Material Adverse
Effect"), (B) no material casualty loss or material condemnation or
other material adverse event with respect to any of the Initial
Properties has occurred, (C) there have been no transactions entered
into by the Company, the Operating Partnership or any of its
Subsidiaries, other than those in the ordinary course of business,
which are material with respect to the Company, the Operating
Partnership and its Subsidiaries considered as one enterprise except in
connection with the Formation Transactions, and (D) there has been no
dividend or distribution of any kind declared, paid or made by the
Company on any class of its capital stock or by the Operating
Partnership with respect to its partnership interests. As used in this
Agreement, the term "Subsidiary" as it relates to the Operating
Partnership includes ET Capital Corp. as well as any corporation,
limited or general partnership, joint venture or other entity through
which the Operating Partnership, upon completion of the Formation
Transactions, will own an interest, either directly or indirectly, in
an Initial Property.
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(v) GOOD STANDING OF THE COMPANY. The Company has been duly
formed and is validly existing as a real estate investment trust in
good standing under the laws of the State of Maryland and has full
trust power and trust authority to own, lease and operate its
properties and to conduct its business as described in the Prospectuses
and to enter into and perform its obligations under this Agreement and
the U.S. Purchase Agreement and the Transaction Documents (as
hereinafter defined) to which it is a party; and the Company is duly
qualified as a foreign corporation to transact business and is in good
standing in each other jurisdiction in which such qualification is
required, whether by reason of the ownership or leasing of property or
the conduct of business, except where the failure so to qualify or to
be in good standing would not result in a Material Adverse Effect.
(vi) GOOD STANDING OF OPERATING PARTNERSHIP AND ITS
SUBSIDIARIES. The Agreement of Limited Partnership of the Operating
Partnership (the "Partnership Agreement") has been duly and validly
authorized, executed and delivered by the parties thereto and is a
valid and binding agreement, enforceable in accordance with its terms,
except as such enforceability may be limited by bankruptcy, insolvency,
reorganization or other similar laws affecting creditors' rights
generally and by general principles of equity. The Operating
Partnership and each of its Subsidiaries has been duly formed and is
validly existing as a limited partnership or corporation, as the case
may be, in good standing under the laws of its state of organization
with partnership or corporate power and authority, as the case may be,
to own, lease and operate its properties, to conduct the business in
which it is engaged or proposes to engage as described in the
Prospectuses and to enter into and perform its obligations under this
Agreement and the U.S. Purchase Agreement, if applicable, and all other
Transaction Documents to which it is a party. The Operating Partnership
and each of its Subsidiaries is duly qualified or registered as a
foreign partnership or corporation, as the case may be, and is in good
standing in each jurisdiction in which such qualification or
registration is required, whether by reason of the ownership or leasing
of property or the conduct of business, except where the failure to so
qualify or register or to be in good standing would not result in a
Material Adverse Effect. All of the issued and outstanding capital
stock or partnership interests, as the case may be, of each such
Subsidiary which are described in the Prospectuses as being owned by
the Company or the Operating Partnership (directly or through
subsidiaries) upon completion of the Formation Transactions, will have
been duly authorized and, upon completion of the Formation
Transactions, will be validly issued, fully paid and (in the case of
corporations) non-assessable and owned by the Company or the Operating
Partnership (directly or through subsidiaries) as so described, free
and clear of any security interest, mortgage, pledge, lien,
encumbrance, claim or equity (except as described in the Prospectus).
None of the outstanding shares of capital stock of any Subsidiary was
issued in violation of the preemptive or similar rights of any
securityholder of such Subsidiary. As of the date hereof, ElderTrust
Realty Group, Inc. is the sole general partner of the Operating
Partnership and, immediately after the Closing Time referred to in
Section 2(c) hereof, the Company will be the sole general partner of
the Operating Partnership and will be the holder of _________ units of
partnership interest in the Operating Partnership ("Units"), or
approximately __% of the outstanding Units, if the over-allotment
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option is not exercised at Closing Time. To the extent any portion of
the over-allotment option is exercised at Closing Time, the relevant
numbers of Units and percentages set forth in this paragraph will be
deemed adjusted accordingly. Additionally, to the extent any portion of
the over-allotment option is exercised subsequent to Closing Time, the
Company will contribute the proceeds from the sale of the Option
Securities to the Operating Partnership in exchange for an equivalent
number of Units. Upon completion of the Formation Transactions, the
Operating Partnership will have no subsidiaries other than the entities
through which it will own interests in the Initial Properties or the
Initial Investments.
(vii) CAPITALIZATION. The authorized, issued and outstanding
shares of beneficial interest of the Company are as set forth in the
Prospectuses in the column entitled "Historical" under the caption
"Capitalization" (except for subsequent issuances, if any, pursuant to
this Agreement, pursuant to reservations, agreements or employee
benefit plans referred to in the Prospectuses, pursuant to the
Formation Transactions, pursuant to the redemption or exchange of Units
or pursuant to the exercise of convertible securities or options
referred to in the Prospectuses). The issued and outstanding shares of
beneficial interest of the Company have been duly authorized and
validly issued and are fully paid and non-assessable; none of the
outstanding shares of beneficial interest of the Company were issued in
violation of the preemptive or other similar rights of any
securityholder of the Company.
(viii) AUTHORIZATION OF AGREEMENT. This Agreement and the U.S.
Purchase Agreement have been duly authorized, executed and delivered by
the Company.
(ix) AUTHORIZATION AND DESCRIPTION OF SECURITIES. The
Securities to be purchased by the International Managers and the U.S.
Underwriters from the Company have been duly authorized for issuance
and sale to the International Managers pursuant to this Agreement and
the U.S. Underwriters pursuant to the U.S. Purchase Agreement,
respectively, and, when issued and delivered by the Company pursuant to
this Agreement and the U.S. Purchase Agreement, respectively, against
payment of the consideration set forth herein and the U.S. Purchase
Agreement, respectively, will be validly issued, fully paid and
non-assessable; the Common Shares conform to all statements relating
thereto contained in the Prospectuses and such description conforms to
the rights set forth in the instruments defining the same; no holder of
the Securities will be subject to personal liability by reason of being
such a holder; and the issuance of the Securities is not subject to the
preemptive or other similar rights of any securityholder of the
Company.
(x) AUTHORIZATION AND DESCRIPTION OF UNITS. The Units to be
issued in connection with the Formation Transactions, including,
without limitation, the Units to be issued to the Company, have been
duly authorized for issuance by the Operating Partnership to the
holders or prospective holders thereof, and at Closing Time will be
validly issued and fully paid. Immediately after Closing Time and not
including any Units issued in exchange for proceeds received by the
Company in connection with the sale of the Option Securities, ______
Units will be issued and outstanding. The Units have been and will be
offered and sold at or prior to Closing Time in compliance with all
applicable laws (including, without limitation, federal and state
7
securities laws) and the issuance and sale of such Units in the
Formation Transactions will be exempt from the registration
requirements of the 1933 Act pursuant to Section 4(2) thereof. The
terms of the Units conform to all statements and descriptions related
thereto contained in the Prospectuses.
(xi) ABSENCE OF DEFAULTS AND CONFLICTS. Upon completion of the
Formation Transactions, none of the Company, the Operating Partnership
or any of its Subsidiaries will be in violation of its declaration of
trust, charter, by-laws, partnership agreement, certificate of limited
partnership or other governing document, as the case may be, or in
default in the performance or observance of any obligation, agreement,
covenant or condition contained in any contract, indenture, mortgage,
deed of trust, loan or credit agreement, note, lease or other agreement
or instrument to which the Company, the Operating Partnership or any of
its Subsidiaries is a party or by which it or any of them may be bound,
or to which any of the Initial Properties or any other property or
assets of the Company, the Operating Partnership or any Subsidiary is
subject (collectively, the "Agreements and Instruments") except for
such defaults that would not result in a Material Adverse Effect; and
the execution, delivery and performance of this Agreement and the U.S.
Purchase Agreement and the consummation of the transactions
contemplated in this Agreement, the U.S. Purchase Agreement and in the
Registration Statement (including the issuance and sale of the
Securities, the consummation of the Formation Transactions, and the use
of the proceeds from the sale of the Securities as described in the
Prospectuses under the caption "Use of Proceeds") and compliance by
each of the Company and the Operating Partnership with its obligations
under this Agreement and the U.S. Purchase Agreement have been duly
authorized by all necessary corporate or partnership action, as the
case may be, and do not and will not, whether with or without the
giving of notice or passage of time or both, conflict with or
constitute a breach of, or default or Repayment Event (as defined
below) under, or result in the creation or imposition of any lien,
charge or encumbrance upon any of the Initial Properties or any other
property or assets of the Company, the Operating Partnership or any
Subsidiary pursuant to, the Agreements and Instruments (except for such
conflicts, breaches or defaults or liens, charges or encumbrances that
would not result in a Material Adverse Effect), nor will such action
result in any violation of the provisions of the declaration of trust,
charter, by-laws, partnership agreement, certificate of limited
partnership or other governing document, as the case may be, of the
Company, the Operating Partnership or any Subsidiary or any applicable
law, statute, rule, regulation, judgment, order, writ or decree of any
government, government instrumentality or court, domestic or foreign,
having jurisdiction over the Company, the Operating Partnership or any
subsidiary or any of their assets, properties or operations. As used
herein, a "Repayment Event" means any event or condition which gives
the holder of any note, debenture or other evidence of indebtedness (or
any person acting on such holder's behalf) the right to require the
repurchase, redemption or repayment of all or a portion of such
indebtedness by the Company, the Operating Partnership or any
Subsidiary.
(xii) TRANSACTION DOCUMENTS. Each of the documents relating to
the Formation Transactions (the "Transaction Documents") to which the
Company, the Operating Partnership or any of its Subsidiaries or any
person or entity contributing interests in an Initial Property or
Subsidiary to the Company or the Operating Partnership in the Formation
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Transactions (each such person or entity, an "Original Owner") has been
duly authorized, executed and delivered by such party and constitutes
the binding agreement of such party, enforceable against such party in
accordance with its terms, except as such enforceability may be limited
by bankruptcy, insolvency, reorganization or other similar laws
affecting creditors' rights generally and by general principles of
equity.
(xiii) REIT QUALIFICATION. Commencing with the Company's
taxable year ending December 31, 1998, the Company will be organized in
conformity with the requirements for qualification as a real estate
investment trust under the Internal Revenue Code of 1986, as amended
(the "Code"), and its proposed method of operation will enable it to
meet the requirements for taxation as a real estate investment trust
under the Code.
(xiv) ABSENCE OF LABOR DISPUTE. No labor dispute with the
employees of the Company, the Operating Partnership or any Subsidiary
exists or, to the knowledge of the Company or the Operating
Partnership, is imminent, which, may reasonably be expected to result
in a Material Adverse Effect.
(xv) ABSENCE OF PROCEEDINGS. There is no action, suit,
proceeding, inquiry or investigation before or brought by any court or
governmental agency or body, domestic or foreign, now pending, or, to
the knowledge of the Company or the Operating Partnership, threatened,
against or affecting the Company, the Operating Partnership or any
Subsidiary or any of the Initial Properties, which is required to be
disclosed in the Registration Statement (other than as disclosed
therein), or which might reasonably be expected to result in a Material
Adverse Effect, or which might reasonably be expected to materially and
adversely affect the consummation of the transactions contemplated in
this Agreement and the U.S. Purchase Agreement or the performance by
the Company of its obligations hereunder or thereunder or the
consummation of the Formation Transactions; the aggregate of all
pending legal or governmental proceedings to which the Company, the
Operating Partnership or any Subsidiary is a party or of which any of
their respective property or assets is the subject which are not
described in the Registration Statement, including ordinary routine
litigation incidental to the business, could not reasonably be expected
to result in a Material Adverse Effect.
(xvi) ACCURACY OF EXHIBITS. There are no contracts or
documents which are required to be described in the Registration
Statement or the Prospectuses or to be filed as exhibits thereto which
have not been so described and filed as required.
(xvii) POSSESSION OF INTELLECTUAL PROPERTY. The Company, the
Operating Partnership and its Subsidiaries own or possess, or can
acquire on reasonable terms, adequate trademarks, service marks and
trade names necessary to conduct their business as described in the
Registration Statement, and none of the Company, the Operating
Partnership or its Subsidiaries has received any notice of infringement
of or conflict with asserted rights of others with respect to any
trademarks, service marks or trade names which, singly or in the
aggregate, if the subject of an unfavorable decision, ruling or
finding, would result in a Material Adverse Effect.
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(xviii) ABSENCE OF FURTHER REQUIREMENTS. No filing with, or
authorization, approval, consent, license, order, registration,
qualification or decree of, any court or governmental authority or
agency is necessary or required for the performance by either the
Company or the Operating Partnership of its obligations hereunder, in
connection with the offering, issuance or sale of the Securities under
this Agreement and the U.S. Purchase Agreement or the consummation of
the transactions contemplated by this Agreement and the U.S. Purchase
Agreement, except (i) such as have been already obtained or as may be
required under the 1933 Act or the 1933 Act Regulations or state
securities or blue sky laws and (ii) such as have been obtained under
the laws and regulations of jurisdictions outside the United States in
which the Reserved Securities are offered.
(xix) POSSESSION OF LICENSES AND PERMITS. Upon completion of
the formation Transactions, each of the Company, the Operating
Partnership and its Subsidiaries possess such permits, licenses,
approvals, consents and other authorizations, if any (collectively,
"Governmental Licenses") issued by the appropriate federal, state,
local or foreign regulatory agencies or bodies necessary to conduct the
business to be conducted by it, except where the failure to possess any
such Governmental License would not have a Material Adverse Effect; the
Company, the Operating Partnership and its Subsidiaries will be in
compliance with the terms and conditions of all such Governmental
Licenses, except where the failure so to comply would not, singly or in
the aggregate, have a Material Adverse Effect; all of the Governmental
Licenses will be valid and in full force and effect, except when the
invalidity of such Governmental Licenses or the failure of such
Governmental Licenses to be in full force and effect would not have a
Material Adverse Effect; and neither the Company nor the Operating
Partnership nor any of its Subsidiaries will have received any notice
of proceedings relating to the revocation or modification of any such
Governmental Licenses which, singly or in the aggregate, if the subject
of an unfavorable decision, ruling or finding, would result in a
Material Adverse Effect.
(xx) TITLE TO, DESCRIPTION OF AND COMPLIANCE OF PROPERTIES.
(a) Upon completion of the Formation Transactions, the Operating
Partnership or a Subsidiary thereof will hold good and marketable title
to all items of real property described in the Prospectuses as being
owned by such entity, in each case free and clear of all liens,
encumbrances, claims, security interests and defects, other than those
referred to in the Prospectuses or which are not material in amount;
(b) all liens, charges, encumbrances, claims, or restrictions on or
affecting the Properties or other assets of the Company, the Operating
Partnership or any Subsidiary thereof which are required to be
disclosed in the Prospectuses are disclosed therein; (c) none of the
Company, the Operating Partnership or any of its Subsidiaries, or, to
the best of the knowledge of the Company and the Operating Partnership,
any lessee under a lease relating to any of the Initial Properties, is
in default under any of the leases relating to the Initial Properties
and neither the Company nor the Operating Partnership knows of any
event which, but for the passage of time or the giving of notice, or
both, would constitute a default under any of such leases, except such
defaults that would not result in a Material Adverse Effect; (d) each
of the Initial Properties is in compliance with all applicable codes
and zoning laws and regulations, except for such failures to comply
which would not individually or in the aggregate result in a Material
Adverse Effect; and (e) neither the Company nor the Operating
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Partnership has knowledge of any pending or threatened condemnation,
zoning change, or other proceeding or action that will in any manner
affect adversely the size of, use of, improvements on, construction on,
or access to the Initial Properties, except such proceedings or actions
that would not result in a Material Adverse Effect.
(xxi) MORTGAGES ON INITIAL PROPERTIES. Except as otherwise
described in the Prospectuses, immediately following the application of
the proceeds of the Offering in the manner set forth in the
Prospectuses, the mortgages and deeds of trust encumbering the Initial
Properties and assets described in the Prospectuses will not be
convertible into an equity ownership interest and neither the Company,
the Operating Partnership, any of its Subsidiaries, any Original Owner
nor any person related to or affiliated with the Company, the Operating
Partnership, any of its Subsidiaries, or any Original Owner will hold a
participating interest therein and said mortgages and deeds of trust
will not be cross-defaulted or cross-collateralized with any property
not owned by the Company, the Operating Partnership or any of its
Subsidiaries.
(xxii) TITLE INSURANCE. Except as otherwise described in the
Prospectuses, upon completion of the Formation Transactions, the
Operating Partnership or a subsidiary thereof will have title insurance
on all properties and assets described in the Prospectuses as owned by
the Operating Partnership or a Subsidiary thereof, as the case may be,
in an amount at least equal to the greater of (a) the cost of
acquisition of such property or assets and (b) the cost of construction
of the improvements located on such properties.
(xxiii) INVESTMENT COMPANY ACT. Neither the Company, the
Operating Partnership nor any of its subsidiaries is, and upon the
issuance and sale of the Securities as herein contemplated and the
application of the net proceeds therefrom as described in the
Prospectuses will be, an "investment company" or an entity "controlled"
by an "investment company" as such terms are defined in the Investment
Company Act of 1940, as amended (the "1940 Act").
(xxiv) ENVIRONMENTAL LAWS. Except as disclosed in the Phase I
environmental reports and associated materials previously delivered to
the International Managers or their counsel, each of the Company and
the Operating Partnership has no knowledge of (a) the unlawful presence
of any substance, material or waste which is regulated by any federal,
state or local governmental or quasi-governmental authority, including,
without limitation, (i) any substance, material or waste defined, used
or listed as a "hazardous waste", "extremely hazardous waste",
"restricted hazardous waste", "hazardous substance", "hazardous
material", "toxic substance" or other similar terms as defined or used
in any Environmental Law (as defined below) (collectively, "Hazardous
Materials"), (ii) any petroleum products, asbestos, polychlorinated
biphenyls, lead-based paint, flammable explosives or radioactive
materials, and (iii) any additional substances or material which are
now hazardous or toxic substances under any Environmental Law relating
to the Properties or of (b) any spill, release, discharge or disposal
of Hazardous Material that have occurred or are presently occurring at,
from or onto any of the Properties or any other property in which the
Operating Partnership or any of its Subsidiaries will have an ownership
interest upon completion of the Formation Transactions or any
11
properties near or adjacent to the Properties, which presence or
occurrence would result in a Material Adverse Effect. In connection
with the construction on or operation and use of the Initial Properties
or any other property in which the Operating Partnership or any of its
Subsidiaries will have an ownership interest upon completion of the
Formation Transactions, the Company and the Operating Partnership
represent that, except as disclosed in the Phase I environmental
reports and associated materials previously delivered to the
International Managers or their counsel, as of the date of this
Agreement, (a) each of the Company and the Operating Partnership has no
knowledge of any material failure to comply with any federal, state,
local or foreign statute, law, rule, regulation, ordinance, code,
policy or rule of common law or any judicial or administrative
interpretation thereof, including any judicial or administrative order,
consent, decree or judgment, relating to pollution or protection of
human health, the environment (including, without limitation, ambient
air, surface water, groundwater, land surface or subsurface strata) or
wildlife, including, without limitation, laws and regulations relating
to the release or threatened release of Hazardous Materials or to the
manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling of Hazardous Materials (collectively,
"Environmental Laws") that would result in a Material Adverse Effect;
(b) the Company, the Operating Partnership and its Subsidiaries have
all permits, authorizations and approvals required under any applicable
Environmental Laws and are each in compliance with their requirements;
(c) there are no pending or threatened administrative, regulatory or
judicial actions, suits, demands, demand letters, claims, liens,
notices of noncompliance or violation, investigation or proceedings
relating to any Environmental Law against the Company, the Operating
Partnership or any of its Subsidiaries; and (d) there are no events or
circumstances that might reasonably be expected to form the basis of an
order for clean-up or remediation, or an action, suit or proceeding by
any private party or governmental body or agency, against or affecting
the Company, the Operating Partnership or any of its Subsidiaries
relating to Hazardous Materials or any Environmental Laws.
(xxv) REGISTRATION RIGHTS. Except as set forth in the
Prospectuses under "Shares Available for Future Sale C Registration
Rights," there are no persons with registration rights or other similar
rights to have any securities registered pursuant to the Registration
Statement or otherwise registered by the Company under the 1933 Act.
(xxvi) OPTION PROPERTIES. At Closing Time, the agreements
pursuant to which the Operating Partnership will have the option and/or
right of first refusal to purchase certain properties (or interests
therein) listed on Schedule D annexed hereto that are not being
acquired by the Operating Partnership pursuant to the Formation
Transactions, will have been duly and validly authorized, executed and
delivered by the parties thereto and will be valid and binding
agreements, enforceable in accordance with their terms, subject as to
enforceability to applicable bankruptcy, insolvency, reorganization and
other similar laws affecting creditors' rights generally and to general
equitable principles.
(b) Officer's Certificates. Any certificate signed by any officer of
the Company or any of its subsidiaries delivered to the Global Coordinator, the
Lead Managers or to counsel for the International Managers shall be deemed a
12
representation and warranty by the Company to each International Manager as to
the matters covered thereby.
SECTION 2. SALE AND DELIVERY TO INTERNATIONAL MANAGERS; CLOSING.
(a) Initial Securities. On the basis of the representations and
warranties herein contained and subject to the terms and conditions herein set
forth, the Company agrees to sell to each International Manager, severally and
not jointly, and each International Manager, severally and not jointly, agrees
to purchase from the Company, at the price per share set forth in Schedule B,
the number of Initial International Securities set forth in Schedule A opposite
the name of such International Manager Underwriter, plus any additional number
of Initial International Securities which such Underwriter may become obligated
to purchase pursuant to the provisions of Section 10 hereof.
(b) Option Securities. In addition, on the basis of the representations
and warranties herein contained and subject to the terms and conditions herein
set forth, the Company hereby grants an option to the International Managers,
severally and not jointly, to purchase up to an additional 181,500 shares of
Common Shares at the price per share set forth in Schedule B, less an amount per
share equal to any dividends or distributions declared by the Company and
payable on the Initial International Securities but not payable on the
International Option Securities. The option hereby granted will expire 30 days
after the date hereof and may be exercised in whole or in part from time to time
only for the purpose of covering over-allotments which may be made in connection
with the offering and distribution of the Initial International Securities upon
notice by the Global Coordinator to the Company setting forth the number of
International Option Securities as to which the several International Managers
are then exercising the option and the time and date of payment and delivery for
such International Option Securities. Any such time and date of delivery for the
International Option Securities (a "Date of Delivery") shall be determined by
the Global Coordinator, but shall not be later than seven full business days
after the exercise of said option, nor in any event prior to the Closing Time,
as hereinafter defined. If the option is exercised as to all or any portion of
the International Option Securities, each of the International Managers, acting
severally and not jointly, will purchase that proportion of the total number of
International Option Securities then being purchased which the number of Initial
International Securities set forth in Schedule A opposite the name of such
International Managers bears to the total number of Initial International
Securities, subject in each case to such adjustments as the Global Coordinator
in its discretion shall make to eliminate any sales or purchases of fractional
shares.
(c) Payment. Payment of the purchase price for, and delivery of
certificates for, the Initial Securities shall be made at the offices of Xxxxx &
Xxxxxxx L.L.P., 000 00xx Xxxxxx, X.X., Xxxxxxxxxx, X.X., or at such other place
as shall be agreed upon by the Global Coordinator and the Company, at 9:00 A.M.
(Eastern time) on the third (fourth, if the pricing occurs after 4:30 P.M.
(Eastern time) on any given day) business day after the date hereof (unless
postponed in accordance with the provisions of Section 10), or such other time
not later than ten business days after such date as shall be agreed upon by the
Global Coordinator and the Company (such time and date of payment and delivery
being herein called "Closing Time").
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In addition, in the event that any or all of the International Option
Securities are purchased by the International Managers, payment of the purchase
price for, and delivery of certificates for, such International Option
Securities shall be made at the above-mentioned offices, or at such other place
as shall be agreed upon by the Global Coordinator and the Company, on each Date
of Delivery as specified in the notice from the Global Coordinator to the
Company.
Payment shall be made to the Company by wire transfer of immediately
available funds to a bank account designated by the Company, against delivery to
the Lead Managers for the respective accounts of the International Managers of
certificates for the International Securities to be purchased by them. It is
understood that each International Managers has authorized the Lead Managers,
for its account, to accept delivery of, receipt for, and make payment of the
purchase price for, the Initial International Securities and the International
Option Securities, if any, which it has agreed to purchase. Each of the Lead
Managers, individually and not as representatives of the International Managers,
may (but shall not be obligated to) make payment of the purchase price for the
Initial International Securities or the International Option Securities, if any,
to be purchased by any International Manager whose funds have not been received
by the Closing Time or the relevant Date of Delivery, as the case may be, but
such payment shall not relieve such International Manager from its obligations
hereunder.
(d) Denominations; Registration. Certificates for the Initial
International Securities and the International Option Securities, if any, shall
be in such denominations and registered in such names as the Lead Managers may
request in writing at least one full business day before the Closing Time or the
relevant Date of Delivery, as the case may be. The certificates for the Initial
International Securities and the International Option Securities, if any, will
be made available for examination and packaging by the Lead Managers in The City
of New York not later than 10:00 A.M. (Eastern time) on the business day prior
to the Closing Time or the relevant Date of Delivery, as the case may be.
SECTION 3. COVENANTS OF THE COMPANY AND THE OPERATING PARTNERSHIP. Each
of the Company and the Operating Partnership covenants with each International
Manager as follows:
(a) Compliance with Securities Regulations and Commission
Requests. The Company, subject to Section 3(b), will comply with the
requirements of Rule 430A or Rule 434, as applicable, and will notify
the Global Coordinator immediately, and confirm the notice in writing,
(i) when any post-effective amendment to the Registration Statement
shall become effective, or any supplement to the Prospectuses or any
amended Prospectuses shall have been filed, (ii) of the receipt of any
comments from the Commission, (iii) of any request by the Commission
for any amendment to the Registration Statement or any amendment or
supplement to the Prospectuses or for additional information, and (iv)
of the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or of any order preventing
or suspending the use of any preliminary prospectus, or of the
suspension of the qualification of the Securities for offering or sale
in any jurisdiction, or of the initiation or threatening of any
proceedings for any of such purposes. The Company will promptly effect
the filings necessary pursuant to Rule 424(b) and will take such steps
as it deems necessary to ascertain promptly whether the form of
14
prospectus transmitted for filing under Rule 424(b) was received for
filing by the Commission and, in the event that it was not, it will
promptly file such prospectus. The Company will make every reasonable
effort to prevent the issuance of any stop order and, if any stop order
is issued, to obtain the lifting thereof at the earliest possible
moment.
(b) Filing of Amendments. The Company will give the Global
Coordinator notice of its intention to file or prepare any amendment to
the Registration Statement (including any filing under Rule 462(b)),
any Term Sheet or any amendment, supplement or revision to either the
prospectuses included in the Registration Statement at the time it
became effective or to the Prospectuses, will furnish the Global
Coordinator with copies of any such documents a reasonable amount of
time prior to such proposed filing or use, as the case may be, and will
not file or use any such document to which the Global Coordinator or
counsel for the International Managers shall reasonably object.
(c) Delivery of Registration Statements. The Company has
furnished or will deliver to the Lead Managers and counsel for the
International Managers, without charge, signed copies of the
Registration Statement as originally filed and of each amendment
thereto (including exhibits filed therewith or incorporated by
reference therein) and signed copies of all consents and certificates
of experts, and will also deliver to the Lead Managers, without charge,
a conformed copy of the Registration Statement as originally filed and
of each amendment thereto (without exhibits) for each of the
International Managers. The copies of the Registration Statement and
each amendment thereto furnished to the International Managers will be
identical to the electronically transmitted copies thereof filed with
the Commission pursuant to XXXXX, except to the extent permitted by
Regulation S-T.
(d) Delivery of Prospectuses. The Company has delivered to
each International Managers, without charge, as many copies of each
preliminary prospectus as such International Managers, reasonably
requested, and the Company hereby consents to the use of such copies
for purposes permitted by the 1933 Act. The Company will furnish to
each International Managers, without charge, during the period when the
International Prospectus is required to be delivered under the 1933 Act
or the Securities Exchange Act of 1934 (the "1934 Act"), such number of
copies of the International Prospectus (as amended or supplemented) as
such International Managers may reasonably request. The International
Prospectus and any amendments or supplements thereto furnished to the
International Managers will be identical to the electronically
transmitted copies thereof filed with the Commission pursuant to XXXXX,
except to the extent permitted by Regulation S-T.
(e) Continued Compliance with Securities Laws. The Company
will comply with the 1933 Act and the 1933 Act Regulations so as to
permit the completion of the distribution of the Securities as
contemplated in this Agreement, the International Purchase Agreement
and in the Prospectuses. If at any time when a prospectus is required
by the 1933 Act to be delivered in connection with sales of the
Securities, any event shall occur or condition shall exist as a result
of which it is necessary, in the opinion of counsel for the
International Managers or for the Company, to amend the Registration
Statement or amend or supplement any Prospectus in order that the
15
Prospectuses will not include any untrue statements of a material fact
or omit to state a material fact necessary in order to make the
statements therein not misleading in the light of the circumstances
existing at the time it is delivered to a purchaser, or if it shall be
necessary, in the reasonable opinion of such counsel, at any such time
to amend the Registration Statement or amend or supplement any
Prospectus in order to comply with the requirements of the 1933 Act or
the 1933 Act Regulations, the Company will promptly prepare and file
with the Commission, subject to Section 3(b), such amendment or
supplement as may be necessary to correct such statement or omission or
to make the Registration Statement or the Prospectuses comply with such
requirements, and the Company will furnish to the International
Managers such number of copies of such amendment or supplement as the
International Managers may reasonably request.
(f) Blue Sky Qualifications. The Company will use its best
efforts, in cooperation with the International Managers, to qualify the
Securities for offering and sale under the applicable securities laws
of such states and other jurisdictions (domestic or foreign) as the
Global Coordinator may designate and to maintain such qualifications in
effect for a period of not less than one year from the later of the
effective date of the Registration Statement and any Rule 462(b)
Registration Statement; provided, however, that the Company shall not
be obligated to file any general consent to service of process or to
qualify as a foreign corporation or as a dealer in securities in any
jurisdiction in which it is not so qualified or to subject itself to
taxation in respect of doing business in any jurisdiction in which it
is not otherwise so subject. In each jurisdiction in which the
Securities have been so qualified, the Company will file such
statements and reports as may be required by the laws of such
jurisdiction to continue such qualification in effect for a period of
not less than one year from the effective date of the Registration
Statement and any Rule 462(b) Registration Statement.
(g) Rule 158. The Company will timely file such reports
pursuant to the 1934 Act as are necessary in order to make generally
available to its securityholders as soon as practicable an earnings
statement for the purposes of, and to provide the benefits contemplated
by, the last paragraph of Section 11(a) of the 1933 Act.
(h) Use of Proceeds. The Company will use the net proceeds
received by it from the sale of the Securities in the manner specified
in the Prospectuses under "Use of Proceeds".
(i) Listing. The Company will use its best efforts to effect
the listing of the Common Shares (including the Securities) on the New
York Stock Exchange.
(j) Restriction on Sale of Securities. During a period of 12
months from the date of the Prospectuses, neither the Company nor the
Operating Partnership will, without the prior written consent of the
Global Coordinator, (i) directly or indirectly, offer, pledge, sell,
contract to sell, sell any option or contract to purchase, purchase any
option or contract to sell, grant any option, right or warrant to
purchase or otherwise transfer or dispose of any Common Shares or any
16
Units or any securities convertible into or exercisable or exchangeable
for Common Shares or Units or file any registration statement under the
1933 Act with respect to any of the foregoing or (ii) enter into any
swap or any other agreement or any transaction that transfers, in whole
or in part, directly or indirectly, the economic consequence of
ownership of the Common Shares or Units, whether any such swap or
transaction described in clause (i) or (ii) above is to be settled by
delivery of Common Shares or Units or such other securities, in cash or
otherwise. The foregoing sentence shall not apply to (A) the Securities
to be sold hereunder or under the U.S. Purchase Agreement, (B) any
Common Shares issued or options to purchase Common Shares granted
pursuant to existing employee benefit plans of the Company referred to
in the Prospectuses, (C) any Common Shares issued pursuant to any
non-employee director stock plan or dividend reinvestment plan or (D)
any Common Shares issued as part of the Formation Transactions as
described in the Prospectuses.
(k) Reporting Requirements. The Company, during the period
when the Prospectuses are required to be delivered under the 1933 Act
or the 1934 Act, will file all documents required to be filed with the
Commission pursuant to the 1934 Act within the time periods required by
the 1934 Act and the rules and regulations of the Commission
thereunder.
(l) Compliance with NASD Rules. The Company hereby agrees that
it will ensure that the Reserved Securities will be restricted as
required by the National Association of Securities Dealers, Inc. (the
"NASD") or the NASD rules from sale, transfer, assignment, pledge or
hypothecation for a period of three months following the date of this
Agreement. The Underwriters will notify the Company as to which persons
will need to be so restricted. At the request of the Underwriters, the
Company will direct the transfer agent to place a stop transfer
restriction upon such securities for such period of time. Should the
Company release, or seek to release, from such restrictions any of the
Reserved Securities, the Company agrees to reimburse the Underwriters
for any reasonable expenses (including, without limitation, legal
expenses) they incur in connection with such release.
(m) Compliance with Rule 463. The Company will comply with the
requirements of Rule 463 of the 1933 Act Regulations.
(n) REIT Qualification. The Company will use its best efforts
to meet the requirements to qualify, commencing with the tax year
ending December 31, 1998, as a "real estate investment trust" under the
Code.
SECTION 4. COVENANTS OF THE INTERNATIONAL MANAGERS. The International
Managers each severally covenants with the Company that at no time shall either
(x) such International Managers or (y) any Person who would Constructively Own
Shares owned by such International Managers Constructively Own, concurrently,
10% or more of the outstanding securities of any class or series of (i) the
Company and any tenant or lessee of the Company (which, as of the Effective
Date, includes, but is not limited to, Genesis Health Ventures, Inc.,
Crozer-Genesis ElderCare Limited Partnership, Senior Life Choice, LLC and the
Age Institute of Florida or subsidiaries of any of the above), and (ii) the
Company and any Person that would be considered to Constructively Own or
17
Beneficially Own 10% or more of any tenant or lessee of the Company (which, as
of the Effective Date, includes, but is not limited to, Genesis Health Ventures,
Inc.). As used in this Section 4, the terms "Person", "Beneficially Own,"
"Constructively Own" and "Effective Date" shall have the meanings ascribed to
such terms in the Company's Amended and Restated Declaration of Trust.
SECTION 5. PAYMENT OF EXPENSES. (a) Expenses. The Company will pay all
expenses incident to the performance of its obligations under this Agreement,
including (i) the preparation, printing and filing of the Registration Statement
(including financial statements and exhibits) as originally filed and of each
amendment thereto, (ii) the preparation, printing and delivery to the
Underwriters of this Agreement, any Agreement among Underwriters and such other
documents as may be required in connection with the offering, purchase, sale,
issuance or delivery of the Securities, (iii) the preparation, issuance and
delivery of the certificates for the Securities to the Underwriters, including
any stock or other transfer taxes and any stamp or other duties payable upon the
sale, issuance or delivery of the Securities to the Underwriters and the
transfer of the Securities between the International Managers and the
International Managers, (iv) the fees and disbursements of the Company's
counsel, accountants and other advisors, (v) the qualification of the Securities
under securities laws in accordance with the provisions of Section 3(f) hereof,
including filing fees and the reasonable fees and disbursements of counsel for
the Underwriters in connection therewith and in connection with the preparation
of the Blue Sky Survey and any supplement thereto, (vi) the printing and
delivery to the Underwriters of copies of each preliminary prospectus, any Term
Sheets and of the Prospectuses and any amendments or supplements thereto, (vii)
the preparation, printing and delivery to the Underwriters of copies of the Blue
Sky Survey and any supplement thereto, (viii) the fees and expenses of any
transfer agent or registrar for the Securities, (ix) the filing fees incident
to, and the reasonable fees and disbursements of counsel to the Underwriters in
connection with, the review by the NASD of the terms of the sale of the
Securities, (x) the fees and expenses incurred in connection with the listing of
the Securities on the New York Stock Exchange and (xi) all costs and expenses of
the Underwriters, including the fees and disbursements of counsel for the
Underwriters, in connection with matters related to the Reserved Securities
which are designated by the Company for sale to eligible employees and others
having a business relationship with the Company.
(b) Termination of Agreement. If this Agreement is terminated by the
Lead Managers in accordance with the provisions of Section 6 or Section 10(a)(i)
hereof, the Company shall reimburse the International Managers for all of their
out-of-pocket expenses, including the reasonable fees and disbursements of
counsel for the International Managers.
SECTION 6. CONDITIONS OF INTERNATIONAL MANAGERS' OBLIGATIONS. The
obligations of the several International Managers hereunder are subject to the
accuracy of the representations and warranties of the Company and the Operating
Partnership contained in Section 1 hereof or in certificates of any officer of
the Company, the Operating Partnership or any subsidiary delivered pursuant to
the provisions hereof, to the performance by the Company and the Operating
Partnership of their covenants and other obligations hereunder, and to the
following further conditions:
18
(a) Effectiveness of Registration Statement. The Registration
Statement, including any Rule 462(b) Registration Statement, has become
effective and at Closing Time no stop order suspending the
effectiveness of the Registration Statement shall have been issued
under the 1933 Act or proceedings therefor initiated or threatened by
the Commission, and any request on the part of the Commission for
additional information shall have been complied with to the reasonable
satisfaction of counsel to the International Managers. A prospectus
containing the Rule 430A Information shall have been filed with the
Commission in accordance with Rule 424(b) (or a post-effective
amendment providing such information shall have been filed and declared
effective in accordance with the requirements of Rule 430A) or, if the
Company has elected to rely upon Rule 434, a Term Sheet shall have been
filed with the Commission in accordance with Rule 424(b).
(b) Opinions of Counsel for the Company and the Operating
Partnership. At Closing Time, the Lead Managers shall have received the
favorable opinion, dated as of Closing Time, of Xxxxx & Xxxxxxx L.L.P.,
counsel for the Company and the Operating Partnership, in form and
substance satisfactory to counsel for the International Managers,
together with signed or reproduced copies of such letters for each of
the other International Managers, to the effect set forth in Exhibit A
and Exhibit B hereto, respectively, and to such further effect as
counsel to the International Managers may reasonably request.
(c) Opinion of Counsel for International Managers. At Closing
Time, the Lead Managers shall have received the favorable opinion,
dated as of Closing Time, of Xxxxx & Wood LLP, counsel for the
International Managers, together with signed or reproduced copies of
such letter for each of the other International Managers with respect
to the matters set forth in clauses (i), (vii), (viii) (solely as to
preemptive or other similar rights arising by operation of law or under
the charter or by-laws of the Company), (x) through (xii), inclusive,
(xiv), (xvi) (solely as to the information in the Prospectus under
"Shares of Beneficial Interest--Common Shares") and the penultimate
paragraph of Exhibit A hereto. In giving such opinion such counsel may
rely, as to all matters governed by the laws of jurisdictions other
than the law of the State of New York and the federal law of the United
States, upon the opinions of counsel satisfactory to the Lead Managers.
Such counsel may also state that, insofar as such opinion involves
factual matters, they have relied, to the extent they deem proper, upon
certificates of officers of the Company, the Operating Partnership and
its subsidiaries and certificates of public officials.
(d) Officers' Certificate. At Closing Time, there shall not
have been, since the date hereof or since the respective dates as of
which information is given in the Prospectuses, any material adverse
change in the condition, financial or otherwise, or in the earnings,
business affairs or business prospects of the Company, the Operating
Partnership, its Subsidiaries and the Initial Investments considered as
one enterprise, whether or not arising in the ordinary course of
business, and the U.S. Representatives shall have received a
certificate of the President or a Vice President of the Company and of
the chief financial or chief accounting officer of the Company and of
the general partner of the Operating Partnership, dated as of Closing
Time, to the effect that (i) there has been no such material adverse
change, (ii) the representations and warranties in Section 1(a) hereof
19
are true and correct in all material respects with the same force and
effect as though expressly made at and as of Closing Time, (iii) the
Company and the Operating Partnership have in all material respects
complied with all agreements and satisfied all conditions on their part
to be performed or satisfied at or prior to Closing Time, and (iv) no
stop order suspending the effectiveness of the Registration Statement
has been issued and no proceedings for that purpose have been
instituted or are pending or are contemplated by the Commission.
(e) Accountant's Comfort Letter. At the time of the execution
of this Agreement, the Lead Managers shall have received from KPMG Peat
Marwick LLP a letter dated such date, in form and substance
satisfactory to the U.S. Representatives, together with signed or
reproduced copies of such letter for each of the other International
Managers containing statements and information of the type ordinarily
included in accountants' "comfort letters" to underwriters with respect
to the financial statements and certain financial information contained
in the Registration Statement and the Prospectuses.
(f) Bring-down Comfort Letter. At Closing Time, the Lead
Managers shall have received from KPMG Peat Marwick LLP a letter, dated
as of Closing Time, to the effect that they reaffirm the statements
made in the letter furnished pursuant to subsection (e) of this
Section, except that the specified date referred to shall be a date not
more than three business days prior to Closing Time.
(g) Approval of Listing. At Closing Time, the Securities shall
have been approved for listing on the New York Stock Exchange, subject
only to official notice of issuance.
(h) No Objection. The NASD has confirmed that it has not
raised any objection with respect to the fairness and reasonableness of
the underwriting terms and arrangements.
(i) Lock-up Agreements. At the date of this Agreement, the
Lead Managers shall have received an agreement substantially in the
form of Exhibit C hereto signed by the persons listed on Schedule C
hereto.
(j) Purchase of Initial U.S. Securities. Contemporaneously
with the purchase by the International Managers of the Initial
International Securities under this Agreement, the U.S. Underwriters
shall have purchased the Initial U.S. Securities under the U.S.
Purchase Agreement.
(k) Conditions to Purchase of International Option Securities.
In the event that the International Managers exercise their option
provided in Section 2(b) hereof to purchase all or any portion of the
International Option Securities, the representations and warranties of
the Company and the Operating Partnership contained herein and the
statements in any certificates furnished by the Company, the Operating
Partnership or any subsidiary hereunder shall be true and correct as of
each Date of Delivery and, at the relevant Date of Delivery, the Lead
Managers shall have received:
20
(i) OFFICERS' CERTIFICATE. A certificate, dated such Date of
Delivery, of the President or a Vice President of the Company
and of the chief financial or chief accounting officer of the
Company and of the general partner of the Operating
Partnership confirming that the certificates delivered at the
Closing Time pursuant to Section 6(d) hereof remain true and
correct as of such Date of Delivery.
(ii) OPINION OF COUNSEL FOR THE COMPANY AND THE OPERATING
PARTNERSHIP. The favorable opinion of Xxxxx & Xxxxxxx L.L.P.,
counsel for the Company and the Operating Partnership, in form
and substance satisfactory to counsel for the International
Managers, dated such Date of Delivery, relating to the
International Option Securities to be purchased on such Date
of Delivery and otherwise to the same effect as the opinions
required by Section 6(b) hereof.
(iii) OPINION OF COUNSEL FOR INTERNATIONAL MANAGERS. The
favorable opinion of Xxxxx & Wood llp, counsel for the
International Managers, dated such Date of Delivery, relating
to the International Option Securities to be purchased on such
Date of Delivery and otherwise to the same effect as the
opinion required by Section 6(c) hereof.
(iv) BRING-DOWN COMFORT LETTER. A letter from KPMG Peat
Marwick LLP, in form and substance satisfactory to the Lead
Managers and dated such Date of Delivery, substantially in the
same form and substance as the letter furnished to the Lead
Managers pursuant to Section 6(f) hereof, except that the
"specified date" in the letter furnished pursuant to this
paragraph shall be a date not more than five days prior to
such Date of Delivery.
(l) Additional Documents. At Closing Time and at each Date of Delivery,
counsel for the International Managers shall have been furnished with such
documents and opinions as they may require for the purpose of enabling them to
pass upon the issuance and sale of the Securities as herein contemplated, or in
order to evidence the accuracy of any of the representations or warranties, or
the fulfillment of any of the conditions, herein contained; and all proceedings
taken by the Company in connection with the issuance and sale of the Securities
as herein contemplated shall be satisfactory in form and substance to the Lead
Managers and counsel for the International Managers.
(m) Termination of Agreement. If any condition specified in this
Section shall not have been fulfilled when and as required to be fulfilled, this
Agreement, or, in the case of any condition to the purchase of International
Option Securities on a Date of Delivery which is after the Closing Time, the
obligations of the several International Managers to purchase the relevant
Option Securities, may be terminated by the U.S. Representatives by notice to
the Company at any time at or prior to Closing Time or such Date of Delivery, as
the case may be, and such termination shall be without liability of any party to
any other party except as provided in Section 4 and except that Sections 1, 7, 8
and 9 shall survive any such termination and remain in full force and effect.
21
SECTION 7. INDEMNIFICATION.
(a) Indemnification of International Managers. The Company and the
Operating Partnership jointly and severally hereby agree to indemnify and hold
harmless each International Managers and each person, if any, who controls any
International Managers within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act as follows:
(i) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, arising out of any untrue statement or
alleged untrue statement of a material fact contained in the
Registration Statement (or any amendment thereto), including the Rule
430A Information and the Rule 434 Information, if applicable, or the
omission or alleged omission therefrom of a material fact required to
be stated therein or necessary to make the statements therein not
misleading or arising out of any untrue statement or alleged untrue
statement of a material fact included in any preliminary prospectus or
the Prospectuses (or any amendment or supplement thereto), or the
omission or alleged omission therefrom of a material fact necessary in
order to make the statements therein, in the light of the circumstances
under which they were made, not misleading;
(ii) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, arising out of (A) the violation of
any applicable laws or regulations of foreign jurisdictions where
Reserved Securities have been offered and (B) any untrue statement or
alleged untrue statement of a material fact included in the supplement
or prospectus wrapper material distributed in any foreign jurisdiction
or in connection with the reservation and sale of the Reserved
Securities to eligible employees and others having a business
relationship with the Company or the omission or alleged omission
therefrom of a material fact necessary to make the statements therein,
when considered in conjunction with the Prospectuses or preliminary
prospectuses, not misleading;
(iii) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, to the extent of the aggregate amount
paid in settlement of any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or threatened,
or of any claim whatsoever based upon any such untrue statement or
omission, or any such alleged untrue statement or omission or in
connection with any violation of the nature referred to in Section
7(a)(ii)(A) hereof; provided that (subject to Section 7(d) below) any
such settlement is effected with the written consent of the Company;
and
(iv) against any and all expense whatsoever, as incurred
(including the fees and disbursements of counsel chosen by Xxxxxxx
Xxxxx), reasonably incurred in investigating, preparing or defending
against any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or any claim
whatsoever based upon any such untrue statement or omission, or any
such alleged untrue statement or omission or in connection with any
violation of the nature referred to in Section 7(a)(ii)(A) hereof, to
the extent that any such expense is not paid under (i), (ii) or (iii)
above;
22
PROVIDED, HOWEVER, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of (A) any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Company by any
International Manager through the Lead Manager expressly for use in the
Registration Statement (or any amendment thereto), including the Rule 430A
Information and the Rule 434 Information, if applicable, or any preliminary
prospectus or the International Prospectus (or any amendment or supplement
thereto) or (B) the fact that such International Managers sold Securities to a
person as to whom it shall be established that there was not sent or given, at
or prior to the written confirmation of such sale, a copy of the International
Prospectus or of the International Prospectus as then amended or supplemented in
any case where such delivery is required by the 1933 Act if the Company has
previously furnished copies thereof in sufficient quantity to such International
Managers and the loss, claim, damage or liability of such International Managers
results from an untrue statement or omission of a material fact contained in any
preliminary prospectus or International Prospectus (or any amendment or
supplement thereto), which was corrected in the International Prospectus or in
the International Prospectus as then amended or supplemented and delivery would
have cured the defect giving rise to such loss, claim, damage or liability.
(b) Indemnification of Company, the Operating Partnership, Trustees,
Trustee Nominees and Officers. Each International Manager severally agrees to
indemnify and hold harmless the Company, its trustees, trustee nominees named in
the Registration Statement, each of its officers who signed the Registration
Statement, the Operating Partnership, and each person, if any, who controls the
Company or the Operating Partnership within the meaning of Section 15 of the
1933 Act or Section 20 of the 1934 Act against any and all loss, liability,
claim, damage and expense described in the indemnity contained in subsection (a)
of this Section, as incurred, but only with respect to untrue statements or
omissions, or alleged untrue statements or omissions, made in the Registration
Statement (or any amendment thereto), including the Rule 430A Information and
the Rule 434 Information, if applicable, or any preliminary International
Prospectus or the International Prospectus (or any amendment or supplement
thereto) in reliance upon and in conformity with written information furnished
to the Company by such International Manager through the Lead Manager expressly
for use in the Registration Statement (or any amendment thereto) or such
preliminary prospectus or the International Prospectus (or any amendment or
supplement thereto). The Company and the Operating Partnership acknowledge that
the statements set forth in the last paragraph of the cover page and in
paragraphs 4, 5, 8, 9 and 15 under the caption "Underwriting" in the
prospectuses constitute the only information furnished in writing by or on
behalf of any Underwriter expressly for use in the Registration Statement
relating to the Securities as originally filed or in any amendment thereof, a
related preliminary prospectus or the Prospectuses or in any amendment thereof
or supplement thereto, as the case may be.
(c) Actions against Parties; Notification. Each indemnified party shall
give notice as promptly as reasonably practicable to each indemnifying party of
any action commenced against it in respect of which indemnity may be sought
hereunder, but failure to so notify an indemnifying party shall not relieve such
indemnifying party from any liability hereunder to the extent it is not
materially prejudiced as a result thereof and in any event shall not relieve it
from any liability which it may have otherwise than on account of this indemnity
agreement. In the case of parties indemnified pursuant to Section 7(a) above,
23
counsel to the indemnified parties shall be selected by Xxxxxxx Xxxxx, and, in
the case of parties indemnified pursuant to Section 7(b) above, counsel to the
indemnified parties shall be selected by the Company. An indemnifying party may
participate at its own expense in the defense of any such action; provided,
however, that counsel to the indemnifying party shall not (except with the
consent of the indemnified party) also be counsel to the indemnified party.
Notwithstanding the foregoing, if it so elects within a reasonable time after
receipt of such notice, an indemnifying party, jointly with any other
indemnifying parties receiving such notice, may assume the defense of such
action with counsel chosen by it and approved by the indemnified parties
defendant in such action (which approval shall not be unreasonably withheld),
unless such indemnified parties reasonably object to such assumption on the
ground that there may be legal defenses available to them which are different
from or in addition to those available to such indemnifying party. If an
indemnifying party assumes the defense of such action, the indemnifying party
shall not be liable for any fees and expenses of counsel for the indemnified
parties incurred thereafter in connection with such action, except the
indemnifying party shall be liable for the reasonable costs of investigation
subsequently incurred by the indemnified party in connection with the defense.
In no event shall the indemnifying parties be liable for fees and expenses of
more than one counsel (in addition to any local counsel) separate from their own
counsel for all indemnified parties in connection with any one action or
separate but similar or related actions in the same jurisdiction arising out of
the same general allegations or circumstances. No indemnifying party shall,
without the prior written consent of the indemnified parties, settle or
compromise or consent to the entry of any judgment with respect to any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever in respect of which
indemnification or contribution could be sought under this Section 7 or Section
8 hereof (whether or not the indemnified parties are actual or potential parties
thereto), unless such settlement, compromise or consent (i) includes an
unconditional release of each indemnified party from all liability arising out
of such litigation, investigation, proceeding or claim and (ii) does not include
a statement as to or an admission of fault, culpability or a failure to act by
or on behalf of any indemnified party.
(d) Settlement without Consent if Failure to Reimburse. If at any time
an indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel, such indemnifying party
agrees that it shall be liable for any settlement of the nature contemplated by
Section 7(a)(iii) effected without its written consent if (i) such settlement is
entered into more than 45 days after receipt by such indemnifying party of the
aforesaid request, (ii) such indemnifying party shall have received notice of
the terms of such settlement at least 30 days prior to such settlement being
entered into and (iii) such indemnifying party shall not have reimbursed such
indemnified party in accordance with such request prior to the date of such
settlement.
(e) Indemnification for Reserved Securities. In connection with the
offer and sale of the Reserved Securities, the Company and the Operating
Partnership agree, promptly upon a request in writing to indemnify and hold
harmless the Underwriters from and against any and all losses, liabilities,
claims, damages and expenses incurred by them as a result of the failure of
eligible employees and persons having business relationships with the Company to
24
pay for and accept delivery of Reserved Securities which, by the end of the
first business day following the date of this Agreement, were subject to a
properly confirmed agreement to purchase.
SECTION 8. CONTRIBUTION. If the indemnification provided for in Section
7 hereof is for any reason unavailable to or insufficient to hold harmless an
indemnified party in respect of any losses, liabilities, claims, damages or
expenses referred to therein, then each indemnifying party shall contribute to
the aggregate amount of such losses, liabilities, claims, damages and expenses
incurred by such indemnified party, as incurred, (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company and the
Operating Partnership on the one hand and the International Managers on the
other hand from the offering of the Securities pursuant to this Agreement or
(ii) if the allocation provided by clause (i) is not permitted by applicable
law, in such proportion as is appropriate to reflect not only the relative
benefits referred to in clause (i) above but also the relative fault of the
Company and the Operating Partnership on the one hand and of the International
Managers on the other hand in connection with the statements or omissions, or in
connection with any violation of the nature referred to in Section 7(a)(ii)(A)
hereof, which resulted in such losses, liabilities, claims, damages or expenses,
as well as any other relevant equitable considerations.
The relative benefits received by the Company and the Operating
Partnership on the one hand and the International Managers on the other hand in
connection with the offering of the U.S. Securities pursuant to this Agreement
shall be deemed to be in the same respective proportions as the total net
proceeds from the offering of the International Securities pursuant to this
Agreement (before deducting expenses) received by the Company and the Operating
Partnership and the total underwriting discount received by the International
Managers, in each case as set forth on the cover of the International
Prospectus, or, if Rule 434 is used, the corresponding location on the Term
Sheet, bear to the aggregate initial public offering price of the International
Securities as set forth on such cover.
The relative fault of the Company and the Operating Partnership on the
one hand and the International Managers on the other hand shall be determined by
reference to, among other things, whether any such untrue or alleged untrue
statement of a material fact or omission or alleged omission to state a material
fact relates to information supplied by the Company or the Operating Partnership
or by the International Managers and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission or any violation of the nature referred to in Section 7(a)(ii)(A)
hereof.
The Company and the Operating Partnership and the International
Managers agree that it would not be just and equitable if contribution pursuant
to this Section 8 were determined by pro rata allocation (even if the
International Managers were treated as one entity for such purpose) or by any
other method of allocation which does not take account of the equitable
considerations referred to above in this Section 8. The aggregate amount of
losses, liabilities, claims, damages and expenses incurred by an indemnified
party and referred to above in this Section 8 shall be deemed to include any
legal or other expenses reasonably incurred by such indemnified party in
investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
25
threatened, or any claim whatsoever based upon any such untrue or alleged untrue
statement or omission or alleged omission.
Notwithstanding the provisions of this Section 8, no International
Manager shall be required to contribute any amount in excess of the amount by
which the total price at which the U.S. Securities underwritten by it and
distributed to the public were offered to the public exceeds the amount of any
damages which such International Manager has otherwise been required to pay by
reason of any such untrue or alleged untrue statement or omission or alleged
omission.
No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the 0000 Xxx) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 8, each person, if any, who controls a
International Manager within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act shall have the same rights to contribution as such
International Manager, and each trustee of the Company, each trustee nominee of
the Company named in the Registration Statement, each officer of the Company who
signed the Registration Statement, and each person, if any, who controls the
Company or the Operating Partnership within the meaning of Section 15 of the
1933 Act or Section 20 of the 1934 Act shall have the same rights to
contribution as the Company and the Operating Partnership, respectively. The
International Managers' respective obligations to contribute pursuant to this
Section 8 are several in proportion to the number of Initial International
Securities set forth opposite their respective names in Schedule A hereto and
not joint. For purposes of this Section 8, the Company, the Operating
Partnership and its subsidiaries shall be deemed one party jointly and severally
liable for any obligations hereunder.
SECTION 9. REPRESENTATIONS, WARRANTIES AND AGREEMENTS TO SURVIVE
DELIVERY. All representations, warranties and agreements contained in this
Agreement or in certificates of officers of the Company and the Operating
Partnership or any of its subsidiaries submitted pursuant hereto, shall remain
operative and in full force and effect, regardless of any investigation made by
or on behalf of any International Manager or controlling person, or by or on
behalf of the Company or the Operating Partnership, and shall survive delivery
of the Securities to the International Manager.
SECTION 10. TERMINATION OF AGREEMENT.
(a) Termination; General. The Lead Managers may terminate this
Agreement, by notice to the Company, at any time at or prior to Closing Time (i)
if there has been, since the time of execution of this Agreement or since the
respective dates as of which information is given in the International
Prospectus, any material adverse change in the condition, financial or
otherwise, or in the earnings, business affairs or business prospects of the
Company, the Operating Partnership, its Subsidiaries and the Initial Investments
considered as one enterprise, whether or not arising in the ordinary course of
business, or (ii) if there has occurred any material adverse change in the
financial markets in the United States or the International financial markets,
any outbreak of hostilities or escalation thereof or other calamity or crisis or
any change or development involving a prospective change in national or
International political, financial or economic conditions, in each case the
26
effect of which is such as to make it, in the judgment of the Lead Managers,
impracticable to market the Securities or to enforce contracts for the sale of
the Securities, or (iii) if trading in any securities of the Company has been
suspended or materially limited by the Commission or the New York Stock
Exchange, or if trading generally on the American Stock Exchange or the New York
Stock Exchange or in the Nasdaq National Market has been suspended or materially
limited, or minimum or maximum prices for trading have been fixed, or maximum
ranges for prices have been required, by any of said exchanges or by such system
or by order of the Commission, the National Association of Securities Dealers,
Inc. or any other governmental authority, or (iv) if a banking moratorium has
been declared by either Federal or New York authorities.
(b) Liabilities. If this Agreement is terminated pursuant to this
Section, such termination shall be without liability of any party to any other
party except as provided in Section 4 hereof, and provided further that Sections
1, 7, 8 and 9 shall survive such termination and remain in full force and
effect.
SECTION 11. DEFAULT BY ONE OR MORE OF THE INTERNATIONAL MANAGERS. If
one or more of the International Managers shall fail at Closing Time or a Date
of Delivery to purchase the Securities which it or they are obligated to
purchase under this Agreement (the "Defaulted Securities"), the Lead Managers
shall have the right, within 24 hours thereafter, to make arrangements for one
or more of the non-defaulting International Managers, or any other underwriters,
to purchase all, but not less than all, of the Defaulted Securities in such
amounts as may be agreed upon and upon the terms herein set forth; if, however,
the Lead Managers shall not have completed such arrangements within such 24-hour
period, then:
(a) if the number of Defaulted Securities does not exceed 10%
of the number of International Securities to be purchased on such date,
each of the non-defaulting International Managers shall be obligated,
severally and not jointly, to purchase the full amount thereof in the
proportions that their respective underwriting obligations hereunder
bear to the underwriting obligations of all non-defaulting
International Managers, or
(b) if the number of Defaulted Securities exceeds 10% of the
number of International Securities to be purchased on such date, this
Agreement or, with respect to any Date of Delivery which occurs after
the Closing Time, the obligation of the International Managers to
purchase and of the Company to sell the Option Securities to be
purchased and sold on such Date of Delivery shall terminate without
liability on the part of any non-defaulting International Managers.
No action taken pursuant to this Section shall relieve any defaulting
International Manager from liability in respect of its default.
In the event of any such default which does not result in a termination
of this Agreement or, in the case of a Date of Delivery which is after the
Closing Time, which does not result in a termination of the obligation of the
International Managers to purchase and the Company to sell the relevant
International Option Securities, as the case may be, either the Lead Managers or
the Company shall have the right to postpone Closing Time or the relevant Date
27
of Delivery, as the case may be, for a period not exceeding seven days in order
to effect any required changes in the Registration Statement or Prospectus or in
any other documents or arrangements. As used herein, the term "International
Manager" includes any person substituted for a International Manager under this
Section 10.
SECTION 12. NOTICES. All notices and other communications hereunder
shall be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the
International Managers shall be directed to the Lead Managers at Xxxxx Xxxxx,
Xxxxx Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000-0000, attention of Xx. Xxxxxxx
X. Xxxxxxxxx, Managing Director; and notices to the Company or the Operating
Partnership shall be directed to the Company at 000 XxXxxxxx Xxxx, Xxxxx 000,
Xxxxxxx Xxxxxx, Xxxxxxxxxxxx 00000, attention of Xxxxxx X. Xxxxxxx, Xx.,
President and Chief Executive Officer.
SECTION 13. PARTIES. This Agreement shall each inure to the benefit of
and be binding upon the International Managers and the Company and their
respective successors. Nothing expressed or mentioned in this Agreement is
intended or shall be construed to give any person, firm or corporation, other
than the International Managers and the Company and the Operating Partnership
and their respective successors and the controlling persons and officers,
trustee and trustee nominees referred to in Sections 7 and 8 and their heirs and
legal representatives, any legal or equitable right, remedy or claim under or in
respect of this Agreement or any provision herein contained. This Agreement and
all conditions and provisions hereof are intended to be for the sole and
exclusive benefit of the International Managers and the Company and the
Operating Partnership and their respective successors, and said controlling
persons and officers, trustee and trustee nominees and their heirs and legal
representatives, and for the benefit of no other person, firm or corporation. No
purchaser of Securities from any International Managers shall be deemed to be a
successor by reason merely of such purchase.
SECTION 14. GOVERNING LAW AND TIME. THIS AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. SPECIFIED
TIMES OF DAY REFER TO NEW YORK CITY TIME.
SECTION 15. EFFECT OF HEADINGS. The Article and Section headings herein
are for convenience only and shall not affect the construction hereof.
28
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company a counterpart hereof, whereupon
this instrument, along with all counterparts, will become a binding agreement
between the International Managers and the Company in accordance with its terms.
Very truly yours,
ElderTrust
By __________________________________
Name:
Title:
ElderTrust Operating Limited Partnership
By: ElderTrust
(its general partner)
By __________________________________
Name:
Title:
CONFIRMED AND ACCEPTED,
as of the date first above written:
XXXXXXX XXXXX INTERNATIONAL
BT ALEX. XXXXX INTERNATIONAL
XXXXXXX SACHS INTERNATIONAL
By: XXXXXXX XXXXX INTERNATIONAL
By ______________________________________
Authorized Signatory
For themselves and as Lead Managers of the other International Managers named in
Schedule A hereto.
29
SCHEDULE A
NAME OF INTERNATIONAL MANAGER Number of
Initial U.S
SECURITIES
Xxxxxxx Xxxxx International.....................................
BT Alex. Xxxxx International....................................
Xxxxxxx Sachs International ....................................
---------
Total........................................................... 1,210,000
=========
Sch A - 1
SCHEDULE B
ELDERTRUST
1,210,000 Common Shares of Beneficial Interest
(Par Value $.01 Per Share)
1. The initial public offering price per share for the
Securities, determined as provided in Section 2, shall be $*
2. The purchase price per share for the International
Securities to be paid by the several International Managers shall be
$* being an amount equal to the initial public offering price set
forth above less $*per share; provided that the purchase price per
share for any International Option Securities purchased upon the
exercise of the over-allotment option described in Section 2(b) shall
be reduced by an amount per share equal to any dividends or
distributions declared by the Company and payable on the Initial
International Securities but not payable on the International Option
Securities.
Sch B - 1
SCHEDULE C
Xxxxxxx X. Xxxxxx
Xxxxxx X. Xxxxxxx, Xx.
D. Xxx XxXxxxxx, Xx.
Sch C - 1
SCHEDULE D
[List of Option Properties]
Sch D - 1
Exhibit A
FORM OF OPINION OF COMPANY'S COUNSEL
TO BE DELIVERED PURSUANT TO
SECTION 5(b)1
(i) The Company was formed, and is validly existing and in good
standing as of the date of the certificate specified in such opinion, under
Title 8 of the Maryland Corporations and Associations Code Xxx.
(ii) The Operating Partnership is a limited partnership formed and
validly existing existing and in good standing as of the date of the certificate
specified in such opinion, under the laws of the State of Delaware.
(iii) Each subsidiary was incorporated or formed, as the case may be,
and is validly existing and in good standing as of the date of the certificate
specified in such opinion, under the laws of the jurisdiction of its
incorporation or formation.2
(iv) Each of the Company, the Operating Partnership and its
Subsidiaries has trust, corporate or partnership power, as the case may be, and
trust, corporate or partnership authority, as the case may be, under its
declaration of trust, charter or partnership agreement, as the case may be, and
under the laws of the jurisdiction of its formation or incorporation to own,
lease and operate its current properties and to conduct its business as
described in the Prospectuses and, in the case of each of the Company and the
Operating Partnership, to enter into and perform its obligations under the U.S.
Purchase Agreement and the International Purchase Agreement.
(v) The Company, the Operating Partnership and its Subsidiaries are
authorized to transact business as foreign corporations or are registered as
foreign limited partnerships, as the case my be, under the laws of the States,
and as of the respective dates of the certificates, specified in such opinion.
(vi) The authorized, issued and outstanding Common Shares of the
Company, as of September 30, 1997, was set forth under the caption
"Capitalization" in the Prospectuses. All Common Shares of the Company shown as
issued and outstanding under said caption are duly authorized and, assuming the
receipt of consideration therefor as provided in resolutions of the Company's
Board of Trustees authorizing issuance thereof, are validly issued, fully paid
and non-assessable. None of the outstanding Common Shares of the Company was
issued in violation of any statutory preemptive right under Title 8 of the
--------
1 As used herein, the term "Subsidiaries" shall mean only those Subsidiaries
formed by the Operating Partnership.
2 Opinions with respect to "good standing" of limited partnerships will be
provided only if the applicable certificates refer to their "good
standing."
A-1
Maryland Corporations and Associations Code Xxx. or, to our knowledge, any
contractual right of any securityholder of the Company to subscribe for any of
the Common Shares.
(vii) When issued in accordance with the provisions of the U.S.
Purchase Agreement and the International Purchase Agreement, the Securities will
be validly issued, fully paid and non-assessable and no holder of the Securities
will be subject to personal liability under Title 8 of the Maryland Corporations
and Associations Code Xxx. by reason of being such holder.
(viii) No holder of outstanding Common Shares of the Company has any
statutory preemptive right under Title 8 of the Maryland Corporations and
Associations Code Xxx. or, to our knowledge, any contractual right to subscribe
for any of the Securities.
(ix) The Units to be issued in connection with the Formation
Transactions, including, without limitation, the Units to be issued to the
Company, have been duly authorized for issuance by the Operating Partnership to
the holders or prospective holders thereof, and at Closing Time, assuming the
receipt of the consideration therefor as provided in resolutions authorizing the
issuance thereof, will be validly issued and fully paid. Immediately after
Closing Time and not including any Units issued in exchange for proceeds
received by the Company in connection with the sale of the Option Securities,
______ Units will be issued and outstanding. The issuance and sale of such Units
in the Formation Transactions is not required to be registered under the 1933
Act. The Units conform in all material respects to the description thereof
contained under the caption "Partnership Agreement" in the Prospectuses.
(x) The U.S. Purchase Agreement and the International Purchase
Agreement have been duly authorized, executed and delivered by or on behalf of
each of the Company and the Operating Partnership.
(xi) The Registration Statement, including any Rule 462(b) Registration
Statement, has been declared effective under the 1933 Act; any required filing
of the Prospectuses pursuant to Rule 424(b) has been made in the manner and
within the time period required by Rule 424(b); and, to our knowledge, no stop
order suspending the effectiveness of the Registration Statement or any Rule
462(b) Registration Statement has been issued under the 1933 Act and no
proceedings for that purpose have been instituted or are threatened by the
Commission.
(xii) The Registration Statement, including any Rule 462(b)
Registration Statement, the Rule 430A Information and the Rule 434 Information,
as applicable, the Prospectuses and each amendment or supplement to the
Registration Statement and the Prospectuses as of their respective effective or
issue dates (other than the financial statements and supporting schedules
included therein or omitted therefrom, as to which we need express no opinion)
complied as to form in all material respects with the requirements of the 1933
Act and the 1933 Act Regulations.
(xiii) The form of certificate used to evidence the Common Shares
complies in all material respects with any applicable requirements of Title 8 of
the Maryland Corporations and Associations Code Xxx. and the Amended and
Restated Declaration of Trust and Bylaws of the Company and the rules and
regulations of the New York Stock Exchange, Inc.
A-2
(xiv) The information in the Prospectuses under the captions "Shares of
Beneficial Interest," "Certain Provisions of Maryland Law and the Company's
Declaration of Trust and Bylaws" and "Shares Available for Future Sale," to the
extent that it constitutes matters of law, summaries of certain provisions of
the Company's Amended and Restated Declaration of Trust and Bylaws or legal
conclusions, has been reviewed by us and is correct in all material respects.
(xv) The execution, delivery and performance as of the date hereof by
the Company and the Operating Partnership of the U.S. Purchase Agreement and the
International Purchase Agreement do not (i) violate Title 8 of the Maryland
Corporations and Associations Code Xxx., the Delaware Revised Uniform Limited
Partnership Act, as amended, the Amended and Restated Declaration of Trust or
Bylaws of the Company or the Limited Partnership Agreement of the Operating
Partnership, (ii) to our knowledge, violate any applicable law, rule,
regulation, order, judgment or decree of any Maryland or Delaware governmental
agency or court or (iii) breach or constitute a default under any agreement or
contract filed as an exhibit to the Registration Statement.
(xvi) No approval or consent of, or registration or filing with, any
Maryland or Delaware governmental agency is required to be obtained or made by
the Company or the Operating Partnership in connection with the execution,
delivery and performance as of the date hereof by the Company and the Operating
Partnership of the U.S. Purchase Agreement and the International Purchase
Agreement.
(xvii) The Limited Partnership Agreement of the Operating Partnership
has been duly executed and delivered on behalf of ElderTrust Realty Group, Inc.,
as general partner of the Operating Partnership, and constitutes a valid and
binding obligation of the Operating Partnership, enforceable in accordance with
its terms, except as may be limited by bankruptcy, insolvency, reorganization,
moratorium or other laws affecting creditors' rights (including, without
limitation, the effect of statutory and other law regarding fraudulent
conveyances, fraudulent transfers and preferential transfers) and as may be
limited by the exercise of judicial discretion and the application of principles
of equity including, without limitation, requirements of good faith, fair
dealing, conscionability and materiality (regardless of whether such agreement
is considered in a proceeding in equity or at law).
(xviii) The Registration Rights Agreement has been duly executed and
delivered on behalf of the Company and constitutes a valid and binding
obligation of the Company, enforceable in accordance with its terms, except as
may be limited by bankruptcy, insolvency, reorganization, moratorium or other
laws affecting creditors' rights (including, without limitation, the effect of
statutory and other law regarding fraudulent conveyances, fraudulent transfers
and preferential transfers) and as may be limited by the exercise of judicial
discretion and the application of principles of equity including, without
limitation, requirements of good faith, fair dealing, conscionability and
materiality (regardless of whether such agreement is considered in a proceeding
in equity or at law).
(xix) To our knowledge, except as set forth under the caption "Shares
Available for Future SaleCRegistration Rights" in the Prospectuses, there are no
persons with registration rights or other similar rights to have any securities
registered pursuant to the Registration Statement or otherwise registered by the
Company under the 1933 Act.
A-3
(xx0 The Company is not an "investment company," as such term is
defined in the 1940 Act.
The opinion expressed in paragraphs (xvii) and (xviii) above shall be
understood to mean only that if there is a default in performance of an
obligation, (i) if a failure to pay or other damage can be shown and (ii) if the
defaulting party can be brought into a court which will hear the case and apply
the governing law, then, subject to the availability of defenses, and to the
exceptions set forth in Paragraphs (xvii) and (xviii) above, the court will
provide a money damage (or perhaps injunctive or specific performance) remedy.
During the course of the preparation of the Registration Statement, we
participated in conferences with officers and other representatives of the
Company, with representatives of the independent public accountants of the
Company and with you and your representatives. While we have not undertaken to
determine independently, and we do not assume any responsibility for, the
accuracy, completeness, or fairness of the statements in the Registration
Statement or the Prospectuses, we may state on the basis of these conferences
and our activities as counsel to the Company in connection with the Registration
Statement that no facts have come to our attention which cause us to believe
that (i) the Registration Statement, at the time it became effective, contained
an untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading, or that the Prospectuses, as of the date hereof, contain an untrue
statement of a material fact or omit to state a material fact necessary in order
to make the statements therein, in the light of the circumstances under which
they were made, not misleading, (ii) there are any legal or governmental
proceedings pending or threatened against the Company that are required to be
disclosed in the Registration Statement or the Prospectuses, other than those
disclosed therein, or (iii) there are any contracts or documents of a character
required to be described in the Registration Statement or the Prospectuses or to
be filed as exhibits to the Registration Statement that are not described or
referred to therein or so filed; PROVIDED THAT in making the foregoing
statements (which shall not constitute an opinion), we are not expressing any
views as to the financial statements and supporting schedules and other
financial data included in or omitted from the Registration Statement or the
Prospectuses.
In rendering such opinion, such counsel may rely as to matters of fact
(but not as to legal conclusions), to the extent they deem proper, on
certificates of responsible officers of the Company, the Operating Partnership,
the Subsidiaries and public officials. Such opinion shall not state that it is
to be governed or qualified by, or that it is otherwise subject to, any
treatise, written policy or other document relating to legal opinions,
including, without limitation, the Legal Opinion Accord of the ABA Section of
Business Law (1991).
A-4
Exhibit B
FORM OF TAX OPINION OF COMPANY'S COUNSEL
TO BE DELIVERED PURSUANT TO
SECTION 5(b)
(i) The information in the Prospectuses under "Federal Income Tax
Consequences", to the extent that it constitutes matters of law or legal
conclusions, has been reviewed by us and is correct in all material respects.
(ii) Commencing with the Company's taxable year ending December 31,
1998, and assuming that the actions contemplated in the Prospectuses are
completed in a timely fashion, the Company is organized in conformity with the
requirements for qualification and taxation as a real estate investment trust
under the Code, and its proposed method of operation will enable it to meet the
requirements for qualification and taxation as a real estate investment trust
under the Code.
B-1
[Form of lock-up from directors and trustees pursuant to Section 5(i)]
Exhibit C
*, 1998
XXXXXXX XXXXX INTERNATIONAL
BT ALEX. XXXXX INTERNATIONAL
XXXXXXX SACHS INTERNATIONAL
as Lead Managers of the several
International Managers to be named in the
within-mentioned International Purchase Agreement
c/o Merrill Xxxxx International
Xxxxxxxxx Xxxxx
Xxxxxxxxx Xxxxxx
Xxxxxx XX00 0XX
Xxxxxxx
Re: PROPOSED PUBLIC OFFERING BY ELDERTRUST
--------------------------------------
Dear Sirs:
The undersigned, an officer and/or trustee of ElderTrust, a Maryland
real estate investment trust (the "Company"), understands that Xxxxxxx Xxxxx
International ("Xxxxxxx Xxxxx"), BT Xxxx. Xxxxx International and Xxxxxxx Sachs
International propose to enter into a an International Purchase Agreement (the
"International Purchase Agreement") with the Company and ElderTrust Operating
Limited Partnership, a Delaware limited partnership (the "Operating
Partnership") providing for the public offering of the Company's common shares
of beneficial interest, par value $.01 per share (the "Common Shares"). In
recognition of the benefit that such an offering will confer upon the
undersigned as an officer and/or trustee of the Company, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the undersigned agrees with each underwriter to be named in the
International Purchase Agreement that, during a period of 12 months from the
date of the International Purchase Agreement, the undersigned will not, without
the prior written consent of Xxxxxxx Xxxxx, directly or indirectly, (i) offer,
pledge, sell, contract to sell, sell any option or contract to purchase,
purchase any option or contract to sell, grant any option, right or warrant for
the sale of, or otherwise dispose of or transfer any Common Shares or any units
of partnership interest in the Operating Partnership ("Units") or any securities
convertible into or exchangeable or exercisable for Common Shares or Units,
whether now owned or hereafter acquired by the undersigned or with respect to
which the undersigned has or hereafter acquires the power of disposition, or
file any registration statement under the Securities Act of 1933, as amended,
with respect to any of the foregoing or (ii) enter into any swap or any other
agreement or any transaction that transfers, in whole or in part, directly or
indirectly, the economic consequence of ownership of the Common Shares or Units,
whether any such swap or transaction is to be settled by delivery of Common
Shares or Units or other securities, in cash or otherwise.
Very truly yours,
Signature:
Print Name:
Annex A
[FORM OF ACCOUNTANTS' COMFORT LETTER PURSUANT TO SECTION 5(e)]
We are independent public accountants with respect to the Company within the
meaning of the 1933 Act and the applicable published 1933 Act Regulations
(i) in our opinion, the audited financial statements and the
related financial statement schedule included in the Registration
Statement and the Prospectuses comply as to form in all material
respects with the applicable accounting requirements of the 1933 Act
and the published rules and regulations thereunder;
(ii) on the basis of procedures (but not an examination in
accordance with generally accepted auditing standards) consisting of a
reading of the latest available unaudited interim financial statements
of the Company, a reading of the minute books of the Company, inquiries
of certain officials of the Company responsible for financial and
accounting matters and such other inquiries and procedures as may be
specified in such letter, nothing came to our attention that caused us
to believe that:
(A) at a specified date not more than five days prior
to the date of this Agreement, there was any change in
the shares of beneficial interest of the Company or any
decrease in the net assets of the Company or any increase
in the debt of the Company, in each case as compared with
amounts shown in the latest balance sheet included in the
Registration Statement, except in each case for changes,
decreases or increases that the Registration Statement
discloses have occurred or may occur; or
(B) for the period from _________, 1997 to a
specified date not more than five days prior to the date
of this Agreement, there was any decrease in revenues or
net income of the Company, in each case as compared with
the comparable period in the preceding year, except in
each case for any decreases that the Registration
Statement discloses have occurred or may occur;
(iii) based upon the procedures set forth in clause (ii) above
and a reading of the Selected Financial Information included in the
Registration Statement (the "Selected Financial Information"), nothing
came to our attention that caused us to believe that the Selected
Financial Information do not comply as to form in all material respects
with the disclosure requirements of Item 301 of Regulation S-K of the
1933 Act or that the amounts included in the Selected Financial
Information are not in agreement with the corresponding amounts in the
audited financial statements for the respective periods;
(iv) we have compared the information in the Registration
Statement under selected captions with the disclosure requirements of
Regulation S-K of the 1933 Act and on the basis of limited procedures
specified herein, nothing came to our attention that caused us to
Annex A-1
believe that this information does not comply as to form in all
material respects with the disclosure requirements of Items 302, 402
and 503(d), respectively, of Regulation S-K;
(v) based upon the procedures set forth in clause (ii) above
and a reading of the Selected Financial Information, nothing came to
our attention that caused us to believe that the unaudited operating
data, balance sheet data and other data set forth in the Selected
Financial Information do not agree with the amounts set forth in the
unaudited financial statements for those periods or that such unaudited
amounts were not determined on a basis substantially consistent with
that of the corresponding amounts in the audited financial statements;
(vi) we are unable to and do not express any opinion on the
pro forma financial information (the "Pro Forma Information") included
in the Registration Statement or on the pro forma adjustments applied
to the historical amounts included in the Pro Forma Information;
however, for purposes of this letter we have:
(A) read the Pro Forma Information;
(B) performed [an audit] [a review in
accordance with SAS 71] of the financial statements
to which the pro forma adjustments were applied;
(C) made inquiries of certain officials of
the Company who have responsibility for financial and
accounting matters about the basis for their
determination of the pro forma adjustments and
whether the Pro Forma Information complies as to form
in all material respects with the applicable
accounting requirements of Rule 11-02 of Regulation
S-X; and
(D) proved the arithmetic accuracy of the
application of the pro forma adjustments to the
historical amounts in the Pro Forma Information; and
on the basis of such procedures and such other inquiries
and procedures as specified herein, nothing came to our
attention that caused us to believe that the Pro Forma
Information included in the Registration Statement does
not comply as to form in all material respects with the
applicable requirements of Rule 11-02 of Regulation S-X
or that the pro forma adjustments have not been properly
applied to the historical amounts in the compilation of
those statements; and
(vii) in addition to the procedures referred to in clause (ii)
above, we have performed other procedures, not constituting an audit,
with respect to certain amounts, percentages, numerical data and
financial information appearing in the Registration Statement, which
are specified herein, and have compared certain of such items with, and
have found such items to be in agreement with, the accounting and
financial records of the Company.
Annex A-2
