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EXHIBIT 1.1
_______________ SHARES
HEALTHCARE FINANCIAL PARTNERS REIT, INC.
COMMON STOCK
UNDERWRITING AGREEMENT
DATED _____________, 1998
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TABLE OF CONTENTS
SECTION 1. REPRESENTATIONS AND WARRANTIES.........................................................................3
Compliance with Registration Requirements.....................................................3
Offering Materials Furnished to Underwriters..................................................3
Distribution of Offering Material By the Company and the Operating Partnership................4
The Underwriting Agreement....................................................................4
Authorization of the Common Shares............................................................4
No Applicable Registration or Other Similar Rights............................................4
No Material Adverse Change....................................................................4
Independent Accountants.......................................................................5
Preparation of the Financial Statements.......................................................5
Organization and Good Standing of the Company, the Operating Partnership and their
Subsidiaries...........................................................................5
Capitalization and Other Capital Stock Matters................................................6
Stock Exchange Listing........................................................................6
Non-Contravention of Existing Instruments; No Further Authorizations or Approvals
Required...............................................................................6
No Material Actions or Proceedings............................................................7
Intellectual Property Rights..................................................................7
All Necessary Permits, etc....................................................................8
Title to Properties...........................................................................8
Tax Law Compliance............................................................................8
Investment Advisors Act; Exchange Act.........................................................9
Insurance.....................................................................................9
No Price Stabilization or Manipulation........................................................9
Accounting System.............................................................................9
ERISA Compliance..............................................................................9
Related Party Transactions...................................................................10
REIT Election................................................................................10
Plan Assets..................................................................................10
Information Supplied by the Company..........................................................10
Conflicts of Interest........................................................................10
Environmental Compliance.....................................................................11
SECTION 2. PURCHASE, SALE AND DELIVERY OF THE COMMON SHARES......................................................11
THE FIRM COMMON SHARES..................................................................................11
THE FIRST CLOSING DATE..................................................................................12
The Optional Common Shares; the Second Closing Date..........................................12
Public Offering of the Common Shares.........................................................12
Payment for the Common Shares................................................................13
DELIVERY OF THE COMMON SHARES...........................................................................13
DELIVERY OF PROSPECTUS TO THE UNDERWRITERS..............................................................13
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SECTION 3. ADDITIONAL COVENANTS..................................................................................13
Representatives' Review of Proposed Amendments and Supplements...............................14
Securities Act Compliance....................................................................14
Amendments and Supplements to the Prospectus and Other Securities Act Matters................14
Copies of any Amendments and Supplements to the Prospectus...................................14
Blue Sky Compliance..........................................................................15
Use of Proceeds..............................................................................15
Transfer Agent...............................................................................15
Earnings Statement...........................................................................15
Periodic Reporting Obligations...............................................................15
Agreement Not To Offer or Sell Additional Securities.........................................15
Future Reports to the Representatives........................................................16
Plan Asset Regulations.......................................................................16
Insurance....................................................................................16
Investment Company Act.......................................................................16
Affiliated Transactions......................................................................16
REIT Status..................................................................................17
Guidelines...................................................................................17
SECTION 4. PAYMENT OF EXPENSES...................................................................................17
SECTION 5. CONDITIONS OF THE OBLIGATIONS OF THE UNDERWRITERS.....................................................18
Accountants' Comfort Letter..................................................................18
Compliance with Registration Requirements; No Stop Order; No Objection from NASD.............18
No Material Adverse Change or Ratings Agency Change..........................................19
Opinion of Counsel for the Company...........................................................19
Opinion of Tax Counsel for the Company.......................................................19
Opinion of Counsel for the Underwriters......................................................19
OFFICERS' CERTIFICATE19
Bring-down Comfort Letter....................................................................20
Lock-Up Agreement from Certain Stockholders of the Company...................................20
Additional Documents.........................................................................20
SECTION 6. REIMBURSEMENT OF UNDERWRITERS' EXPENSES...............................................................20
SECTION 7. EFFECTIVENESS OF THIS AGREEMENT.......................................................................21
SECTION 8. INDEMNIFICATION.......................................................................................21
Indemnification of the Underwriters..........................................................21
Indemnification of the Company, the Operating Partnership and the Company Directors
and Officers..........................................................................22
Notifications and Other Indemnification Procedures...........................................23
Settlements..................................................................................24
SECTION 9. CONTRIBUTION..........................................................................................24
SECTION 10. DEFAULT OF ONE OR MORE OF THE SEVERAL UNDERWRITERS...................................................25
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SECTION 11. TERMINATION OF THIS AGREEMENT........................................................................26
SECTION 12. REPRESENTATIONS AND INDEMNITIES TO SURVIVE DELIVERY..................................................27
SECTION 13. NOTICES..............................................................................................27
SECTION 14. SUCCESSORS..........................................................................................28
SECTION 15. PARTIAL UNENFORCEABILITY.............................................................................28
SECTION 16. GOVERNING LAW PROVISIONS.............................................................................28
SECTION 17. GENERAL PROVISIONS...................................................................................28
SCHEDULE A 1
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UNDERWRITING AGREEMENT
_____________, 1998
NATIONSBANC XXXXXXXXXX SECURITIES LLC
ABN AMRO INCORPORATED CREDIT SUISSE FIRST
BOSTON CORPORATION FRIEDMAN, BILLINGS, XXXXXX & CO., INC.
XXXXXXXX INC.
As Representatives of the several Underwriters
c/o NationsBanc Xxxxxxxxxx Securities LLC
000 Xxxxxxxxxx Xxxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Ladies and Gentlemen:
INTRODUCTORY. HealthCare Financial Partners REIT, Inc., a Maryland
corporation (the "Company), proposes to issue and sell to the several
underwriters named in Schedule A (the "Underwriters") an aggregate of ______
shares (the "Firm Common Shares") of its Common Stock, par value $0.0001 per
share (the "Common Stock"). In addition, the Company has granted to the
Underwriters an option to purchase up to an additional ______ shares (the
"Optional Common Shares") of Common Stock, as provided in Section 2. The Firm
Common Shares and, if and to the extent such option is exercised, the Optional
Common Shares are collectively called the "Common Shares". NationsBanc
Xxxxxxxxxx Securities LLC, ABN AMRO Incorporated, Credit Suisse First Boston
Corporation, Friedman, Billings, Xxxxxx & Co., Inc. and Xxxxxxxx Inc. have
agreed to act as representatives of the several Underwriters (in such capacity,
the "Representatives") in connection with the offering and sale of the Common
Shares.
The Company has prepared and filed with the Securities and Exchange
Commission (the "Commission") a registration statement on Form S-11 (File No.
333-___), which contains a form of prospectus to be used in connection with the
public offering and sale of the Common Shares. Such registration statement, as
amended, including the financial statements, exhibits and schedules thereto, in
the form in which it was declared effective by the Commission under the
Securities Act of 1933 and the rules and regulations promulgated thereunder
(collectively, the "Securities Act"), including any information deemed to be a
part thereof at the time of effectiveness pursuant to Rule 430A or Rule 434
under the Securities Act, is called the "Registration Statement". Any
registration statement filed by the Company pursuant to Rule 462(b) under the
Securities Act is called the "Rule 462(b) Registration Statement", and from and
after the date and time of filing of the Rule 462(b) Registration Statement, the
term "Registration Statement" shall include the Rule 462(b) Registration
Statement. Such prospectus, in the form first used by the Underwriters to
confirm sales of the Common Shares, is called the "Prospectus"; provided,
however, if the Company has, with the consent of NationsBanc Xxxxxxxxxx
Securities LLC, elected to rely upon Rule 434 under the Securities Act, the term
"Prospectus" shall mean the Company's prospectus subject to completion (each, a
"preliminary
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prospectus") dated _____________, 1998 (such preliminary prospectus
is called the "Rule 434 preliminary prospectus"), together with the applicable
term sheet (the "Term Sheet") prepared and filed by the Company with the
Commission under Rules 434 and 424(b) under the Securities Act, and all
references in this Agreement to the date of the Prospectus shall mean the date
of the Term Sheet. All references in this Agreement to the Registration
Statement, the Rule 462(b) Registration Statement, a preliminary prospectus, the
Prospectus or the Term Sheet, or any amendments or supplements to any of the
foregoing, shall include any copy thereof filed with the Commission pursuant to
its Electronic Data Gathering, Analysis and Retrieval System ("XXXXX").
The Company is the sole 1% general partner of HCFP REIT Operating
Partnership, L.P. (the "Operating Partnership"). HCFP Limited, Inc. is a wholly
owned subsidiary of the Company and the sole 99% limited partner of the
Operating Partnership.
The Company has also filed with the Commission a shelf registration
statement on Form S-11 (File No. 333-___) (the "Shelf Registration Statement")
in order to fulfill its obligations under that certain Registration Rights
Agreement, dated as of May 6, 1998.
The Company and the Operating Partnership hereby confirm their
respective agreements with the Underwriters as follows:
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SECTION 1. REPRESENTATIONS AND WARRANTIES.
The Company and the Operating Partnership hereby represent, warrant and
covenant to each Underwriter as follows:
(a) Compliance with Registration Requirements. The
Registration Statement and any Rule 462(b) Registration Statement have been
declared effective by the Commission under the Securities Act. The Company and
the Operating Partnership have complied to the Commission's satisfaction with
all requests of the Commission for additional or supplemental information. No
stop order suspending the effectiveness of the Registration Statement or any
Rule 462(b) Registration Statement is in effect and no proceedings for such
purpose have been instituted or are pending or, to the best knowledge of the
Company and the Operating Partnership, are contemplated or threatened by the
Commission.
Each preliminary prospectus and the Prospectus, when filed,
complied in all material respects with the Securities Act and, if filed by
electronic transmission pursuant to XXXXX (except as may be permitted by
Regulation S-T under the Securities Act), was identical to the copy thereof
delivered to the Underwriters for use in connection with the offer and sale of
the Common Shares. Each of the Registration Statement, any Rule 462(b)
Registration Statement and any post-effective amendment thereto, at the time it
became effective and at all subsequent times, complied and will comply in all
material respects with the Securities Act and did not and will not contain any
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not misleading.
The Prospectus, as amended or supplemented, as of its date and at all subsequent
times, did not and will not contain any 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.
The representations and warranties set forth in the two immediately preceding
sentences do not apply to statements in or omissions from the Registration
Statement, any Rule 462(b) Registration Statement, or any post-effective
amendment thereto, or the Prospectus, or any amendments or supplements thereto,
made in reliance upon and in conformity with information relating to any
Underwriter furnished to the Company or the Operating Partnership in writing by
the Representatives expressly for use therein. There are no contracts or other
documents required to be described in the Prospectus or to be filed as exhibits
to the Registration Statement that have not been described or filed as required.
(b) Offering Materials Furnished to Underwriters. The Company
and the Operating Partnership have delivered to the Representatives one complete
manually signed copy of the Registration Statement and of each consent and
certificate of experts filed as a part thereof, and conformed copies of the
Registration Statement (without exhibits) and preliminary prospectuses and the
Prospectus, as amended or supplemented, in such quantities and at such places as
the Representatives has reasonably requested for each of the Underwriters.
(c) Distribution of Offering Material By the Company and the
Operating Partnership. The Company and the Operating Partnership have not
distributed and will not distribute, prior to the later of the Second Closing
Date (as defined below) and the completion of
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the Underwriters' distribution of the Common Shares, any offering material in
connection with the offering and sale of the Common Shares other than a
preliminary prospectus, the Prospectus or the Registration Statement.
(d) The Underwriting Agreement. This Agreement has been duly
authorized, executed and delivered by, and is a valid and binding agreement of,
the Company and the Operating Partnership, enforceable in accordance with its
terms, except as rights to indemnification hereunder may be limited by
applicable law and except as the enforcement hereof may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
relating to or affecting the rights and remedies of creditors or by general
equitable principles.
(e) Authorization of the Common Shares. The Common Shares to
be purchased by the Underwriters from the Company have been duly authorized for
issuance and sale pursuant to this Agreement and, when issued and delivered by
the Company pursuant to this Agreement, will be validly issued, fully paid and
nonassessable.
(f) No Applicable Registration or Other Similar Rights. There
are no persons with registration or other similar rights to have any equity or
debt securities registered for sale under the Registration Statement or included
in the offering contemplated by this Agreement.
(g) No Material Adverse Change. Except as otherwise disclosed
in the Prospectus, subsequent to the respective dates as of which information is
given in the Prospectus: (i) there has been no material adverse change, or any
development that could reasonably be expected to result in a material adverse
change, in the condition, financial or otherwise, or in the earnings, business,
operations or prospects, whether or not arising from transactions in the
ordinary course of business, of the Company, the Operating Partnership and their
respective subsidiaries, considered as one entity (any such change is called a
"Material Adverse Change"); (ii) the Company, the Operating Partnership and
their respective subsidiaries, considered as one entity, have not incurred any
material liability or obligation, indirect, direct or contingent, not in the
ordinary course of business, nor entered into any material transaction or
agreement not in the ordinary course of business; and (iii) there has been no
dividend or distribution of any kind declared, paid or made by the Company or
the Operating Partnership or, except for dividends paid to the Company, the
Operating Partnership or other subsidiaries, any of their respective
subsidiaries on any class of capital stock, or repurchase or redemption by the
Company, the Operating Partnership or any of their respective subsidiaries of
any class of capital stock.
(h) Independent Accountants. Ernst & Young LLP, who have
expressed their opinion with respect to the financial statements (which term as
used in this Agreement includes the related notes thereto) filed with the
Commission as a part of the Registration Statement and included in the
Prospectus, are independent public or certified public accountants as required
by the Securities Act.
(i) Preparation of the Financial Statements. The financial
statements filed with the Commission as a part of the Registration Statement and
included in the Prospectus present fairly the consolidated financial position of
the Company, the Operating Partnership and their respective subsidiaries as of
and at the dates indicated and the results of their operations and cash
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flows for the periods specified. Such financial statements have been prepared in
conformity with generally accepted accounting principles ("GAAP") applied on a
consistent basis throughout the periods involved, except as may be expressly
stated in the related notes thereto. To the best of the Company's and the
Operating Partnership's knowledge, the financial statements of [Xxxxxxx Oaks]
filed with the Commission as part of the Registration Statement and included in
the Prospectus present fairly the consolidated financial position of [Xxxxxxx
Oaks] and its subsidiaries as of and at the dates indicated, and the results of
their operations and cash flows for the periods specified, and such financial
statements have been prepared in conformity with GAAP applied on a consistent
basis throughout the periods involved, except as may be expressly stated in the
related notes thereof. To the best of the Company's and the Operating
Partnership's knowledge, the financial statements of [Valencia/Vista] filed with
the Commission as part of the Registration Statement and included in the
Prospectus present fairly the consolidated financial position of
[Valencia/Vista] and [its/their] subsidiaries as of and at the dates indicated,
and the results of their operations and cash flows for the periods specified,
and such financial statements have been prepared in conformity with GAAP applied
on a consistent basis throughout the periods involved, except as may be
expressly stated in the related notes thereto. The financial statements of
[Xxxxxxx Oaks and Valencia/Vista] are the only financial statements of the
Company's real estate properties that are required to be disclosed in the
Prospectus under Regulation S-X under the Securities Act and the Commission's
other relevant guidance thereunder. The financial data set forth in the
Prospectus under the captions "Prospectus Summary--Summary Selected Financial
Data", "Selected Financial Data" and "Capitalization" fairly present the
information set forth therein on a basis consistent with that of the audited
financial statements contained in the Registration Statement.
(j) Organization and Good Standing of the Company, the
Operating Partnership and their Subsidiaries. Each of the Company and the
Operating Partnership (i) has been duly incorporated or organized, as
applicable, and is validly existing as a corporation or limited partnership, as
the case may be, in good standing under the laws of the States of Maryland and
Delaware, respectively; (ii) has corporate or partnership power and authority,
as applicable, to own, lease and operate its properties and assets and to
conduct its business as described in the Registration Statement; and (iii) has
the power and authority to enter into and perform its obligations under this
Agreement. Each of the Company and the Operating Partnership is duly qualified
as a foreign corporation or partnership, as the case may be, to transact
business, and is in good standing in each jurisdiction in which such
qualification is required, whether by reason of the ownership or leasing of its
properties and assets or the conduct of business. The Company does not own or
control, directly or indirectly, any corporation, partnership, association or
other entity other than the subsidiaries listed on Exhibit 21 to the
Registration Statement. The Company is the sole general partner of the Operating
Partnership and, together with its wholly owned subsidiary, HCFP Limited, Inc.,
will, as of each Closing Date, own 100% of all outstanding partnership interests
in the Operating Partnership. Except as described in the Registration Statement,
the Operating Partnership is not currently prohibited, directly or indirectly,
from paying any dividends or distributions to the Company to the extent
permitted by applicable law, from making any other distribution, from repaying
to the Company any loans or advances to the Operating Partnership from the
Company or from transferring any of the Operating Partnership's property or
assets to the Company.
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(k) Capitalization and Other Capital Stock Matters. The
authorized, issued and outstanding capital stock of the Company is as set forth
in the Prospectus under the caption "Capitalization" (other than for subsequent
issuances, if any, upon exercise of outstanding options or warrants described in
the Prospectus). The Common Stock (including the Common Shares) conforms in all
material respects to the description thereof contained in the Prospectus. All of
the issued and outstanding shares of Common Stock have been duly authorized and
validly issued, are fully paid and nonassessable and have been issued in
compliance with federal and state securities laws. None of the outstanding
shares of Common Stock were issued in violation of any preemptive rights, rights
of first refusal or other similar rights to subscribe for or purchase securities
of the Company. There are no authorized or outstanding options, warrants,
preemptive rights, rights of first refusal or other rights to purchase, or
equity or debt securities convertible into or exchangeable or exercisable for,
any capital stock of the Company, interests in the Operating Partnership or
capital stock or interests in their respective subsidiaries, other than those
accurately described in the Prospectus. The description of the Company's stock
option and stock incentive plans, and the options or other rights granted
thereunder, set forth in the Prospectus accurately and fairly presents the
information required to be shown with respect to such plans, options and rights.
(l) Stock Exchange Listing. The Common Shares have been
approved for listing on the New York Stock Exchange, subject only to official
notice of issuance.
(m) Non-Contravention of Existing Instruments; No Further
Authorizations or Approvals Required. Neither the Company nor the Operating
Partnership nor any of their respective subsidiaries is in violation of its
organizational documents or is in default (or, with the giving of notice or
lapse of time, would be in default) ("Default") under any indenture, mortgage,
loan or credit agreement, note, contract, franchise, lease or other instrument
to which the Company or the Operating Partnership or any of their respective
subsidiaries is a party or by which it or any of them may be bound, or to which
any of the property or assets of the Company or the Operating Partnership or any
of their respective subsidiaries is subject (each, an "Existing Instrument"),
except for such Defaults as would not, individually or in the aggregate, result
in a Material Adverse Change. The Company's and the Operating Partnership's
execution, delivery and performance of this Agreement and consummation of the
transactions contemplated hereby and by the Prospectus (i) have been duly
authorized by all necessary corporate and partnership action and will not result
in any violation of the provisions of the organizational documents of the
Company or the Operating Partnership or any of their respective subsidiaries,
(ii) will not conflict with or constitute a breach of, or Default or a Debt
Repayment Triggering Event (as defined below) under, or result in the creation
or imposition of any lien, charge or encumbrance upon any property or assets of
the Company or the Operating Partnership or any of their respective subsidiaries
pursuant to, or require the consent of any other party to, any Existing
Instrument, except for such conflicts, breaches, Defaults, liens, charges or
encumbrances as would not, individually or in the aggregate, result in a
Material Adverse Change and (iii) will not result in any violation of any law,
administrative regulation or administrative or court decree applicable to the
Company or the Operating Partnership or any of their respective subsidiaries. No
consent, approval, authorization or other order of, or registration or filing
with, any court or other governmental or regulatory authority or agency, is
required for the Company's and the Operating Partnership's execution, delivery
and performance of this Agreement and consummation of the transactions
contemplated hereby and by the Prospectus,
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except such as have been obtained or made by the Company and the Operating
Partnership and are in full force and effect under the Securities Act,
applicable state securities or blue sky laws and from the National Association
of Securities Dealers, Inc. (the "NASD"). As used herein, a "Debt Repayment
Triggering Event" means any event or condition which gives, or with the giving
of notice or lapse of time would give, 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 or the Operating Partnership or any of their
respective subsidiaries.
(n) No Material Actions or Proceedings. There are no legal or
governmental actions, suits or proceedings pending or, to the best of the
Company's or the Operating Partnership's knowledge, threatened (i) against or
affecting the Company or the Operating Partnership or any of their respective
subsidiaries, (ii) which has as the subject thereof any officer or director of,
or property owned or leased by, the Company or the Operating Partnership or any
of their respective subsidiaries or (iii) relating to environmental or
discrimination matters, where in any such case (A) there is a reasonable
possibility that such action, suit or proceeding might be determined adversely
to the Company or the Operating Partnership or their respective subsidiaries and
(B) any such action, suit or proceeding, if so determined adversely, would
reasonably be expected to result in a Material Adverse Change or adversely
affect the consummation of the transactions contemplated by this Agreement. No
material labor dispute with the employees of the Company or the Operating
Partnership or any of their respective subsidiaries exists or, to the best of
the Company's and the Operating Partnership's knowledge, is threatened or
imminent.
(o) Intellectual Property Rights. The Company, the Operating
Partnership and their respective subsidiaries own or possess sufficient
trademarks, trade names, patent rights, copyrights, licenses, approvals, trade
secrets and other similar rights (collectively, "Intellectual Property Rights")
reasonably necessary to conduct their businesses as now conducted; and the
expected expiration of any of such Intellectual Property Rights would not result
in a Material Adverse Change. Neither the Company nor the Operating Partnership
nor any of their respective subsidiaries has received any notice of infringement
or conflict with asserted Intellectual Property Rights of others, which
infringement or conflict, if the subject of an unfavorable decision, would
result in a Material Adverse Change.
(p) All Necessary Permits, etc. The Company, the Operating
Partnership and their respective subsidiaries are conducting their respective
businesses in compliance in all material respects with applicable federal, state
and local laws, rules, regulations, decisions, directives and orders. The
Company, the Operating Partnership and their respective subsidiaries possess
such valid and current certificates, authorizations or permits issued by the
appropriate state, federal or foreign regulatory agencies or bodies necessary to
conduct their respective businesses, and neither the Company nor the Operating
Partnership nor any of their respective subsidiaries has received any notice of
proceedings relating to the revocation or modification of, or non-compliance
with, any such certificate, authorization or permit that, singly or in the
aggregate, if the subject of an unfavorable decision, ruling or finding, could
result in a Material Adverse Change.
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(q) Title to Properties. (a) The Company, the Operating
Partnership and each of their respective subsidiaries has good and marketable
title to all the properties and assets reflected as owned in the financial
statements referred to in Section 1(i) above, in each case free and clear of any
security interests, mortgages, liens, encumbrances, equities, claims and other
defects, except such as do not materially and adversely affect the value of such
property and do not materially interfere with the use made or proposed to be
made of such property by the Company or the Operating Partnership or such
subsidiary; (b) the real property, improvements, equipment and personal property
held under lease by the Company, the Operating Partnership or any of their
respective subsidiaries are held under valid and enforceable leases, with such
exceptions as are not material and do not materially interfere with the use made
or proposed to be made of such real property, improvements, equipment or
personal property by the Company, the Operating Partnership or such subsidiaries
or are disclosed in the Prospectus; (c) neither the Company nor the Operating
Partnership knows of any event that, but for the passage of time, the giving of
notice or both, would constitute a Default under any such lease; (d) each of the
properties and assets reflected as owned in the financial statements referred to
in Section 1(i) above or held under lease by the Company, the Operating
Partnership or any of their respective subsidiaries is in compliance with all
applicable codes and zoning laws and regulations; and (e) neither the Company
nor the Operating Partnership has knowledge of any pending or threatened
condemnation, zoning change or other proceeding or action that will in any
manner affect the size of, use of, improvement on, construction on or access to
the properties or assets of the Company, the Operating Partnership or any of
their respective subsidiaries.
(r) Tax Law Compliance. The Company, the Operating Partnership
and their respective subsidiaries have filed all necessary federal, state and
foreign income and franchise tax returns and have paid all taxes required to be
paid by any of them and, if due and payable, any related or similar assessment,
fine or penalty levied against any of them, except as may be being contested in
good faith and by appropriate proceedings. The Company has made adequate
charges, accruals and reserves in the applicable financial statements referred
to in Section 1(i) above in respect of all federal, state and foreign income and
franchise taxes for all periods as to which the tax liability of the Company,
the Operating Partnership or any of their respective subsidiaries has not been
finally determined.
(s) Investment Advisors Act; Exchange Act. Neither the Company
nor the Operating Partnership is now, or, after receipt of payment for the
Common Shares, use of proceeds of the offering as described in the Registration
Statement and consummation of all related transactions, will be an "investment
company" or an "affiliated person" of, or "promoter" or "principal underwriter"
for, an "investment company," as such term is defined in the Investment Company
Act of 1940, as amended, or an "investment advisor," as such term is defined in
the Investment Advisors Act of 1940, as amended, or a "broker" within the
meaning of Section 3(a)(4) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), or a "dealer" within the meaning of Section 3(a)(5) of the
Exchange Act.
(t) Insurance. Each of the Company, the Operating Partnership
and their respective subsidiaries is insured by recognized, financially sound
and reputable institutions with policies in such amounts and with such
deductibles and covering such risks as are generally deemed
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adequate and customary for their businesses, including, but not limited to,
policies covering real and personal property owned or leased by the Company, the
Operating Partnership and their respective subsidiaries against theft, damage,
destruction, acts of vandalism and earthquakes. The Company and the Operating
Partnership have no reason to believe that they or any of their respective
subsidiaries will not be able (i) to renew their existing insurance coverage as
and when such policies expire or (ii) to obtain comparable coverage from similar
institutions as may be necessary or appropriate to conduct their business as now
conducted and at a cost that would not result in a Material Adverse Change.
Neither of the Company nor the Operating Partnership nor any of their respective
subsidiaries has been denied any insurance coverage that it has sought or for
which it has applied.
(u) No Price Stabilization or Manipulation. The Company and
the Operating Partnership have not taken and will not take, directly or
indirectly, any action designed to or that might be reasonably expected to cause
or result in stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of the Common Shares.
(v) Accounting System. The Company and the Operating
Partnership maintain a system of accounting controls sufficient to provide
reasonable assurances that (i) all transactions are executed in accordance with
management's general or specific authorization; (ii) all transactions are
recorded as necessary to permit preparation of financial statements in
conformity with GAAP and to maintain accountability for assets; (iii) access to
assets is permitted only in accordance with management's general or specific
authorization, and (iv) the recorded accountability for assets is compared with
existing assets at reasonable intervals and appropriate action is taken with
respect to any differences.
(w) ERISA Compliance. The Company and the Operating
Partnership are in compliance in all material respects with the Employee
Retirement Income Security Act of 1974, as amended, including the regulations
and published interpretations thereunder ("ERISA"). No "reportable event" (as
defined under ERISA Section 4043) has occurred or is reasonably expected to
occur with respect to any "employee benefit plan" established or maintained by
the Company or the Operating Partnership or any of their ERISA Affiliates.
Neither the Company nor the Operating Partnership, nor any of their ERISA
Affiliates, has incurred or reasonably expects to incur any liability under (i)
Title IV of ERISA with respect to termination of, or withdrawal from, any
"employee benefit plan" or (ii) Sections 412, 4971, 497S or 4980B of the
Internal Revenue Code of 1986, as amended (the "Code"). Each "employee benefit
plan" established or maintained by the Company or the Operating Partnership or
any of their ERISA Affiliates that is intended to be qualified under Section
401(a) of the Code is so qualified, and nothing has occurred, whether by action
or failure to act, that would cause the loss of such qualification.
(x) Policies. The Company has adopted written policies for
each policy referenced in the Prospectus (the "Policies"), including, without
limitation, the Guidelines (as defined in the Prospectus), and the Company and
the Operating Partnership are in compliance with the Policies and the
Guidelines.
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(y) Related Party Transactions. There are no business
relationships or related party transactions involving the Company, the Operating
Partnership, their respective subsidiaries or any other person required to be
described in the Prospectus that have not been described as required.
(z) REIT Election. The Company is organized in conformity with
the requirements for qualification as a real estate investment trust ("REIT")
under the Code and its method of operation, as described in the Registration
Statement, will enable it to meet the requirements for taxation as a REIT under
the Code, commencing with the Company's taxable year ending December 31, 1998.
(aa) Plan Assets. Each of the Company and the Operating
Partnership qualifies and will continue to qualify under an available exception
under the Plan Assets Regulation issued by the Department of Labor so that the
assets of each entity are not assets of an "employee benefit plan" as defined
under ERISA.
(ab) Information Supplied by the Company. All of the
information supplied by the Company to the Underwriters for inclusion in the
Registration Statement is true, accurate and complete in all respects. In
addition, the Company has received written permission from each and every entity
or person that has any right to own or possess or otherwise authorize permission
respecting the information. Further, the public dissemination of such
information will not constitute a Default or Debt Repayment Triggering Event
under any Existing Instruments or create any liability, except in such cases
where the Company has obtained written consents stating that the aggrieved party
will not pursue the claim in any manner.
(ac) Conflicts of Interest. The consummation of the
transactions contemplated by the Registration Statement and this Agreement will
not result in a conflict of interest by or among the Company, the Operating
Partnership or any of their respective subsidiaries or affiliates (as defined in
Section 501(b) of the Securities Act) that has not been or will not be (i)
approved by a majority of the independent members of the Company's Board of
Directors or (ii) disclosed in the Registration Statement.
(ae) Environmental Compliance. Each of the Company and the
Operating Partnership have no knowledge of (a) the unlawful presence of any
substance, material or waste that 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), (ii) any petroleum
products, asbestos, polychlorinated biphenyls, lead-based paint, flammable
explosives or radioactive materials, (iii) any additional substances or
materials that are now or hereafter hazardous or toxic substances under any
Environmental Law relating to the properties or assets and (iv) as of any date
of determination, any additional substances or materials that are hereafter
incorporated in or added to the definitions of "hazardous materials" for
purposes of any Environmental Law (collectively, "Hazardous Materials") on any
of the properties or assets owned by or to be
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transferred to the Company or the Operating Partnership, or on any of the
properties as to which the Company is a secured lender. In the ordinary course
of their respective businesses, the Company and the Operating Partnership
conduct periodic reviews of the effect of Environmental Laws on the business,
operations and the properties and assets of the Company and the Operating
Partnership in the course of which they intend to identify and evaluate
associated costs and liabilities. "Environmental Laws" are any federal, state,
local or foreign laws or regulations relating to pollution or protection of
human health or the environment (including, without limitation, ambient air,
surface water, ground water, land surface or subsurface strata) or wildlife,
including, without limitation, laws and regulations relating to emissions,
discharges, releases of threatened releases of chemicals, pollutants,
contaminants, wastes, toxic substances, hazardous substances, petroleum and
petroleum products (collectively, "Matters of Environmental Concern"), or
otherwise relating to the manufacture, processing, distribution, use, treatment,
storage, disposal, transport or handling of Matters of Environmental Concern.
Any certificate signed by an officer of the Company on behalf
of the Company or on behalf of the Company as general partner of the Operating
Partnership and delivered to the Representatives or to counsel for the
Underwriters shall be deemed to be a representation and warranty to each
Underwriter as to the matters set forth therein.
SECTION 2. PURCHASE, SALE AND DELIVERY OF THE COMMON SHARES.
The Firm Common Shares. The Company agrees to issue and sell to the
several Underwriters the Firm Common Shares upon the terms herein set forth. On
the basis of the representations, warranties and agreements herein contained,
and upon the terms but subject to the conditions herein set forth, the
Underwriters agree, severally and not jointly, to purchase from the Company the
respective number of Firm Common Shares set forth opposite their names on
Schedule A. The purchase price per Firm Common Share to be paid by the several
Underwriters to the Company shall be $___ per share.
The First Closing Date. Delivery of certificates for the Firm Common
Shares to be purchased by the Underwriters and payment therefor shall be made at
the offices of NationsBanc Xxxxxxxxxx Securities LLC, 000 Xxxxxxxxxx Xxxxxx, Xxx
Xxxxxxxxx, Xxxxxxxxxx (or such other place as may be agreed to by the Company
and the Representatives) at 6:00 a.m. San Francisco time, on ________________,
1998, or such other time and date not later than 10:30 a.m. San Francisco time,
on _____________, 1998 as the Representatives shall designate by notice to the
Company (the time and date of such closing are called the "First Closing Date").
The Company hereby acknowledges that circumstances under which the
Representatives may provide notice to postpone the First Closing Date as
originally scheduled include, but are in no way limited to, any determination by
the Company or the Representatives to recirculate to the public copies of an
amended or supplemented Prospectus or a delay as contemplated by the provisions
of Section 10 of this Agreement.
The Optional Common Shares; the Second Closing Date. In addition, on
the basis of the representations, warranties and agreements herein contained,
and upon the terms but subject to the conditions herein set forth, the Company
hereby grants an option to the several Underwriters to
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purchase, severally and not jointly, up to an aggregate of ___ Optional Common
Shares from the Company at the purchase price per share to be paid by the
Underwriters for the Firm Common Shares. The option granted hereunder is for use
by the Underwriters solely in covering any over-allotments in connection with
the sale and distribution of the Firm Common Shares. The option granted
hereunder may be exercised at any time (but not more than once) upon notice by
the Representatives to the Company, which notice may be given at any time within
30 days from the date of this Agreement. Such notice shall set forth (i) the
aggregate number of Optional Common Shares as to which the Underwriters are
exercising the option, (ii) the names and denominations in which the
certificates for the Optional Common Shares are to be registered and (iii) the
time, date and place at which such certificates will be delivered (which time
and date may be simultaneous with, but not earlier than, the First Closing Date;
and in such case the term "First Closing Date" shall refer to the time and date
of delivery of certificates for the Firm Common Shares and the Optional Common
Shares). Such time and date of delivery, if subsequent to the First Closing
Date, is called the "Second Closing Date" and shall be determined by the
Representatives and shall not be earlier than three nor later than five full
business days after delivery of such notice of exercise. If any Optional Common
Shares are to be purchased, each Underwriter agrees, severally and not jointly,
to purchase the number of Optional Common Shares (subject to such adjustments to
eliminate fractional shares as the Representatives may determine) that bears the
same proportion to the total number of Optional Common Shares to be purchased as
the number of Firm Common Shares set forth on Schedule A opposite the name of
such Underwriter bears to the total number of Firm Common Shares. The
Representatives may cancel the option at any time prior to its expiration by
giving written notice of such cancellation to the Company.
Public Offering of the Common Shares. The Representatives hereby advise
the Company that the Underwriters intend to offer for sale to the public, as
described in the Prospectus, their respective portions of the Common Shares as
soon after this Agreement has been executed and the Registration Statement has
been declared effective as the Representatives, in their sole judgment, have
determined is advisable and practicable.
Payment for the Common Shares. Payment for the Common Shares shall be
made at the First Closing Date (and, if applicable, at the Second Closing Date)
by wire transfer of immediately available funds to the order of the Company.
It is understood that the Representatives have been authorized, for
their own accounts and the accounts of the several Underwriters, to accept
delivery of and receipt for, and make payment of the purchase price for, the
Firm Common Shares and any Optional Common Shares the Underwriters have agreed
to purchase. NationsBanc Xxxxxxxxxx Securities LLC, individually and not as a
Representative of the Underwriters, may (but shall not be obligated to) make
payment for any Common Shares to be purchased by any Underwriter whose funds
shall not have been received by the Representatives by the First Closing Date or
the Second Closing Date, as the case may be, for the account of such
Underwriter, but any such payment shall not relieve such Underwriter from any of
its obligations under this Agreement.
Delivery of the Common Shares. The Company shall deliver, or cause to
be delivered, to the Representatives for the accounts of the several
Underwriters, certificates for the Firm Common
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Shares at the First Closing Date, against the irrevocable release of a wire
transfer of immediately available funds for the amount of the purchase price
therefor. The Company shall also deliver, or cause to be delivered, to the
Representatives for the accounts of the several Underwriters, certificates for
the Optional Common Shares the Underwriters have agreed to purchase at the First
Closing Date or the Second Closing Date, as the case may be, against the
irrevocable release of a wire transfer of immediately available funds for the
amount of the purchase price therefor. The certificates for the Common Shares
shall be in definitive form and registered in such names and denominations as
the Representatives shall have requested at least two full business days prior
to the First Closing Date (or the Second Closing Date, as the case may be) and
shall be made available for inspection on the business day preceding the First
Closing Date (or the Second Closing Date, as the case may be) at a location in
New York City as the Representatives may designate. Time shall be of the
essence, and delivery at the time and place specified in this Agreement is a
further condition to the obligations of the Underwriters.
Delivery of Prospectus to the Underwriters. Not later than 12:00 p.m.
on the second business day following the date the Common Shares are released by
the Underwriters for sale to the public, the Company shall deliver or cause to
be delivered copies of the Prospectus in such quantities and at such places as
the Representatives shall request.
SECTION 3. ADDITIONAL COVENANTS.
The Company and the Operating Partnership further covenant and agree
with each Underwriter as follows:
(a) Representatives' Review of Proposed Amendments and
Supplements. During such period beginning on the date hereof and ending on the
later of the First Closing Date and such date, as in the opinion of counsel for
the Underwriters, the Prospectus is no longer required by law to be delivered in
connection with sales by an Underwriter or dealer (the "Prospectus Delivery
Period"), prior to amending or supplementing the Registration Statement
(including any registration statement filed under Rule 462(b) under the
Securities Act) or the Prospectus, the Company shall furnish to the
Representatives for review a copy of each such proposed amendment or supplement,
and the Company shall not file any such proposed amendment or supplement to
which the Representatives reasonably object.
(b) Securities Act Compliance. After the date of this
Agreement, the Company shall promptly advise the Representatives in writing (i)
of the receipt of any comments of, or requests for additional or supplemental
information from, the Commission, (ii) of the time and date of any filing of any
post-effective amendment to the Registration Statement or any amendment or
supplement to any preliminary prospectus or the Prospectus, (iii) of the time
and date that any post-effective amendment to the Registration Statement becomes
effective and (iv) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or any post-effective
amendment thereto or of any order preventing or suspending the use of any
preliminary prospectus or the Prospectus, or of any proceedings to remove,
suspend or terminate from listing or quotation the Common Stock from any
securities exchange upon which it is listed for trading or included or
designated for quotation, or of the threatening or initiation of any
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proceedings for any of such purposes. If the Commission shall enter any such
stop order at any time, the Company will use its best efforts to obtain the
lifting of such order at the earliest possible moment. Additionally, the Company
agrees that it shall comply with the provisions of Rules 424(b), 430A and 434,
as applicable, under the Securities Act and will use its reasonable efforts to
confirm that any filings made by the Company under such Rule 424(b) were
received in a timely manner by the Commission.
(c) Amendments and Supplements to the Prospectus and Other
Securities Act Matters. If, during the Prospectus Delivery Period, any event
shall occur or condition exist as a result of which it is necessary to amend or
supplement the Prospectus in order to make the statements therein, in the light
of the circumstances when the Prospectus is delivered to a purchaser, not
misleading, or if in the opinion of the Representatives or counsel for the
Underwriters it is otherwise necessary to amend or supplement the Prospectus to
comply with law, the Company agrees to promptly prepare (subject to Section 3(a)
hereof), file with the Commission and furnish at its own expense to the
Underwriters and to dealers, amendments or supplements to the Prospectus so that
the statements in the Prospectus as so amended or supplemented will not, in the
light of the circumstances when the Prospectus is delivered to a purchaser, be
misleading or so that the Prospectus, as amended or supplemented, will comply
with law.
(d) Copies of any Amendments and Supplements to the
Prospectus. The Company agrees to furnish the Representatives, without charge,
during the Prospectus Delivery Period, as many copies of the Prospectus and any
amendments and supplements thereto as the Representatives may request.
(e) Blue Sky Compliance. The Company shall cooperate with the
Representatives and counsel for the Underwriters to qualify or register the
Common Shares for sale under (or obtain exemptions from the application of) the
state securities or blue sky laws or Canadian provincial securities laws of
those jurisdictions designated by the Representatives, shall comply with such
laws and shall continue such qualifications, registrations and exemptions in
effect so long as required for the distribution of the Common Shares. The
Company shall not be required to qualify as a foreign corporation or to take any
action that would subject it to general service of process in any such
jurisdiction where it is not presently qualified or where it would be subject to
taxation as a foreign corporation. The Company will advise the Representatives
promptly of the suspension of the qualification or registration of (or any such
exemption relating to) the Common Shares for offering, sale or trading in any
jurisdiction or any initiation or threat of any proceeding for any such purpose,
and in the event of the issuance of any order suspending such qualification,
registration or exemption, the Company shall use its best efforts to obtain the
withdrawal thereof at the earliest possible moment.
(f) Use of Proceeds. The Company shall apply the net proceeds
from the sale of the Common Shares sold by it in the manner described under the
caption "Use of Proceeds" in the Prospectus.
(g) Transfer Agent. The Company shall engage and maintain, at
its expense, a registrar and transfer agent for the Common Stock.
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(h) Earnings Statement. As soon as practicable, the Company
will make generally available to its security holders and to the Representatives
an earnings statement (which need not be audited) covering the twelve-month
period ending December 31, 1999 that satisfies the provisions of Section 11(a)
of the Securities Act.
(i) Periodic Reporting Obligations. During the Prospectus
Delivery Period the Company shall file, on a timely basis, with the Commission
and the New York Stock Exchange all reports and documents required to be filed
under the Exchange Act.
(j) Agreement Not To Offer or Sell Additional Securities.
During the period of 180 days following the date of the Prospectus, the Company
and the Operating Partnership will not, without the prior written consent of
NationsBanc Xxxxxxxxxx Securities LLC (which consent may be withheld at the sole
discretion of NationsBanc Xxxxxxxxxx Securities LLC), directly or indirectly,
sell, offer, contract or grant any option to sell, pledge, transfer or establish
an open "put equivalent position" within the meaning of Rule 16a-1(h) under the
Exchange Act, or otherwise dispose of or transfer, or announce the offering of,
or file any registration statement under the Securities Act in respect of, any
shares of Common Stock, options or warrants to acquire shares of the Common
Stock or securities exchangeable or exercisable for or convertible into shares
of Common Stock (other than as contemplated by this Agreement with respect to
the Common Shares); provided, however, that (i) the Company may issue shares of
its Common Stock or options to purchase its Common Stock, or Common Stock upon
exercise of options, pursuant to any stock option or stock incentive plan
described in the Prospectus, but only if the holders of such shares, options, or
shares issued upon exercise of such options, agree in writing not to sell,
offer, dispose of or otherwise transfer any such shares or options during such
180 day period without the prior written consent of NationsBanc Xxxxxxxxxx
Securities LLC (which consent may be withheld at the sole discretion of
NationsBanc Xxxxxxxxxx Securities LLC), (ii) the Operating Partnership may issue
limited partnership interests in the Operating Partnership in consideration for
real estate or real estate-related assets in arms-length transactions, and (iii)
the Company may file the Shelf Registration Statement and any amendment thereto.
(k) Future Reports to the Representatives. During the period
of five years hereafter the Company will furnish to the Representatives at 000
Xxxxxxxxxx Xxxxxx, Xxx Xxxxxxxxx, XX 00000, Attention: Xxxxxxxx Xxxxxx, and
Xxxxxx, Xxxx & Xxxxxxxx LLP, Xxx Xxxxxxxxxx Xxxxxx, Xxxxxxx Xxxxx, Xxx
Xxxxxxxxx, XX 00000, Attention: Xxxx X. Xxxxx, Esq.: (i) as soon as practicable
after the end of each fiscal year, copies of the Annual Report of the Company
containing the balance sheet of the Company as of the close of such fiscal year
and statements of income, stockholders' equity and cash flows for the year then
ended and the opinion thereon of the Company's independent public or certified
public accountants; (ii) as soon as practicable after the filing thereof, copies
of each proxy statement, Annual Report on Form 10-K, Quarterly Report on Form
10-Q, Current Report on Form 8-K or other report filed by the Company with the
Commission, the NASD, the New York Stock Exchange or any other securities
exchange; and (iii) as soon as available, copies of any report or communication
of the Company mailed generally to holders of its capital stock.
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(l) Plan Asset Regulations. The Company shall promptly notify
the Representatives upon the Company's failure to comply with an available
exception under the Plan Asset Regulations issued by the Department of Labor.
(m) Insurance. As of and at all times subsequent to the First
Closing Date, the Company and the Operating Partnership shall be insured in such
amounts and with such deductibles and covering such risks as are generally
deemed adequate, customary and commercially reasonable for their businesses
against theft, damage, destruction and acts of vandalism.
(n) Investment Company Act. The Company and the Operating
Partnership shall conduct their respective businesses so as not to become
subject to the Investment Company Act.
(o) Affiliated Transactions. The Company and the Operating
Partnership may not engage in transactions with the other, or with Affiliates of
the Company or the Operating Partnership, or any entities owned or controlled by
any employee, officer or director of the Company or the Operating Partnership,
except to the extent that such transactions meet the following criteria: (i) are
in the ordinary course of business, (ii) the compensation therefor is fair and
reasonable, and (iii) the overall terms and conditions thereof are not less
favorable to the Company than the probable overall market-rate terms and
conditions of a similar transaction with an unaffiliated person. Additionally,
prior to entering into any such transaction, such transaction shall be approved
by a majority of the independent members of the Company's Board of Directors; or
in the alternative, such transaction shall be pursuant to the policies and/or
management agreements previously approved by a majority of the independent
members of the Company's Board of Directors.
(p) REIT Status. The Company shall operate and conduct its
business so as to qualify as a REIT in accordance with the requirement of the
Code and shall elect to be taxed as a REIT beginning with its tax year ending
December 31, 1998. The Company shall not thereafter revoke its REIT election nor
conduct its business and operations so as to fail to qualify as a REIT under the
Code.
(q) Guidelines. The Company shall not amend the Guidelines (as
defined in the Registration Statement) without the prior approval of a majority
of the independent members of the Company's Board of Directors.
NationsBanc Xxxxxxxxxx Securities LLC, on behalf of the several
Underwriters may, in its sole discretion, but shall not be required to, waive in
writing the performance by the Company or the Operating Partnership of any one
or more of the foregoing covenants or extend the time for their performance.
SECTION 4. PAYMENT OF EXPENSES. The Company agrees to pay all costs,
fees and expenses incurred in connection with the performance of its obligations
hereunder and in connection with the transactions contemplated hereby, including
without limitation (i) all expenses incident to the issuance and delivery of the
Common Shares (including all printing and engraving
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costs), (ii) all fees and expenses of the registrar and transfer agent of the
Common Stock, (iii) all necessary issue, transfer and other stamp taxes in
connection with the issuance and sale of the Common Shares to the Underwriters,
(iv) all fees and expenses of the Company's counsel, independent public or
certified public accountants and other advisors, (v) all costs and expenses
incurred in connection with the preparation, printing, filing, shipping and
distribution of the Registration Statement (including financial statements,
exhibits, schedules, consents and certificates of experts), each preliminary
prospectus and the Prospectus, and all amendments and supplements thereto, and
this Agreement, (vi) all filing fees, attorneys' fees and expenses incurred by
the Company or the Underwriters in connection with qualifying or registering (or
obtaining exemptions from the qualification or registration of) all or any part
of the Common Shares for offer and sale under the state securities or blue sky
laws or the provincial securities laws of Canada, and, if requested by the
Representatives, preparing and printing a "Blue Sky Survey" or memorandum, and
any supplements thereto, advising the Underwriters of such qualifications,
registrations and exemptions, (vii) the filing fees incident to, and the
reasonable fees and expenses of counsel for the Underwriters in connection with,
the NASD's review and approval of the Underwriters' participation in the
offering and distribution of the Common Shares, (viii) the fees and expenses
associated with listing the Common Stock on the New York Stock Exchange, and
(ix) all other fees, costs and expenses referred to in Item 31 of Part II of the
Registration Statement. Except as provided in this Section 4, Section 6, Section
8 and Section 9 hereof, the Underwriters shall pay their own expenses, including
the fees and disbursements of their counsel.
SECTION 5. CONDITIONS OF THE OBLIGATIONS OF THE UNDERWRITERS.
The obligations of the several Underwriters to purchase and pay for the
Common Shares as provided herein on the First Closing Date and, with respect to
the Optional Common Shares, the Second Closing Date, shall be subject to the
accuracy of the representations and warranties on the part of the Company and
the Operating Partnership set forth in Section 1 hereof as of the date hereof
and as of the First Closing Date as though then made and, with respect to the
Optional Common Shares, as of the Second Closing Date as though then made, to
the timely performance by the Company and the Operating Partnership of their
covenants and other obligations hereunder, and to each of the following
additional conditions:
(a) Accountants' Comfort Letter. On the date hereof, the
Representatives shall have received from Ernst & Young LLP, independent public
or certified public accountants for the Company, a letter dated the date hereof
addressed to the Underwriters, in form and substance satisfactory to the
Representatives, containing statements and information of the type ordinarily
included in accountant's "comfort letters" to underwriters, delivered according
to Statement of Auditing Standards No. 72 (or any successor bulletin), with
respect to the audited and unaudited financial statements and certain financial
information contained in the Registration Statement and the Prospectus.
(b) Compliance with Registration Requirements; No Stop Order;
No Objection from NASD. For the period from and after effectiveness of this
Agreement and prior to the First Closing Date and, with respect to the Optional
Common Shares, the Second Closing Date:
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(i) the Company shall have filed the Prospectus
with the Commission (including the information required by Rule 430A under the
Securities Act) in the manner and within the time period required by Rule 424(b)
under the Securities Act; or the Company shall have filed a post-effective
amendment to the Registration Statement containing the information required by
such Rule 430A, and such post-effective amendment shall have become effective;
or, if the Company elected to rely upon Rule 434 under the Securities Act and
obtained the Representative's consent thereto, the Company shall have filed a
Term Sheet with the Commission in the manner and within the time period required
by such Rule 424(b);
(ii) no stop order suspending the effectiveness
of the Registration Statement, any Rule 462(b) Registration Statement, or any
post-effective amendment to the Registration Statement, shall be in effect and
no proceedings for such purpose shall have been instituted or threatened by the
Commission; and
(iii) the NASD shall have raised no objection to
the fairness and reasonableness of the underwriting terms and arrangements.
(c) No Material Adverse Change or Ratings Agency Change.
For the period from and after the date of this Agreement and prior to the First
Closing Date and, with respect to the Optional Common Shares, the Second Closing
Date:
(i) in the reasonable judgment of the
Representatives there shall not have occurred any Material Adverse Change; and
(ii) there shall not have occurred any
downgrading, nor shall any notice have been given of any intended or potential
downgrading or of any review for a possible change that does not indicate the
direction of the possible change, in the rating accorded any securities of the
Company, the Operating Partnership or their respective subsidiaries by any
"nationally recognized statistical rating organization" as such term is defined
for purposes of Rule 436(g)(2) under the Securities Act.
(d) Opinion of Counsel for the Company. On each of the
First Closing Date and the Second Closing Date, the Representatives shall have
received the favorable opinion of Powell, Goldstein, Xxxxxx & Xxxxxx LLP,
counsel for the Company, dated as of such Closing Date, the form of which is
attached as Exhibit A and upon which the Underwriters and their counsel can
rely.
(e) Opinion of Tax Counsel for the Company. On each of
the First Closing Date and the Second Closing Date, the Representatives shall
have received the favorable opinion of Powell, Goldstein, Xxxxxx & Xxxxxx LLP,
tax counsel for the Company, dated as of such Closing Date, with respect to
matters set forth on Exhibit B and upon which the Underwriters and their counsel
can rely.
(f) Opinion of Counsel for the Underwriters. On each of
the First Closing Date and the Second Closing Date, the Representatives shall
have received the favorable opinion of Xxxxxx, Xxxx & Xxxxxxxx LLP, counsel for
the Underwriters, dated as of such Closing Date, with respect to such matters as
may be reasonably requested by the Underwriters.
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(g) Officers' Certificate. On each of the First Closing
Date and the Second Closing Date, the Representatives shall have received a
written certificate executed by the Chief Executive Officer and the Chief
Financial Officer of the Company and the General Partner of the Operating
Partnership, dated as of such Closing Date, to the effect set forth in
subsections (b)(ii) and (c)(ii) of this Section 5, and further to the effect
that:
(i) for the period from and after the date of
this Agreement and prior to such Closing Date, there has not occurred any
Material Adverse Change;
(ii) the representations, warranties and
covenants of the Company and the Operating Partnership set forth in Section 1 of
this Agreement are true and correct with the same force and effect as though
expressly made on and as of such Closing Date; and
(iii) the Company and the Operating Partnership
have complied with all the agreements and satisfied all the conditions on their
part to be performed or satisfied at or prior to such Closing Date.
(h) Bring-down Comfort Letter. On each of the First
Closing Date and the Second Closing Date, the Representatives shall have
received from Ernst & Young LLP, independent public or certified public
accountants for the Company, a letter dated such date, in form and substance
satisfactory to the Representatives, to the effect that they reaffirm the
statements made in the letter furnished by them pursuant to subsection (a) of
this Section 5, except that the specified date referred to therein for the
carrying out of procedures shall be no more than three business days prior to
the First Closing Date or Second Closing Date, as the case may be.
(i) Lock-Up Agreement from Certain Stockholders of the
Company. On the date hereof, the Company shall have furnished to the
Representatives an agreement in the form of Exhibit C hereto from each director
and officer, and such agreement shall be in full force and effect on each of the
First Closing Date and the Second Closing Date.
(j) Additional Documents. On or before each of the First
Closing Date and the Second Closing Date, the Representatives and counsel for
the Underwriters shall have received such information, documents and opinions as
they may reasonably require for the purposes of enabling them to pass upon the
issuance and sale of the Common Shares as contemplated herein, or in order to
evidence the accuracy of any of the representations and warranties, or the
satisfaction of any of the conditions or agreements, herein contained.
If any condition specified in this Section 5 is not satisfied
when and as required to be satisfied, this Agreement may be terminated by the
Representatives by notice to the Company at any time on or prior to the First
Closing Date and, with respect to the Optional Common Shares, at any time prior
to the Second Closing Date, which termination shall be without liability on the
part of any party to any other party, except that Section 4, Section 6, Section
8 and Section 9 shall at all times be effective and shall survive such
termination.
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SECTION 6. REIMBURSEMENT OF UNDERWRITERS' EXPENSES.
If this Agreement is terminated by the Representatives pursuant to
Section 5 or Section 11 (but only with respect to a termination as a result of a
Material Adverse Change relating to the Company), or if the sale to the
Underwriters of the Common Shares on the First Closing Date is not consummated
because of any refusal, inability or failure on the part of the Company to
perform any agreement herein or to comply with any provision hereof, the Company
agrees to reimburse the Representatives and the other Underwriters (or such
Underwriters as have terminated this Agreement with respect to themselves),
severally, upon demand for all out-of-pocket expenses that shall have been
reasonably incurred by the Representatives and the Underwriters in connection
with the proposed purchase and the offering and sale of the Common Shares,
including but not limited to fees and disbursements of counsel, printing
expenses, travel expenses, postage, facsimile and telephone charges.
SECTION 7. EFFECTIVENESS OF THIS AGREEMENT.
This Agreement shall not become effective until the later of (i) the
execution of this Agreement by the parties hereto and (ii) notification by the
Commission to the Company and the Representatives of the effectiveness of the
Registration Statement under the Securities Act.
Prior to such effectiveness, this Agreement may be terminated by any
party by notice to each of the other parties hereto, and any such termination
shall be without liability on the part of (a) the Company or the Operating
Partnership to any Underwriter, except that the Company and the Operating
Partnership shall be obligated to reimburse the expenses of the Representatives
and the Underwriters pursuant to Sections 4 and 6 hereof, (b) of any Underwriter
to the Company or the Operating Partnership, or (c) of any party hereto to any
other party, except that the provisions of Section 8 and Section 9 shall at all
times be effective and shall survive such termination.
SECTION 8. INDEMNIFICATION.
(a) Indemnification of the Underwriters. Each of the Company and
the Operating Partnership, jointly and severally, agree to indemnify and hold
harmless each Underwriter, its officers and employees, and each person, if any,
who controls any Underwriter within the meaning of the Securities Act and the
Exchange Act against any loss, claim, damage, liability or expense, as incurred,
to which such Underwriter or such controlling person may become subject, under
the Securities Act, the Exchange Act or other federal or state statutory law or
regulation, or at common law or otherwise (including in settlement of any
litigation, if such settlement is effected with the written consent of the
Company), insofar as such loss, claim, damage, liability or expense (or actions
in respect thereof as contemplated below) arises out of or is based (i) upon any
untrue statement or alleged untrue statement of a material fact contained in the
Registration Statement, or any amendment thereto, including any information
deemed to be a part thereof pursuant to Rule 430A or Rule 434 under the
Securities Act, 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 (ii) upon any untrue statement or alleged untrue statement of a
material fact contained in any preliminary prospectus or the Prospectus (or any
amendment or supplement thereto), or the omission or alleged omission therefrom
of a material fact necessary in order to make
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the statements therein, in the light of the circumstances under which they were
made, not misleading; or (iii) in whole or in part upon any inaccuracy in the
representations and warranties of the Company and the Operating Partnership
contained herein; or (iv) in whole or in part upon any failure of the Company
and the Operating Partnership to perform their respective obligations hereunder
or under law; or (v) any act or failure to act or any alleged act or failure to
act by any Underwriter in connection with, or relating in any manner to, the
Common Stock or the offering contemplated hereby, and which is included as part
of or referred to in any loss, claim, damage, liability or action arising out of
or based upon any matter covered by clause (i) or (ii) above, provided that the
Company shall not be liable under this clause (v) to the extent that a court of
competent jurisdiction shall have determined by a final judgment that such loss,
claim, damage, liability or action resulted directly from any such acts or
failures to act undertaken or omitted to be taken by such Underwriter through
its gross negligence or willful misconduct; and to reimburse each Underwriter
and each such controlling person for any and all expenses (including the fees
and disbursements of counsel chosen by NationsBanc Xxxxxxxxxx Securities LLC) as
such expenses are reasonably incurred by such Underwriter or such controlling
person in connection with investigating, defending, settling, compromising or
paying any such loss, claim, damage, liability, expense or action; provided,
however, that the foregoing indemnity agreement shall not apply to any loss,
claim, damage, liability or expense to the extent, but only to the extent,
arising out of or based upon any untrue statement or alleged untrue statement or
omission or alleged omission made in reliance upon and in conformity with
written information furnished to the Company by the Representatives expressly
for use in the Registration Statement, any preliminary prospectus or the
Prospectus (or any amendment or supplement thereto); and provided, further, that
with respect to any preliminary prospectus, the foregoing indemnity agreement
shall not inure to the benefit of any Underwriter from whom the person asserting
any loss, claim, damage, liability or expense purchased Common Shares, or any
person controlling such Underwriter, if copies of the Prospectus were timely
delivered to the Underwriter pursuant to Section 2 and a copy of the Prospectus
(as then amended or supplemented if the Company shall have furnished any
amendments or supplements thereto) was not sent or given by or on behalf of such
Underwriter to such person, if required by law so to have been delivered, at or
prior to the written confirmation of the sale of the Common Shares to such
person, and if the Prospectus (as so amended or supplemented) would have cured
the defect giving rise to such loss, claim, damage, liability or expense. The
indemnity agreement set forth in this Section 8(a) shall be in addition to any
liabilities that the Company and the Operating Partnership may otherwise have.
(b) Indemnification of the Company, the Operating Partnership and
the Company Directors and Officers. Each Underwriter agrees, severally and not
jointly, to indemnify and hold harmless the Company, the Operating Partnership,
each of the Company's directors, each of its officers who signed the
Registration Statement and each person, if any, who controls the Company or the
Operating Partnership within the meaning of the Securities Act or the Exchange
Act, against any loss, claim, damage, liability or expense, as incurred, to
which the Company or the Operating Partnership, or any such director, officer or
controlling person may become subject, under the Securities Act, the Exchange
Act, or other federal or state statutory law or regulation, or at common law or
otherwise (including in settlement of any litigation, if such settlement is
effected with the written consent of such Underwriter), insofar as such loss,
claim, damage, liability or expense (or actions in respect thereof as
contemplated below) arises out of or is based upon any untrue or
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alleged untrue statement of a material fact contained in the Registration
Statement, any preliminary prospectus or the Prospectus (or any amendment or
supplement thereto), or arises out of or is based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in the Registration
Statement, any preliminary prospectus, the Prospectus (or any amendment or
supplement thereto), in reliance upon and in conformity with written information
furnished to the Company and the Operating Partnership by the Representatives
expressly for use therein; and to reimburse the Company and the Operating
Partnership, or any such director, officer or controlling person for any legal
and other expense reasonably incurred by the Company or the Operating
Partnership, or any such director, officer or controlling person in connection
with investigating, defending, settling, compromising or paying any such loss,
claim, damage, liability, expense or action. Each of the Company and the
Operating Partnership hereby acknowledges that the only information that the
Underwriters have furnished to the Company and the Operating Partnership
expressly for use in the Registration Statement, any preliminary prospectus or
the Prospectus (or any amendment or supplement thereto) are the statements set
forth (A) as the last paragraph on the inside front cover page of the Prospectus
concerning stabilization by the Underwriters and (B) in the table in the first
paragraph and as the second and [_] paragraphs under the caption "Underwriting"
in the Prospectus; and the Underwriters confirm that such statements are
correct. The indemnity agreement set forth in this Section 8(b) shall be in
addition to any liabilities that each Underwriter may otherwise have.
(c) Notifications and Other Indemnification Procedures. Promptly
after receipt by an indemnified party under this Section 8 of notice of the
commencement of any action, such indemnified party will, if a claim in respect
thereof is to be made against an indemnifying party under this Section 8, notify
the indemnifying party in writing of the commencement thereof, but the omission
so to notify the indemnifying party will not relieve it from any liability that
it may have to any indemnified party for contribution or otherwise than under
the indemnity agreement contained in this Section 8 or to the extent it is not
prejudiced as a proximate result of such failure. In case any such action is
brought against any indemnified party and such indemnified party seeks or
intends to seek indemnity from an indemnifying party, the indemnifying party
will be entitled to participate in, and, to the extent that it shall elect,
jointly with all other indemnifying parties similarly notified, by written
notice delivered to the indemnified party promptly after receiving the aforesaid
notice from such indemnified party, to assume the defense thereof with counsel
reasonably satisfactory to such indemnified party; provided, however, if the
defendants in any such action include both the indemnified party and the
indemnifying party and the indemnified party shall have reasonably concluded
that a conflict may arise between the positions of the indemnifying party and
the indemnified party in conducting the defense of any such action or that there
may be legal defenses available to it and/or other indemnified parties that are
different from or additional to those available to the indemnifying party, the
indemnified party or parties shall have the right to select separate counsel to
assume such legal defenses and to otherwise participate in the defense of such
action on behalf of such indemnified party or parties. Upon receipt of notice
from the indemnifying party to such indemnified party of such indemnifying
party's election so to assume the defense of such action and approval by the
indemnified party of counsel, the indemnifying party will not be liable to such
indemnified party under this Section 8 for any legal or other expenses
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subsequently incurred by such indemnified party in connection with the defense
thereof unless (i) the indemnified party shall have employed separate counsel in
accordance with the proviso to the next preceding sentence (it being understood,
however, that the indemnifying party shall not be liable for the expenses of
more than one separate counsel (together with local counsel), approved by the
indemnifying party (NationsBanc Xxxxxxxxxx Securities LLC in the case of Section
8(b) and Section 9), representing the indemnified parties who are parties to
such action) or (ii) the indemnifying party shall not have employed counsel
satisfactory to the indemnified party to represent the indemnified party within
a reasonable time after notice of commencement of the action, in each of which
cases the fees and expenses of counsel shall be at the expense of the
indemnifying party.
(d) Settlements. The indemnifying party under this Section 8 shall
not be liable for any settlement of any proceeding effected without its written
consent, but if settled with such consent or if there be a final judgment for
the plaintiff, the indemnifying party agrees to indemnify the indemnified party
against any loss, claim, damage, liability or expense by reason of such
settlement or judgment. Notwithstanding the foregoing sentence, if at any time
an indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel as contemplated by Section
8(c) hereof, the indemnifying party agrees that it shall be liable for any
settlement of any proceeding effected without its written consent if (i) such
settlement is entered into more than 30 days after receipt by such indemnifying
party of the aforesaid request and (ii) such indemnifying party shall not have
reimbursed the indemnified party in accordance with such request prior to the
date of such settlement. No indemnifying party shall, without the prior written
consent of the indemnified party, effect any settlement, compromise or consent
to the entry of judgment in any pending or threatened action, suit or proceeding
in respect of which any indemnified party is or could have been a party and
indemnity was or could have been sought hereunder by such indemnified party,
unless such settlement, compromise or consent includes an unconditional release
of such indemnified party from all liability on claims that are the subject
matter of such action, suit or proceeding.
SECTION 9. CONTRIBUTION.
If the indemnification provided for in Section 8 is for any reason held
to be unavailable to or otherwise insufficient to hold harmless an indemnified
party in respect of any losses, claims, damages, liabilities or expenses
referred to therein, then each indemnifying party shall contribute to the
aggregate amount paid or payable by such indemnified party, as incurred, as a
result of any losses, claims, damages, liabilities or expenses referred to
therein (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 Underwriters, on the other hand, from the offering of the Common Shares
pursuant to this Agreement or (ii) if the allocation provided by clause (i)
above 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 the
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Underwriters, on the other hand, in connection with the statements or omissions
or inaccuracies in the representations and warranties herein that resulted in
such losses, claims, damages, liabilities 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 Underwriters, on the
other hand, in connection with the offering of the Common Shares pursuant to
this Agreement shall be deemed to be in the same respective proportions as the
total net proceeds from the offering of the Common Shares pursuant to this
Agreement (before deducting expenses) received by the Company and the Operating
Partnership, and the total underwriting discount received by the Underwriters,
in each case as set forth on the front cover page of the Prospectus (or, if Rule
434 under the Securities Act is used, the corresponding location on the Term
Sheet) bear to the aggregate initial public offering price of the Common Shares
as set forth on such cover. The relative fault of the Company and the Operating
Partnership, on the one hand, and the Underwriters, on the other hand, shall be
determined by reference to, among other things, whether any such untrue or
alleged untrue statement of a material fact or omission or alleged omission to
state a material fact or any such inaccurate or alleged inaccurate
representation or warranty relates to information supplied by the Company and
the Operating Partnership, on the one hand, or the Underwriters, on the other
hand, and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission.
The amount paid or payable by a party as a result of the losses,
claims, damages, liabilities and expenses referred to above shall be deemed to
include, subject to the limitations set forth in Section 8(c), any legal or
other fees or expenses reasonably incurred by such party in connection with
investigating or defending any action or claim. The provisions set forth in
Section 8(c) with respect to notice of commencement of any action shall apply if
a claim for contribution is to be made under this Section 9; provided, however,
that no additional notice shall be required with respect to any action for which
notice has been given under Section 8(c) for purposes of indemnification.
The Company, the Operating Partnership and the Underwriters agree that
it would not be just and equitable if contribution pursuant to this Section 9
were determined by pro rata allocation (even if the Underwriters were treated as
one entity for such purpose) or by any other method of allocation which does not
take account of the equitable considerations referred to in this Section 9.
Notwithstanding the provisions of this Section 9, no Underwriter shall
be required to contribute any amount in excess of the underwriting commissions
received by such Underwriter in connection with the Common Shares underwritten
by it and distributed to the public. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Underwriters' obligations to contribute
pursuant to this Section 9 are several, and not joint, in proportion to their
respective underwriting commitments as set forth opposite their names in
Schedule A. For purposes of this Section 9, each officer and employee of an
Underwriter and each person, if any, who controls an Underwriter within the
meaning of the Securities Act and the Exchange Act shall have the same rights to
contribution as such Underwriter, and each director of the Company, 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 the
Securities Act and the Exchange Act shall have the same rights to contribution
as the Company.
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SECTION 10. DEFAULT OF ONE OR MORE OF THE SEVERAL UNDERWRITERS.
If, on the First Closing Date or the Second Closing Date, as the case
may be, any one or more of the several Underwriters shall fail or refuse to
purchase Common Shares that it or they have agreed to purchase hereunder on such
date, and the aggregate number of Common Shares that such defaulting Underwriter
or Underwriters agreed but failed or refused to purchase does not exceed 10% of
the aggregate number of the Common Shares to be purchased on such date, the
other Underwriters shall be obligated, severally, in the proportions that the
number of Firm Common Shares set forth opposite their respective names on
Schedule A bears to the aggregate number of Firm Common Shares set forth
opposite the names of all such non-defaulting Underwriters, or in such other
proportions as may be specified by the Representatives with the consent of the
non-defaulting Underwriters, to purchase the Common Shares that such defaulting
Underwriter or Underwriters agreed but failed or refused to purchase on such
date. If, on the First Closing Date or the Second Closing Date, as the case may
be, any one or more of the Underwriters shall fail or refuse to purchase Common
Shares and the aggregate number of Common Shares with respect to which such
default occurs exceeds 10% of the aggregate number of Common Shares to be
purchased on such date, and arrangements satisfactory to the Representatives and
the Company for the purchase of such Common Shares are not made within 48 hours
after such default, this Agreement shall terminate without liability of any
party to any other party, except that the provisions of Section 4, Section 8 and
Section 9 shall at all times be effective and shall survive such termination. In
any such case, either the Representatives or the Company shall have the right to
postpone the First Closing Date or the Second Closing Date, as the case may be,
but in no event for longer than seven days in order that the required changes,
if any, to the Registration Statement and the Prospectus or any other documents
or arrangements may be effected.
As used in this Agreement, the term "Underwriter" shall be deemed to
include any person substituted for a defaulting Underwriter under this Section
10. Any action taken under this Section 10 shall not relieve any defaulting
Underwriter from liability in respect of any default of such Underwriter under
this Agreement.
SECTION 11. TERMINATION OF THIS AGREEMENT.
Prior to the First Closing Date, this Agreement may be terminated by
the Representatives by notice given to the Company if at any time (i) trading or
quotation in any of the Company's securities shall have been suspended or
limited by the Commission or by the New York Stock Exchange, or trading in
securities generally on either the Nasdaq Stock Market or the New York Stock
Exchange shall have been suspended or limited, or minimum or maximum prices
shall have been generally established on any of such stock exchanges by the
Commission or the NASD; (ii) a general banking moratorium shall have been
declared by any of federal, New York or California authorities; (iii) there
shall have occurred any outbreak or escalation of national or international
hostilities or any crisis or calamity, or any change in the United States or
international financial markets, or any substantial change or development
involving a prospective substantial change in United States' or international
political, financial or economic conditions, as in the judgment of the
Representatives is material and adverse and makes it impracticable to market the
Common Shares
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in the manner and on the terms described in the Prospectus or to enforce
contracts for the sale of securities; (iv) in the reasonable judgment of the
Representatives there shall have occurred any Material Adverse Change; or (v)
the Company shall have sustained a loss by strike, fire, flood, earthquake,
accident or other calamity of such character as in the judgment of the
Representatives may interfere materially with the conduct of the business and
operations of the Company regardless of whether or not such loss shall have been
insured. Any termination pursuant to this Section 11 shall be without liability
on the part of (a) the Company or the Operating Partnership to any Underwriter,
except that the Company and the Operating Partnership shall be obligated to
reimburse the expenses of the Representatives and the Underwriters pursuant to
Sections 4 and 6 hereof, (b) any Underwriter to the Company and the Operating
Partnership, or (c) of any party hereto to any other party except that the
provisions of Section 8 and Section 9 shall at all times be effective and shall
survive such termination.
SECTION 12. REPRESENTATIONS AND INDEMNITIES TO SURVIVE DELIVERY.
The respective indemnities, agreements, representations, warranties and
other statements of the Company, its officers, the Operating Partnership and of
the several Underwriters set forth in or made pursuant to this Agreement will
remain in full force and effect, regardless of any investigation made by or on
behalf of any Underwriter, the Company, the Operating Partnership or any of
their respective partners, officers or directors or any controlling person, as
the case may be, and will survive delivery of and payment for the Common Shares
sold hereunder and any termination of this Agreement.
SECTION 13. NOTICES.
All communications hereunder shall be in writing and shall be mailed,
hand delivered or telecopied and confirmed to the parties hereto as follows:
If to the Representatives:
NationsBanc Xxxxxxxxxx Securities LLC
000 Xxxxxxxxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
Facsimile: (000) 000-0000
Attention: Xxxxx Xxxxxx, Esq.
with a copy to:
Xxxxxx, Xxxx & Xxxxxxxx LLP
Xxx Xxxxxxxxxx Xxxxxx, Xxxxxxx Xxxxx
Xxx Xxxxxxxxx, XX 00000
Facsimile: (000) 000-0000
Attention: Xxxx X. Xxxxx, Esq.
If to the Company or the Operating Partnership:
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HealthCare Financial Partners REIT, Inc.
Xxx Xxxxxxxxx Xxxxxx, Xxxxx 000
Xxxxx Xxxxx, XX 00000
Facsimile: (000) 000-0000
Attention: Xxxx X. Xxxxxxx, Chairman
with a copy to:
Powell, Goldstein, Xxxxxx & Xxxxxx
16th Floor
000 Xxxxxxxxx Xxxxxx, X.X.
Xxxxxxx, XX 00000
Facsimile: (000) 000-0000
Attention: G. Xxxxxxx Xxxxx, Esq.
Any party hereto may change the address for receipt of communications by giving
written notice to the others.
SECTION 14. SUCCESSORS.
This Agreement will inure to the benefit of and be binding upon the
parties hereto and to the benefit of the employees, officers and directors and
controlling persons referred to in Section 8 and Section 9 of this Agreement,
and in each case their respective successors, and no other person will have any
right or obligation hereunder. The term "successors" shall not include any
purchaser of the Common Shares as such from any of the Underwriters merely by
reason of such purchase.
SECTION 15. PARTIAL UNENFORCEABILITY.
The invalidity or unenforceability of any Section, paragraph or
provision of this Agreement shall not affect the validity or enforceability of
any other Section, paragraph or provision hereof. If any Section, paragraph or
provision of this Agreement is for any reason determined to be invalid or
unenforceable, there shall be deemed to be made such minor changes (and only
such minor changes) as are necessary to make it valid and enforceable.
SECTION 16. GOVERNING LAW PROVISIONS.
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE INTERNAL LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO
BE PERFORMED IN SUCH STATE.
SECTION 17. GENERAL PROVISIONS.
This Agreement constitutes the entire agreement of the parties to this
Agreement and supersedes all prior written or oral and all contemporaneous oral
agreements, understandings and negotiations with respect to the subject matter
hereof. This Agreement may be executed in two or more counterparts, each one of
which shall be an original, with the same effect as if the signatures
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thereto and hereto were upon the same instrument. This Agreement may not be
amended or modified unless in writing by all of the parties hereto, and no
condition herein (express or implied) may be waived unless waived in writing by
each party whom the condition is meant to benefit. The Table of Contents and the
Section headings herein are for the convenience of the parties only and shall
not affect the construction or interpretation of this Agreement.
Each of the parties hereto acknowledges that it is a sophisticated
business person who was adequately represented by counsel during negotiations
regarding the provisions hereof, including, without limitation, the
indemnification provisions of Section 8 and the contribution provisions of
Section 9, and is fully informed regarding said provisions. Each of the parties
hereto further acknowledges that the provisions of Sections 8 and 9 hereto
fairly allocate the risks in light of the ability of the parties to investigate
the Company and the Operating Partnership, their affairs and business in order
to assure that adequate disclosure has been made in the Registration Statement,
any preliminary prospectus and the Prospectus (and any amendments and
supplements thereto), as required by the Securities Act and the Exchange Act.
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If the foregoing is in accordance with your understanding of
our agreement, kindly sign and return to the Company the enclosed copies hereof,
whereupon this instrument, along with all counterparts hereof, shall become a
binding agreement in accordance with its terms.
Very truly yours,
HEALTHCARE FINANCIAL PARTNERS REIT, INC.,
a Maryland corporation
By:
---------------------------------------
Name: Xxxx X. Xxxxxxx
Title: Chairman of the Board and
Chief Executive Officer
HCFP REIT OPERATING
PARTNERSHIP, L.P.
a Delaware limited partnership
By: HealthCare Financial Partners REIT, Inc.
Its: General Partner
By:
---------------------------------------
Name: Xxxx X. Xxxxxxx
Title: Chairman of the Board and
Chief Executive Officer
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The foregoing Underwriting Agreement is hereby confirmed and accepted by the
Representatives in San Francisco, California as of the date first above written.
NATIONSBANC XXXXXXXXXX SECURITIES LLC
ABN AMRO INCORPORATED
CREDIT SUISSE FIRST BOSTON CORPORATION
FRIEDMAN, BILLINGS, XXXXXX & CO., INC.
XXXXXXXX INC.
ACTING AS REPRESENTATIVES OF THE SEVERAL
UNDERWRITERS NAMED IN THE ATTACHED
SCHEDULE A
By: NationsBanc Xxxxxxxxxx Securities LLC
By:
----------------------------------
Name:
-----------------------------
Title:
----------------------------
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SCHEDULE A
NUMBER OF FIRM
COMMON SHARES
UNDERWRITERS TO BE PURCHASED
NationsBanc Xxxxxxxxxx Securities LLC........ [___]
ABN AMRO Incorporated........................ [___]
Credit Suisse First Boston Corporation [___]
Friedman, Billings, Xxxxxx & Co., Inc........ [___]
Xxxxxxxx Inc................................. [___]
Total........................................ [___]
36
EXHIBIT A
Opinion of Powell, Goldstein, Xxxxxx & Xxxxxx LLP, counsel for the
Company, to be delivered pursuant to Section 5(e) of the Underwriting Agreement.
References to the Prospectus in this Exhibit A include any supplements
thereto at the First Closing Date or the Second Closing Date. Counsel for the
Underwriters may rely on this opinion.
(i) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State of
Maryland.
(ii) The Operating Partnership has been duly organized and
is validly existing as a limited partnership in good standing under the laws of
the State of Delaware.
(iii) The Company has corporate power and authority to own,
lease and operate its properties and to conduct its business as described in the
Prospectus and to enter into and perform its obligations under the Underwriting
Agreement.
(iv) The Operating Partnership has the partnership power
and authority to own, lease and operate its properties and to conduct its
business as described in the Prospectus and to enter into and perform its
obligations under the Underwriting Agreement.
(v) Each of the Company and the Operating Partnership is
duly qualified as a foreign corporation or limited partnership, as the case may
be, to transact business and is in good standing as a foreign corporation or
limited partnership, as the case may be, in each jurisdiction in which such
qualification is required, whether by reason of the ownership or leasing of
property or the conduct of business, except for such jurisdictions where the
failure to so qualify or to be in good standing would not, individually or in
the aggregate, result in a Material Adverse Change.
(vi) Each significant subsidiary (as defined in Rule 405
under the Securities Act) has been duly organized and is validly existing as a
corporation, limited partnership or limited liability company, as the case may
be, in good standing under the laws of the jurisdiction of its organization, has
corporate or partnership power, as the case may be, and authority to own, lease
and operate its properties and to conduct its business as described in the
Prospectus and, to the best knowledge of such counsel, is duly qualified as a
foreign corporation, limited partnership or limited liability company, as the
case may be, to transact business and is in good standing in each jurisdiction
in which such qualification is required, whether by reason of the ownership or
leasing of property or the conduct of business, except for such jurisdictions
where the failure to so qualify or to be in good standing would not,
individually or in the aggregate, result in a Material Adverse Change.
(vii) All of the issued and outstanding capital stock or
interests of each such significant subsidiary has been duly authorized and
validly issued, is fully paid and non-assessable and is owned by the Company,
directly or through subsidiaries, to the best knowledge of such counsel, free
and clear of any security interest, mortgage, pledge, lien, encumbrance or, to
the best
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37
knowledge of such counsel, any pending or threatened claim. The Company is the
sole general partner of the Operating Partnership, and HCFP Limited, Inc. is the
sole limited partner of the Operating Partnership.
(viii) The authorized, issued and outstanding capital stock
of the Company (including the Common Stock) conforms to the descriptions thereof
set forth in the Prospectus. All of the outstanding shares of Common Stock have
been duly authorized and validly issued, are fully paid and nonassessable and,
to the best of such counsel's knowledge, have been issued in compliance with the
registration and qualification requirements of federal and state securities
laws. The form of certificate used to evidence the Common Stock is in due and
proper form and complies with all applicable requirements of the charter and
by-laws of the Company and the General Corporation Law of the State of Maryland.
The description of the Company's stock option and stock incentive plans, and the
options or other rights granted and exercised thereunder, set forth in the
Prospectus accurately and fairly presents the information required to be shown
with respect to such plans, arrangements, options and rights.
(ix) No stockholder of the Company or any other person has
any preemptive right, right of first refusal or other similar right to subscribe
for or purchase securities of the Company arising (i) by operation of the
charter or by-laws of the Company or the General Corporation Law of the State of
Maryland or (ii) to the best knowledge of such counsel, otherwise.
(x) No person has any preemptive right, right of first
refusal or other similar right to subscribe for securities of or interests in
the Operating Partnership arising (i) by operation of the agreement of limited
partnership of the Operating Partnership or the Delaware Revised Uniform Limited
Partnership Act or (ii) to the best knowledge of such counsel, otherwise.
(xi) The Underwriting Agreement has been duly authorized,
executed and delivered by, and is a valid and binding agreement of, the Company
and the Operating Partnership, enforceable in accordance with its terms, except
as rights to indemnification thereunder may be limited by applicable law and
except as the enforcement thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to or affecting
creditors' rights generally or by general equitable principles.
(xii) The Common Shares to be purchased by the Underwriters
from the Company have been duly authorized for issuance and sale pursuant to the
Underwriting Agreement and, when issued and delivered by the Company pursuant to
the Underwriting Agreement against payment of the consideration set forth
therein, will be validly issued, fully paid and nonassessable.
(xiii) The Registration Statement and the Rule 462(b)
Registration Statement, if any, has been declared effective by the Commission
under the Securities Act. To the best knowledge of such counsel, no stop order
suspending the effectiveness of either of the Registration Statement or the Rule
462(b) Registration Statement, if any, has been issued under the Securities Act
and no proceedings for such purpose have been instituted or are pending or are
contemplated or threatened by the Commission. Any required filing of the
Prospectus and any supplement thereto pursuant to Rule 424(b) under the
Securities Act has been made in the manner and within the time period required
by such Rule 424(b).
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(xiv) The Registration Statement, including any Rule 462(b)
Registration Statement, the Prospectus, and each amendment or supplement to the
Registration Statement and the Prospectus, as of their respective effective or
issue dates (other than the financial statements and supporting schedules
included therein or in exhibits to or excluded from the Registration Statement,
as to which no opinion need be rendered) comply as to form in all material
respects with the applicable requirements of the Securities Act.
(xv) The Common Shares have been approved for listing on
the New York Stock Exchange.
(xvi) The statements (i) in the Prospectus under the
captions "Prospectus Summary," "Risk Factors -- Risks Associated with the
Healthcare Industry," "Certain Provisions of Maryland Law and of the Company's
Charter and Bylaws," "Partnership Agreement," "Federal Income Tax
Considerations," "ERISA Considerations," and "Shares Eligible for Future Sale,"
insofar as such statements constitute matters of law, summaries of legal
matters, the Company's charter or by-law provisions, documents or legal
proceedings, or legal conclusions, has been reviewed by such counsel and fairly
present and summarize, in all material respects, the matters referred to
therein.
(xvii) To the best knowledge of such counsel, there are no
legal or governmental actions, suits or proceedings pending or threatened that
are required to be disclosed in the Registration Statement, other than those
disclosed therein.
(xviii) To the best knowledge of such counsel, there are no
Existing Instruments required to be described or referred to in the Registration
Statement or to be filed as exhibits thereto other than those described or
referred to therein or filed or incorporated by reference as exhibits thereto;
and the descriptions thereof and references thereto are correct in all material
respects.
(xix) No consent, approval, authorization or other order
of, or registration or filing with, any court or other governmental authority or
agency, is required for the Company's execution, delivery and performance of the
Underwriting Agreement and consummation of the transactions contemplated thereby
and by the Prospectus, except as required under the Securities Act, applicable
state securities or blue sky laws and from the NASD.
(xx) The execution and delivery of the Underwriting
Agreement by the Company and the Operating Partnership and the performance by
the Company and the Operating Partnership of their respective obligations
thereunder (other than performance by the Company and the Operating Partnership
of their respective obligations under the indemnification section of the
Underwriting Agreement, as to which no opinion need be rendered) (i) have been
duly authorized by all necessary corporate or partnership action, as the case
may be, on the part of the Company and the Operating Partnership; (ii) will not
result in any violation of the provisions of the charter or by-laws of the
Company, the agreement of limited partnership of the Operating Partnership, or
the organizational documents of any subsidiary of the Company or the Operating
Partnership; (iii) will not constitute a breach of, or Default or a Debt
Repayment Triggering Event under, or result in the creation or imposition of any
lien, charge or encumbrance upon any property or assets of the Company, the
Operating Partnership or any of their respective subsidiaries pursuant to the
best
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knowledge of such counsel, any material Existing Instrument; or (iv) to the
best knowledge of such counsel, will not result in any violation of any law,
administrative regulation or administrative or court decree applicable to the
Company, the Operating Partnership or any of their respective subsidiaries.
(xxi) The Company is not, and after receipt of payment for
the Common Shares will not be, an "investment company" within the meaning of
Investment Company Act.
(xxii) The Operating Partnership is not, and after the
Closing will not be, an "investment company" within the meaning of the
Investment Company Act.
(xxiii) Except as disclosed in the Prospectus under the
caption "Shares Eligible for Future Sale", to the best knowledge of such
counsel, there are no persons with registration or other similar rights to have
any equity or debt securities registered for sale under the Registration
Statement or included in the offering contemplated by the Underwriting
Agreement, except for such rights as have been duly waived.
(xxiv) To the best knowledge of such counsel, neither the
Company nor the Operating Partnership nor any of their respective subsidiaries
is in violation of its organizational documents or any law, administrative
regulation or administrative or court decree applicable to the Company, the
Operating Partnership or any of their respective subsidiaries or is in Default
in the performance or observance of any obligation, agreement, covenant or
condition contained in any material Existing Instrument, except in each such
case for such violations or Defaults as would not, individually or in the
aggregate, result in a Material Adverse Change.
In addition, such counsel shall state that they have participated in
conferences with officers and other representatives of the Company and the
Operating Partnership, representatives of the independent public or certified
public accountants for the Company and the Operating Partnership and with
representatives of the Underwriters at which the contents of the Registration
Statement and the Prospectus, and any supplements or amendments thereto, and
related matters were discussed and, although such counsel is not passing upon
and does not assume any responsibility for the accuracy, completeness or
fairness of the statements contained in the Registration Statement or the
Prospectus (other than as specified above), and any supplements or amendments
thereto, on the basis of the foregoing, nothing has come to their attention that
would lead them to believe that either the Registration Statement or any
amendments thereto, at the time the Registration Statement or such amendments
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 Prospectus, as of its date or at
the First Closing Date or the Second Closing Date, as the case may be, contained
an untrue statement of a material fact or omitted to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading (it being understood
that such counsel need express no belief as to the financial statements or
schedules or other financial or statistical data derived therefrom, included in
the Registration Statement or the Prospectus or any amendments or supplements
thereto).
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In rendering such opinion, such counsel may rely (A) as to matters
involving the application of laws of any jurisdiction other than the General
Corporation Law of the State of Maryland, the Delaware Revised Uniform Limited
Partnership Act, the law of the State of New York or the federal law of the
United States, to the extent they deem proper and specified in such opinion,
upon the opinion (which shall be dated the First Closing Date or the Second
Closing Date, as the case may be, shall be satisfactory in form and substance to
the Underwriters, shall expressly state that the Underwriters may rely on such
opinion as if it were addressed to them and shall be furnished to the
Representative) of other counsel of good standing whom they believe to be
reliable and who are satisfactory to counsel for the Underwriters; provided,
however, that such counsel shall further state that they believe that they and
the Underwriters are justified in relying upon such opinion of other counsel,
and (B) as to matters of fact, to the extent they deem proper, on certificates
of responsible officers of the Company and public officials.
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EXHIBIT B
___________, 1998
HealthCare Financial Partners REIT, Inc.
0 Xxxxxxxxx Xxxxxx, Xxxxx 000
Xxxxx Xxxxx, Xxxxxxxx 00000
Re: HealthCare Financial Partners REIT, Inc.
Qualification as a
Real Estate Investment Trust
Ladies and Gentlemen:
We have acted as counsel to HealthCare Financial Partners REIT, Inc., a
Maryland corporation (the "Company"), in connection with the preparation of the
registration statement on Form S-11 (File No. 333-___) dated ___________, 1998
(the "Registration Statement"), with respect to the offering and sale (the
"Offering") of up to ___________ shares of $0.01 par value common stock (the
"Common Stock") of the Company. You have requested our opinion regarding certain
U.S. federal income tax matters in connection with the Offering.
The Company, initially directly, and ultimately through HCFP REIT
Operating Partnership, L.P. (the "Operating Partnership"), plans to invest in
real estate used by a variety of healthcare facilities. The investments may be
structured as mortgage loans, mortgage-backed securities, other mortgage-related
assets, purchase leaseback transactions, joint ventures or partnerships, or
combinations of the foregoing. The Company intends to invest the balance of the
net proceeds of the Offering (pending investment thereof in income producing
real estate assets of the type described above) in readily marketable,
interest-bearing securities.
In giving this opinion letter, we have examined the following:
1. The Company's Articles of Incorporation, as duly filed with
the Department of Assessments and Taxation of the State of Maryland on
_______ __, 1998, and as amended on _____________ ____, 1998, and
____________ _____, 1998.
2. The Company's Bylaws.
3. The Registration Statement, including the prospectus
contained as part of the Registration Statement (the "Prospectus").
4. The Agreement of Limited Partnership of HCFP REIT Operating
Partnership, L.P. (the "Partnership Agreement") between the Company, as
general partner, and HCFP Limited, Inc., as the initial limited partner
(the "Limited Partner"), in the form filed as an exhibit to the
Registration Statement.
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5. Such other documents as we have deemed necessary or
appropriate for purposes of this opinion.
In connection with the opinions rendered below, we have assumed, with
your consent, that:
1. Each of the documents referred to above has been duly
authorized, executed, and delivered; is authentic, if an original, or
is accurate, if a copy; and has not been amended.
2. During its short taxable year ending December 31, 1998, and
for all subsequent taxable years, the Company will operate in a manner
that will make the representations contained in a certificate, dated as
of [May 6, 1998] and executed by a duly appointed officer of the
Company (the "Officer's Certificate"), true for such years.
3. The Company will not make any amendments to its
organizational documents or the Partnership Agreement after the date of
this opinion that would affects its qualification as a real estate
investment trust (a "REIT") for any taxable year.
4. Neither the Company, nor the Operating Partnership, nor the
Limited Partner will take any action after the date hereof that would
have the effect of altering the facts upon which the opinions set forth
below are based.
In connection with the opinions rendered below, we also have relied
upon the correctness of the representations contained in the Officer's
Certificate. No facts have come to our attention, however, that would cause us
to question the accuracy and completeness of the facts contained in the
documents and assumptions set forth above, the representations set forth in the
Officer's Certificate, or the Prospectus in a material way. In addition, to the
extent that any of the representations provided to us in the Officer's
Certificate are with respect to matters set forth in the Internal Revenue Code
of 1986, as amended (the "Code"), or the Treasury regulations thereunder (the
"Regulations"), we have reviewed with the individuals making such
representations the relevant portions of the Code and the applicable
Regulations.
Based on the documents and assumptions set forth above, the
representations set forth in the Officer's Certificate, and the discussion in
the Offering Memorandum under the caption "Federal Income Tax Considerations"
(which is incorporated herein by reference), we are of the opinion that:
(a) Commencing with the Company's short taxable year beginning
on ________ __, 1998 and ending December 31, 1998, the Company will qualify to
be taxed as a REIT pursuant to Code Sections 856 through 860, and the Company's
organization and proposed method of operation will enable it to continue to meet
the requirements for qualification and taxation as a REIT under the Code.
(b) The Operating Partnership will be characterized, for
Federal income tax purposes, as a partnership and not as an association taxable
as a corporation.
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(c) The descriptions of the law and the legal conclusions
contained in the Prospectus under the captions "PROSPECTUS SUMMARY-Tax Status of
the Company," " RISK FACTORS- Legal and Tax Risks," "PARTNERSHIP AGREEMENT-Tax
Matters," and "FEDERAL INCOME TAX CONSIDERATIONS" are correct in all material
respects, and the discussion thereunder fairly summarizes the federal income tax
considerations that are likely to be material to a holder of the Common Shares.
We will not review on a continuing basis the Company's compliance with
the documents or assumptions set forth above, or the representations set forth
in the Officer's Certificate. Accordingly, no assurance can be given that the
actual results of the Company's operations for any given taxable year will
satisfy the requirements for qualification and taxation as a REIT.
The foregoing opinions are based on current provisions of the Code and
Regulations, published administrative interpretations thereof, and published
court decisions. The Internal Revenue Service has not issued Regulations or
administrative interpretations with respect to various provisions of the Code
relating to REIT qualification. No assurance can be given that the law will not
change in a way that will prevent the Company from qualifying as a REIT.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement. We also consent to the references to Powell, Goldstein,
Xxxxxx & Xxxxxx LLP under the caption "Federal Income Tax Considerations" in the
Offering Memorandum. In giving this consent, we do not admit that we are in the
category of persons whose consent is required by Section 7 of the Securities Act
of 1933, as amended, or the rules and regulations promulgated thereunder by the
SEC.
The foregoing opinions are limited to the U.S. federal income tax
matters addressed herein, and no other opinions are rendered with respect to
other federal tax matters or to any issues arising under the tax laws of any
other country, or any state or locality. We undertake no obligation to update
the opinions expressed herein after the date of this letter. This opinion letter
is for the information and use of the addressee and the purchasers of Company
Common Stock, and it may not be distributed, relied upon for any purpose by any
other person, quoted in whole or in part or otherwise reproduced in any
document, or filed with any governmental agency without our express written
consent.
Very truly yours,
Powell, Goldstein, Xxxxxx & Xxxxxx LLP
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EXHIBIT C
[Date]
NationsBanc Xxxxxxxxxx Securities LLC
ABN AMRO Incorporated Friedman, Billings,
Xxxxxx & Co., Inc.
Xxxxxxxx Inc.
Xxxx Xxxxx Xxxxxx Xxxx, Incorporated
Credit Suisse First Boston Corporation
As Representatives of the Several Underwriters
000 Xxxxxxxxxx Xxxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
RE: HealthCare Financial Partners REIT, Inc. (the "Company")
Ladies & Gentlemen:
Reference is made to that certain Underwriting Agreement, dated ________, 1998
(the "Underwriting Agreement"), by and between HealthCare Financial Partners
REIT, Inc., a Maryland corporation (the "Company"), and NationsBanc Xxxxxxxxxx
Securities LLC, ABN AMRO Incorporated, Friedman, Billings, Xxxxxx & Co., Inc.,
Xxxxxxxx Inc., Xxxx Xxxxx Xxxxxx Xxxx, Incorporated and Credit Suisse First
Boston Corporation, as representatives (the "Representatives") of the several
underwriters (the "Underwriters"), pursuant to which the Underwriters intend to
underwrite a proposed public Offering (the "Offering ") of up to ________ shares
of commons stock, par value $0.0001 per share (the "Common Stock") of the
Company.
The undersigned is an owner of record or beneficially of certain shares of
Common Stock of the Company or securities convertible into or exchangeable or
exercisable for Common Stock. The Company proposes to carry out a public
offering of Common Stock, for which you will act as the Representatives of the
Underwriters. The undersigned recognizes that the Offering will be of benefit to
the undersigned and will benefit the Company by, among other things, raising
additional capital for its operations. The undersigned acknowledges that you and
the other underwriters are relying on the representations and agreements of the
undersigned contained in this letter in carrying out the Offering and in
entering into underwriting arrangements with the Company with respect to the
Offering.
In consideration of the foregoing, the undersigned hereby agrees that the
undersigned will not, without the prior written consent of NationsBanc
Xxxxxxxxxx Securities LLC (which consent may be withheld in its sole
discretion), directly or indirectly, sell, offer, contract or grant any option
to sell (including without limitation any short sale), pledge, transfer,
establish an open "put equivalent position" within the meaning of Rule 16a-1(h)
under the Securities Exchange Act of 1934, as amended, or otherwise dispose of
any shares of Common Stock, options or warrants to acquire shares of Common
Stock, or securities exchangeable or exercisable for or convertible
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into shares of Common Stock currently or hereafter owned either of record or
beneficially (as defined in Rule 13d-3 under Securities Exchange Act of 1934, as
amended) by the undersigned, or publicly announce the undersigned's intention to
do any of the foregoing, for a period commencing on the date hereof and
continuing through the close of trading on the date 180 days after the date of
the Prospectus. The undersigned also agrees and consents to the entry of stop
transfer instructions with the Company's transfer agent and registrar against
the transfer of shares of Common Stock or securities convertible into or
exchangeable or exercisable for Common Stock held by the undersigned except in
compliance with the foregoing restrictions.
With respect to the Offering only, the undersigned waives any registration
rights relating to registration under the Securities Act of any Common Stock
owned either of record or beneficially by the undersigned, including any rights
to receive notice of the Offering.
This agreement is irrevocable and will be binding on the undersigned and the
respective successors, heirs, personal representatives, and assigns of the
undersigned.
------------------------------------------------
Printed Name of Holder
By: ------------------------------------------
Signature
------------------------------------------------
Printed Name of Person Signing
(and indicate capacity of person signing if
signing as custodian, trustee, or on behalf
of an entity)
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