Exhibit 1.1
11,000,000 Shares
HRPT PROPERTIES TRUST
(a Maryland real estate investment trust)
8 3/4% Series B Cumulative Redeemable Preferred Shares
(Liquidation Preference $25 Per Share)
PURCHASE AGREEMENT
September 6, 2002
XXXXXXX XXXXX & CO.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
UBS WARBURG LLC
as Representatives of the several Underwriters named
in Schedule A hereto
x/x XXXXXXX XXXXX & XX.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
0 Xxxxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Ladies and Gentlemen:
HRPT Properties Trust, a Maryland real estate investment trust (the
"Company"), confirms its agreement with Xxxxxxx Xxxxx & Co., Xxxxxxx Lynch,
Pierce, Xxxxxx & Xxxxx Incorporated ("Xxxxxxx Xxxxx") and UBS Warburg LLC
("UBS") and each of the other Underwriters named in Schedule A hereto
(collectively, the "Underwriters", which term shall also include any underwriter
substituted as hereinafter provided in Section 10 hereof), for whom Xxxxxxx
Xxxxx and UBS are acting as representatives (in such capacity, the
"Representatives"), with respect to the issue and sale by the Company and the
purchase by the Underwriters, acting severally and not jointly, of the
respective numbers of shares of 8 3/4% Series B Cumulative Redeemable Preferred
Shares (Liquidation Preference $25 Per Share) (the "Series B Preferred Shares")
set forth in said Schedule B, and with respect to the grant by the Company to
the Underwriters, acting severally and not jointly, of the option described in
Section 2(b) hereof to purchase all or any part of 1,650,000 additional Series B
Preferred Shares to cover over-allotments, if any. The aforesaid 11,000,000
Series B Preferred Shares (the "Initial Shares"), together with all or any part
of the 1,650,000 Series B Preferred Shares subject to the option described in
Section 2(b) hereof (the "Option Shares"), are collectively hereinafter called
the "Preferred Shares".
The Company understands that the Underwriters propose to make a public
offering of the Series B Preferred Shares as soon as the Representatives deem
advisable after this Agreement has been executed and delivered.
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 (No. 333-56051) for the
registration of debt securities, preferred shares of beneficial interest,
depositary shares, common shares of beneficial interest and warrants under the
Securities Act of 1933, as amended (the "1933 Act"), and has filed such
amendments thereto, if any, as may have been required to the date hereof. Such
registration statement has been declared effective under the 1933 Act. Such
registration statement and the prospectus constituting a part thereof, as
supplemented by the prospectus supplement relating to the Preferred Shares, as
amended or supplemented through the date hereof pursuant to the 1933 Act, the
Securities Exchange Act of 1934, as amended (the "1934 Act") (including, in each
case, all documents incorporated or deemed to be incorporated by reference
therein as of the date hereof), or otherwise, are hereinafter referred to as the
"Registration Statement" and the "Prospectus", respectively. All references in
this Agreement to financial statements and schedules and other information which
is "contained", "included" or "stated" in the Registration Statement or the
Prospectus (and all other references of like import) shall be deemed to mean and
include all such financial statements and schedules and other information which
is or is deemed to be incorporated by reference in the Registration Statement or
in the Prospectus, as the case may be.
Section 1. REPRESENTATIONS AND WARRANTIES.
(a) The Company represents and warrants to each Underwriter as of the date
hereof as follows:
(i) At the respective times the Registration Statement and any
post-effective amendments thereto (including the filing of the Company's
most recent Annual Report on Form 10-K with the Commission) became
effective, the Registration Statement complied in all material respects
with the requirements of the 1933 Act and the rules and regulations of the
Commission under the 1933 Act (the "1933 Act Regulations") and did 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. The Prospectus, at the date hereof (unless the term
"Prospectus" refers to a prospectus which has been provided to the
Underwriters by the Company for use in connection with the offering of the
Preferred Shares which differs from the Prospectus on file at the
Commission at the date of effectiveness of the Registration Statement, in
which case at the time it is first provided to the Underwriters for such
use) and at the Closing Time referred to in Section 2(c) hereof, does not
and will not include an untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading;
provided, however, that the representations and warranties in this
subsection (i) shall not apply to statements or omissions in the
Registration Statement or the Prospectus made in reliance upon and in
conformity with information furnished to the Company in writing by any
Underwriter through Xxxxxxx Xxxxx expressly for use in the Registration
Statement or the Prospectus.
(ii) The documents incorporated or deemed to be incorporated by
reference in the Prospectus, at the time they were or hereafter are filed
with the Commission, complied and will comply in all material respects with
the requirements of the 1934 Act and the
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rules and regulations of the Commission under the 1934 Act (the "1934 Act
Regulations"), and, when read together with the other information in the
Prospectus, at the time the Registration Statement became effective and at
Closing Time, did not and will not include 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 were made, not misleading.
(iii) The Company is a Maryland real estate investment trust duly
organized, validly existing and in good standing under the laws of the
State of Maryland. Each of its subsidiaries has been duly organized and is
validly existing as a corporation, partnership, limited liability company
or trust in good standing under the laws of its jurisdiction of
incorporation or organization, except where the failure to be in good
standing would not have a material adverse effect on the Company and its
subsidiaries, taken as a whole. Each of the Company and its subsidiaries
has full power and authority (corporate and other) to carry on its business
as described in the Registration Statement and in the Prospectus and to
own, lease and operate its properties. Each of the Company and its
subsidiaries is duly qualified and is in good standing as a foreign
corporation, partnership, limited liability company or trust, as the case
may be, and is authorized to do business in each jurisdiction in which the
nature of its business or its ownership or leasing of property requires
such qualification, except where the failure to be so qualified would not
have a material adverse effect on the Company and its subsidiaries, taken
as a whole. The Articles Supplementary relating to the Series B Preferred
Shares (the "Articles Supplementary") will be in full force and effect as
of the Closing Time.
(iv) The financial statements of the Company and its subsidiaries,
together with the related schedules and notes thereto, included or
incorporated by reference in the Registration Statement and in the
Prospectus, comply as to form in all material respects with the
requirements of the 1933 Act. Such financial statements of the Company,
together with the related schedules and notes thereto, present fairly the
consolidated financial position, results of operations, shareholders'
equity and changes in financial position of the Company and its
subsidiaries, at the dates or for the periods therein specified and have
been prepared in accordance with generally accepted accounting principles
("GAAP") consistently applied throughout the periods involved. The pro
forma financial statements and other pro forma financial information
(including the notes thereto) included or incorporated by reference in the
Registration Statement and in the Prospectus (i) present fairly the
information shown therein, (ii) have been prepared in accordance with the
Commission's rules and guidelines with respect to pro forma financial
statements and (iii) have been properly compiled on the basis described
therein and the assumptions used in the preparation of such pro forma
financial statements and other pro forma financial information (including
the notes thereto) are reasonable and the adjustments used therein are
appropriate to give effect to the transactions or circumstances referred to
therein. The adjusted pro forma financial statements and other adjusted pro
forma financial information (including the notes thereto) included or
incorporated by reference in the Registration Statement and in the
Prospectus (i) present fairly the information shown therein and (ii) have
been properly compiled on the basis described therein and the assumptions
used in the preparation of such adjusted pro forma financial statements and
other adjusted pro forma financial information (including the
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notes thereto) are reasonable and the adjustments used therein are
appropriate to give effect to the transactions or circumstances referred to
therein.
(v) The accountants who have certified the financial statements of the
Company and its subsidiaries included or incorporated by reference in the
Registration Statement and in the Prospectus are independent certified
public accountants as required by the 1933 Act and the 1933 Act
Regulations; provided, however, the Company makes no representation or
warranty with respect to Xxxxxx Xxxxxxxx LLP, who audited the financial
statements of Hospitality Properties Trust for the year ended December 31,
2001 and was convicted of obstruction of justice in June 2002 and ceased to
practice before the Commission on August 31, 2002.
(vi) The Preferred Shares to be issued and sold pursuant to this
Agreement have been duly authorized and, when issued and delivered to you
against payment therefor as provided hereunder, will have been validly
issued and will be fully paid, non-assessable (except as otherwise
described in the Registration Statement) and free of preemptive or similar
rights; the Preferred Shares conform to the provisions of the Articles
Supplementary; all outstanding common shares, except for shares issued
pursuant to the Company's Incentive Share Award Plan and shares issued to
the Advisor (as defined below) and its affiliates, are listed on the New
York Stock Exchange, Inc. (the "NYSE") and the Company knows of no reason
or set of facts which is likely to result in the delisting of such common
shares or the inability to list the Series B Preferred Shares; and there
are no rights of holders of securities of the Company to the registration
of common shares or other securities that would require inclusion of such
common shares or other securities in the offering of the Series B Preferred
Shares.
(vii) This Agreement has been duly authorized, executed and delivered
by the Company.
(viii) All of the outstanding shares of beneficial interest of, or
other ownership interests in, each of the Company's subsidiaries have been
duly authorized and validly issued and are fully paid and, except as to
subsidiaries that are partnerships or limited liability companies,
nonassessable, and, except as disclosed in the Registration Statement or in
the Prospectus, are or will be owned by the Company free and clear of any
security interest, claim, lien, encumbrance or adverse interest of any
nature.
(ix) The authorized capital of the Company, including the Series B
Preferred Shares, conforms as to legal matters to the description thereof
contained in the Prospectus (or the documents incorporated therein by
reference).
(x) Since the respective dates as of which information is given in the
Prospectus, and except as otherwise disclosed therein, (i) there has been
no material adverse change in the business, operations, earnings,
prospects, properties or condition (financial or otherwise) of the Company
and its subsidiaries, taken as a whole, whether or not arising in the
ordinary course of business, (ii) there have been no material transactions
entered into by the Company and its subsidiaries, on a consolidated basis,
other than transactions in the ordinary course of business, (iii) neither
the Company nor its subsidiaries has
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incurred any material liabilities or obligations, direct or contingent, and
(iv) the Company and its subsidiaries, on a consolidated basis, have not,
(A) other than regular quarterly dividends, declared, paid or made a
dividend or distribution of any kind on any class of its shares of
beneficial interest (other than dividends or distributions from wholly
owned subsidiaries to the Company), (B) issued any shares of beneficial
interest of the Company or any of its subsidiaries or any options,
warrants, convertible securities or other rights to purchase the shares of
beneficial interest of the Company or any of its subsidiaries (other than
the issuance of common shares of beneficial interest ("Common Shares") upon
conversion of certain convertible debentures of the Company) or the
issuance of Common Shares to the trustees and officers of the Company
pursuant to the Company's Incentive Share Award Plan) or (C) repurchased or
redeemed shares of beneficial interest, and (v) there has not been (A) any
material decrease in the Company's net worth or (B) any material increase
in the short-term or long-term debt (including capitalized lease
obligations but excluding borrowings under existing bank lines of credit)
of the Company and its subsidiaries, on a consolidated basis.
(xi) The Company and each of its subsidiaries maintains a system of
internal accounting controls sufficient to provide reasonable assurance
that (i) transactions are executed in accordance with management's general
or specific authorizations; (ii) transactions are recorded as necessary to
permit preparation of financial statements in conformity with GAAP and to
maintain asset accountability; (iii) access to assets is permitted only in
accordance with management's general or specific authorization; and (iv)
the recorded accountability for assets is compared with the existing assets
at reasonable intervals and appropriate action is taken with respect to any
differences.
(xii) Neither the Company nor any of its subsidiaries is in violation
of its respective charter or by-laws or other organizational documents or
in default in the performance of any obligation, agreement or condition
contained in any bond, debenture, note or any other evidence of
indebtedness or in any other agreement, indenture or instrument to which
the Company or any of its subsidiaries is a party or by which any of their
respective properties or assets may be bound or affected, except for any
such violation that would not have a material adverse effect on the
condition, financial or otherwise or in the earnings, business affairs or
business prospects of the Company and its subsidiaries, taken as a whole.
The Company is not in violation of any law, ordinance, governmental rule or
regulation or court decree to which it is subject, except for any such
violations that would not, individually or in the aggregate, have a
material adverse effect on the business, operations, earnings, prospects,
properties or condition (financial or otherwise) of any of the Company and
its subsidiaries, taken as a whole.
(xiii) Except as disclosed in the Registration Statement or in the
Prospectus, there is not now pending or, to the knowledge of the Company,
threatened, any litigation, action, suit or proceeding to which the Company
is or will be a party before or by any court or governmental agency or
body, which (A) might result in any material adverse change in the
condition, financial or otherwise, or in the earnings, business affairs or
business prospects of the Company and its subsidiaries, taken as a whole,
or (B) might materially and adversely affect the property or assets of the
Company and its subsidiaries, taken as a whole, or (C) concerns the Company
and is required to be disclosed in the Registration
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Statement or the Prospectus, or (D) could adversely affect the consummation
of this Agreement and the issuance, purchase and sale of the Preferred
Shares. No contract or other document is required to be described in the
Registration Statement or in the Prospectus or to be filed as an exhibit to
the Registration Statement that is not described therein or filed as
required.
(xiv) The execution, delivery and performance by the Company of this
Agreement, the issuance, offering and sale by the Company of the Preferred
Shares as contemplated by the Registration Statement and by the Prospectus
and the consummation of the transactions contemplated hereby and
compliance with the terms and provisions hereof, will not violate or
conflict with or constitute a breach of any of the terms or provisions of,
or a default under, (i) the Amended and Restated Declaration of Trust (the
"Declaration of Trust") or the By-laws of the Company or the charter or
by-laws or other organizational documents of any subsidiaries of the
Company, (ii) any agreement, indenture or other instrument to which the
Company or any of its subsidiaries is a party or by which the Company or
any of its subsidiaries or their respective properties or assets is bound,
or (iii) any laws, administrative regulations or rulings or decrees to
which the Company or any of its subsidiaries or their respective properties
or assets may be subject.
(xv) No consent, approval, authorization or order of, or registration,
filing or qualification with, any governmental body or regulatory agency
having jurisdiction over the Company or any of its subsidiaries or any of
their respective properties or assets is required for the execution,
delivery and performance of this Agreement and the consummation of the
transactions contemplated hereby, including, without limitation, the
issuance, sale and delivery of the Preferred Shares pursuant to this
Agreement, except such as have been obtained and such as may be required
under foreign and state securities or "Blue Sky" or real estate syndication
laws, it being understood that the Articles Supplementary have not been
filed with the State Department of Assessments and Taxation of the State of
Maryland ("SDAT") as of the date hereof, but that such document will be
filed with the SDAT prior to the Closing Time.
(xvi) Except as otherwise disclosed in the Registration Statement or
in the Prospectus, the Company and each of its subsidiaries has good and
marketable title or ground leases, free and clear of all liens, claims,
encumbrances and restrictions, except liens for taxes not yet due and
payable and other liens and encumbrances which do not, either individually
or in the aggregate, materially and adversely affect the current use or
value thereof, to all property and assets described in the Registration
Statement or in the Prospectus as being owned by them. Except as otherwise
set forth in the Registration Statement or in the Prospectus, all leases to
which the Company and each of its subsidiaries is a party relating to real
property, and all other leases which are material to the business of the
Company and its subsidiaries, taken as a whole, are valid and binding, and
no default (to the Company's knowledge, in the case of leases to which the
Company is a party as lessor, that would, individually or in the aggregate,
have a material adverse effect on the business, operations, earnings,
prospects, properties or condition (financial or otherwise) of the Company
and its subsidiaries, taken as a whole) has occurred and is continuing
thereunder, and the Company and each of its subsidiaries enjoys peaceful
and undisturbed possession under all such leases to which it is a party as
lessee. With respect
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to all properties owned or leased by the Company and each of its
subsidiaries, the Company or such subsidiary has such documents,
instruments, certificates, opinions and assurances, including without
limitation, fee, leasehold owners or mortgage title insurance policies
(disclosing no encumbrances or title exceptions which are material to the
Company and its subsidiaries considered as a whole, except as otherwise set
forth in the Registration Statement and in the Prospectus), legal opinions
and property insurance policies in each case in form and substance as are
usual and customary in transactions involving the purchase of similar real
estate and are appropriate for the Company or such subsidiary to have
obtained.
(xvii) The Company and each of its subsidiaries owns, or possesses
adequate rights to use, all patents, trademarks, trade names, service
marks, copyrights, licenses and other rights necessary for the conduct of
their respective businesses as described in the Registration Statement and
in the Prospectus, and neither the Company nor any of its subsidiaries has
received any notice of conflict with, or infringement of, the asserted
rights of others with respect to any such patents, trademarks, trade names,
service marks, copyrights, licenses and other such rights (other than
conflicts or infringements that, if proven, would not have a material
adverse effect on the business, operations, earnings, prospects, properties
or condition (financial or otherwise) of the Company and its subsidiaries,
taken as a whole), and neither the Company nor any of its subsidiaries
knows of any basis therefor.
(xviii) All material tax returns required to be filed by the Company
and each of its subsidiaries in any jurisdiction have been timely filed,
other than those filings being contested in good faith, and all material
taxes, including withholding taxes, penalties and interest, assessments,
fees and other charges due pursuant to such returns or pursuant to any
assessment received by the Company or any of its subsidiaries have been
paid, other than those being contested in good faith and for which adequate
reserves have been provided.
(xix) Except for those matters which in the aggregate do not have a
material adverse effect on the business, operations, earnings, prospects,
properties or condition (financial or otherwise) of the Company and its
subsidiaries taken as a whole, and except for Hazardous Materials (as
defined below) or substances which are handled and/or disposed of in
compliance with all applicable federal, state and local requirements, to
the Company's knowledge, after due investigation, the real property owned,
leased or otherwise operated by the Company and each of its subsidiaries in
connection with the operation of their respective businesses, including,
without limitation, any subsurface soils and ground water (the "Realty"),
is free of contamination from any Hazardous Materials. To the Company's
knowledge, after due investigation, the Realty does not contain any
underground storage or treatment tanks, active or abandoned water, gas or
oil xxxxx, or any other underground improvements or structures, other than
the foundations, footings, or other supports for the improvements located
thereon which, based on present knowledge, could, in their present
condition, reasonably be expected to presently cause a material detriment
to or materially impair the beneficial use thereof by the Company or
constitute or cause a significant health, safety or other environmental
hazard to occupants or users thereof without regard to any special
conditions of such occupants or users.
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The Company represents that, after due investigation, it has no knowledge
of any material violation, with respect to the Realty, of any Environmental
Law, or of any material liability on the part of the Company with respect
to the Realty, resulting from the presence, use, release, threatened
release, emission, disposal, pumping, discharge, generation or processing
of any Hazardous Materials. As used herein, "Environmental Law" means any
federal, state or local statute, regulation, judgment, order or
authorization relating to emissions, discharges, releases or threatened
releases of Hazardous Materials into ambient air, surface water, ground
water, publicly-owned treatment works, septic systems or land, or otherwise
relating to the pollution or protection of public health or the
environment, and "Hazardous Materials" means any substance, material or
waste which is regulated, defined, or listed as a "hazardous waste",
"hazardous substance", "toxic substance", "medical waste", "infectious
waste" or other similar terms in any Environmental Law or by any federal,
state or local government or quasi-government authority, or any petroleum
products, asbestos, lead-based paint, polychlorinated biphenyls, flammable
explosives or radioactive materials.
(xx) Each of the Company and its subsidiaries has such permits,
licenses, franchises and authorizations of governmental or regulatory
authorities (together, "permits"), including, without limitation, under any
applicable Environmental Law, as are necessary to own, lease and operate
its properties and to engage in the business currently conducted by it,
except such licenses and permits as to which the failure to own or possess
will not in the aggregate have a material adverse effect on the business,
operations, earnings, prospects, properties or condition (financial or
otherwise) of the Company and its subsidiaries, taken as a whole, and the
Company does not have any reason to believe that any governmental body or
agency is considering limiting, suspending or revoking any such license,
certificate, permit, authorization, approval, franchise or right; each of
the Company and its subsidiaries has fulfilled and performed all of its
material obligations with respect to such permits and no event has occurred
which allows, or after notice or lapse of time would allow, revocation or
termination thereof or results in any other material impairment of the
rights of the holder of any such permit; and, except as described in the
Registration Statement and in the Prospectus, such permits contain no
restrictions that are materially burdensome to the Company or any of its
subsidiaries.
(xxi) To the knowledge of the Company, no labor problem exists or is
imminent with employees of the Company or any of its subsidiaries that
could have a material adverse effect on the business, operations, earnings,
prospects, properties or condition (financial or otherwise) of the Company
and its subsidiaries, taken as a whole.
(xxii) Neither the Company nor any of its subsidiaries nor, to the
knowledge of the Company, any officer, trustee or director purporting to
act on behalf of the Company or any of its subsidiaries, has at any time:
(i) made any contributions to any candidate for political office, or failed
to disclose fully any such contributions, in violation of law; (ii) made
any payment of funds to, or received or retained any funds from, any state,
federal or foreign governmental officer or official, or other person
charged with similar public or quasi-public duties, other than payments
required or allowed by applicable law; or (iii) engaged in any
transactions, maintained any bank accounts or used any corporate funds
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except for transactions, bank accounts and funds, which have been and are
reflected in the normally maintained books and records of the Company and
its subsidiaries.
(xxiii) Except as referred to or described in the Registration
Statement and in the Prospectus, none of the subsidiaries of the Company
owns any shares of stock or any other securities of any corporation or has
any equity interest in any firm, partnership, association or other entity
other than the issued capital shares of its subsidiaries, and the Company
does not own, directly or indirectly, any shares of stock or any other
securities of any corporation or have any equity interest in any firm,
partnership, association or other entity other than the issued capital
shares of its subsidiaries, except in each case for non-controlling
positions acquired in the ordinary course of business.
(xxiv) Except as disclosed in the Registration Statement and in the
Prospectus, there are no material outstanding loans or advances or material
guarantees of indebtedness by the Company or any of its subsidiaries to or
for the benefit of any of the officers, trustees or directors of the
Company or any of its subsidiaries or any of the members of the families of
any of them.
(xxv) The Company and each of its subsidiaries maintains insurance,
duly in force, with insurers of recognized financial responsibility; such
insurance insures against such losses and risks as are adequate in
accordance with customary industry practice to protect the Company and its
subsidiaries and their respective businesses; and neither the Company nor
any such subsidiary has any reason to believe that it will not be able to
renew its existing insurance coverage as and when such coverage expires or
to obtain similar coverage from similar insurers as may be necessary to
continue its business at a cost that would not materially and adversely
affect the business, operations, earnings, prospects, properties or
condition (financial or otherwise) of the Company and its subsidiaries,
taken as a whole, except as disclosed in or contemplated by the
Registration Statement and by the Prospectus.
(xxvi) Neither the Company nor any of its officers and directors (as
defined in the 1933 Act Regulations) has taken or will take, directly or
indirectly, prior to the termination of the offering contemplated by this
Agreement, any action designed to stabilize or manipulate the price of any
security of the Company, or which has caused or resulted in, or which might
in the future reasonably be expected to cause or result in, stabilization
or manipulation of the price of any security of the Company to facilitate
the sale or resale of the Preferred Shares.
(xxvii) Neither the Company nor any of its subsidiaries is an
"investment company" or an "affiliated person" of, or "promoter" or
"principal underwriter" for, an "investment company" as such terms are
defined in the Investment Company Act of 1940, as amended (the "1940 Act"),
or an "investment adviser" as such term is defined in the Investment
Advisers Act of 1940, as amended.
(xxviii) The Company is organized in conformity with the requirements
for qualification, and, as of the date hereof the Company operates, and as
of Closing Time the Company will operate, in a manner that qualifies the
Company as a "real estate
9
investment trust" under the Internal Revenue Code of 1986, as amended (the
"Code"), and the rules and regulations thereunder, for 2002 and subsequent
years. The Company qualified as a real estate investment trust under the
Code for each of its taxable years from 1987 through 2001.
(xxix) No default exists, and no event has occurred which, with notice
or lapse of time or both, would constitute a default in the due performance
and observance of any term, covenant or condition of any indenture,
mortgage, deed of trust, lease or other agreement or instrument to which
the Company or any of its subsidiaries is a party or by which the Company
or any of its subsidiaries or any of their respective properties is bound
or may be affected, except such defaults which, singly or in the aggregate,
would not have a material adverse effect on the business, operations,
earnings, prospects, properties or condition (financial or otherwise) of
the Company and its subsidiaries, considered as a whole, except as
disclosed in the Registration Statement and in the Prospectus.
(xxx) Except as otherwise disclosed in the Prospectus, since the
respective dates as of which information is given in the Prospectus, there
has been no material adverse change in the business, operations, earnings,
prospects, properties or condition (financial or otherwise) of Reit
Management & Research LLC (the "Advisor"), whether or not arising in the
ordinary course of business, that would have a material adverse effect on
the Company and its subsidiaries, taken as a whole. The Advisory Agreement,
dated as of January 1, 1998 and Amendment No. 1 thereto, dated as of
October 12, 1999 (the "Advisory Agreement"), between the Company and the
Advisor, has been duly authorized, executed and delivered by the parties
thereto and constitutes the valid agreement of the parties thereto,
enforceable in accordance with its terms, except as limited by (a) the
effect of bankruptcy, insolvency, reorganization, moratorium, fraudulent
transfer or other similar laws relating to or affecting the rights or
remedies of creditors or (b) the effect of general principles of equity
(regardless of whether enforcement is sought in a proceeding in equity or
at law).
(b) Any certificate signed by any officer of the Company or any of its
subsidiaries and delivered to the Representatives or to counsel for the
Underwriters shall be deemed a representation and warranty by the Company to
each Underwriter as to the matters covered thereby.
Section 2. SALE AND DELIVERY TO THE UNDERWRITERS; CLOSING.
(a) On the basis of the representations and warranties herein contained and
subject to the terms and conditions herein set forth, the Company agrees to sell
to each Underwriter, severally and not jointly, and each Underwriter, severally
and not jointly, agrees to purchase from the Company, at a price per share of
$24.2125 plus accrued distributions, if any, from (but excluding) the date of
original issue, the number of Initial Shares set forth in Schedule A opposite
the name of such Underwriter, plus any additional number of Initial Shares which
such Underwriter may become obligated to purchase pursuant to the provisions of
Section 10 hereof.
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(b) In addition, on the basis of the representations and warranties herein
included and subject to the terms and conditions herein set forth, the Company
hereby grants an option to the Underwriters, severally and not jointly, to
purchase up to an additional 1,650,000 Preferred Shares at the price per share
set forth in Section 2(a) above. The option hereby granted will expire 30 days
after the date of this Agreement and may be exercised in whole or in part from
time to time only for the purpose of covering over-allotments which may be made
in connection with the offering and distribution of the Initial Shares upon
notice by the Representatives to the Company setting forth the number of Option
Shares as to which the several Underwriters are then exercising the option and
the time, date and place of payment and delivery for such Option Shares. Any
such time and date of delivery (a "Date of Delivery") shall be determined by the
Representatives but shall not be later than seven full business days, nor
earlier than two full business days, after the exercise of said option, nor in
any event prior to Closing Time, unless otherwise agreed upon by the
Representatives and the Company. If the option is exercised as to all or any
portion of the Option Shares, such Option Shares shall be purchased by the
Underwriters, severally and not jointly, in proportion to their respective
Initial Share underwriting obligations as set forth in Schedule A.
(c) Payment of the purchase price for and delivery of certificates for the
Initial Shares shall be made at the offices of Xxxxxxxx & Worcester LLP, Xxx
Xxxx Xxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000, or at such other place as shall
be agreed upon by the Representatives and the Company, at 9:00 A.M. on the
fourth business day (unless postponed in accordance with the provisions of
Section 10 hereof) following the date of this Agreement, or such other time not
later than ten business days after such date as shall be agreed upon by the
Representatives and the Company (such time and date of payment and delivery
being herein called "Closing Time"). In addition, in the event that the
over-allotment option described in Section 2(b) above is exercised by the
Underwriters, payment of the purchase price for and delivery of certificates for
the related Option Shares shall be made at the above-mentioned office of
Xxxxxxxx & Worcester LLP, or at such other place as shall be mutually agreed
upon by the Representatives and the Company, on each Date of Delivery as
specified in the notice from the Representatives to the Company. Payment shall
be made by wire transfer of immediately available funds to an account designated
by the Company against delivery to the Representatives for the respective
accounts of the Underwriters of certificates for the Preferred Shares to be
purchased by them. The certificates for the Initial Shares and the Option Shares
shall be in such authorized denominations and registered in such names as the
Representatives may request in writing at least two full business days before
Closing Time or the Date of Delivery, as the case may be. It is understood that
each Underwriter has authorized the Representatives, for its account, to accept
delivery of and receipt for, and to make payment of, the purchase price for, the
Initial Shares and the Option Shares which it has agreed to purchase. The
Representatives, individually and not as representatives of the several
Underwriters may (but shall not be obligated to) make payment of the purchase
price for the Initial Shares or the Option Shares to be purchased by any
Underwriter whose funds have not been received by Closing Time, but any such
payment shall not relieve such Underwriter from its obligations hereunder. The
certificates for the Initial Shares and the Option Shares will be made available
for examination and packaging by the Representatives not later than 10:00 A.M.
(Eastern time) on the business day prior to Closing Time or the Date of
Delivery, as the case may be.
11
Section 3. COVENANTS OF THE COMPANY. The Company covenants with each
Underwriter as follows:
(a) Immediately following the execution of this Agreement, the Company will
prepare a Prospectus Supplement setting forth the number of Preferred Shares
covered thereby and their terms not otherwise specified in the Prospectus, the
Underwriters' names, the price at which the Preferred Shares are to be purchased
by the Underwriters from the Company, and such other information as the
Representatives and the Company deem appropriate in connection with the offering
of the Preferred Shares; and the Company will promptly transmit copies of the
Prospectus Supplement to the Commission for filing pursuant to Rule 424(b) of
the 1933 Act Regulations and will furnish to the Representatives as many copies
of the Prospectus (including such Prospectus Supplement) as they shall
reasonably request.
(b) Until the termination of the initial offering of the Preferred Shares,
the Company will notify the Representatives immediately, and confirm the notice
in writing, (i) of the effectiveness of any amendment to the Registration
Statement, (ii) of the transmittal to the Commission for filing of any
supplement or amendment to the Prospectus or any document to be filed pursuant
to the 1934 Act, (iii) of the receipt of any comments from the Commission with
respect to the Preferred Shares, (iv) of any request by the Commission for any
amendment to the Registration Statement or any amendment or supplement to the
Prospectus with respect to the Preferred Shares or for additional information
relating thereto, and (v) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or the initiation of
any proceedings for that purpose. The Company will make every reasonable effort
to prevent the issuance of any such stop order and, if any stop order is issued,
to obtain the lifting thereof at the earliest possible moment.
(c) The Company will give the Representatives notice of its intention to
file or prepare any post-effective amendment to the Registration Statement or
any amendment or supplement (including any document to be filed pursuant to the
1934 Act prior to the termination of the initial offering of the Preferred
Shares) to the Prospectus (including any revised prospectus which the Company
proposes for use by the Underwriters in connection with the offering of the
Preferred Shares which differs from the prospectus on file at the Commission at
the time that the Registration Statement becomes effective, whether or not such
revised prospectus is required to be filed pursuant to Rule 424(b) of the 1933
Act Regulations), will furnish the Representatives with copies of any such
amendment or supplement a reasonable amount of time prior to such proposed
filing or use, as the case may be, and will not file any such amendment or
supplement or use any such prospectus to which counsel for the Underwriters
shall reasonably object.
(d) The Company will deliver to each of the Representatives a conformed
copy of the Registration Statement as originally filed and of each amendment
thereto filed prior to the termination of the initial offering of the Preferred
Shares (including exhibits filed therewith or incorporated by reference therein
and the documents incorporated by reference into the Prospectus pursuant to Item
12 of Form S-3).
(e) The Company will furnish to the Representatives, from time to time
during the period when the Prospectus is required to be delivered under the 1933
Act or the 1934 Act, such number of copies of the Prospectus (as amended or
supplemented) as the Representatives may reasonably
12
request for the purposes contemplated by the 1933 Act, the 1933 Act Regulations,
the 1934 Act or 1934 Act Regulations.
(f) If any event shall occur as a result of which it is necessary, in the
opinion of counsel for the Underwriters, to amend or supplement the Prospectus
in order to make the Prospectus not misleading in the light of the circumstances
existing at the time it is delivered, the Company will either (i) forthwith
prepare and furnish to the Representatives an amendment of or supplement to the
Prospectus or (ii) make an appropriate filing pursuant to Section 13, 14 or 15
of the 1934 Act, in form and substance reasonably satisfactory to counsel for
the Underwriters, which will amend or supplement the Prospectus so that it will
not include an untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements therein, in the light of the
circumstances existing at the time it is delivered, not misleading.
(g) The Company will endeavor in good faith, in cooperation with the
Representatives, to qualify the Preferred Shares for offering and sale under the
applicable securities laws and real estate syndication laws of such states and
other jurisdictions of the United States as the Representatives may designate;
provided that, in connection therewith, the Company shall not be required to
qualify as a foreign corporation or trust or to file any general consent to
service of process. In each jurisdiction in which the Preferred Shares have been
so qualified the Company will file such statements and reports as may be
required by the laws of such jurisdiction to continue such qualification in
effect for so long as required for the distribution of the Preferred Shares.
(h) The Company will make generally available to its security holders as
soon as reasonably practicable, but not later than 30 days after the close of
the period covered thereby, an earning statement of the Company (in form
complying with the provisions of Rule 158 of the 1933 Act Regulations) covering
a period of at least twelve months beginning not later than the first day of the
Company's fiscal quarter next following the effective date of the Registration
Statement. "Earning statement", "make generally available" and "effective date"
will have the meanings contained in Rule 158 of the 1933 Act Regulations.
(i) The Company will use the net proceeds received by it from the sale of
the Preferred Shares in the manner specified in the Prospectus under the caption
"Use of Proceeds" in all material respects.
(j) The Company will use its best efforts to effect the listing of the
Preferred Shares on the NYSE.
(k) The Company currently intends to continue to elect to qualify as a
"real estate investment trust" under the Code, and use its best efforts to
continue to meet the requirements to qualify as a "real estate investment
trust".
(l) The Company will timely file any document which it is required to file
pursuant to the 1934 Act prior to the termination of the offering of the
Preferred Shares.
(m) The Company will not, during a period of 90 days from the date of this
Agreement, without the prior written consent of Xxxxxxx Xxxxx, register, offer,
sell, contract to sell, grant any option to purchase or otherwise dispose of any
Series B Preferred Shares or any securities
13
convertible into or exercisable or exchangeable for Series B Preferred Shares,
or warrants to purchase Series B Preferred Shares, other than the Preferred
Shares which are to be sold pursuant to this Agreement.
Section 4. PAYMENT OF EXPENSES. The Company will pay all expenses incident
to the performance of its obligations under this Agreement, including (i) the
preparation and filing of the Registration Statement as originally filed and of
each amendment thereto, (ii) the preparation and filing of this Agreement, (iii)
the preparation, issuance and delivery of the Preferred Shares to the
Underwriters, (iv) the fees and disbursements of counsel for the Company,
referred to in Section 5(b) hereof, and the Company's accountants, (v) the
qualification of the Preferred Shares under securities laws and real estate
syndication laws in accordance with the provisions of Section 3(g) hereof,
including filing fees and the fee and disbursements of counsel for the Company
in connection therewith and in connection with the preparation of any Blue Sky
Survey, (vi) the printing and delivery to the Underwriters of copies of the
Registration Statement as originally filed and of each amendment thereto, and of
the Prospectus and any amendments or supplements thereto, (vii) the fees and
expenses incurred in connection with the listing of the Preferred Shares on the
NYSE, (viii) the cost of printing or reproducing and delivering to the
Underwriters copies of any Blue Sky Survey, (ix) the cost of providing any CUSIP
or other identification numbers for the Preferred Shares, and (x) any transfer
taxes imposed on the sale of the Preferred Shares to the Underwriters.
If this Agreement is terminated by the Representatives in accordance with
the provisions of Section 5 or Section 9(a)(i), the Company shall reimburse the
Underwriters for all of their out-of-pocket expenses, including the reasonable
fees and disbursements of counsel for the Underwriters.
Section 5. CONDITIONS OF THE UNDERWRITERS' OBLIGATIONS. The obligations of
the Underwriters hereunder are subject to the accuracy of the representations
and warranties of the Company herein contained, to the performance by the
Company of its obligations hereunder, and to the following further conditions:
(a) At Closing Time no stop order suspending the effectiveness of the
Registration Statement shall have been issued under the 1933 Act or proceedings
therefor initiated or threatened by the Commission. The price of the Preferred
Shares and any other information previously omitted from the effective
Registration Statement pursuant to Rule 415 of the 1933 Act Regulations shall
have been transmitted to the Commission for filing pursuant to Rule 424(b) of
the 1933 Act Regulations within the prescribed time period, and prior to Closing
Time the Company shall have provided evidence satisfactory to
theRepresentativesof such timely filing, or a post-effective amendment providing
such information shall have been filed and declared effective in accordance with
the requirements of the 1933 Act Regulations.
(b) At Closing Time the Representatives shall have received the favorable
opinion, dated as of Closing Time, of Xxxxxxxx & Worcester LLP, counsel for the
Company, in form and substance satisfactory to counsel for the Underwriters, to
the effect that:
(i) The Company is a Maryland real estate investment trust duly
organized, validly existing and in good standing under the laws of the
State of Maryland; each of its
14
Significant Subsidiaries (as defined in Rule 1-02 of Regulation S-X under
the 0000 Xxx) is a Maryland real estate investment trust duly organized,
validly existing and in good standing under the laws of the State of
Maryland; each of the Company and its subsidiaries has the trust,
partnership or corporate (as applicable) power and authority to carry on
its business as described in the Registration Statement and in the
Prospectus and to own, lease and operate its properties; each of the
Company and its subsidiaries is duly qualified and is in good standing as a
foreign corporation, partnership or trust, as the case may be, authorized
to do business in each jurisdiction in which its ownership or leasing of
property requires such qualification, except where the failure to be so
qualified would not have a material adverse effect on the Company and its
subsidiaries, taken as a whole.
(ii) (A) All of the outstanding shares of beneficial interest of the
Company have been duly authorized by all necessary trust action and are
validly issued, fully paid and non-assessable (except as otherwise
described in the Registration Statement and the Prospectus) and (B) the
Preferred Shares have been duly authorized by all necessary trust action
and, when issued and delivered to the Underwriters against payment therefor
in accordance with the terms of this Agreement, will be validly issued,
fully paid and non-assessable, and will be free of any preemptive or, to
such counsel's knowledge, similar rights that entitle any person (other
than the Underwriters, their successors and assigns) to acquire any
Preferred Shares upon the issuance thereof by the Company.
(iii) All of the issued and outstanding shares of beneficial interest
of, or other ownership interests in, each of the Company's subsidiaries
have been duly authorized and validly issued and are fully paid and, except
as to subsidiaries that are partnerships, non-assessable, and, to such
counsel's knowledge, are owned by the Company free and clear of any
security interest or other adverse interest (within the meaning of Article
8 of the Massachusetts Uniform Commercial Code).
(iv) The Company has the requisite trust power and authority to enter
into and perform this Agreement and to issue and deliver the Preferred
Shares.
(v) The relative rights, preferences, interests and powers of the
Series B Preferred Shares are set forth in the Declaration of Trust,
including the Articles Supplementary relating to the Series B Preferred
Shares, and all such provisions relating to the Series B Preferred Shares
are valid under Title 8 of the Corporations and Associations Article of the
Annotated Code of Maryland.
(vi) This Agreement has been duly authorized, executed and delivered
by the Company.
(vii) The execution, delivery and performance of this Agreement, and
the consummation of the transactions herein contemplated will not conflict
with or constitute a breach or violation of any of the terms or provisions
of, or constitute a default under, (A) the declaration of trust or the
by-laws of the Company or the Significant Subsidiaries of the Company, (B)
except as disclosed in the Prospectus, any material agreement, indenture or
other instrument to which the Company, or the Significant Subsidiaries or
their respective material properties or assets is bound, or (C) any laws,
administrative
15
regulations or rulings or decrees known to such counsel to which the
Company, the Significant Subsidiaries or their respective material
properties or assets may be subject.
(viii) No consent, approval, authorization, order, registration,
filing, qualification, license or permit of or with any federal,
Massachusetts or Maryland court or public, governmental or regulatory
agency or body having jurisdiction over the Company or the Significant
Subsidiaries or any of their respective material properties or assets is
required for the Company's execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated hereby,
including, without limitation, the issuance, sale and delivery of the
Preferred Shares pursuant to this Agreement, except such as have been
obtained and such as may be required under foreign and state securities or
"Blue Sky" laws.
(ix) The Registration Statement has become effective under the 1933
Act, and, to the knowledge of such counsel, no stop order suspending the
effectiveness of the Registration Statement is in effect, and no
proceedings for such purpose are pending before or threatened by the
Commission; and any required filing of the Prospectus pursuant to Rule 424
under the 1933 Act has been made in accordance with said Rule 424.
(x) To such counsel's knowledge, except as disclosed in the
Registration Statement or in the Prospectus, there is not now pending or
threatened, any litigation, action, suit or proceeding to which the Company
or any of its subsidiaries is or will be a party before or by any court or
governmental agency or body, which (A) might result in any material adverse
change in the condition, financial or otherwise, or in the business,
operations, earnings, prospects or properties of the Company and its
subsidiaries, taken as a whole, or (B) might materially and adversely
affect the property or assets of the Company and its subsidiaries, taken as
a whole, or (C) concerns the Company or any of its subsidiaries and is
required to be disclosed in the Prospectus, or (D) could adversely affect
the consummation of this Agreement and the issuance of the Preferred
Shares; to such counsel's knowledge, no contract or other document is
required to be described in the Registration Statement or in the Prospectus
or to be filed as an exhibit to the Registration Statement that is not
described therein or filed as required.
(xi) Except as otherwise disclosed in the Prospectus, to such
counsel's knowledge, neither the Company nor any of its subsidiaries is in
violation of its respective charter or by-laws or other organizational
documents or in default in the performance of any obligation, agreement or
condition contained in any bond, debenture, note or any other evidence of
indebtedness or in any other material agreement, indenture or instrument to
which the Company or any of its subsidiaries is a party or by which any of
their respective properties or assets may be bound or affected, except for
any such violation that would not have a material adverse effect on the
business, operations, earnings, business prospects, properties or condition
(financial or otherwise) of the Company and its subsidiaries taken as a
whole.
(xii) To such counsel's knowledge, each of the Company and its
subsidiaries has such permits, licenses, franchises and authorizations of
governmental or regulatory
16
authorities (together, "permits"), including, without limitation, under any
applicable Environmental Law, as are necessary to own, lease and operate
its properties and to engage in the business currently conducted by it,
except such licenses and permits as to which the failure to own or possess
will not in the aggregate have a material adverse effect on the business,
operations, earnings, business prospects, properties or condition
(financial or otherwise) of the Company and its subsidiaries, taken as a
whole.
(xiii) The Registration Statement and the Prospectus and any
supplements or amendments thereto (except for the financial statements and
the notes thereto and the schedules and other financial data included
therein, as to which such counsel need not express any opinion) comply as
to form in all material respects with the requirements of the 1933 Act.
(xiv) Each document incorporated by reference in the Registration
Statement and in the Prospectus (except for the financial statements and
the notes thereto and the schedules and other financial data included
therein, as to which such counsel need not express any opinion) complied as
to form when filed with the Commission in all material respects with the
requirements of the 1934 Act.
(xv) To the extent required to be described therein, the Preferred
Shares conform in all material respects to the descriptions in the
Registration Statement and the Prospectus.
(xvi) The statements (a) in the Prospectus under the captions
"Description of the Series B Preferred Shares", "Redemption; Business
Combinations and Control Share Acquisitions," "Limitation of Liability;
Shareholder Liability" and "Federal Income Tax and ERISA Considerations"
and (b) in Item 1 of the Company's Annual Report on Form 10-K for the
fiscal year ended December 31, 2001 under the captions "Federal Income Tax
Considerations" and "ERISA Plans, Xxxxx Plans and Individual Retirement
Accounts" in each case insofar as they purport to summarize matters arising
under Massachusetts or Maryland law or the federal law of the United
States, or provisions of documents to which the Company is a party
specifically referred to therein, are accurate summaries of such legal
matters or provisions.
(xvii) The Company has qualified to be taxed as a real estate
investment trust pursuant to Sections 856-860 of the Code for each of the
fiscal years ended December 31, 1987 through December 31, 2001, and the
Company's current anticipated investments and its current plan of operation
will enable it to continue to meet the requirements for qualification and
taxation as a real estate investment trust under the Code; actual
qualification of the Company as a real estate investment trust, however,
will depend upon the Company's continued ability to meet, and its meeting,
through actual annual operating results and distributions, the various
qualification tests imposed under the Code.
(xviii) The Company is not required to register as an "investment
company" within the meaning of the 1940 Act.
17
(xix) The Advisor (A) is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware,
and (B) has the requisite corporate power and authority to conduct its
business as described in the Prospectus and to own and operate its
material properties.
(xx) The Advisory Agreement has been duly authorized, executed and
delivered by the parties thereto and constitutes the valid agreement of the
parties thereto, enforceable in accordance with its terms, except (a) as
limited by the effect of bankruptcy, insolvency, reorganization, fraudulent
transfer, moratorium or other similar laws relating to or affecting the
rights or remedies of creditors, (b) as limited by the effect of general
principles of equity (regardless of whether enforcement is sought in a
proceeding in equity or at law) and (c) insofar as the enforceability of
the indemnity and contribution provisions contained in such agreement may
be limited by federal or state securities laws and the public policy
underlying such laws.
(xxi) Although counsel has not undertaken, except as otherwise
indicated in their opinion, to determine independently, and does not assume
any responsibility for, the accuracy or completeness of the statements in
the Registration Statement, such counsel has participated in the
preparation of the Registration Statement and the Prospectus, including
review and discussion of the contents thereof (including review and
discussion of the contents of all documents incorporated by reference in
the Registration Statement and the Prospectus), and nothing has come to the
attention of such counsel that has caused them to believe that the
Registration Statement (including the documents incorporated by reference
therein) at the time the Registration Statement became effective, or the
Prospectus, as of its date and as of Closing Time, 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 not misleading or that any amendment or supplement to
the Prospectus, as of its respective date, and as of Closing Time, as the
case may be, contained any untrue statement of a material fact or omitted
to state a material fact necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not
misleading (it being understood that such counsel need express no view with
respect to the financial statements and the notes thereto and the schedules
and other financial data included or incorporated by reference in the
Registration Statement or in the Prospectus).
In rendering their opinion as aforesaid, Xxxxxxxx & Worcester LLP may
rely upon an opinion, dated as of Closing Time, of Xxxxxxx Xxxxx Xxxxxxx &
Ingersoll, 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 Representatives and is, in form and substance,
satisfactory to the Representatives 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 its subsidiaries to do business in
jurisdictions other than their respective jurisdictions of organization is
based solely upon certificates to such effect issued by an appropriate
official of the applicable jurisdictions.
18
The opinion of Xxxxxxx Xxxxx Xxxxxxx & Xxxxxxxxx, LLP described in the
paragraph above shall be rendered to the Representatives at the request of
the Company and shall so state therein.
(c) The Representatives shall have received at Closing Time an opinion,
dated as of Closing Time, of Sidley Xxxxxx Xxxxx & Xxxx LLP, counsel for the
Underwriters, as to the matters referred to in clauses (ii)(B), (vi), (ix),
(xiii), (xv) and (xxi) of the foregoing paragraph (b). In giving such opinion
with respect to the matters covered by clause (xxi), such counsel may state that
their opinion and belief are based upon their participation in the preparation
of the Registration Statement and the Prospectus and any amendments or
supplements thereto and review and discussion of the contents thereof, but are
without independent check or verification except as specified. In rendering
their opinion as aforesaid, Sidley Xxxxxx Xxxxx & Xxxx LLP may rely upon an
opinion, dated as of Closing Time, of Xxxxxxx Xxxxx Xxxxxxx & Ingersoll, LLP as
to matters governed by Maryland law, and the opinion of Xxxxxxxx & Worcester LLP
referred to above as to matters governed by Massachusetts law. 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.
(d) At Closing Time (i) the Registration Statement and the Prospectus shall
contain all statements which are required to be stated therein in accordance
with the 1933 Act and the 1933 Act Regulations and in all material respects
shall conform to the requirements of the 1933 Act and the 1933 Act Regulations,
and neither the Registration Statement nor the Prospectus shall contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary to make the statements therein not misleading
and no action, suit or proceeding at law or in equity shall be pending or to the
knowledge of the Company threatened against the Company which would be required
to be set forth in the Prospectus other than as set forth therein, (ii) there
shall not have been, since the respective dates as of which information is given
in the Registration Statement and the Prospectus, any material adverse change in
the condition, financial or otherwise, of the Company and its subsidiaries,
taken as a whole, or in their earnings, business affairs or business prospects,
whether or not arising in the ordinary course of business from that set forth in
the Registration Statement, and (iii) no proceedings shall be pending or, to the
knowledge of the Company, threatened against the Company before or by any
federal, state or other commission, board or administrative agency wherein an
unfavorable decision, ruling or finding would materially and adversely affect
the business, property, financial condition or income of the Company other than
as set forth in the Prospectus; and the Representatives shall have received, at
Closing Time, a certificate of the President and Chief Operating Officer and the
chief financial officer of the Company, dated as of Closing Time, evidencing
compliance with the provisions of this subsection (d) and stating that the
representations and warranties set forth in Section 1(a) hereof are accurate as
though expressly made at and as of Closing Time.
(e) At Closing Time, there shall not have been, since the respective dates
as of which information is given in the Registration Statement and the
Prospectus, any material adverse change in the business, operations, earnings,
prospects, properties or condition (financial or otherwise) of the Advisor,
whether or not arising in the ordinary course of business; and the
Representatives shall have received, at Closing Time, a certificate of the Vice
President of the Advisor evidencing compliance with this subsection (e).
19
(f) Concurrently with the execution and delivery of this Agreement, and at
Closing Time prior to payment and delivery of the Preferred Shares, Ernst &
Young LLP shall have furnished to the Underwriters a letter, dated the date of
its delivery, addressed to the Representatives and in form and substance
satisfactory to the Representatives, confirming that they are independent
accountants with respect to the Company as required by the 1933 Act and the 1933
Act Regulations and with respect to the financial and other numerical
information contained in the Registration Statement and the Prospectus or
incorporated by reference therein. Each such letter shall contain information of
the type customarily included in accountants' comfort letters to underwriters.
(g) At Closing Time counsel for the Underwriters shall have been furnished
with such documents and opinions as they may reasonably require for the purpose
of enabling them to pass upon the issuance and sale of the Preferred Shares as
herein contemplated and related proceedings, or in order to evidence the
accuracy of any of the representations or warranties, or the fulfillment of any
of the conditions, herein contained; and all proceedings taken by the Company in
connection with the issuance and sale of the Preferred Shares as herein
contemplated shall be reasonably satisfactory in form and substance to the
Representatives and counsel for the Underwriters.
(h) Subsequent to the execution and delivery of this Agreement and prior to
Closing Time, there shall not have occurred any downgrading, nor shall any
notice have been given of (i) any intended or potential downgrading or (ii) any
review or possible change that indicates anything other than a stable outlook,
in the rating accorded any securities of or guaranteed by the Company by any
"nationally recognized statistical rating organization," as such term is defined
for purposes of Rule 436(g)(2) under the 1933 Act; and the Preferred Shares
shall be rated BBB- by Standard and Poor's Ratings Services and baa3 by Xxxxx'x
Investors Service, Inc.
(i) In the event the Underwriters exercise the option described in Section
2(b) hereof to purchase all or any portion of the Option Shares, the
representations and warranties of the Company included herein and the statements
in any certificates furnished by the Company hereunder shall be true and correct
as of the Date of Delivery, and the Representatives shall have received:
(i) A certificate of the President and Chief Executive Officer and the
chief financial officer of the Company, dated such Date of Delivery,
confirming that their certificate delivered at Closing Time pursuant to
Section 5(d) hereof remains true as of such Date of Delivery.
(ii) The favorable opinion of Xxxxxxxx & Worcester LLP, counsel for
the Company, in form and substance satisfactory to counsel for the
Underwriters, dated such Date of Delivery, relating to the Option Shares
and otherwise to the same effect as the opinion required by Section 5(b)
hereof.
(iii) Certificate of the President of the Advisor confirming that his
certificate delivered at Closing Time pursuant to Section 5(e) hereof
remains true as of such Date of Delivery.
20
(iv) The favorable opinion of Sidley Xxxxxx Xxxxx & Xxxx LLP, counsel
for the Underwriters, dated such Date of Delivery, relating to the Option
Shares and otherwise to the same effect as the opinion required by Section
5(c) hereof.
(v) A letter from Ernst & Young, in form and substance satisfactory to
the Representatives, dated such Date of Delivery, substantially the same in
scope and substance as the letter furnished to the Representatives pursuant
to Section 5(f) hereof.
If any condition specified in this Section 5 shall not have been fulfilled
when and as required to be fulfilled, this Agreement may be terminated by the
Representatives by notice to the Company at any time at or prior to Closing
Time, and such termination shall be without liability of any party to any other
party except as provided in Section 4 hereof.
Section 6. INDEMNIFICATION. (A) The Company hereby agrees to indemnify and
hold harmless each Underwriter and each person, if any, who controls each
Underwriter within the meaning of Section 15 of the 1933 Act as follows:
(1) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement
(or any amendment thereto), or the omission or alleged omission therefrom
of a material fact required to be stated therein or necessary to make the
statements therein not misleading or arising out of any untrue statement or
alleged untrue statement of a material fact included in any preliminary
prospectus or the Prospectus (or any amendment or supplement thereto), or
the omission, or alleged omission therefrom of a material fact necessary in
order to make the statements therein, in the light of the circumstances
under which they were made, not misleading:
(2) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim
whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission, if such settlement is effected with
the written consent of the Company; and
(3) against any and all expense whatsoever, as incurred (including,
subject to Section 6(c) hereof, the fees and disbursements of counsel
chosen by Xxxxxxx Xxxxx), reasonably incurred in investigating, preparing
or defending against any litigation, or any investigation or proceedings by
any governmental agency or body, commenced or threatened, or any claim
whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission, to the extent that any such expense
is not paid under paragraph (1) or (2) above;
provided, however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Company by any
Underwriter through Xxxxxxx Xxxxx expressly for use in the Registration
Statement (or any amendment thereto) or the Prospectus (or any amendment or
21
supplement thereto); and provided, further, that the foregoing indemnity
agreement with respect to any preliminary prospectus shall not inure to the
benefit of any Underwriter, or the benefit of any person controlling any
Underwriter, if a copy of the Prospectus (as then amended or supplemented if the
Company shall have furnished any amendments or supplements thereto and excluding
documents incorporated or deemed to be incorporated by reference therein) was
not sent or given by or on behalf of such Underwriter to such person asserting
any such losses, claims, damages or liabilities at or prior to the written
confirmation of the sale of such Preferred Shares to such person, if required by
law so to have been delivered, and if the Prospectus (as so amended or
supplemented) would have cured the defect giving rise to such loss, claim,
damage or expense.
(b) Each Underwriter agrees to indemnify and hold harmless the Company,
each of the Company's trustees, each of the Company's officers who signed the
Registration Statement and each person, if any, who controls the Company within
the meaning of Section 15 of the 1933 Act against any and all loss, liability,
claim, damage and expense described in the indemnity contained in subsection (a)
of this Section 6, as incurred, but only with respect to untrue statements or
omissions, or alleged untrue statements or omissions, made in the Registration
Statement (or any amendment thereto) or the Prospectus (or any amendment or
supplement thereto) in reliance upon and in conformity with written information
furnished to the Company by any Underwriter through Xxxxxxx Xxxxx expressly for
use in the Registration Statement (or any amendment thereto) or the Prospectus
(or any amendment or supplement thereto).
(c) Each indemnified party shall give notice as promptly as reasonably
practicable to each indemnifying party of any action commenced against it in
respect of which indemnity may be sought hereunder, but failure to so notify an
indemnifying party shall not relieve such indemnifying party from any liability
which it may have otherwise than on account of this indemnity agreement. An
indemnifying party may participate at its own expense in the defense of such
action. In no event shall the indemnifying parties be liable for fees and
expenses of more than one counsel (in addition to any local counsel) separate
from their own counsel for all indemnified parties in connection with any one
action or separate but similar or related actions in the same jurisdiction
arising out of the same general allegations or circumstances.
Section 7. CONTRIBUTION. In order to provide for just and equitable
contribution in circumstances in which the indemnity agreement provided for in
Section 6 hereof is for any reason held to be unenforceable by the indemnified
parties although applicable in accordance with its terms, the Company and the
Underwriters shall contribute to the aggregate losses, liabilities, claims,
damages and expenses of the nature contemplated by said indemnity agreement
incurred by the Company and the Underwriters, as incurred, (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Company on the one hand and the Underwriters on the other hand from the offering
of the Preferred Shares pursuant to this Agreement or (ii) if the allocation
provided by clause (i) is not permitted by applicable law, in such proportion as
is appropriate to reflect not only the relative benefits referred to in clause
(i) above but also the relative fault of the Company on the one hand and of the
Underwriters on the other hand in connection with the statements or omissions
which resulted in such losses, liabilities, claims, damages or expenses, as well
as any other relevant equitable considerations.
22
The relative benefits received by the Company on the one hand and the
Underwriters on the other hand in connection with the offering of the Preferred
Shares pursuant to this Agreement shall be deemed to be in the same respective
proportions as the total net proceeds from the offering of the Preferred Shares
pursuant to this Agreement (before deducting expenses) received by the Company
and the total discount received by the Underwriters, bear to the aggregate
initial offering price of the Preferred Shares.
The relative fault of the Company on the one hand and the Underwriters on
the other hand shall be determined by reference to, among other things, whether
any such untrue or alleged untrue statement of a material fact or omission or
alleged omission to state a material fact relates to information supplied by the
Company or by the Underwriters and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission.
The Company and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this Section 7 were determined by pro rata
allocation or by any other method of allocation which does not take into account
the equitable considerations referred to above in this Section 7. The aggregate
amount of losses, liabilities, claims, damages and expenses incurred by an
indemnified party and referred to above in this Section 7 shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue or alleged untrue
statement or omission or alleged omission.
No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the 0000 Xxx) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. Notwithstanding the
provisions of this Section 7, the Underwriters shall not be required to
contribute any amount in excess of the amount by which the total price at which
the Preferred Shares purchased from the Company by the Underwriters and
distributed to the public were offered to the public exceeds the amount of any
damages which the Underwriters have otherwise been required to pay in respect of
such losses, liabilities, claims, damages and expenses. For purposes of this
Section 7, each person, if any, who controls any Underwriter within the meaning
of Section 15 of the 1933 Act shall have the same rights to contribution as such
Underwriter, and each trustee of the Company, each officer of the Company who
signed the Registration Statement, and each person, if any, who controls the
Company within the meaning of Section 15 of the 1933 Act shall have the same
rights to contribution as the Company.
Section 8. REPRESENTATIONS, WARRANTIES AND AGREEMENTS TO SURVIVE DELIVERY.
All representations, warranties and agreements contained in this Agreement or in
certificates of officers of the Company submitted pursuant hereto, shall remain
operative and in full force and effect, regardless of any investigation made by
or on behalf of the Underwriters or any controlling person, or by or on behalf
of the Company, and shall survive delivery of the Preferred Shares to the
Underwriters.
Section 9. TERMINATION OF AGREEMENT. (a) The Representatives may terminate
this Agreement, by notice to the Company, at any time at or prior to Closing
Time (i) if there has been, since the respective dates as of which information
is given in the Registration Statement, any material adverse change in the
condition, financial or otherwise, or in the earnings, business
23
affairs or business prospects of the Company and its subsidiaries, taken as a
whole, or the Advisor, whether or not arising in the ordinary course of
business, which would make it, in the Representatives' reasonable judgment,
impracticable or inadvisable to market the Preferred Shares or enforce contracts
for the sale of the Preferred Shares, (ii) if there has occurred any material
adverse change in the financial markets in the United States or any outbreak of
hostilities or escalation of existing hostilities or other calamity or crisis or
any change or development involving a prospective change in national or
international political, financial or economic conditions, in each case the
effect of which is such as to make it, in the Representatives' reasonable
judgment, impracticable or inadvisable to market the Preferred Shares or enforce
contracts for the sale of the Preferred Shares, or (iii) if trading in the
Company's common shares has been suspended by the Commission, or if trading
generally on either the New York Stock Exchange or the American Stock Exchange
has been suspended, or minimum or maximum prices for trading have been fixed, or
maximum ranges for prices for securities have been required, by either of said
exchanges or by order of the Commission or any other governmental authority, or
a material disruption has occurred in commercial banking or securities
settlement or clearance services in the United States, or (iv) if a banking
moratorium has been declared by Federal or New York authorities.
(b) If this Agreement is terminated pursuant to this Section 9, such
termination shall be without liability of any party to any other party except as
provided in Section 4, and provided further that Sections 6 and 7 hereof shall
survive such termination.
Section 10. DEFAULT. If one or more of the Underwriters shall fail at
Closing Time to purchase the Initial Shares which it or they are obligated to
purchase under this Agreement (the "Defaulted Shares"), the Representatives
shall have the right, within 24 hours thereafter, to make arrangements for one
or more of the non-defaulting Underwriters, or any other underwriters, to
purchase all, but not less than all, of the Defaulted Shares in such amounts as
may be agreed upon and upon the terms herein set forth; if, however, the
Representatives shall not have completed such arrangements within such 24-hour
period, then: (i) if the number of Defaulted Shares does not exceed 10% of the
Initial Shares, the non-defaulting Underwriters shall be obligated to purchase
the full amount thereof in the proportions that their respective underwriting
obligations hereunder bear to the underwriting obligations of all non-defaulting
Underwriters, or (ii) if the number of Defaulted Shares exceeds 10% of the
Initial Shares, this Agreement shall terminate without liability on the part of
any non-defaulting Underwriter and the Company. No action taken pursuant to this
Section 10 shall relieve any defaulting Underwriter from liability in respect of
its default. In the event of any such default which does not result in a
termination of this Agreement, either the Representatives or the Company shall
have the right to postpone Closing Time for a period not exceeding seven days in
order to effect any required changes in the Prospectus or in any other documents
or arrangements.
Section 11. NOTICES. All notices and other communications hereunder shall
be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the
Underwriters shall be directed to the Representatives c/o Merrill Lynch, Pierce,
Xxxxxx & Xxxxx Incorporated at 0 Xxxxx Xxxxxxxxx Xxxxxx, Xxx Xxxx, XX 00000,
Attention: Xxxxx Xxxxx, Managing Director; and notices to the Company shall be
directed to it at 000 Xxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000, Attention:
Xxxx X. Xxxxxx, President.
24
Section 12. PARTIES. This Agreement shall inure to the benefit of and be
binding upon the Underwriters and the Company and their respective successors.
Nothing expressed or mentioned in this Agreement is intended or shall be
construed to give any person, firm or corporation, other than those referred to
in Sections 6 and 7 and their heirs and legal representatives, any legal or
equitable right, remedy or claim under or in respect of this Agreement or any
provision herein contained. This Agreement and all conditions and provisions
hereof are intended to be for the sole and exclusive benefit of the parties
hereto and thereto and their respective successors and said controlling persons
and officers, trustees and directors and their heirs and legal representatives,
and for the benefit of no other person, firm or corporation. No purchaser of
Preferred Shares from any Underwriter shall be deemed to be a successor by
reason merely of such purchase.
Section 13. GOVERNING LAW AND TIME; MISCELLANEOUS. This Agreement shall be
governed by and construed in accordance with the laws of the State of New York
applicable to agreements made and to be performed in said State. Specified times
of day refer to New York City time.
THE AMENDED AND RESTATED DECLARATION OF TRUST ESTABLISHING THE COMPANY,
DATED JULY 1, 1994, A COPY OF WHICH, TOGETHER WITH ALL AMENDMENTS THERETO (THE
"DECLARATION"), IS DULY FILED IN THE OFFICE OF THE STATE DEPARTMENT OF
ASSESSMENTS AND TAXATION OF MARYLAND, PROVIDES THAT THE NAME "HRPT PROPERTIES
TRUST" REFERS TO THE TRUSTEES UNDER THE DECLARATION COLLECTIVELY AS TRUSTEES,
BUT NOT INDIVIDUALLY OR PERSONALLY, AND THAT NO TRUSTEE, OFFICER, SHAREHOLDER,
EMPLOYEE OR AGENT OF THE COMPANY SHALL BE HELD TO ANY PERSONAL LIABILITY,
JOINTLY OR SEVERALLY, FOR ANY OBLIGATION OF, OR CLAIM AGAINST, THE COMPANY. ALL
PERSONS DEALING WITH THE COMPANY, IN ANY WAY, SHALL LOOK ONLY TO THE ASSETS OF
THE COMPANY FOR THE PAYMENT OF ANY SUM OR THE PERFORMANCE OF ANY OBLIGATION.
25
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to us a counterpart hereof, whereupon this instrument
along with all counterparts will become a binding agreement between the
Underwriters and the Company in accordance with its terms.
Very truly yours,
HRPT PROPERTIES TRUST
By: /s/ Xxxx X. Xxxxx
----------------------------------------
Xxxx X. Xxxxx
Treasurer and Chief Financial Officer
CONFIRMED AND ACCEPTED, as of
the date first above written:
XXXXXXX XXXXX & CO.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
UBS WARBURG LLC
By: Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
By: /s/ Xxxx Xxxxx
-------------------------------------------
Name:
Title:
For themselves and as Representatives
of the other Underwriters named in
Schedule A hereto
26
SCHEDULE A
NUMBER OF
NAME OF UNDERWRITER INITIAL SHARES
------------------- --------------
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated.................................................. 1,212,500
UBS Warburg LLC........................................................... 1,212,500
X.X. Xxxxxxx & Sons, Inc. ................................................ 1,200,000
Xxxx Xxxxx Xxxx Xxxxxx, Incorporated...................................... 1,200,000
Xxxxxx Xxxxxxx & Co. Incorporated......................................... 1,200,000
Prudential Securities Incorporated........................................ 1,200,000
Xxxxxxx Xxxxx & Associates, Inc. ......................................... 1,200,000
RBC Xxxx Xxxxxxxx Inc. ................................................... 1,200,000
Wachovia Securities, Inc. ................................................ 1,200,000
Bear, Xxxxxxx & Co. Inc. ................................................. 15,000
CIBC World Markets Corp. ................................................. 15,000
Credit Suisse First Boston Corporation.................................... 15,000
X.X. Xxxxxxxx & Co. ...................................................... 15,000
Deutsche Bank Securities Inc. ............................................ 15,000
Xxxxxxxxxx & Co. Inc. .................................................... 15,000
J.J.B. Xxxxxxxx, X.X. Xxxxx, Inc. ........................................ 15,000
McDonald Investments Inc., a KeyCorp Company.............................. 15,000
U.S. Bancorp Xxxxx Xxxxxxx Inc. .......................................... 15,000
Xxxxx Fargo Securities, LLC............................................... 15,000
BNY Capital Markets, Inc. ................................................ 5,000
Credit Lyonnais Securities (USA) Inc. .................................... 5,000
ING Financial Markets LLC................................................. 5,000
XX Xxxxx Securities Corporation........................................... 5,000
SunTrust Capital Markets, Inc. ........................................... 5,000
----------
Total..................................................... 11,000,000
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