EXHIBIT 1.6
SNH CAPITAL TRUST I
10.125% Trust Preferred Securities,
guaranteed to the extent set forth in the Guarantee by
Senior Housing Properties Trust
UNDERWRITING AGREEMENT
June 18, 2001
UNDERWRITING AGREEMENT
June 18, 2001
UBS Warburg LLC
Xxxxxxx Xxxxx Xxxxxx Inc.
X.X. Xxxxxxx & Sons, Inc.
First Union Securities, Inc.
Prudential Securities Incorporated
Credit Suisse First Boston Corporation
Xxxxxx Xxxxxxx Incorporated
as Representatives of the several Underwriters
c/o UBS Warburg LLC
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Ladies and Gentlemen:
SNH Capital Trust I, a statutory business trust created under
the laws of the State of Maryland (the "Trust"), SNH Capital Trust Holdings, a
statutory trust created under the laws of the State of Maryland, as sponsor of
the Trust (the "Sponsor") and Senior Housing Properties Trust, a real estate
investment trust formed and existing under the laws of the State of Maryland, as
guarantor (the "Company" and, together with the Trust, the "Offerors"), propose,
subject to the terms and conditions stated herein, that the Trust issue and sell
to the Underwriters named in Schedule A hereto (the "Underwriters") an aggregate
of $25,000,000 liquidation amount of 10.125% Trust Preferred Securities
(liquidation amount $25.00 per preferred security) representing undivided
beneficial interests in the assets of the Trust (the "Trust Preferred
Securities"), guaranteed by the Company as to the payment of distributions, and
as to payments on liquidation or redemption, to the extent set forth in a
guarantee agreement (the "Guarantee") among the Company and State Street Bank
and Trust Company, as trustee (the "Guarantee Trustee") (the "Firm Securities").
In addition, solely for the purpose of covering over-allotments, the Offerors
propose to grant to the Underwriters the option to purchase up to an additional
150,000 Trust Preferred Securities (the "Additional Securities"). The Firm
Securities and the Additional Securities are hereinafter collectively sometimes
referred to as the "Securities."
The proceeds of the sale of the Securities and an aggregate of
$773,200 liquidation amount of the Trust's Common Securities (liquidation amount
$25.00 per common security) (the "Common Securities") are to be invested by the
Trust in 10.125% Junior Subordinated Debentures due June 15, 2041 (the
"Subordinated Debentures") of the Company to be issued pursuant to a Junior
Subordinated Indenture, to be dated as of June 21, 2001, among the Company and
State Street Bank and Trust Company, as trustee (the "Debenture Trustee").
The Company has prepared and filed with the Securities and
Exchange Commission (the "Commission") in accordance with the provisions of the
Securities Act of 1933, as amended, and the rules and regulations of the
Commission thereunder (collectively, the "Act"), a registration statement (file
number 333-60392) on Form S-3 under the Act (the "registration statement"),
including, among other things, a prospectus relating to, among other things,
common shares of beneficial interest, preferred shares of beneficial interest,
depository shares, guarantees, debt securities and warrants for such securities
of the Company and preferred securities of the Trust, and such amendments to
such registration statement as may have been required prior to the date hereof
have been similarly prepared and have been filed with the Commission. Such
registration statement, as so amended, and any post-effective amendments
thereto, have been declared by the Commission to be effective under the Act.
Such registration statement, as amended at the date of this Agreement meets the
requirements set forth in Rule 415(a)(1)(x) under the Act ("Rule 415") and
complies in all other material respects with said Rule. The Company will next
file with the Commission pursuant to Rule 424(b) under the Act a final
prospectus supplement to the basic prospectus included in such registration
statement, as so amended, describing the Securities and the offering thereof, in
such form as has been provided to or discussed with, and approved by the
Underwriters.
The term "Registration Statement" as used in this Agreement
means the registration statement, as amended at the time it became effective, as
supplemented or amended prior to the execution of this Agreement, including (i)
all financial schedules and exhibits thereto and (ii) all documents incorporated
by reference or deemed to be incorporated by reference therein. If it is
contemplated, at the time this Agreement is executed, that a post-effective
amendment to the registration statement will be filed and must be declared
effective before the offering of the Securities may commence, the term
"Registration Statement" as used in this Agreement means the registration
statement as amended by said post-effective amendment. If an abbreviated
registration statement is prepared and filed with the Commission in accordance
with Rule 462(b) under the Act (an "Abbreviated Registration Statement"), the
term "Registration Statement" includes the Abbreviated Registration Statement.
The term "Basic Prospectus" as used in this Agreement means the prospectus dated
May 21, 2001 forming a part of the Registration Statement. The term "Prepricing
Prospectus" as used in this Agreement means the Basic Prospectus together with
any preliminary form of prospectus supplement specifically relating to the
Securities, in the form first filed with, or
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transmitted for filing to, the Commission pursuant to Rule 424 of the Rules and
Regulations. The term "Prospectus Supplement" as used in this Agreement means
the prospectus supplement dated June 18, 2001 specifically relating to the
Securities, in the form first filed with, or transmitted for filing to, the
Commission pursuant to Rule 424 under the Act. The term "Prospectus" as used in
this Agreement means the Basic Prospectus together with the Prospectus
Supplement except that if such Basic Prospectus is amended or supplemented on or
prior to the date on which the Prospectus Supplement was first filed pursuant to
Rule 424, the term "Prospectus" shall refer to the Basic Prospectus as so
amended or supplemented and as supplemented by the Prospectus Supplement. Any
reference in this Agreement to the registration statement, the Registration
Statement, the Basic Prospectus, any Prepricing Prospectus, the Prospectus
Supplement or the Prospectus shall be deemed to refer to and include the
documents incorporated by reference therein pursuant to Item 12 of Form S-3
under the Act, as of the date of the registration statement, the Registration
Statement, the Basic Prospectus, such Prepricing Prospectus, the Prospectus
Supplement or the Prospectus, as the case may be, and any reference to any
amendment or supplement to the registration statement, the Registration
Statement, the Basic Prospectus, any Prepricing Prospectus, the Prospectus
Supplement or the Prospectus shall be deemed to refer to and include any
documents filed after such date under the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the Commission thereunder
(collectively, the "Exchange Act") which, upon filing, are incorporated by
reference therein, as required by paragraph (b) of Item 12 of Form S-3. As used
herein, the term "Incorporated Documents" means the documents which at the time
are incorporated by reference in the registration statement, the Registration
Statement, the Basic Prospectus, any Prepricing Prospectus, the Prospectus
Supplement, the Prospectus, or any amendment or supplement thereto.
The Offerors and the Underwriters agree as follows:
1. Sale and Purchase. On the basis of the representations and
warranties herein and subject to the terms and conditions herein set forth, the
Trust agrees to issue and sell to each of the Underwriters, and each of the
Underwriters agrees, severally and not jointly, to purchase from the Trust, at a
price of $25.00 per Security that number of Securities set forth opposite the
name of such Underwriter in Schedule A hereto.
2. Payment and Delivery. As compensation to the Underwriters
for their commitments hereunder, and in view of the fact that the proceeds of
the sale of the Securities will be used by the Trust to purchase the
Subordinated Debentures of the Company, the Company hereby agrees to pay at the
time of purchase (as defined below) to UBS Warburg LLC ("UBS Warburg"), for the
accounts of the several Underwriters, a commission of $0.7875 per Security for
the Securities to be delivered at the time of purchase by wire transfer of
federal (same-day) funds. The total aggregate amount of the Underwriters'
compensation is $787,500.
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In addition, the Offerors hereby grant to the several
Underwriters the option to purchase, and upon the basis of the representations,
warranties and agreements of the Offerors and subject to all the terms and
conditions herein set forth, the Underwriters shall have the right to purchase,
severally and not jointly, from the Trust, ratably in accordance with the number
of Firm Securities to be purchased by each of them (subject to such adjustment
as you shall determine to avoid fractional shares), all or a portion of the
Additional Securities as may be necessary to cover over-allotments made in
connection with the offering of the Firm Securities, at the same purchase price
per share to be paid by the Underwriters to the Trust for the Firm Securities.
This option may be exercised by you on behalf of the several Underwriters at any
time (but not more than once) on or before the thirtieth day following the date
hereof, by written notice to the Offerors. Such notice shall set forth the
aggregate number of Additional Securities as to which the option is being
exercised, and the date and time when the Additional Securities are to be
delivered (such date and time being herein referred to as the "additional time
of purchase"); provided, however, that the additional time of purchase shall not
be earlier than the time of purchase (as defined below) nor earlier than the
second business day1 after the date on which the option shall have been
exercised nor later than the tenth business day after the date on which the
option shall have been exercised. The number of Additional Securities to be sold
to each Underwriter shall be the number which bears the same proportion to the
aggregate number of Additional Securities being purchased as the number of Firm
Securities set forth opposite the name of such Underwriter on Schedule A hereto
bears to the total number of Firm Securities (subject, in each case, to such
adjustment as you may determine to eliminate fractional shares).
The Securities to be purchased by each Underwriter hereunder
will be represented by one or more definitive global certificates in book-entry
form which will be deposited by or on behalf of the Trust with The Depository
Trust Company ("DTC") or its designated custodian. The Trust will deliver the
Securities to UBS Warburg, for the account of each Underwriter, against payment
by or on behalf of such Underwriter of the purchase price therefor by wire
transfer of federal (same day) funds to a commercial bank account located in the
United States and designated in writing at least forty-eight hours prior to the
time of purchase by the Company to UBS Warburg, by causing DTC to credit the
Securities to the account of UBS Warburg. The Trust will cause the global
certificates representing the Securities to be made available to UBS Warburg for
checking at least twenty-four hours prior to the time of purchase or the
additional time of purchase, as the case may be. The time and date of such
delivery and payment shall be 9:30 a.m., New York City time, on June 21, 2001
------
1 As used herein "business day" shall mean a day on which the New York
Stock Exchange is open for trading.
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or such other time and date as UBS Warburg and the Company may agree upon in
writing. Such time and date are herein called the "time of purchase".
The documents to be delivered at the time of purchase and at
the additional time of purchase, as the case may be, by or on behalf of the
parties hereto pursuant to Section 6 hereof, will be delivered at such time and
date at the offices of Xxxxx Xxxxxxxxxx LLP, 1301 Avenue of the Americas, Xxx
Xxxx, Xxx Xxxx 00000 or such other location as UBS Warburg and the Company may
agree in writing (the "Closing Location"), and the Firm Securities and the
Additional Securities will be delivered, at the time of purchase and at the
additional time of purchase, as the case may be.
3. Representations and Warranties of the Offerors. The
Offerors jointly and severally represent and warrant to each of the Underwriters
that:
(a) No order preventing or suspending the use of the Basic
Prospectus, any Prepricing Prospectus, the Prospectus Supplement or the
Prospectus is in effect and no proceedings for such purpose are pending
or, to the knowledge of the Offerors, threatened by the Commission or
the securities authority of any state or other jurisdiction. The
Registration Statement has become effective under the Act; no stop
order suspending the effectiveness of the Registration Statement is in
effect, and no proceedings for such purpose are pending before or, to
the knowledge of the Offerors, threatened by the Commission or the
securities authority of any state or other jurisdiction.
(b) (i) The Offerors are eligible to use Form S-3 and the
offering of the Securities complies with the requirements of Rule 415,
(ii) each part of the Registration Statement, when such part became
effective, complied in all material respects with applicable
requirements of the Act, the Exchange Act and the Trust Indenture Act
of 1939, as amended (the "TIA"), (iii) each part of the Registration
Statement, when such part became effective, did not contain and each
such part, as may be amended or supplemented, if applicable, 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, (iv) the Registration Statement, any
Abbreviated Registration Statement, the Basic Prospectus, any
Prepricing Prospectus, the Prospectus Supplement and the Prospectus
comply and, as may be amended or supplemented, if applicable, will
comply in all material respects with the Act, the Exchange Act and the
TIA (v) the Prospectus does not contain and, as may be amended or
supplemented, if applicable, will not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the
statements therein, in the light of the circumstances under which they
were made, not misleading, except that the representations and
warranties set forth in this paragraph (b) do not apply to statements
or omissions in the Registration Statement, the Basic
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Prospectus, any Prepricing Prospectus, the Prospectus Supplement and
the Prospectus based upon information relating to any Underwriter
furnished to the Offerors by such Underwriter through you expressly for
use therein.
(c) The Incorporated Documents, when they were filed with the
Commission, conformed in all material respects to the requirements of
the Exchange Act, and none of such documents, when they were filed with
the Commission, contained an untrue statement of a material fact or
omitted to state a material fact necessary to make the statements
therein not misleading; and any further documents so filed and
incorporated by reference in (a) the Registration Statement, when such
documents are filed with the Commission, will conform in all material
respects to the requirements of the Exchange Act, as applicable, and
will not contain an untrue statement of a material fact or omit to
state a material fact necessary to make the statements therein not
misleading, and (b) the Prospectus, when such documents are filed with
the Commission, will conform in all material respects to the
requirements of the Exchange Act, as applicable, and will not contain
an untrue statement of a material fact or omit to state a material fact
necessary to make the statements therein, in the light of the
circumstances in which they were made, not misleading.
(d) The Trust has been duly formed and is existing as a
business trust in good standing under the laws of the State of
Maryland, with full power to own, lease and operate its properties and
conduct its business as described in the Registration Statement and the
Trust will be classified as a grantor trust and will not be classified
as an association taxable as a corporation for United States federal
income tax purposes.
(e) The Company has been duly formed and is existing and is in
good standing under the laws of the State of Maryland, with the trust
power to own, lease and operate its properties and conduct its business
as described in the Registration Statement.
(f) The Company is duly qualified to do business as a foreign
corporation and is in good standing in each jurisdiction in which the
ownership or leasing of its properties or the carrying on of its
business requires such qualification, except where the failure to so
qualify in any such jurisdiction would not individually or in the
aggregate have a material adverse effect on the business, prospects,
properties, condition (financial or otherwise) or results of operation
of the Company and the Subsidiaries (as defined herein), taken as a
whole (a "Material Adverse Effect").
(g) The Company has no subsidiaries other than those
identified in Schedule B hereto (collectively, the "Subsidiaries").
Other than the Subsidiaries, the Company does not own, directly or
indirectly, any shares of stock or any other equity
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or long-term debt of any other corporation or have any direct or
indirect equity interest or ownership of long-term debt in any firm,
partnership, joint venture, limited liability company, association or
other entity, except for HRPT Properties Trust and Marriott
International, Inc. Each Subsidiary has been duly incorporated or
formed and is existing as a corporation or other entity, as the case
may be, in good standing under the laws of the jurisdiction of its
incorporation or organization, with the requisite corporate trust,
partnership or other power to acquire and own, lease and operate its
properties and to conduct its business, as described in the
Registration Statement and the Prospectus; and each Subsidiary is duly
qualified and in good standing to do business in each jurisdiction in
which the nature of its business or the ownership or leasing of the
property requires such qualification, except where the failure to be so
qualified would not have a Material Adverse Effect.
(h) This Agreement has been duly authorized, executed and
delivered by the Offerors.
(i) The Securities have been duly authorized in the
Declaration (as defined below), and, when issued and delivered pursuant
to this Agreement, such Securities will be validly issued and, subject
to the qualifications set forth below, fully paid and non-assessable
undivided beneficial interests in the assets of the Trust entitled to
the benefits provided by the Amended and Restated Declaration of Trust
of SNH Capital Trust I (the "Declaration") among the Sponsor and the
Trustees named therein (the "Trustees") (subject to the terms of the
Declaration); provided that the holders of the Securities (the
"Securityholders") may be obligated, pursuant to the Declaration, to
(a) provide indemnity and/or security in connection with and pay taxes
or governmental charges arising from transfers of Securities and (b)
provide security and indemnity in connection with requests of or
directions to the Property Trustee (as defined in the Declaration) to
exercise its rights and remedies under the Declaration; and the
Securities conform to the description thereof contained in the
Prospectus.
(j) The Common Securities have been duly authorized in the
Declaration, and upon delivery by the Trust to the Company against
payment therefor as set forth in the Declaration, will be validly
issued undivided beneficial interests in the assets of the Trust and
conform to the description thereof contained in the Prospectus; the
issuance of the Common Securities is not subject to preemptive or other
similar rights; and at the time of purchase and at the additional time
of purchase, as the case may be, all of the issued and outstanding
Common Securities will be directly or indirectly owned by the Company,
free and clear of any security interest, mortgage, pledge, lien,
encumbrance, claim or equity.
(k) The Securityholders will be entitled to the same
limitation of personal liability extended to stockholders of private
corporations for profit organized under
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Title 2 of the Maryland General Corporation Law; provided that the
holders of the Securities may be obligated, pursuant to the
Declaration, to (a) provide indemnity and/or security in connection
with and pay taxes or governmental charges arising from transfers of
Securities and (b) provide security and indemnity in connection with
requests of or directions to the Property Trustee (as defined in the
Declaration) to exercise its rights and remedies under the Declaration;
and the Securities conform to the description thereof contained in the
Prospectus.
(l) The Guarantee, the Declaration, the Subordinated
Debentures and the Indenture (the Guarantee, the Declaration, the
Subordinated Debentures and the Indenture being collectively referred
to as the "Company Agreements") have each been duly authorized by the
Company and/or the Sponsor, as the case may be, and when validly
executed and delivered by the Company and/or the Sponsor, as the case
may be, and, in the case of the Guarantee, by the Guarantee Trustee, in
the case of the Declaration, by the Trustees and, in the case of the
Indenture, by the Debenture Trustee, and, in the case of the
Subordinated Debentures, when issued by the Company and duly
authenticated and delivered by the Debenture Trustee and paid for by
the Trust, will constitute valid and legally binding obligations of the
Company and/or the Sponsor, as the case may be, enforceable in
accordance with their respective terms, subject, as to enforcement, to
bankruptcy, insolvency, reorganization and other laws of general
applicability relating to or affecting creditors' rights and to general
equity principles (regardless of whether such enforceability is
considered in a proceeding in equity or at law); the Subordinated
Debentures when issued by the Company and duly authenticated and
delivered by the Debenture Trustee, will be entitled to the benefits of
the Indenture; and the Company Agreements conform to the descriptions
thereof in the Prospectus;
(m) The issue and sale of the Securities by the Trust, the
compliance by the Trust with all of the provisions of this Agreement,
the Securities and the Declaration, the purchase of the Subordinated
Debentures by the Trust, the execution, delivery and performance by the
Trust of the Declaration and the consummation of the transactions
contemplated herein and therein will not conflict with or result in a
breach or violation of any of the terms or provisions of, or constitute
a default under, any indenture, mortgage, deed of trust, loan agreement
or other agreement or instrument to which the Trust is a party or by
which the Trust is bound or to which any of the property or assets of
the Trust is subject, nor will such action result in any violation of
the provisions of the Declaration or any existing statute or any order,
rule or regulation of any court or governmental agency or body having
jurisdiction over the Trust or any of its properties;
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(n) Except as would not individually or in the aggregate, have
a Material Adverse Effect, the issuance by the Company of the Guarantee
and the Subordinated Debentures, the compliance by the Company with all
of the provisions of this Agreement, the Guarantee, the Subordinated
Debentures, the Declaration and the Indenture, the execution, delivery
and performance by the Company and/or the Sponsor, as the case may be,
of the Company Agreements, and the consummation of the transactions
contemplated herein and therein will not conflict with or result in a
breach or violation of any of the terms or provisions of, or constitute
a default under, any indenture, mortgage, deed of trust, loan agreement
or other agreement or instrument to which the Company or any Subsidiary
is a party or by which the Company or any Subsidiary is bound or to
which any of the property or assets of the Company or any Subsidiary is
subject. In addition, such action will not result in any violation of
the provisions of the Declaration of Trust or the bylaws of the Company
or any of the Company's other organizational documents or applicable
laws or any order, rule or regulation of any court or governmental
agency or body having jurisdiction over the Company or any of its or
its Subsidiaries' properties;
(o) The Commission has issued an order under the Act declaring
the Registration Statement effective and the Guarantee, the Declaration
and the Indenture have been qualified under the TIA and no other
consent, approval, authorization, order, registration or qualification
of or with any such court or governmental agency or body is required
for the issue of the Securities, the Guarantee or the Subordinated
Debentures or the consummation by the Trust or the Company of the other
transactions contemplated by this Agreement or the Company Agreements,
except (1) for approval of the eligibility of the Trustees, the
Guarantee Trustee and the Debenture Trustee under the Form T-1s filed
with the Commission and (2) such consents, approvals, authorizations,
registrations or qualifications as may be required under state
securities or Blue Sky laws in connection with the issuance by the
Trust of the Securities and by the Company of the Guarantee and the
Subordinated Debentures.
(p) Ernst & Young LLP, whose report on the consolidated
financial statements of the Company and the Subsidiaries was filed with
the Commission as part of the Company's Annual Report on Form 10-K for
the fiscal year ended December 31, 2000 and is incorporated by
reference in the Registration Statement and Prospectus, are independent
public accountants as required by the Act.
(q) KPMG LLP, whose report on the financial statements with
respect to 42 nursing home facilities was filed with the Commission as
part of the Company's Current Report on Form 8-K/A and is incorporated
by reference in the Registration Statement and Prospectus, are
independent public accountants as required by the Act.
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(r) All legal or governmental proceedings, contracts, leases
or documents of a character required to be described in the
Registration Statement or the Prospectus or any Incorporated Document,
and all documents required to be filed as an exhibit to the
Registration Statement or any Incorporated Document, have been so
described or filed or will be filed prior to the time of purchase as
required.
(s) Except as otherwise set forth in the Prospectus, there are
no legal or governmental proceedings pending to which the Company, the
Trust or any of the Subsidiaries is a party or of which any of the
Company's, the Trust's or any of the Subsidiaries' properties or assets
or, to the knowledge of the Offerors, any of the properties of the
Company, the Trust and the Subsidiaries that is the subject, the result
of which would, individually or in the aggregate, have a Material
Adverse Effect, and, to the Offerors' knowledge, no such proceedings
are threatened or contemplated, except as disclosed in the Prospectus,
the result of which would, individually or in the aggregate, have a
Material Adverse Effect. To the Offerors' knowledge, after due
investigation, there are no legal or governmental proceedings pending
to which any lessee, sublessee or operator of any property of the
Company or the Trust or any Subsidiary or portion thereof is a party,
the result of which would, individually or in the aggregate, have a
Material Adverse Effect, and no such proceedings are being threatened
or contemplated, except as disclosed in the Prospectus and the result
of which would, individually or in the aggregate, have a Material
Adverse Effect. Neither the Company, the Trust nor any of the
Subsidiaries has received from any governmental authority notice of any
violation of any local, state or federal law, rule or regulation
including without limitation any such law, rule or regulation
applicable to the health care industry ("Health Care Laws") or relating
to human health or safety or the environment or any hazardous or toxic
substances or wastes, pollutants or contaminants ("Environmental
Laws"), except as disclosed in the Prospectus, the result of which
would, individually or in the aggregate, have a Material Adverse
Effect, and to the Offerors' knowledge, there is no such violation, or
any occurrence or circumstance that would give rise to a claim under or
pursuant to any local, state or federal law, rule or regulation
(including without limitation any Health Care Laws or Environmental
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Laws), which would, individually or in the aggregate, have a Material
Adverse Effect. To the Offerors' knowledge, there is no violation of
any local, state or federal law, rule or regulation (including without
limitation Health Care Laws and Environmental Laws) by any person from
whom the Company or any of the Subsidiaries acquired any of its
properties (a "seller"), or any lessee, sublessee or operator of any of
their respective properties or any part thereof, the result of
which would, individually or in the aggregate, have a Material Adverse
Effect, and to the Offerors' knowledge, there is no such violation, or
any occurrence or circumstance that would give rise to a claim under or
pursuant to any local, state or federal law, rule or regulation
(including without limitation any Health Care Laws or Environmental
Laws), which would, individually or in the aggregate, have a Material
Adverse Effect, except as disclosed in the Prospectus. Neither the
Offerors nor any of the Subsidiaries have received from any
governmental authority any written notice of any condemnation of or
zoning change affecting the properties or any part thereof of the
Company or any of the Subsidiaries that individually or in the
aggregate would have a Material Adverse Effect and the Offerors do not
know of any such condemnation or zoning change which is threatened and
which if consummated individually or in the aggregate would have a
Material Adverse Effect. Nothing has come to the Offerors' attention
that any seller, lessee, sublessee or operator of any property of the
Company or any of the Subsidiaries, or portion thereof has, received
from any governmental authority any written notice of any condemnation
of or zoning change affecting the Properties or any part thereof of the
Company or any of the Subsidiaries that individually or in the
aggregate would have a Material Adverse Effect.
(t) Each of the Company and the Subsidiaries have good and
marketable title in fee simple or ground leases to the properties
disclosed in the Prospectus as being owned by them (the "Properties"),
free and clear of all liens, encumbrances, claims, mortgages, deeds of
trust, restrictions, security interests and defects ("Property
Encumbrances"), except for: (x) the leasehold interests of lessees in
the Company's and the Subsidiaries' properties held under lease (the
"Leases") and (y) any other Property Encumbrances that would not,
individually or in the aggregate, have a Material Adverse Effect. All
Property Encumbrances on or affecting the properties of the Company or
any of the Subsidiaries which are required to be disclosed in the
Prospectus are disclosed therein. Each of the Leases pertaining to the
properties of the Company or any of the Subsidiaries has been duly
authorized by the Company or one of the Subsidiaries, as applicable,
and is a valid and binding agreement of the Company or one of the
Subsidiaries, as applicable, and, to the knowledge of the Offerors,
each other party thereto, enforceable in accordance with its terms,
except as enforcement thereof may be limited by bankruptcy, insolvency,
moratorium, fraudulent conveyance or other similar laws affecting the
enforcement of creditors' rights generally and by general equitable
principles. To the knowledge of the Offerors, no lessee of any portion
of any of the properties of the Company or any of the Subsidiaries is
in default under its respective lease and there is no event which, but
for the passage of time or the giving of notice or both, would
constitute a default under any such lease, except such defaults that
would not, individually or in the aggregate, have a Material Adverse
Effect.
(u) The Offerors and each of the Subsidiaries and, to the
Offerors' knowledge, each of the operators, lessees or sublessees of
any property or portion thereof of the Company or any of the
Subsidiaries have such permits, licenses, approvals, certificates,
franchises and authorizations of governmental or regulatory
11
authorities ("permits"), including, without limitation, under any
Health Care Laws or Environmental Laws, as are necessary in the case of
each such party to acquire and own, lease or operate its properties and
to conduct its business, all as described in the Prospectus, except
where the failure to obtain such permits would not individually or in
the aggregate have a Material Adverse Effect; except as described in
the Prospectus, the Offerors and each of the Subsidiaries and, to the
Offerors' knowledge, each of the lessees, sublessees or operators of
any property or portion thereof of the Company or any of the
Subsidiaries have fulfilled and performed all of their obligations with
respect to such permits and, except as disclosed in the Prospectus, no
event has occurred which allows, or after notice or lapse of time would
allow, revocation or termination thereof or result in any other
impairment of the rights of the holder of any such permit, except where
the failure to fulfill or perform, or the resulting termination or
impairment, would not, individually or in the aggregate, have a
Material Adverse Effect; and, except as described in the Prospectus,
such permits contain no restrictions that are burdensome to the
Offerors and the Subsidiaries, taken as a whole and that would,
individually or in the aggregate, have a Material Adverse Effect.
(v) The financial statements, together with the related
schedules and notes, forming a part of the Registration Statement and
the Prospectus present fairly the consolidated financial position of
the Offerors and the Subsidiaries as of the dates indicated and the
consolidated results of operations and cash flows of the Offerors and
the Subsidiaries for the periods specified. Such financial statements
have been prepared in conformity with generally accepted accounting
principles applied on a consistent basis during the periods involved.
The pro forma financial statements and other pro forma financial data
included in the Registration Statement and the Prospectus comply as to
form in all material respects with the applicable accounting
requirements of Regulation S-X of the Act, and the pro forma
adjustments have been properly applied to the historical amounts in the
compilation of those statements. The other financial and statistical
data set forth in the Registration Statement and the Prospectus are
accurately presented and prepared on a basis consistent with such
financial statements and books and records of the Company. There are no
financial statements (historical or pro forma) that are required to be
included in the Registration Statement and the Prospectus that are not
included as required.
(w) Subsequent to the respective dates as of which information
is given in the Registration Statement and the Prospectus, there has
not been (i) any material adverse change, or any prospective material
adverse change, in the business, properties, condition (financial or
otherwise), or results of operations of the Offerors and the
Subsidiaries taken as a whole, (ii) any transaction which is material
to the Offerors or the Subsidiaries, (iii) any obligation, direct or
contingent, which is material to the Offerors and the Subsidiaries
taken as a whole, incurred by the Offerors or the
12
Subsidiaries, (iv) any change in the shares of beneficial interest or
outstanding indebtedness of the Offerors or the Subsidiaries other than
an increase of approximately $2 million under the Company's credit
facility, or (v) any dividend or distribution of any kind declared,
paid or made on the shares of beneficial interest of the Offerors other
than (A) regular quarterly dividends, declared, paid or made or a
dividend distribution of any kind on any class of its shares of
beneficial interest (other than dividends or distributions from
wholly-owned subsidiaries of the Company) and (B) the issuance of
common shares of beneficial interest to the trustees and officers
pursuant to the Company's Incentive Share Award Plan. Neither the
Offerors nor the Subsidiaries has any material contingent obligation
which is not disclosed in the Registration Statement.
(x) Each of the Offerors and the Subsidiaries are insured by
insurers of recognized financial responsibility against such losses and
risks and in such amount as are customary in the business in which they
are engaged, except as described in the Prospectus. Except as would
not, individually or in the aggregate, have a Material Adverse Effect,
all policies of insurance insuring the Offerors and the Subsidiaries or
any of their businesses, assets, employees, officers, directors and
trustees are in full force and effect, and the Offerors and the
Subsidiaries are in compliance with the terms of such policies in all
material respects. Except as would not, individually or in the
aggregate, have a Material Adverse Effect, there are no claims by the
Offerors or any of the Subsidiaries under any such policy or instrument
as to which any insurance company is denying liability or defending
under a reservation of rights clause.
(y) Neither the Offerors nor any of the Subsidiaries has
either sent or received any communication regarding termination of, or
intent not to renew, any of the contracts or agreements referred to or
described in, or filed as an exhibit to, the Registration Statement,
and no such termination or non-renewal has been threatened by the
Offerors or any of the Subsidiaries or any other party to any such
contract or agreement.
(z) Neither the Offerors nor any of the Subsidiaries or any of
their respective affiliates has taken, directly or indirectly, any
action designed to or which has constituted or which might reasonably
be expected to cause or result, under the Exchange Act or otherwise, in
stabilization or manipulation of the price of any security of the
Offerors to facilitate the sale or resale of the Securities.
(aa) The Offerors and the Subsidiaries have not sustained
since the date of the latest audited financial statements included in
the Prospectus any loss or interference with their businesses from
fire, explosion, flood or other calamity, whether or not covered by
insurance, or from any labor dispute or court or governmental action,
order or decree, otherwise than as disclosed in the Prospectus or
13
other than any loss or interference, which would individually or in the
aggregate not have a Material Adverse Effect.
(bb) The Offerors and Subsidiaries maintain a system of
internal accounting controls sufficient to provide reasonable
assurances that (i) transactions are executed in accordance with
management's general or specific authorization; (ii) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles 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.
(cc) The Offerors and the Subsidiaries have filed all federal,
state, local and foreign tax returns and tax forms required to be
filed. Such returns and forms are complete and correct in all material
respects, and all taxes shown by such returns or otherwise assessed
that are due or payable have been paid, except such taxes as are being
contested in good faith and as to which adequate reserves have been
provided. All payroll withholdings required to be made by the Offerors
and the Subsidiaries with respect to employees have been made, except
where the failure to fulfill or perform, would not, individually or in
the aggregate, have a Material Adverse Effect. The charges, accruals
and reserves on the books of the Offerors and the Subsidiaries in
respect of any tax liability for any year not finally determined are
adequate to meet any assessments or reassessments for additional taxes.
There have been no tax deficiencies asserted and, to the Offerors'
knowledge, no tax deficiency might be reasonably asserted or threatened
against the Offerors and/or the Subsidiaries that would individually or
in the aggregate have a Material Adverse Effect.
(dd) The Company meets the requirements for qualification and
taxation as a real estate investment trust ("REIT") under the Internal
Revenue Code of 1986 (the "Code").
(ee) Neither the Trust nor the Company is nor, after giving
effect to the offering and sale of the Securities, will be an
"investment company" or an entity "controlled" by an "investment
company," as such terms are defined in the Investment Company Act of
1940, as amended (the "Investment Company Act").
4. Certain Covenants of the Offerors. The Offerors jointly and
severally hereby agree:
(a) to furnish such information as may be required and
otherwise to cooperate in qualifying the Securities, and, to the extent
required or advisable, the
14
Guarantee and the Subordinated Debentures, for offering and sale under
the securities or blue sky laws of such states as you may designate and
to maintain such qualifications in effect so long as required for the
distribution of the Securities; provided that the Company and the Trust
shall not be required to qualify as a foreign corporation or to consent
to the service of process under the laws of any such state (except
service of process with respect to the offering and sale of the
Securities); and to promptly advise you of the receipt by the Company
of any notification with respect to the suspension of the qualification
of the Securities for sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose;
(b) to make available to the Underwriters in New York City as
many copies of the Prospectus (or of the Prospectus as amended or
supplemented if the Offerors shall have made any amendments or
supplements thereto) as the Underwriters may reasonably request for the
purposes contemplated by the Act; in case any Underwriter is required
to deliver a prospectus beyond the nine-month period referred to in
Section 10(a)(3) of the Act in connection with the sale of the
Securities, the Offerors will prepare promptly upon request, at its
expense, such amendment or amendments to the Registration Statement and
such prospectuses as may be necessary to permit compliance with the
requirements of Section 10(a)(3) of the Act;
(c) to advise you promptly, confirming such advice in writing,
of any request by the Commission for amendments or supplements to the
Registration Statement or Prospectus or for additional information with
respect thereto, or of notice of institution of proceedings for, or the
entry of a stop order suspending the effectiveness of the Registration
Statement and, if the Commission should enter a stop order suspending
the effectiveness of the Registration Statement, to make every
reasonable effort to obtain the lifting or removal of such order as
soon as possible; to advise you promptly of any proposal to amend or
supplement the Registration Statement or Prospectus including by filing
any documents that would be incorporated therein by reference and to
file no such amendment or supplement to which you shall object in
writing;
(d) that the Company will file promptly all reports and any
definitive proxy or information statement required to be filed by the
Company with the Commission in order to comply with the Exchange Act
subsequent to the date of the Prospectus and for so long as the
delivery of a prospectus is required in connection with the offering or
sale of the shares, and to promptly notify you of such filing;
(e) if, at the time this Agreement is executed and delivered,
it is necessary for the registration statement or a post-effective
amendment thereto or any Abbreviated Registration Statement to be
declared effective before the offering of the Securities may commence,
the Offerors will endeavor to cause the Registration
15
Statement or such post-effective amendment to become effective as soon
as possible and will advise you promptly and, if requested by you, will
confirm such advice in writing, when the Registration Statement or such
post-effective amendment has become effective;
(f) to furnish to you and, upon request, to each of the other
Underwriters for a period of three years from the date of this
Agreement (i) copies of any reports or other communications which the
Company shall send to its shareholders or shall from time to time
publish or publicly disseminate, (ii) copies of all annual, quarterly
and current reports filed with the Commission on Forms 10-K, 10-Q and
8-K, or such other similar form as may be designated by the Commission,
(iii) copies of documents or reports filed with any national securities
exchange on which any class of securities of the Offerors are listed,
and (iv) such other information as you may reasonably request regarding
the Offerors or the Subsidiaries, in each case as soon as such
communications, documents or information becomes available; provided,
however, that in no case shall the Offerors be required to furnish
materials pursuant to this paragraph which are filed and publicly
accessible via XXXXX;
(g) to advise the Underwriters promptly of the happening of
any event known to the Offerors within the time during which a
Prospectus relating to the Securities is required to be delivered under
the Act which, in the judgment of the Offerors, would require the
making of any change in the Prospectus then being used, or in the
information incorporated therein by reference, so that the Prospectus
would not include an untrue statement of material fact or omit to state
a material fact necessary to make the statements therein, in the light
of the circumstances under which they are made, not misleading, and,
during such time, to prepare and furnish, at the Offerors' expense, to
the Underwriters promptly such amendments or supplements to such
Prospectus as may be necessary to reflect any such change and to
furnish you a copy of such proposed amendment or supplement before
filing any such amendment or supplement with the Commission;
(h) to make generally available to its security holders, and
to deliver to you, an earnings statement of the Company (which will
satisfy the provisions of Section 11(a) of the Act) covering a period
of twelve months beginning after the date of the Prospectus (as
contemplated in Rule 158(c) of the Act) as soon as is reasonably
practicable after the termination of such twelve-month period;
(i) to furnish to each of the Representatives and Xxxxx
Xxxxxxxxxx LLP one conformed copy of the Registration Statement, as
initially filed with the Commission, and of all amendments thereto
(including all exhibits thereto and documents incorporated by reference
therein), and sufficient conformed copies of the
16
foregoing (other than exhibits) for distribution of a copy to each of
the other Underwriters;
(j) to furnish to you as early as practicable prior to the
time of purchase and the additional time of purchase, as the case may
be, but not later than two business days prior thereto, a copy of the
latest available unaudited interim consolidated financial statements,
if any, of the Company and the Subsidiaries which have been read by the
Company's independent certified public accountants, as stated in their
letter to be furnished pursuant to Section 6(d) hereof;
(k) to apply the proceeds from the sale of the Securities in
the manner set forth under the caption "Use of Proceeds" in the
Prospectus;
(l) that the Offerors will jointly and severally be
responsible for payment of all expenses, fees and taxes in connection
with (i) the preparation and filing of the Registration Statement, the
Basic Prospectus, any Prepricing Prospectus, the Prospectus Supplement,
the Prospectus, and any amendments or supplements thereto, and the
printing and furnishing of copies of each thereof to the Underwriters
and to dealers (including costs of mailing and shipment), (ii) the
issuance, sale and delivery of the Securities, (iii) the word
processing and/or printing of this Agreement, any Agreement Among
Underwriters and any dealer agreements and the reproduction and/or
printing and furnishing of copies of each thereof to the Underwriters
and to dealers (including costs of mailing and shipment), (iv) the
qualification of the Securities, the Guarantee and Subordinated
Debentures issuable upon exchange of the Securities, for offering and
sale under state laws and the determination of their eligibility for
investment under state law as aforesaid (including the legal fees and
filing fees and other disbursements of counsel to the Underwriters) and
the printing and furnishing of copies of any blue sky surveys or legal
investment surveys to the Underwriters and to dealers, (v) any listing
of the Securities on any securities exchange and any registration
thereof under the Exchange Act, (vi) the filing for review of the
public offering of the Securities by NASD Regulation, Inc. (including
the legal fees and filing fees and other disbursements of counsel to
the Underwriters with respect thereto), (vii) the cost of preparing the
Securities and the Company Agreements, (viii) the fees and expenses of
the Trustees, the Guarantee Trustee and the Debenture Trustee and any
agent of the Trustees, the Guarantee Trustee and the Debenture Trustee
and the fees and disbursements of counsel for the Trustees in
connection with the Declaration and the Securities, counsel for the
Guarantee Trustee in connection with the Guarantee and counsel for the
Debenture Trustee in connection with the Indenture and the Subordinated
Debentures, (ix) any fees charged by securities ratings services for
rating the Securities and the Subordinated Indentures, and (x) the
performance of the Company's other obligations under this agreement;
17
(m) to furnish to you, before filing with the Commission
subsequent to the effective date of the Registration Statement and
during the period referred to in paragraph (g) above, a copy of any
document proposed to be filed pursuant to Section 13, 14 or 15(d) of
the Exchange Act;
(n) to not, without the prior written consent of UBS Warburg,
offer, sell, contract to sell, pledge, or otherwise dispose of, (or
enter into any transaction which is designed to, or might reasonably be
expected to, result in the disposition (whether by actual disposition
or effective economic disposition due to cash settlement or otherwise)
by the Company or any affiliate of the Company or any person in privity
with the Company or any affiliate of the Company) directly or
indirectly, including the filing (or participation in the filing) of a
registration statement with the Commission in respect of, or establish
or increase a put equivalent position or liquidate or decrease a call
equivalent position within the meaning of Section 16 of the Exchange
Act, any Trust Preferred Securities or substantially similar securities
to Trust Preferred Securities, or publicly announce an intention to
effect any such transaction, within 30 days after the time of purchase
or the additional time of purchase, as the case may be;
(o) to use their best efforts to cause the Securities to be
listed on the NYSE within 30 days hereof; if the Securities are
exchanged for Subordinated Debentures, the Company will use its best
efforts to effect the listing of the Subordinated Debentures on any
exchange on which the Securities are then listed;
(p) that the Company will use its best efforts to continue to
qualify as a REIT under the Code.
5. Reimbursement of Underwriters' Expenses. If the Securities
are not delivered for any reason other than the termination of this Agreement
pursuant to clause (ii), (iii) or (iv) of the second paragraph of Section 7
hereof or pursuant to the last paragraph of Section 8 hereof or the default by
one or more of the Underwriters in its or their respective obligations
hereunder, the Company shall, in addition to paying the amounts described in
Section 4 hereof, reimburse the Underwriters for all of their out-of-pocket
expenses, including the reasonable fees and disbursements of their counsel.
6. Conditions of Underwriters' Obligations. The several
obligations of the Underwriters hereunder are subject to the accuracy of the
representations and warranties on the part of the Offerors on the date hereof,
at the time of purchase and at the additional time of purchase, as the case may
be, the performance by the Offerors of their respective obligations hereunder
and to the following additional conditions precedent:
(a) The Offerors shall furnish to you at the time of purchase
and at the additional time of purchase, as the case may be, an opinion
of Xxxxxxxx & Worcester
18
LLP, counsel for the Offerors, addressed to the Underwriters, and dated
the time of purchase and the additional time of purchase, as the case
may be, with reproduced copies for each of the other Underwriters and
in form satisfactory to Xxxxx Xxxxxxxxxx LLP, counsel for the
Underwriters, stating that:
(i) the Company has been duly formed, is existing as
a real estate investment trust and is in good standing under
the laws of the State of Maryland, with trust power to own,
lease and operate its properties and conduct its business in
all material respects as described in the Registration
Statement and the Prospectus, to execute and deliver this
Agreement and to issue, sell and deliver the Subordinated
Debentures as herein contemplated;
(ii) the Company is duly qualified to transact
business and is in good standing in each other jurisdiction in
which it owns or leases properties, or conducts any business,
so as to require such qualification, other than those
jurisdictions as to which the failure to be so qualified or in
good standing could not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect;
(iii) each Subsidiary of the Company identified in
Schedule C attached hereto (each a "Material Subsidiary") is a
corporation or other legal entity duly formed, existing and in
good standing under the laws of its jurisdiction of
organization, and is duly qualified as a foreign corporation
or other legal entity and is in good standing in each
jurisdiction in which such qualification is required by law,
other than those jurisdictions as to which the failure to be
so qualified or in good standing could not, individually or in
the aggregate, reasonably be expected to have a Material
Adverse Effect. Each Material Subsidiary has the corporate
trust, partnership or other power to own or hold under lease
the properties it purports to own or hold under lease and to
transact the business it transacts and proposes to transact.
All of the issued and outstanding shares of beneficial
ownership of, or other ownership interests in, of each
Material Subsidiary has been duly authorized and validly
issued, is fully paid and except as to Material Subsidiaries
that are partnerships, non-assessable and except for SPTMRT
Properties Trust, is owned by the Company, directly or through
subsidiaries, free and clear of any security interest,
mortgage, pledge, lien or encumbrance;
(iv) this Agreement has been duly authorized,
executed and delivered by the Company, and is a legal, valid
and binding agreement of the Company, enforceable in
accordance with their terms, except as enforcement of the same
may be limited by bankruptcy, insolvency,
19
moratorium, fraudulent conveyance or other similar laws
affecting the enforcement of creditors' rights generally and
by general equitable principles and except as to those
provisions relating to indemnities for liabilities arising
under the Act as to which no opinion need be expressed;
(v) the Subordinated Debentures have been duly and
validly authorized by all necessary trust action on the part
of the Company and, the Subordinated Debentures have been duly
and validly executed by and delivered by the Company and when
authenticated by the Debenture Trustee in accordance with the
Indenture and paid for by the Trust, will be valid and binding
obligations of the Company, enforceable in accordance with
their terms, except as such enforceability is subject to the
effect of any applicable bankruptcy, insolvency,
reorganization or other law relating to or affecting
creditors' rights generally and to general principles of
equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law), and the
Subordinated Debentures are in the form provided for by the
Indenture;
(vi) the Guarantee has been duly and validly
authorized by all necessary trust action on the part of the
Company; the Guarantee has been duly and validly executed and
delivered by the Company and (assuming due authorization,
execution and delivery by the Guarantee Trustee) constitutes
the valid and binding obligation of the Company, enforceable
in accordance with its terms, except as such enforceability is
subject to the effect of any applicable bankruptcy,
insolvency, reorganization or other law relating to or
affecting creditors' rights generally and to general
principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at
law);
(vii) the Declaration and the Indenture have each
been duly authorized, executed and delivered by the Sponsor
and the Company, as the case may be, and, when executed and
delivered by the other parties thereto, will constitute valid
and binding obligations of the Sponsor and the Company, as the
case may be, enforceable in accordance with their respective
terms, except as such enforceability is subject to the effect
of any applicable bankruptcy, insolvency, reorganization or
other law relating to or affecting creditors' rights generally
and to general principles of equity (regardless of whether
such enforceability is considered in proceeding in equity or
at law);
(viii) the Company has an authorized capitalization
as set forth under the caption "Description of Common Shares"
in the Prospectus, and
20
all of the issued shares of beneficial interest of the Company
have been duly authorized by all necessary trust action and
are validly issued, and are fully paid and non-assessable and
are not subject to preemptive or, to the knowledge of such
counsel, similar rights;
(ix) the terms of the Securities, the Subordinated
Debentures and the Guarantee conform as to legal matters in
all material respects to the descriptions thereof contained in
the Prospectus, including, without limitation, under the
captions "Description of debt securities" and "Description of
trust preferred securities and trust guarantee"; the
Securities, the Subordinated Debentures and the Guarantee
conform as to legal matters in all material respects to the
descriptions thereof contained in the Prospectus Supplement,
including, without limitation, under the captions "Description
of the trust preferred securities", "Description of the junior
subordinated debentures", "Subordination of the guarantee" and
"Relationship among the trust preferred securities, the
guarantee and the junior subordinated debentures";
(x) the Guarantee, the Declaration and the Indenture
will have been duly qualified under the TIA;
(xi) the Registration Statement and the Prospectus
(except as to the financial statements and schedules and other
financial and statistical data contained therein and the
Statements of Eligibility on Form T-1 included in the
Registration Statement, as to all of which such counsel need
express no opinion) comply as to form in all material respects
with the requirements of the Act;
(xii) the Registration Statement has become effective
under the Act and, to such counsel's knowledge, no stop order
proceedings with respect thereto are pending or threatened
under the Act and any required filing of the Prospectus, and
any supplement thereto pursuant to Rule 424 under the Act has
been made in the manner and within the time period required by
such Rule 424;
(xiii) no approval, authorization, consent or order
of or filing with any federal, Maryland, Massachusetts or New
York governmental or regulatory commission, board, body,
authority or agency having jurisdiction over the Company or
the Sponsor, as the case may be, is required in connection
with the execution, delivery and performance of this Agreement
and the Company Agreements, the issuance and sale of the
Securities being delivered at the time of purchase and at the
additional
21
time of purchase, as the case may be, or the issuance of the
Guarantee and the Subordinated Debentures and the consummation
of the transactions contemplated hereby, by the Company
Agreements and by the Prospectus, other than those that have
been obtained under the Act and other than any necessary
qualification under the state securities or blue sky laws of
the various jurisdictions in which the Securities are being
offered by the Underwriters, as to which such qualification
such counsel need express no opinion;
(xiv) the execution, delivery and performance of this
Agreement and the Company Agreements by the Company and the
transactions contemplated hereby, by the Company Agreements do
not and will not conflict with, or result in any breach of, or
constitute a violation under (nor constitute any event which
with notice, lapse of time, or both, would result in any
breach of, or constitute a default under) (A) any provisions
of the Declaration of Trust, charter, by-laws or other
organizational documents of the Company or any of the Material
Subsidiaries, (B) any provision of any material agreement or
other instrument to which the Company or any of the Material
Subsidiaries is a party or by which their respective
properties may be bound or affected, that is described in the
Prospectus filed as an exhibit to the Registration Statement
or is otherwise known to such counsel or (C) any federal,
state, local or foreign law, regulation or rule, or any
decree, to which the Company or the Material Subsidiaries may
be subject;
(xv) to such counsel's knowledge, there are no
contracts, licenses, agreements, leases or documents of a
character which are required to be filed as exhibits to the
Registration Statement or to be described in the Prospectus
which have not been so filed or described;
(xvi) each of the Company and the Trust is not, and
after the offering and sale of the Securities and the
Subordinated Debentures, will not be, an "investment company,"
or an entity controlled by an "investment company," as such
terms are defined in the Investment Company Act; and
(xvii) to such counsel's knowledge the statements in
(i) the Registration Statement and the Prospectus under the
captions "Risk factors--Risks Relating to the Trust Preferred
Securities", "Tenants and property operations", "SNH Capital
Trust I", "Description of the trust preferred securities",
"Description of the junior subordinated debentures",
"Subordination of the guarantee", "Relationship among the
trust preferred
22
securities, the guarantee and the junior subordinated
debentures", "Federal income tax considerations" and "ERISA
plans, Xxxxx plans and individual retirement accounts" and in
the Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 2000 under the captions
"Business--Financing Policies" (with respect to the first
paragraph only), "Business--Regulation and Reimbursement",
"Business--Government Regulations and Rate Setting" and
"Federal Income Tax Considerations" in each case insofar as
such statements purport to summarize matters arising under
Maryland, Massachusetts or New York law or the federal law of
the United States, or provisions of documents as to which the
Company or the Trust is a party specifically referred to
therein, are accurate in all material respects.
In addition, such counsel shall state that, in the opinion of
such counsel, and subject to the restrictions and limitations set forth in such
counsel's tax opinion filed as an exhibit to the Registration Statement, (a) the
Company has qualified to be taxed as a REIT under the Code for each of its
fiscal years and (b) the proposed method of operation described in the
Prospectus and as represented to such counsel by the Company will enable the
Company to continue to satisfy the requirements for such qualification for
subsequent fiscal years under the Code. Actual qualification as a REIT, however,
will depend upon the Company's continued ability to meet, and its meeting,
through actual annual operating results and distributions, the various
qualifying tests under the Code.
Also, such counsel shall state that it has participated in
conferences with officers and other representatives of the Company,
representatives of the independent public accountants of the Company and
representatives of the Underwriters at which the contents of the Registration
Statement and Prospectus were discussed and, although such counsel is not
passing upon and does not assume responsibility for the accuracy, completeness
or fairness of the statements contained in the Registration Statement or
Prospectus (except as and to the extent stated in subparagraphs (xi) and (xvii)
above and the paragraph immediately preceeding this paragraph), on the basis of
the foregoing nothing has come to the attention of such counsel that causes them
to believe that the Registration Statement or any amendment thereto at the time
such Registration Statement or amendment 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 or any supplement thereto at the date of such Prospectus or
such supplement, and at all times up to and including the time of purchase and
the additional time of purchase, as the case may be, contained an untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading (it being understood
that such counsel need express no opinion with respect to the
23
financial statements and schedules and other financial and statistical data
included and the Statements of Eligibility on Form T-1 in the Registration
Statement or Prospectus).
In rendering their opinion as aforesaid, Xxxxxxxx & Worcester
LLP may rely upon an opinion, dated as of the time of purchase or the additional
time of purchase, as the case may be, of Xxxxxxx Xxxxx Xxxxxxx & Xxxxxxxxx, LLP
as to matters governed by Maryland law, provided that such reliance is expressly
authorized by such opinion and a copy of such opinion is delivered to the
Underwriters and is, in form and substance, satisfactory to the Underwriters and
counsel for the Underwriters. In addition, in rendering such opinion, such
counsel may state that their opinion as to laws of the State of Delaware is
limited to the Delaware General Corporation Law and that their opinion with
respect to the qualification of the Company and is Subsidiaries to do business
in jurisdictions other than their respective jurisdiction of organization is
based solely upon certificates to such effect issued by an appropriate official
of the applicable jurisdictions.
(b) The Offerors shall furnish to you at the time of purchase
and at the additional time of purchase, as the case may be, an opinion
of Xxxxxxx Xxxxx Xxxxxxx & Ingersoll, LLP, special Maryland counsel of
the Offerors, addressed to the Underwriters, and dated the time of
purchase and the additional time of purchase, as the case may be, with
reproduced copies for each of the other Underwriters and in form
satisfactory to Xxxxx Xxxxxxxxxx LLP, counsel for the Underwriters,
stating that:
(i) the Company has been duly formed, is existing as
a real estate investment trust and is in good standing under
the laws of the State of Maryland, with trust power to own,
lease and operate its properties and conduct its business in
all material respects as described in the Registration
Statement and the Prospectus, to execute and deliver this
Agreement and to issue, sell and deliver the Subordinated
Debentures as herein contemplated;
(ii) each Subsidiary of the Company identified in
Schedule D attached hereto (each a "Maryland Subsidiary") is a
corporation or other legal entity duly formed, existing and in
good standing under the laws of its jurisdiction of
organization. Each Maryland Subsidiary has the trust power to
own or hold under lease the properties it purports to own or
hold under lease and to transact the business it transacts and
proposes to transact. All of the issued and outstanding shares
of beneficial interest of each Maryland Subsidiary have been
duly authorized and validly issued, is fully paid and
non-assessable and is owned by the Company, directly or
through subsidiaries, and to such counsel's knowledge, except
for SPTMRT Properties Trust, free and clear of any security
interest, mortgage, pledge, lien, encumbrance, claim or
equity;
24
(iii) the Trust has been duly formed and is existing
and in good standing as a business trust under the Maryland
Business Trust Act, and all filings required under the laws of
the State of Maryland with respect to the creation and valid
existence of the Trust as a business trust have been made;
(iv) under the Maryland Business Trust Act and the
Declaration, the Trust has the trust power to own property and
conduct its business, in all material respects as described in
the Prospectus;
(v) under the Maryland Business Trust Act and the
Declaration, the Trust has the trust power to (a) enter into
and perform its obligations under this Agreement and (b) issue
and perform its obligations under the Securities and the
Common Securities;
(vi) under the Maryland Business Trust Act and the
Declaration, the execution and delivery by the Trust of this
Agreement, and the performance by the Trust of its obligations
hereunder, have been duly authorized by all necessary trust
action on the part of the Trust;
(vii) under the Maryland Business Trust Act and the
Declaration, this Agreement has been duly executed by the
Company, the Sponsor and the Trust;
(viii) the Securities have been duly authorized in
the Declaration and are validly issued and, subject to the
qualifications set forth herein, fully paid and non-assessable
undivided beneficial interests in the assets of the Trust and
are entitled to the benefits provided by the Declaration
(subject to the terms of the Declaration); provided that such
counsel may note that the Securityholders may be obligated,
pursuant to the Declaration, to (a) provide indemnity and/or
security in connection with and pay taxes or governmental
charges arising from transfers or exchanges of Securities
certificates and the issuance of replacement Securities
certificates and (b) provide security and indemnity in
connection with requests of or directions to the Property
Trustee (as defined in the Declaration) to exercise its rights
and remedies under the Declaration. Except as provided in the
foregoing sentence, the Securityholders, as beneficial owners
of the Trust, are entitled to the same limitation of personal
liability extended to stockholders of private corporations for
profit organized under Title 2 of the Maryland General
Corporation Law;
25
(ix) the Common Securities of the Trust have been
duly authorized by the Declaration and are validly issued, and
fully paid undivided beneficial interests in the assets of the
Trust;
(x) under the Maryland Business Trust Act and the
Declaration, the issuance of the Securities and the Common
Securities is not subject to preemptive rights;
(xi) the issuance and sale by the Trust of the
Securities and the Common Securities, the execution, delivery
and performance by the Trust of this Agreement and the Company
Agreements, the consummation by the Trust of the transactions
contemplated by this Agreement and the Declaration and
compliance by the Trust with its obligations thereunder do not
violate (a) any of the provisions of the Certificate of Trust
of the Trust or the Declaration or any organizational
documents of any of the Maryland Subsidiaries, or (b) any
applicable local or state Maryland law or administrative
regulation;
(xii) the Subordinated Debentures have been duly and
validly authorized by all necessary trust action on the part
of the Company and, the Subordinated Debentures have been duly
and validly executed by and delivered by the Company;
(xiii) the Guarantee has been duly and validly
authorized by all necessary trust action on the part of the
Company; the Guarantee has been duly and validly executed and
delivered by the Company;
(xiv) the Company has an authorized capitalization as
set forth under the caption "Description of Common Shares" in
the Prospectus, and all of the issued shares of beneficial
interest of the Company have been duly authorized by all
necessary trust action and are validly issued, and are fully
paid and non-assessable and are not subject to preemptive or,
to the knowledge of such counsel, similar rights;
(xv) to such counsel's knowledge the statements in
(i) the Registration Statement and the Prospectus under the
captions "Risk factors--Risks Relating to the Trust Preferred
Securities", "SNH Capital Trust I", "Description of the trust
preferred securities", "Relationship among the trust preferred
securities, the guarantee and the junior subordinated
debentures", "Description of trust preferred securities and
trust guarantee", "Description of certain provisions of
Maryland law and of our declaration of trust and bylaws" and
in each case insofar as such
26
statements purport to summarize matters arising under Maryland
law are accurate in all material respects;
(xvi) no approval, authorization, consent or order of
or filing with any Maryland governmental or regulatory
commission, board, body, authority or agency having
jurisdiction over the Company is required in connection with
the execution, delivery and performance of this Agreement and
the Company Agreements, the issuance and sale of the
Securities being delivered at the time of purchase and at the
additional time of purchase, as the case may be, or the
issuance of the Guarantee and the Subordinated Debentures and
the consummation of the transactions contemplated hereby, by
the Company Agreements and by the Prospectus (In rendering the
opinion expressed in this paragraph (xvi), such counsel need
express no opinion concerning the securities laws of the State
of Maryland.); and
(xvii) the Securityholders (other than those holders
of the Securities who reside or are domiciled in the State of
Maryland) will have no liability for income taxes imposed by
the State of Maryland solely as a result of their
participation in the Trust, and the Trust will not be liable
for any income tax imposed by the State of Maryland.
(c) You shall have received at the time of purchase and at the
additional time of purchase, as the case may be, an opinion of Xxxxx
Xxxxxxxxxx LLP, counsel for the Underwriters, dated the time of
purchase and the additional time of purchase, as the case may be, with
respect to the issuance and sale of the Securities by the Company, the
Registration Statement, the Prospectus and such other related matters
as the Underwriters may require. In addition, Xxxxx Xxxxxxxxxx LLP may
rely on the opinion of Xxxxxxx Xxxxx Xxxxxxx & Ingersoll, LLP as to all
matters of Maryland law.
(d) You shall have received from Ernst & Young LLP, a letter
dated, respectively, the date of this Agreement and the time of
purchase and the additional time of purchase, as the case may be, and
addressed to the Underwriters (with reproduced copies for each of the
Underwriters) in the forms approved by Xxxxx Xxxxxxxxxx LLP, counsel
for the Underwriters.
(e) You shall have received from KPMG LLP, a letter dated,
respectively, the date of this Agreement and the time of purchase and
the additional time of purchase, as the case may be, and addressed to
the Underwriters (with reproduced copies for each of the Underwriters)
in the forms approved by Xxxxx Xxxxxxxxxx LLP, counsel for the
Underwriters.
27
(f) No amendment or supplement to the Registration Statement
or Prospectus, including documents deemed to be incorporated by
reference therein, shall have been made to which you have objected in
writing.
(g) Prior to the time of purchase and the additional time of
purchase, as the case may be, (i) no stop order with respect to the
effectiveness of the Registration Statement shall have been issued
under the Act or proceedings initiated under Section 8(d) or 8(e) of
the Act; (ii) the Registration Statement and all amendments thereto, or
modifications thereof, if any, shall not contain an untrue statement of
a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading; and
(iii) the Prospectus and all amendments or supplements thereto, or
modifications thereof, if any, shall not contain an untrue statement of
a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein, in the light of
the circumstances under which they are made, not misleading.
(h) Between the time of execution of this Agreement and the
time of purchase and the additional time of purchase, as the case may
be, (i) no material and unfavorable change, financial or otherwise
(other than as referred to in the Registration Statement and
Prospectus), in the business, prospects, properties, condition of the
Offerors and the Subsidiaries taken as a whole shall occur or become
known and (ii) no transaction which is material and unfavorable to the
Offerors and the Subsidiaries taken as a whole shall have been entered
into by the Offerors or any of the Subsidiaries.
(i) Between the time of execution of this Agreement and the
time of purchase and the additional time of purchase, as the case may
be, there shall not have occurred any downgrading, nor shall any notice
or announcement have been given or made of (i) any intended or
potential downgrading or (ii) any review or possible change that does
not indicate an improvement, in the rating accorded any securities of
or guaranteed by the Company by any "nationally recognized statistical
rating organization," as that term is defined in Rule 436(g)(2) under
the Act.
(j) The Company will, at the time of purchase and at the
additional time of purchase, as the case may be, deliver to you a
certificate of two of its executive officers to the effect that the
representations and warranties of the Company as set forth in this
Agreement are true and correct as of such date, that the Company has
performed such of its obligations under this Agreement as are to be
performed at or before the time of purchase and the additional time of
purchase, as the case may be, and the conditions set forth in
paragraphs (g), (h) and (i) of this Section 6 have been met.
28
(k) The Company will, at the time of purchase and at the
additional time of purchase, as the case may be, deliver to you a
certificate signed by the President of the Company substantially in
such form approved by you and counsel to the Underwriters, respecting
the Company's compliance, both prior to and after giving effect to the
transactions contemplated hereby, and certain matters relating to the
Company and the Subsidiaries.
(l) The Securities shall have been approved for listing on the
New York Stock Exchange, such listing to be effective within thirty
days of the date hereof.
(m) The Company, the Sponsor, the Trustees, the Guarantee
Trustee and the Debenture Trustee shall have executed and delivered the
Company Agreements.
The Company shall have furnished to you such other documents
and certificates as to the accuracy and completeness of any statement in the
Registration Statement and the Prospectus as of the time of purchase and the
additional time of purchase, as the case may be, as you may reasonably request.
7. Effective Date of Agreement; Termination. This Agreement
shall become effective when the parties hereto have executed and delivered this
Agreement.
The obligations of the several Underwriters hereunder shall be
subject to termination in the absolute discretion of you or any group of
Underwriters (which may include you) which has agreed to purchase in the
aggregate at least 50% of the Firm Securities (i) if, since the time of
execution of this Agreement or the respective dates as of which information is
given in the Registration Statement and Prospectus, (y) there has been any
material adverse and unfavorable change, financial or otherwise (other than as
referred to in the Registration Statement and Prospectus), in the business,
prospects, properties, condition (financial or otherwise) or results of
operations of the Company and the Subsidiaries taken as a whole, which would, in
your judgment or in the judgment of such group of Underwriters, make it
impracticable to market the Securities, or (z) there shall have occurred any
downgrading, or any notice shall have been given of (a) any intended or
potential downgrading or (b) any review or possible change that does not
indicate an improvement, in the rating accorded any securities of or guaranteed
by the Company or any of its subsidiaries by any "nationally recognized
statistical rating organization", as that term is defined in Rule 436(g)(2)
under the Act or (ii) if, at any time prior to the time of purchase and the
additional time of purchase, as the case may be, trading in securities on the
New York Stock Exchange, the American Stock Exchange or the Nasdaq shall have
been suspended or limitations or minimum prices shall have been established on
the New York Stock Exchange, the American Stock Exchange or the Nasdaq or (iii)
if, at any time prior to the time of purchase and the additional time of
purchase, as the case may be, a banking moratorium shall have been declared
either by the United States or New York State authorities, or (iv) if, at any
time prior
29
to the time of purchase and the additional time of purchase, as the case may be,
the United States shall have declared war in accordance with its constitutional
processes or there shall have occurred any material outbreak or escalation of
hostilities or other national or international calamity or crisis of such
magnitude in its effect on the financial markets of the United States as, in
your judgment or in the judgment of such group of Underwriters, to make it
impracticable to market the Securities.
If you or any group of Underwriters elects to terminate this
Agreement as provided in this Section 7, the Offerors and each other Underwriter
shall be notified promptly by letter, telegram or telecopy.
If the sale to the Underwriters of the Securities, as
contemplated by this Agreement, is not carried out by the Underwriters for any
reason permitted under this Agreement or if such sale is not carried out because
the Offerors shall be unable to comply with any of the terms of this Agreement,
the Offerors shall not be under any obligation or liability under this Agreement
(except to the extent provided in Sections 4, 5 and 9 hereof), and the
Underwriters shall be under no obligation or liability to the Offerors under
this Agreement (except to the extent provided in Section 9 hereof) or to one
another hereunder.
8. Increase in Underwriters' Commitments. Subject to Sections
6 and 7, if any Underwriter shall default in its obligation to take up and pay
for the Securities to be purchased by it hereunder (otherwise than for reasons
sufficient to justify the termination of this Agreement under the provisions of
Section 7 hereof) and if the principal amount of Securities which all
Underwriters so defaulting shall have agreed but failed to take up and pay for
does not exceed 10% of the total aggregate principal amount of Securities, the
non-defaulting Underwriters shall take up and pay for (in addition to the
principal amount of Securities they are obligated to purchase pursuant to
Section 1 hereof) the principal amount of Securities agreed to be purchased by
all such defaulting Underwriters, as hereinafter provided. Such Securities shall
be taken up and paid for by such non-defaulting Underwriter or Underwriters in
such principal amount or amounts as you may designate with the consent of each
Underwriter so designated or, in the event no such designation is made, such
Securities shall be taken up and paid for by all non-defaulting Underwriters pro
rata in proportion to the aggregate principal amount of Securities set opposite
the names of such non-defaulting Underwriters in Schedule A.
If a new Underwriter or Underwriters are substituted by the
Underwriters or by the Offerors for a defaulting Underwriter or Underwriters in
accordance with the foregoing provision, the Offerors or you shall have the
right to postpone the time of purchase and the additional time of purchase, as
the case may be, for a period not exceeding five business days in order that any
necessary changes in the Prospectus and other documents may be effected.
30
The term Underwriter as used in this agreement shall refer to
and include any Underwriter substituted under this Section 8 with like effect as
if such substituted Underwriter had originally been named in Schedule A.
If the aggregate principal amount of Securities which the
defaulting Underwriter or Underwriters agreed to purchase exceeds 10% of the
total aggregate principal amount of Securities which all Underwriters agreed to
purchase hereunder, and if neither the non-defaulting Underwriters nor the
Offerors shall make arrangements within the five business day period stated
above for the purchase of all the Securities which the defaulting Underwriter or
Underwriters agreed to purchase hereunder, this Agreement shall be terminated
without further act or deed and without any liability on the part of the
Offerors to any non-defaulting Underwriter and without any liability on the part
of any non-defaulting Underwriter to the Offerors. Nothing in this paragraph,
and no action taken hereunder, shall relieve any defaulting Underwriter from
liability in respect of any default of such Underwriter under this Agreement.
9. Indemnity and Contribution.
(a) The Company and the Trust, jointly and severally, agree to
indemnify, defend and hold harmless each Underwriter, its partners, directors,
officers, employees and agents and any person who controls any Underwriter
within the meaning of Section 15 of the Act or Section 20 of the Exchange Act,
and the successors and assigns of all of the foregoing persons from and against
any loss, damage, expense, liability or claim (including the reasonable cost of
investigation) which, jointly or severally, any such Underwriter or any such
person may incur under the Act, the Exchange Act, the common law or otherwise,
insofar as such loss, damage, expense, liability or claim arises out of or is
based upon (i) any untrue statement or alleged untrue statement of a material
fact contained in the Registration Statement, the Basic Prospectus, any
Prepricing Prospectus, the Prospectus Supplement or in the Prospectus (or in any
of the foregoing as the same may at any time be amended or supplemented), or
arises out of or is based upon any omission or alleged omission to state a
material fact required to be stated in the Registration Statement, the Basic
Prospectus, any Prepricing Prospectus, the Prospectus Supplement or the
Prospectus (or in any of the foregoing as the same may at any time be amended or
supplemented) or necessary to make the statements made therein not misleading,
except insofar as any such loss, damage, expense, liability or claim arises out
of or is based upon any untrue statement or alleged untrue statement of a
material fact contained in and in conformity with information furnished by or on
behalf of any Underwriter through you to the Offerors expressly for use with
reference to such Underwriter in the Registration Statement, the Basic
Prospectus, any Prepricing Prospectus, the Prospectus Supplement or the
Prospectus (or in any of the foregoing as the same may at any time be amended or
supplemented) or arises out of or is based upon any omission or alleged omission
to state a material fact in connection with such information
31
required to be stated in the Registration Statement, the Basic Prospectus, any
Prepricing Prospectus, the Prospectus Supplement or the Prospectus (or in any of
the foregoing as the same may at any time be amended or supplemented) or
necessary to make such information not misleading or (ii) any untrue statement
or alleged untrue statement made by the Offerors in Section 3 of this Agreement
or the failure by the Offerors to perform when and as required any agreement or
covenant contained herein or (iii) any untrue statement or alleged untrue
statement of any material fact contained in any audio or visual materials
provided by the Offerors or based upon written information furnished by or on
behalf of the Offerors including, without limitation, slides, videos, films,
tape recordings, used in connection with the marketing of the Securities;
provided, however, that, solely with regard to clause (i), the foregoing
indemnity agreement with respect to any Basic Prospectus or Prepricing
Prospectus shall not inure to the benefit of any Underwriter from whom the
person asserting such losses, claims, damages or liabilities purchased
Securities, or any person controlling the Underwriter, if sufficient copies of
the Prospectus were timely delivered to such Underwriter pursuant to Section 4
hereof and a copy of the Prospectus (as then amended or supplemented if the
Company shall have furnished any amendments or supplements thereto) was not
given or sent to such person, if required by law to have been delivered, at or
prior to the written confirmation of the sale of the Securities to such person,
and if the Prospectus (as so amended or supplemented) would have cured the
defect giving rise to such losses, claims, damages or liabilities.
If any action, suit or proceeding (together, a "Proceeding")
is brought against an Underwriter or any such person in respect of which
indemnity may be sought against the Offerors pursuant to the foregoing
paragraph, such Underwriter or such person shall promptly notify the Offerors in
writing of the institution of such Proceeding and the Offerors shall assume the
defense of such Proceeding, including the employment of counsel reasonably
satisfactory to such indemnified party and payment of all fees and expenses;
provided, however, that the omission to so notify the Offerors shall not relieve
the Offerors from any liability which the Offerors may have to any Underwriter
or any such person or otherwise. Such Underwriter or such person shall have the
right to employ its or their own counsel in any such case, but the fees and
expenses of such counsel shall be at the expense of such Underwriter or of such
person unless the employment of such counsel shall have been authorized in
writing by the Offerors in connection with the defense of such Proceeding or the
Offerors shall not have, within a reasonable period of time in light of the
circumstances employed counsel to have charge of the defense of such Proceeding
or such indemnified party or parties shall have reasonably concluded that there
may be defenses available to it or them which are different from, additional to
or in conflict with those available to the Offerors (in which case the Offerors
shall not have the right to direct the defense of such Proceeding on behalf of
the indemnified party or parties), in any of which events such fees and expenses
shall be borne by the Offerors and paid as incurred (it being understood,
however, that the Offerors shall not be liable for the expenses of more than one
separate counsel (in addition to
32
any local counsel) in any one Proceeding or series of related Proceedings in the
same jurisdiction representing the indemnified parties who are parties to such
Proceeding). The Offerors shall not be liable for any settlement of any such
Proceeding effected without its written consent but if settled with the written
consent of the Offerors, the Offerors agree to indemnify and hold harmless any
Underwriter and any such person from and against any loss or liability by reason
of such settlement. 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 the second
sentence of this paragraph, then 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 60 business days after receipt
by such indemnifying party of the aforesaid request, (ii) such indemnifying
party shall not have reimbursed the indemnified party in accordance with such
request prior to the date of such settlement and (iii) such indemnified party
shall have given the indemnifying party at least 30 days' prior notice of its
intention to settle. No indemnifying party shall, without the prior written
consent of the indemnified party, effect any settlement of any pending or
threatened Proceeding in respect of which any indemnified party is or could have
been a party and indemnity could have been sought hereunder by such indemnified
party, unless such settlement includes an unconditional release of such
indemnified party from all liability on claims that are the subject matter of
such Proceeding and does not include an admission of fault, culpability or a
failure to act, by or on behalf of such indemnified party.
(b) Each Underwriter severally agrees to indemnify, defend and
hold harmless each of the Company and the Trust, its trustees, officers,
employees and agents, and any person who controls the Company within the meaning
of Section 15 of the Act, or Section 20 of the Exchange Act, from and against
any loss, damage, expense, liability or claim (including the reasonable cost of
investigation) which, jointly or severally, the Offerors or any such person may
incur under the Act, the Exchange Act, or common law or otherwise, insofar as
such loss, damage, expense, liability or claim arises out of or is based upon
any untrue statement or alleged untrue statement of a material fact contained in
and in conformity with information furnished by or on behalf of such Underwriter
through you to the Offerors expressly for use with reference to such Underwriter
in the Registration Statement, the Basic Prospectus, any Prepricing Prospectus,
the Prospectus Supplement or in the Prospectus (or in any of the foregoing as
such document may at any time be amended or supplemented) or arises out of or is
based upon any omission or alleged omission to state a material fact in
connection with such information required to be stated in the Registration
Statement, the Basic Prospectus, any Prepricing Prospectus, the Prospectus
Supplement or the Prospectus (or in any of the foregoing as such document may at
any time be amended or supplemented) or necessary to make such information not
misleading.
33
If any Proceeding is brought against the Offerors or any such
person in respect of which indemnity may be sought against any Underwriter
pursuant to the foregoing paragraph, the Offerors or such person shall promptly
notify such Underwriter in writing of the institution of such Proceeding and
such Underwriter shall assume the defense of such Proceeding, including the
employment of counsel reasonably satisfactory to such indemnified party and
payment of all fees and expenses, provided, however, that the omission to so
notify such Underwriter shall not relieve such Underwriter from any liability
which such Underwriter may have to the Offerors or any such person or otherwise.
The Offerors or such person shall have the right to employ its own counsel in
any such case, but the fees and expenses of such counsel shall be at the expense
of the Offerors or such person unless the employment of such counsel shall have
been authorized in writing by such Underwriter in connection with the defense of
such Proceeding or such Underwriter shall not have employed counsel to have
charge of the defense of such Proceeding or such indemnified party or parties
shall have reasonably concluded that there may be defenses available to it or
them which are different from or additional to or in conflict with those
available to such Underwriter (in which case such Underwriter shall not have the
right to direct the defense of such Proceeding on behalf of the indemnified
party or parties, but such Underwriter may employ counsel and participate in the
defense thereof but the fees and expenses of such counsel shall be at the
expense of such Underwriter), in any of which events such fees and expenses
shall be borne by such Underwriter and paid as incurred (it being understood,
however, that such Underwriter shall not be liable for the expenses of more than
one separate counsel (in addition to any local counsel) in any one Proceeding or
series of related Proceedings in the same jurisdiction representing the
indemnified parties who are parties to such Proceeding). No Underwriter shall be
liable for any settlement of any such Proceeding effected without the written
consent of such Underwriter but if settled with the written consent of such
Underwriter, such Underwriter agrees to indemnify and hold harmless the Offerors
and any such person from and against any loss or liability by reason of such
settlement. 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 the second
sentence of this paragraph, then 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 60 business days after receipt
by such indemnifying party of the aforesaid request, (ii) such indemnifying
party shall not have reimbursed the indemnified party in accordance with such
request prior to the date of such settlement and (iii) such indemnified party
shall have given the indemnifying party at least 30 days' prior notice of its
intention to settle. No indemnifying party shall, without the prior written
consent of the indemnified party, effect any settlement of any pending or
threatened Proceeding in respect of which any indemnified party is or could have
been a party and indemnity could have been sought hereunder by such indemnified
party, unless such settlement includes an unconditional release of such
indemnified party from all liability on claims that are the subject matter of
such Proceeding.
34
(c) If the indemnification provided for in this Section 9 is
unavailable to an indemnified party under subsections (a) and (b) of this
Section 9 in respect of any losses, damage, expenses, liabilities or claims
referred to therein, then each applicable indemnifying party, in lieu of
indemnifying such indemnified party, shall contribute to the amount paid or
payable by such indemnified party as a result of such losses, damages, expenses,
liabilities or claims (i) in such proportion as is appropriate to reflect the
relative benefits received by the Offerors on the one hand and the Underwriters
on the other hand from the offering of the Securities 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 Offerors on the one
hand and of the Underwriters on the other in connection with the statements or
omissions which resulted in such losses, damages, expenses, liabilities or
claims, as well as any other relevant equitable considerations. The relative
benefits received by the Offerors on the one hand and the Underwriters on the
other shall be deemed to be in the same respective proportion as the total
proceeds from the offering (net of underwriting discounts and commissions but
before deducting expenses) received by the Offerors and the total underwriting
discounts and commissions received by the Underwriters, bear to the aggregate
public offering price of the Securities. The relative fault of the Offerors on
the one hand and of the Underwriters on the other shall be determined by
reference to, among other things, whether the untrue statement or alleged untrue
statement of a material fact or omission or alleged omission relates to
information supplied by the Offerors or by the Underwriters 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, damages, expenses, liabilities and claims referred to in
this subsection shall be deemed to include any legal or other fees or expenses
reasonably incurred by such party in connection with investigating, preparing to
defend or defending any claim or Proceeding.
(d) The Offerors 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 that does not take account of
the equitable considerations referred to in subsection (c) above.
Notwithstanding the provisions of this Section 9, no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the Securities underwritten by such Underwriter and distributed
to the public were offered to the public exceeds the amount of any damage which
such Underwriter has otherwise been required to pay by reason of such untrue
statement or alleged untrue statement or omission or alleged omission. No person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Act) shall be entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation. The Underwriters' obligations to contribute
pursuant to this Section 9 are several in proportion to their respective
underwriting commitments and not joint.
35
(e) The indemnity and contribution agreements contained in
this Section 9 and the covenants, warranties and representations of the Offerors
contained in this Agreement shall remain in full force and effect regardless of
any investigation made by or on behalf of any Underwriter, its partners,
directors, officers, employees or agents or any person (including each partner,
officer, director, employee or agent of such person) who controls any
Underwriter within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act, or by or on behalf of the Offerors, its trustees, officers,
employees or agents or any person who controls the Offerors within the meaning
of Section 15 of the Act or Section 20 of the Exchange Act, and shall survive
any termination of this Agreement or the issuance and delivery of the
Securities. The Offerors and each Underwriter agree promptly to notify each
other of the commencement of any Proceeding against it and, in the case of the
Offerors, against any of the Offerors's trustees, officers, employees or agents
in connection with the issuance and sale of the Securities, or in connection
with the Registration Statement or Prospectus.
10. Notices. Except as otherwise herein provided, all
statements, requests, notices and agreements shall be in writing or by telegram
and, if to the Underwriters, shall be sufficient in all respects if delivered or
sent to UBS Warburg LLC, 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention:
Syndicate Department, with a copy to Xxxxx Xxxxxxxxxx LLP, 0000 Xxxxxx xx xxx
Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxxx X. Xxxxxxx, Esq., if to the
Company, shall be sufficient in all respects if delivered or sent to the Company
at the offices of the Company c/o Senior Housing Properties Trust at 000 Xxxxxx
Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000, Attention: Xxxxx X. Xxxxxxx, President,
with a copy to Xxxxxxxx & Worcester LLP, Xxx Xxxx Xxxxxx Xxxxxx, Xxxxxx,
Xxxxxxxxxxxxx 00000, Attention: Xxxxxxxxx X. Xxxxxxxxxx, Xx., Esq., and if to
the Trust at 000 Xxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000, Attention: Xxxxx X.
Xxxxxxx, with a copy to Xxxxxxxx & Worcester LLP, Attention: Xxxxxxxxx X.
Xxxxxxxxxx, Xx., Esq.
11. Governing Law; Construction. This Agreement and any claim,
counterclaim or dispute of any kind or nature whatsoever arising out of or in
any way relating to this Agreement (a "Claim"), directly or indirectly, shall be
governed by, and construed in accordance with, the laws of the State of New
York. The Section headings in this Agreement have been inserted as a matter of
convenience of reference and are not a part of this Agreement.
12. Submission to Jurisdiction. Except as set forth below, no
Claim may be commenced, prosecuted or continued in any court other than the
courts of the State of New York located in the City and County of New York or in
the United States District Court for the Southern District of New York, which
courts shall have jurisdiction over the adjudication of such matters, and the
Offerors consent to the jurisdiction of such courts and personal service with
respect thereto. The Offerors hereby consent to personal jurisdiction, service
and
36
venue in any court in which any Claim arising out of or in any way relating to
this Agreement is brought by any third party against an Underwriter or any
indemnified party. Each Underwriter, the Company and the Trust (on its behalf
and, to the extent permitted by applicable law, on behalf of its stockholders
and affiliates) waives all right to trial by jury in any action, proceeding or
counterclaim (whether based upon contract, tort or otherwise) in any way arising
out of or relating to this Agreement. The Offerors agree that a final judgment
in any such action, proceeding or counterclaim brought in any such court shall
be conclusive and binding upon the Offerors and may be enforced in any other
courts in the jurisdiction of which the Offerors are or may be subject, by suit
upon such judgment.
13. Parties at Interest. The Agreement herein set forth has
been and is made solely for the benefit of the Underwriters, the Company, the
Trust and to the extent provided in Section 9 hereof the controlling persons,
directors and officers and, if applicable, trustees referred to in such Section,
and their respective successors, assigns, heirs, personal representatives and
executors and administrators. No other person, partnership, association or
corporation (including a purchaser, as such purchaser, from any of the
Underwriters) shall acquire or have any right under or by virtue of this
Agreement.
14. Information Furnished by the Underwriters. The statements
set forth in the last sentence on the last paragraph on the cover page of the
Prospectus Supplement and the statements set forth in the first, third, fifth,
seventh and eighth paragraph under the caption "Underwriting" in the Prospectus
Supplement constitute the only information furnished by or on behalf of the
Underwriters as such information is referred to in Sections 3 and 9 hereof.
15. Counterparts. This Agreement may be signed by the parties
in one or more counterparts that together shall constitute one and the same
agreement among the parties.
16. Successors and Assigns. This Agreement shall be binding
upon the Underwriters, the Company, the Trust and their respective successors
and assigns and any successor or assign of any substantial portion of the
Company's, the Trust's and any of the Underwriters' respective businesses and/or
assets.
17. Miscellaneous. UBS Warburg, an indirect, wholly-owned
subsidiary of UBS AG, is not a bank and is separate from any affiliated bank,
including any U.S. branch or agency of UBS Warburg. Because UBS Warburg is a
separately incorporated entity, it is solely responsible for its own contractual
obligations and commitments, including obligations with respect to sales and
purchases of securities. Securities sold, offered or recommended by UBS Warburg
are not deposits, are not insured by the Federal Deposit Insurance Corporation,
are not guaranteed by a branch or agency, and are not otherwise an obligation or
responsibility of a branch or agency.
37
A lending affiliate of UBS Warburg may have lending
relationships with issuers of securities underwritten or privately placed by UBS
Warburg. To the extent required under the securities laws, prospectuses and
other disclosure documents for securities underwritten or privately placed by
UBS Warburg will disclose the existence of any such lending relationships and
whether the proceeds of the issue will be used to repay debts owed to affiliates
of UBS Warburg.
THE ARTICLES OF AMENDMENT AND RESTATEMENT ESTABLISHING SENIOR
HOUSING PROPERTIES TRUST, DATED SEPTEMBER 2, 1999, A COPY OF WHICH, TOGETHER
WILL ALL AMENDMENTS THERETO, IS DULY FILED IN THE OFFICE OF THE DEPARTMENT OF
ASSESSMENTS AND TAXATION OF THE STATE OF MARYLAND, PROVIDES THAT THE NAME
"SENIOR HOUSING PROPERTIES TRUST" REFERS TO THE TRUSTEES UNDER THE DECLARATION
OF TRUST, BUT NOT INDIVIDUALLY OR PERSONALLY, AND THAT NO TRUSTEE, OFFICER,
SHAREHOLDER, EMPLOYEE OR AGENT OF SENIOR HOUSING PROPERTIES TRUST SHALL BE HELD
TO ANY PERSONAL LIABILITY, FOR ANY OBLIGATION OF, OR CLAIM AGAINST, SENIOR
HOUSING PROPERTIES TRUST. ALL PERSONS DEALING WITH SENIOR HOUSING PROPERTIES
TRUST, SHALL LOOK ONLY TO THE ASSETS OF SENIOR HOUSING PROPERTIES TRUST FOR THE
PAYMENT OF ANY SUM OR THE PERFORMANCE OF ANY OBLIGATION.
38
If the foregoing correctly sets forth the understanding
between each of the Underwriters, the Company, the Sponsor and the Trust please
so indicate in the space provided below for the purpose, whereupon this letter
and your acceptance shall constitute a binding agreement between the
Underwriters severally, the Company and the Trust.
Very truly yours,
SNH CAPITAL TRUST HOLDINGS,
On behalf and as sponsor of SNH Capital Trust I
By: /s/ Xxxxx X. Xxxxxxx
Name: Xxxxx X. Xxxxxxx
Title: President
SNH CAPITAL TRUST I
By: /s/ Xxxxx X. Xxxxxxx
Name: Xxxxx X. Xxxxxxx
Title: Trustee
SENIOR HOUSING PROPERTIES TRUST
By: /s/ Xxxxx X. Xxxxxxx
Name: Xxxxx X. Xxxxxxx
Title: President and Chief Operating Officer
Accepted and agreed to as of the date first above written:
UBS WARBURG LLC
XXXXXXX XXXXX XXXXXX INC.
X.X. XXXXXXX & SONS, INC.
FIRST UNION SECURITIES, INC.
PRUDENTIAL SECURITIES INCORPORATED
CREDIT SUISSE FIRST BOSTON CORPORATION
XXXXXX XXXXXXX INCORPORATED
By: UBS WARBURG LLC
By: /s/ Xxxxxxx XxXxxxx
Name: Xxxxxxx XxXxxxx
Title: Managing Director
By: /s/ Xxxx Xxxxxxx
Name: Xxxx Xxxxxxx
Title: Director
SCHEDULE A
Number of Firm Securities
Underwriters to be Purchased
UBS Warburg LLC.............................................................. 158,804
Xxxxxxx Xxxxx Xxxxxx Inc. ................................................... 158,800
X.X. Xxxxxxx & Sons, Inc. ................................................... 158,800
First Union Securities, Inc. ................................................ 158,800
Prudential Securities Incorporated .......................................... 158,800
Credit Suisse First Boston Corporation ...................................... 53,000
Xxxxxx Xxxxxxx Incorporated ................................................. 53,000
Xxxxxxxx & Partners, L.P..................................................... 8,333
Boenning & Scattergood, Inc.................................................. 8,333
CIBC World Markets Corp...................................................... 8,333
Xxxxxxxxxx & Co. Inc......................................................... 8,333
Xxxxxx Xxxxxxxxxx Xxxxx LLC.................................................. 8,333
McDonald Investments Inc..................................................... 8,333
XxXxxx, Xxxxx & Co. Inc...................................................... 8,333
Mesirow Financial Inc........................................................ 8,333
The Xxxxxxxx-Xxxxxxxx Company, LLC........................................... 8,333
The Xxxxxxxx Capital Group, L.P.............................................. 8,333
U.S. Bancorp Xxxxx Xxxxxxx Inc............................................... 8,333
Xxxxxxxx Capital Partners, L.P............................................... 8,333
-----------------------------------
Total............................... ==================================
1,000,000
SCHEDULE A - 1
SCHEDULE B
Subsidiary Name
HRES1 Properties Trust
HRES2 Properties Trust
SHOPCO Holdings, Inc.
SHOPCO-AZ, LLC
SHOPCO-CA, LLC
SHOPCO-COLORADO, LLC
SHOPCO-CT, LLC
SHOPCO-GA, LLC
SHOPCO-IA, LLC
SHOPCO-KS, LLC
SHOPCO-LA, LLC
SHOPCO-MA, LLC
SHOPCO-MI, LLC
SHOPCO-MO, LLC
SHOPCO-NC, LLC
SHOPCO-NE, LLC
SHOPCO-PA, LLC
SHOPCO-SD, LLC
SHOPCO-WI, LLC
SHOPCO-WY, LLC
SNH-CALIFORNIA, INC.
SNH Capital Trust Holdings
SNH Capital Trust I
SNH Capital Trust II
SNH Capital Trust III
SNH-IOWA, INC.
SNH Holding Co., Inc.
SNH-MICHIGAN, INC.
SNH-NEBRASKA, INC.
SPTGEN Properties Trust
SPTIHS Properties Trust
SPTMISC Properties Trust
SPTMNR Properties Trust
SPTMRT Properties Trust
SPTSUN Properties Trust
SPTSUN II Properties Trust
SCHEDULE B - 1
SCHEDULE C
Material Subsidiaries
HRES1 Properties Trust
SPTMRT Properties Trust
SCHEDULE C - 1
SCHEDULE D
Maryland Subsidiaries
HRES1 Properties Trust
HRES2 Properties Trust
SNH Capital Trust Holdings
SNH Capital Trust I
SNH Capital Trust II
SNH Capital Trust III
SPTGEN Properties Trust
SPTIHS Properties Trust
SPTMISC Properties Trust
SPTMNR Properties Trust
SPTMRT Properties Trust
SPTSUN Properties Trust
SPTSUN II Properties Trust
--------
1 As used herein "business day" shall mean a day on which the New York
Stock Exchange is open for trading.
SCHEDULE D - 1
