Number of Shares] Legacy Healthcare Properties Trust Inc. Common Stock ($0.01 par value per share) UNDERWRITING AGREEMENT
Exhibit 1.1
[Number of Shares]
Common Stock
($0.01 par value per share)
($0.01 par value per share)
[ ], 2010
XXXXXXXXX & COMPANY, INC.
XXXXXX, XXXXXXXX & COMPANY, INCORPORATED
As Representatives of the several Underwriters
c/o JEFFERIES & COMPANY, INC.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
XXXXXX, XXXXXXXX & COMPANY, INCORPORATED
As Representatives of the several Underwriters
c/o JEFFERIES & COMPANY, INC.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Introductory. Legacy Healthcare Properties Trust Inc., a Maryland corporation (the
“Company”), proposes to issue and sell to the several underwriters named in Schedule A (the
“Underwriters”) an aggregate of [___] shares of its common stock, par value $0.01 per share (the
“Shares”). The [___] Shares to be sold by the Company are called the “Firm Shares.” In addition,
the Company has granted to the Underwriters an option to purchase up to an additional [___] Shares
as provided in Section 2. The additional [___] Shares to be sold by the Company pursuant to such
option are collectively called the “Optional Shares.” The Firm Shares and, if and to the extent
such option is exercised, the Optional Shares are collectively called the “Offered Shares.”
Xxxxxxxxx & Company, Inc. (“Jefferies”) and Xxxxxx, Xxxxxxxx & Company, Incorporated have agreed to
act as representatives of the several Underwriters (in such capacity, the “Representatives”) in
connection with the offering and sale of the Offered Shares.
Jefferies agrees that a portion of the Firm Shares to be purchased by it (the “Directed
Shares”) shall be reserved for sale by Jefferies and its affiliates to certain eligible directors,
officers and employees of the Company and persons having business relationships with the Company
(collectively, the “Participants”), as part of the distribution of the Offered Shares by Jefferies
(the “Directed Share Program”) subject to the terms of this Agreement, the applicable rules,
regulations and interpretations of the Financial Industry Regulatory Authority, Inc. (“FINRA”) and
all other applicable laws, rule and regulations. To the extent that such Directed Shares are not
orally confirmed for purchase by the Participants by the end of the first business day after the
date of this Agreement, such Directed Shares may be offered to the public by the Underwriters as
part of the public offering contemplated hereby.
The Company has prepared and filed with the Securities and Exchange Commission (the
“Commission”) a registration statement on Form S-11 (File No. 333-166448), which contains a
form of prospectus to be used in connection with the public offering and sale of the Offered
Shares. Such registration statement, as amended, including the financial statements, exhibits and
schedules thereto, in the form in which it was declared effective by the Commission under the
Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder
(collectively, the “Securities Act”), including any information deemed to be a part thereof at the
time of effectiveness pursuant to Rule 430A under the Securities Act, is called the “Registration
Statement.” Any registration statement filed by the Company pursuant to Rule 462(b) under the
Securities Act is called the “Rule 462(b) Registration Statement,” and from and after the date and
time of filing of the Rule 462(b) Registration Statement the term “Registration Statement” shall
include the Rule 462(b) Registration Statement. Such prospectus, in the form first used by the
Underwriters to confirm sales of the Offered Shares or in the form first made available to the
Underwriters by the Company to meet requests of purchasers pursuant to Rule 173 under the
Securities Act, is called the “Prospectus.” Each preliminary prospectus describing the Offered
Shares and the offering thereof is called a “preliminary prospectus.” As used herein, “Applicable
Time” is ___:__ _m (New York time) on [ ], 2010. As used herein, “free
writing prospectus” has the meaning set forth in Rule 405 under the Securities Act, and “Time of
Sale Prospectus” means the preliminary prospectus, as amended or supplemented immediately prior to
the Applicable Time, together with the free writing prospectuses, if any, identified in Schedule B
hereto, and each “Road Show” means a “bona fide electronic road show” as defined in Rule 433(h)(5)
under the Securities Act that has been made without restriction to any person. As used herein, the
terms “Registration Statement,” “Rule 462(b) Registration Statement,” “preliminary prospectus,”
“Time of Sale Prospectus” and “Prospectus” shall include the documents incorporated and deemed to
be incorporated by reference therein. All references in this Agreement to amendments or
supplements to the Registration Statement, the Rule 462(b) Registration Statement, any preliminary
prospectus, the Time of Sale Prospectus or the Prospectus shall be deemed to mean and include the
filing of any document under the Exchange Act which is or is deemed to be incorporated by reference
in the Registration Statement, the Rule 462(b) Registration Statement, any preliminary prospectus,
the Time of Sale Prospectus or the Prospectus, as the case may be. All references in this
Agreement to (i) the Registration Statement, the 462(b) Registration Statement, any preliminary
prospectus, or the Prospectus, or any amendments or supplements to any of the foregoing, shall
include any copy thereof filed with the Commission pursuant to its Electronic Data Gathering,
Analysis and Retrieval System (“XXXXX”) and (ii) the Prospectus shall be deemed to include the
“electronic Prospectus” provided for use in connection with the offering of the Offered Shares as
contemplated by Section 3(A) (k) of this Agreement.
In the event that the Company has only one subsidiary, then all references herein to
“subsidiaries” of the Company shall be deemed to refer to such single subsidiary, mutatis
mutandis.
At or immediately prior to the First Closing Date (as defined herein), the Company and Legacy
Healthcare Properties, LP, a Delaware limited partnership and the operating partnership of the
Company (the “Operating Partnership”), have engaged or will engage in a series of transactions (the
“Transactions”) described in the Registration Statement, the Time of Sale Prospectus and the
Prospectus, including (i) the acquisition by the Company of certain membership and partnership
interests in entities that directly or indirectly own or ground lease six senior housing facilities
and certain vacant land located in Florida, Illinois, New Jersey, New York and Virginia (the
“Facilities”) for a purchase price of $246 million, including the assumption by the Company of
approximately $158 million of in-place mortgage debt; and (ii) the issuance and sale by the Company
of an aggregate of [ ] shares (the “Private Placement Shares”) of common stock directly by the
Company to Xxxxxx X. Xxxxxxxxx III, the Company’s
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Chairman and Chief Executive Officer, Xxxxxxx X. Xxxxxxxx, Xx., the Company’s President and
Chief Operating Officer and Xxxx X. Xxxxxx, the Company’s Executive Vice President and Chief
Financial Officer, in a concurrent private placement pursuant to Section 4(2) of the Securities Act
and Rule 506 of Regulation D thereunder (the “Concurrent Private Placement”). All of the
agreements entered into in connection with the Transactions, including (i) the Interest Purchase
and Sale Agreement, as amended, by and among WSL Holdings IV, L.L.C., Xxxxxx Acquisition Holdings
IV, L.P., SL Jupiter Holdings, L.L.C., Mangrove Bay Investors, L.L.C., Senior Lifestyle
Contribution Company, L.L.C., Senior Lifestyle CI-II, L.L.C., collectively, as sellers, and Legacy
Healthcare Advisors, LLC, as purchaser, which has been assigned by Legacy Healthcare Advisors, LLC
to the Company and pursuant to which the Facilities will be acquired by the Company (the “Purchase
and Sale Agreement”), (ii) the Agreement of Limited Partnership of the Operating Partnership (the
“Operating Partnership Agreement”), (iii) the Subscription Agreements relating to the Private
Placement Shares by and between the Company and each of Xxxxxx X. Xxxxxxxxx III, the Company’s
Chairman and Chief Executive Officer, Xxxxxxx X. Xxxxxxxx, the Company’s President and Chief
Operating Officer and Xxxx X. Xxxxxx, the Company’s Executive Vice President and Chief Financial
Officer (the “Subscription Agreements”), and (iii) the Employment Agreements between the Company
and each of Xxxxxx X. Xxxxxxxxx III, the Company’s Chairman and Chief Executive Officer, Xxxxxxx X.
Xxxxxxxx, the Company’s President and Chief Operating Officer, Xxxx X. Xxxxxx, the Company’s
Executive Vice President and Chief Financial Officer, Xxxxx X.
Xxxxxxx, the Company’s Senior
Vice President of Investments, and Xxxx X. Xxxxxxx, the
Company’s Senior Vice
President of Portfolio Management (the “Employment Agreements”), are herein referred to as the
“Transaction Agreements.”
The Company and the Operating Partnership hereby confirm their respective agreements with the
Underwriters as follows:
Section 1. Representations and Warranties of the Company and the Operating Partnership.
Each of the Company and the Operating Partnership hereby represents, warrants and
covenants to each Underwriter, as of the date of this Agreement, as of the First Closing Date
(as hereinafter defined) and as of each Option Closing Date (as hereafter defined), if any, and
covenants with each Underwriter, as follows:
(a) Compliance with Registration Requirements. The Registration Statement and any
Rule 462(b) Registration Statement have been declared effective by the Commission under the
Securities Act. To the best knowledge of the Company and the Operating Partnership, the
Company has complied to the Commission’s satisfaction with all requests of the Commission for
additional or supplemental information. No stop order suspending the effectiveness of the
Registration Statement or any Rule 462(b) Registration Statement is in effect and no
proceedings for such purpose have been instituted or are pending or, to the best knowledge of
the Company and the Operating Partnership, are contemplated or threatened by the
Commission.
The preliminary prospectus, dated as of [ ], 2010 (subject to completion) and
the Prospectus when filed complied in all material respects with the requirements of the
Securities Act and, if filed by electronic transmission pursuant to XXXXX (except as may be
permitted by Regulation S-T under the Securities Act), was identical to the copy thereof
delivered to the Underwriters for use in connection with the offer and sale of the Offered
Shares. Each of the Registration Statement, any Rule 462(b) Registration Statement and any
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post-effective amendment thereto, at the time it became effective, and at the time of each sale
of the Offered Shares and at the First Closing Date (as defined in Section 2), complied and
will comply in all material respects with the requirements of the Securities Act and did not
and will not contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein not misleading. As
of the Applicable Time, the Time of Sale Prospectus, together with each Road Show, if any,
(including any preliminary prospectus wrapper) did not, and at the time of each sale of the
Offered Shares and at the First Closing Date (as defined in Section 2), the Time of Sale
Prospectus, together with each Road Show, if any, as then amended or supplemented by the
Company, 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. The Prospectus (including any
Prospectus wrapper), as amended or supplemented, as of its date, and at the time of each sale
of the Offered Shares and at the First Closing Date (as defined in Section 2), did not and will
not contain any untrue statement of a material fact or omit to state a material fact necessary
in order to make the statements therein, in the light of the circumstances under which they
were made, not misleading. The representations and warranties set forth in the three
immediately preceding sentences do not apply to statements in or omissions from the
Registration Statement, any Rule 462(b) Registration Statement, or any post-effective amendment
thereto, or the Prospectus or the Time of Sale Prospectus, or any amendments or supplements
thereto or any Road Show, made in reliance upon and in conformity with information relating to
any Underwriter furnished to the Company in writing by the Representatives expressly for use
therein, it being understood and agreed that the only such information furnished by the
Representatives to the Company consists of the information described in Section 9(b) below.
There are no contracts or other documents required to be described in the Time of Sale
Prospectus or the Prospectus or to be filed as exhibits to the Registration Statement which
have not been described or filed as required.
The Company is not an “ineligible issuer” in connection with the offering of the Offered
Shares pursuant to Rules 164, 405 and 433 under the Securities Act. Any free writing
prospectus that the Company is required to file pursuant to Rule 433(d) under the Securities
Act has been, or will be, filed with the Commission in accordance with the requirements of the
Securities Act. Each free writing prospectus that the Company has filed, or is required to
file, pursuant to Rule 433(d) under the Securities Act or that was prepared by or behalf of or
used or referred to by the Company complies or will comply in all material respects with the
requirements of Rule 433 under the Securities Act including timely filing with the Commission
or retention where required and legending, and each such free writing prospectus, as of its
issue date and at all subsequent times through the completion of the public offer and sale of
the Offered Shares did not, does not and will not include any information that conflicted,
conflicts with or will conflict with the information contained in the Registration Statement,
the Prospectus or any preliminary prospectus, including any document incorporated by reference
therein. Except for the free writing prospectuses, if any, identified in Schedule B hereto,
and electronic road shows, if any, furnished to you before first use, the Company has not
prepared, used or referred to, and will not, without your prior consent, prepare, use or refer
to, any free writing prospectus.
(b) Offering Materials Furnished to Underwriters. The Company has delivered to the Representatives two complete manually signed copies of
the Registration Statement, each amendment thereto and any Rule 462(b) Registration Statement
and of each consent and certificate of experts filed as a part thereof, and conformed copies of
the Registration Statement, each amendment thereto and any Rule 462(b) Registration Statement
(without
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exhibits) and preliminary prospectuses, the Time of Sale Prospectus, the Prospectus,
as amended or supplemented, and any free writing prospectus reviewed and consented to by the
Representatives, in such quantities and at such places as the Representatives have reasonably
requested for each of the Underwriters.
(c) Distribution of Offering Material By the Company. The Company has not distributed and
will not distribute, prior to the later of (i) the expiration or termination of the option
granted to the several Underwriters in Section 2, (ii) the completion of the Underwriters’
distribution of the Offered Shares and (iii) the expiration of 25 days after the date of the
Prospectus, any offering material in connection with the offering and sale of the Offered
Shares other than a preliminary prospectus, the Time of Sale Prospectus, the Prospectus, any
free writing prospectus reviewed and consented to by the Representatives, or the Registration
Statement.
(d) The Underwriting Agreement. This Agreement has been duly authorized, executed and
delivered by, and is a valid and binding agreement of, each of the Company and the Operating
Partnership, enforceable in accordance with its terms, except as rights to indemnification
hereunder may be limited by applicable law and except as the enforcement hereof may be limited
by bankruptcy, insolvency, reorganization, moratorium or other similar laws relating to or
affecting the rights and remedies of creditors or by general equitable principles.
(e) The Transaction Agreements. Each of the Transaction Agreements has been duly
authorized, executed and delivered by, and is a valid and binding agreement of, each of the
Company and the Operating Partnership, enforceable in accordance with its terms, except as
rights to indemnification hereunder may be limited by applicable law and except as the
enforcement hereof may be limited by bankruptcy, insolvency, reorganization, moratorium or
other similar laws relating to or affecting the rights and remedies of creditors or by general
equitable principles.
(f) Authorization of the Offered Shares and the Private Placement Shares. The Offered
Shares and the Private Placement Shares have been duly authorized for issuance and sale
pursuant to this Agreement and the Subscription Agreements and, when issued and delivered by
the Company pursuant to this Agreement or the Subscription Agreements, as applicable, will be
validly issued, fully paid and nonassessable, and the issuance and sale of the Offered Shares
and the Private Placement Shares is not subject to any preemptive rights, rights of first
refusal or other similar rights to subscribe for or purchase the Offered Shares or the Private
Placement Shares. The Company will contribute the net proceeds from the sale of the Offered
Shares and the Private Placement Shares to the Operating Partnership in exchange for a number
of units of partnership interest in the Operating Partnership (the “OP Units”) equal to the
number of Offered Shares and the Private Placement Shares; the OP Units to be issued by the
Operating Partnership in
connection with the Company’s contribution of the net proceeds from the sale of the
Offered Shares and the Private Placement Shares to the Operating Partnership have been duly
authorized for issuance and sale pursuant to this Agreement and, when issued and delivered, by
the Operating Partnership pursuant to this Agreement will be validly issued and fully paid, and
the issuance and sale of the OP Units is not subject to any preemptive rights, rights of first
refusal or other similar rights to subscribe for or purchase the OP Units.
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(g) No Applicable Registration or Other Similar Rights. There are no persons with
registration or other similar rights to have any equity or debt securities registered for sale
under the Registration Statement or included in the offering contemplated by this Agreement.
(h) No Material Adverse Change. Except as otherwise disclosed in the Time of Sale
Prospectus, subsequent to the respective dates as of which information is given in Time of Sale
Prospectus: (i) there has been no material adverse change, or any development that could
reasonably be expected to result in a material adverse change, in the condition, financial or
otherwise, or in the earnings, business, operations or prospects, whether or not arising from
transactions in the ordinary course of business, of the Company and its subsidiaries,
considered as one entity (any such change is called a “Material Adverse Change”); (ii) the
Company and its subsidiaries, considered as one entity, have not incurred any material
liability or obligation, indirect, direct or contingent, not in the ordinary course of business
nor entered into any material transaction or agreement not in the ordinary course of business;
and (iii) there has been no dividend or distribution of any kind declared, paid or made by the
Company or, except for dividends paid to the Company or other subsidiaries, any of its
subsidiaries on any class of capital stock or repurchase or redemption by the Company or any of
its subsidiaries of any class of capital stock.
(i) Independent Accountants. KPMG LLP, who have expressed their opinion with respect to
certain financial statements (which term as used in this Agreement includes the related notes
thereto) filed with the Commission as a part of the Registration Statement and included in the
preliminary prospectus, dated as of [ ], 2010 (subject to completion), as supplemented or
amended, the Prospectus and Time of Sale Prospectus (each, an “Applicable Prospectus” and
collectively, the “Applicable Prospectuses”), are (i) independent public or certified public
accountants as required by the Securities Act (ii) in compliance with the applicable
requirements relating to the qualification of accountants under Rule 2-01 of Regulation S-X and
(iii) a registered public accounting firm as defined by the Public Company Accounting Oversight
Board (the “PCAOB”) whose registration has not been suspended or revoked and who has not
requested such registration to be withdrawn. McGladrey and Xxxxxx, LLP, who have expressed
their opinion with respect to certain financial statements (which term as used in this
Agreement includes the related notes thereto) filed with the Commission as a part of the
Registration Statement and included in the Applicable Prospectuses, are (i) independent public
or certified public accountants as required by the Securities Act (ii) in compliance with the
applicable requirements relating to the qualification of accountants under Rule 2-01 of
Regulation S-X and (iii) a registered public accounting firm as defined by the PCAOB whose
registration has not been suspended or revoked and who has not requested such registration to
be withdrawn.
(j) Preparation of the Financial Statements. The financial statements filed with the
Commission as a part of the Registration Statement included in each Applicable Prospectus
present fairly the consolidated financial position, the consolidated results of operations,
cash flows and changes in stockholders’ equity of the Company and its subsidiaries as of and at
the dates indicated, the combined financial position, the combined results of operations, cash
flows and changes in stockholders’ equity of Senior Lifestyle 2004 Portfolio as of and at the
dates indicated, the financial position, the results of operations, cash flows and changes in
stockholders’ equity of Senior Lifestyle Jupiter, L.P. as of and at the dates indicated and the
consolidated financial position, the consolidated results of operations, cash flows and changes
in stockholders’ equity of WSL Holdings IV, LLC as of and at the dates indicated. Such
financial statements have been prepared in conformity with generally accepted accounting
principles applied on a consistent basis throughout the periods involved, except as may be
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expressly stated in the related notes thereto. No other financial statements or supporting
schedules are required to be included in the Registration Statement or any Applicable
Prospectus. The financial data set forth in each Applicable Prospectus under the captions
“Capitalization” fairly present the information set forth therein on a basis consistent with
that of the audited financial statements contained in the Registration Statement and each
Applicable Prospectus. The pro forma condensed consolidated financial statements of the
Company and its subsidiaries and the related notes thereto included under the captions “Summary
Pro Forma Financial and Other Data” and “Selected Pro Forma Financial Information” and
elsewhere in each Applicable Prospectus and in the Registration Statement present fairly the
information contained therein, have been prepared in accordance with the Commission’s rules and
guidelines with respect to pro forma financial statements and have been properly presented on
the bases described therein, and the assumptions used in the preparation thereof are reasonable
and the adjustments used therein are appropriate to give effect to the transactions and
circumstances referred to therein. No person who has been suspended or barred from being
associated with a registered public accounting firm, or who has failed to comply with any
sanction pursuant to Rule 5300 promulgated by the PCAOB, has participated in or otherwise aided
the preparation of, or audited, the financial statements, supporting schedules or other
financial data filed with the Commission as a part of the Registration Statement and included
in any Applicable Prospectus.
(k) Company’s Accounting System. The Company and each of its subsidiaries make and keep
accurate books and records and maintain a system of internal accounting controls sufficient to
provide reasonable assurance 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. There has not been and is no
material weakness in the Company’s internal control over financial reporting (whether or not
remediated) and since June 30, 2010, there has been no change in the Company’s internal control
over financial reporting that has materially affected, or is reasonably likely to materially
affect, the Company’s internal control over financial reporting.
(l) Incorporation and Good Standing of the Company and its Subsidiaries. Each of the Company and its subsidiaries has been duly incorporated or organized, as
the case may be, and is validly existing as a corporation, partnership or limited liability
company, as applicable, in good standing under the laws of the jurisdiction of its
incorporation or organization and has the power and authority (corporate or other) to own,
lease and operate its properties and to conduct its business as described in each Applicable
Prospectus and, in the case of the Company and the Operating Partnership, to enter into and
perform their respective obligations under this Agreement and to execute and deliver the
Transaction Agreements to which it is a party and perform their respective obligations as
contemplated therein. Each of the Company and each subsidiary is duly qualified as a foreign
corporation, partnership or limited liability company, as applicable, to transact business and
is in good standing in each jurisdiction in which such qualification is required, whether by
reason of the ownership or leasing of property or the conduct of business. All of the issued
and outstanding capital stock or other equity or ownership interests of each subsidiary have
been duly authorized and validly issued, are fully paid and nonassessable and are owned by the
Company, directly or through subsidiaries, free and clear of any security interest, mortgage,
pledge, lien, encumbrance or adverse claim. The Company does not own or control, directly
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or
indirectly, any corporation, association or other entity other than (i) the subsidiaries listed
in Exhibit 21 to the Registration Statement.
(m) Capitalization and Other Capital Stock Matters. The authorized, issued and
outstanding capital stock of the Company is as set forth in each Applicable Prospectus under
the caption “Capitalization” (other than for subsequent issuances, if any, pursuant to employee
benefit plans described in the Time of Sale Prospectus). The Shares (including the Offered
Shares) conform in all material respects to the description thereof contained in the Time of
Sale Prospectus. The OP Units conform in all material respects to the description thereof
contained in the Time of Sale Prospectus. All of the issued and outstanding Shares have been
duly authorized and validly issued, are fully paid and nonassessable and have been issued in
compliance with federal and state securities laws. None of the outstanding Shares was issued
in violation of any preemptive rights, rights of first refusal or other similar rights to
subscribe for or purchase securities of the Company. There are no authorized or outstanding
options, warrants, preemptive rights, rights of first refusal or other rights to purchase, or
equity or debt securities convertible into or exchangeable or exercisable for, any capital
stock of the Company or any of its subsidiaries other than those accurately described in each
Applicable Prospectus. The description of the Company’s stock option, stock bonus and other
stock plans or arrangements, and the options or other rights granted thereunder, set forth in
each Applicable Prospectus accurately and fairly presents the information required to be shown
with respect to such plans, arrangements, options and rights.
(n) Stock Exchange Listing. The Offered Shares have been approved for listing on the New
York Stock Exchange, subject only to official notice of issuance.
(o) Non-Contravention of Existing Instruments; No Further Authorizations or Approvals
Required. Neither the Company nor any of its subsidiaries is in violation of its charter or
by-laws, partnership agreement or operating agreement or similar organizational document, as
applicable, or is in default (or, with the giving of notice or lapse of time, would be in
default)
(“Default”) under any indenture, mortgage, loan or credit agreement, note, contract,
franchise, lease or other instrument to which the Company or any of its subsidiaries is a party
or by which it or any of them may be bound (including, without limitation, any credit
agreement, indenture, pledge agreement, security agreement or other instrument or agreement
evidencing, guaranteeing, securing or relating to indebtedness of the Company or any of its
subsidiaries ), or to which any of the property or assets of the Company or any of its
subsidiaries is subject (each, an “Existing Instrument”), except for such Defaults as would
not, individually or in the aggregate, result in a Material Adverse Change. The Company’s and
the Operating Partnership’s execution, delivery and performance of this Agreement and the
Transaction Agreements, consummation of the transactions contemplated hereby and thereby and by
each Applicable Prospectus and the issuance and sale of the Offered Securities (i) have been
duly authorized by all necessary corporate action and will not result in any violation of the
provisions of the charter or by-laws, partnership agreement or operating agreement or similar
organizational document of the Company or any subsidiary, as applicable, (ii) will not conflict
with or constitute a breach of, or Default under, or result in the creation or imposition of
any lien, charge or encumbrance upon any property or assets of the Company or any of its
subsidiaries pursuant to, or require the consent of any other party to, any Existing Instrument
and (iii) will not result in any violation of any law, administrative regulation or
administrative or court decree applicable to the Company or any subsidiary. No consent,
approval, authorization or other order of, or registration or filing with, any court or other
governmental or regulatory authority or agency, is required for the Company’s and the Operating
Partnership’s execution, delivery and performance of this Agreement and the
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Transaction
Agreements and consummation of the transactions contemplated hereby and thereby and by each
Applicable Prospectus, except such as have been obtained or made by the Company and are in full
force and effect under the Securities Act, applicable state securities or blue sky laws and
from FINRA.
(p) No Material Actions or Proceedings. There are no legal or governmental actions, suits
or proceedings pending or, to the best knowledge of the Company and the Operating Partnership,
threatened (i) against or affecting the Company or any of its subsidiaries, (ii) which have as
the subject thereof any officer or director of, or property owned or leased by, the Company or
any of its subsidiaries or (iii) relating to environmental or discrimination matters, where in
any such case (A) there is a reasonable possibility that such action, suit or proceeding might
be determined adversely to the Company, such subsidiary or such officer or director, (B) any
such action, suit or proceeding, if so determined adversely, would reasonably be expected to
result in a Material Adverse Change or adversely affect the consummation of the transactions
contemplated by this Agreement or (C) any such action, suit or proceeding is or would be
material in the context of the sale of Shares. No material labor dispute with the employees of
the Company or any of its subsidiaries, or with the employees of any principal supplier,
manufacturer, customer or contractor of the Company, exists or, to the best knowledge of the
Company and the Operating Partnership, is threatened or imminent.
(q) Intellectual Property Rights. The Company and its subsidiaries own or possess
sufficient trademarks, trade names, patent rights, copyrights, domain names, licenses,
approvals, trade secrets and other similar rights (collectively, “Intellectual Property
Rights”) reasonably necessary to conduct their businesses as now conducted; and the expected
expiration of any of such Intellectual Property Rights would not result in a Material Adverse
Change. Neither
the Company nor any of its subsidiaries has received any notice of infringement or
conflict with asserted Intellectual Property Rights of others. The Company is not a party to
or bound by any options, licenses or agreements with respect to the Intellectual Property
Rights of any other person or entity that are required to be set forth in the Prospectus and
are not described therein. (The Time of Sale Prospectus contains in all material respects the
same description of the matters set forth in the preceding sentence contained in the
Prospectus.) None of the technology employed by the Company or any of its subsidiaries has
been obtained or is being used by the Company or any of its subsidiaries in violation of any
contractual obligation binding on the Company or any of its subsidiaries or, to the Company’s
and the Operating Partnership’s knowledge, any of its or its subsidiaries’ officers, directors
or employees or otherwise in violation of the rights of any persons.
(r) All Necessary Permits, etc. Except as otherwise disclosed in the Time of Sale
Prospectus, the Company and each subsidiary possess such valid and current certificates,
authorizations or permits issued by the appropriate state, federal or foreign regulatory
agencies or bodies necessary to conduct their respective businesses, including certification to
participate in the Medicare program, the Medicaid program and any other state healthcare
program (collectively, the “Government Programs”), and neither the Company nor any subsidiary
has received, or has any reason to believe that it will receive, any notice of proceedings
relating to the revocation or modification of, or non-compliance with, any such certificate,
authorization or permit which, singly or in the aggregate, if the subject of an unfavorable
decision, ruling or finding, could result in a Material Adverse Change.
(s) Title to Properties. The Company and each of its subsidiaries has good and marketable
title in fee simple to all real property and good title to all personal property owned
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by them,
in each case free and clear of all liens, security interests, pledges, charges, encumbrances,
encroachments, restrictions, mortgages and defects, except as disclosed in the Registration
Statement, the Time of Sale Prospectus or such as do not materially and adversely affect the
value of such property and do not interfere with the use made or proposed to be made of such
property by the Company or the particular subsidiary; any real property, buildings,
improvements, equipment and personal property held under lease by the Company or any subsidiary
are held under valid, existing and enforceable leases, with such exceptions as are disclosed in
the Time of Sale Prospectus or are not material and do not interfere with the use made or
proposed to be made of such property, buildings, improvements, equipment and personal property
by the Company or such subsidiary; the Company or a subsidiary has obtained an owner’s or
leasehold title insurance policy, from a title insurance company licensed to issue such policy,
on any real property owned in fee or leased, as the case may be, by the Company or any
subsidiary, that insures the Company’s or the subsidiary’s fee or leasehold interest, as the
case may be, in such real property, which policies are in full force and effect and include
commercially reasonable exceptions, and with coverages in amounts at least equal to amounts
that are generally deemed in the Company’s industry to be commercially reasonable in the
markets where the Company’s properties are located and true and complete copies of such title
policies (including all underlying title documents) have been provided to the Underwriters or
their counsel, or a lender’s title insurance policy insuring the lien of its mortgage securing
the real property with coverage equal to the maximum aggregate principal amount of any
indebtedness held by the Company or a subsidiary and secured by the real property.
(t) No Violation of Laws Pertaining to Real Property. (A) Neither the Company nor any
subsidiary knows of any violation of any municipal, state or federal law, rule or regulation
(including those pertaining to environmental matters) concerning any real property owned in fee
simple or leased by the Company or the subsidiaries as of the date of this Agreement
(collectively, for purposes of this subsection only, the “Properties”) or any part thereof,
except for such violations which would not, individually or in the aggregate, materially and
adversely affect the value of any such Property or the use or proposed use of any such Property
by the Company or the particular subsidiary; the Company has fairly summarized in the Time of
Sale Prospectus all options and rights of first refusal to purchase all or part of any Property
or any interest therein; (B) each of the Properties complies with all applicable zoning laws,
ordinances, regulations, development agreements, reciprocal easement agreements, ground leases
and deed restrictions or other covenants in all material respects and, if and to the extent
there is a failure to comply, such failure does not materially impair the value, use or
proposed use of any of the Properties and will not result in a forfeiture or reversion of
title; (C) neither the Company nor any subsidiary has received from any governmental authority
any written notice of any condemnation of or zoning change affecting the Properties or any part
thereof, and neither the Company nor any subsidiary knows of any such condemnation or zoning
change which is threatened, except for such condemnations or zoning changes which, if
consummated, would not, individually or in the aggregate, result in a Material Adverse Change;
(D) all liens, charges, encumbrances, claims, or restrictions on or affecting the properties
and assets (including the Properties) of the Operating Partnership or any of the other
subsidiaries that are required to be described in the Time of Sale Prospectus are disclosed
therein; (E) neither (1) the Operating Partnership nor any of the other subsidiaries that are
landlords under any lease of the Properties nor (2) any tenant of any portion of any of the
Properties is in default under any of the leases governing such Properties 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 of such leases, except for such defaults which would not, individually or in
the aggregate, result in a Material Adverse Change; and (F) no tenant under
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any lease pursuant
to which the Operating Partnership or any of the other subsidiaries leases the Properties has
an option or right of first refusal to purchase the premises leased thereunder or the building
of which such premises are a part or any other portion thereof.
(u) Operating Leases. Effective upon consummation of the transactions contemplated under
the Purchase and Sale Agreement and except as described in the Time of Sale Prospectus: (i) the
operating leases set forth on Schedule C attached hereto (each, an “Operating Lease”) will be
in full force and effect and true, correct and complete copies of such Operating Leases
(including all exhibits, schedules or other documents related thereto) in the form agreed to by
the parties thereto have been or will be provided to the Underwriters or their counsel; (ii)
there will be no uncured events of default, or events that with the giving of notice or passage
of time, or both, would constitute an event of default, by the Operating Partnership or any of
the other subsidiaries that will be landlords under the Operating Leases or, to the knowledge
of the Company and the Operating Partnership, by any tenant under any of the terms and
provisions of the Operating Leases; (iii) there will be no other material agreements between
the Company, the Operating Partnership or any other subsidiary and a tenant under any of the
Operating Leases; (iv) no rentals or other amounts due under the Operating Leases will have
been paid more than one (1) month in advance; (v) no tenant under any of the Operating Leases
will have asserted in writing any defense or set-off against the payment of rent in
connection with any Operating Lease nor will have any tenant or subtenant contested any
tax, operating cost or other escalation payment or occupancy charge, or any other amounts
payable under the applicable Operating Lease; and (vi) to the knowledge of the Company and the
Operating Partnership, none of the Operating Leases will have been assigned, mortgaged,
pledged, sublet, hypothecated or otherwise encumbered.
(v) Ground Leases. Effective upon consummation of the transactions contemplated in the
Purchase and Sale Agreement, and except as described in the Time of Sale Prospectus, (i) the
ground lease agreement dated as of January 1, 2001 between Cortland County Industrial
Development Agency, as landlord, and WSL Xxxxxx Investors IV, L.L.C., successor by assignment
from Cortland Associates LLC, as tenant, relating to that certain property located at 000
Xxxxxx Xxxx, Xxxxxxxxxxxxx, Xxx Xxxx (the “Xxxxxx Ground Lease”), and any guaranty related
thereto, will be in full force and effect and, to the knowledge of the Company and the
Operating Partnership, true, correct and complete copies of the Xxxxxx Ground Lease (including
all exhibits, schedules or other documents related thereto) have been provided to the
Underwriters or their counsel; (iii) there will be no disputes or uncured events of default, or
events that with the giving of notice or passage of time, or both, would constitute an event of
default, by the tenant under the Xxxxxx Ground Lease or, to the knowledge of the Company and
the Operating Partnership, by the landlord under any of the terms and provisions of the Xxxxxx
Ground Lease; (iv) there will be no oral agreements or other material agreements between the
Company, the Operating Partnership or any other subsidiary and the landlord under the Xxxxxx
Ground Lease other than those agreements set forth on Schedule D attached hereto; (v) to the
knowledge of the Company and the Operating Partnership, the landlord under the Xxxxxx Ground
Lease will have good and marketable title to the property demised thereunder, free and clear of
all liens, security interests, pledges, charges, encumbrances, encroachments, restrictions,
mortgages and defects, except as disclosed in the Time of Sale Prospectus or except those which
do not materially and adversely affect the value of such property and do not interfere with the
use made or proposed to be made of such property by the tenant under the Xxxxxx Ground Lease;
and (vi) to the knowledge of the Company and the Operating Partnership, except for any mortgage
loan encumbering the property demised under the Xxxxxx Ground Lease and described in the
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Time
of Sale Prospectus, the Xxxxxx Ground Lease will not have been assigned, mortgaged, pledged,
sublet, hypothecated or otherwise encumbered.
(w) No Cross-Default. Except as described in the Time of Sale Prospectus, the mortgages
and deeds of trust encumbering the properties described in the Time of Sale Prospectus, are not
convertible and neither the Company or the Operating Partnership or any other subsidiary, nor
any person affiliated therewith holds a participating interest therein, and such mortgages and
deeds of trust are not cross-defaulted or cross-collateralized to any property not owned
directly or indirectly in part by the Company or the Operating Partnership or any other
subsidiary.
(x) Services. To the knowledge of the Company and the Operating Partnership, water,
stormwater, sanitary sewer, electricity and telephone service are all available at the property
lines of each property owned by the Company, the Operating Partnership or any
other subsidiary, over duly dedicated streets or perpetual easements of record benefiting
the applicable property.
(y) No Contracts, Letter of Intent, etc. There are no contracts, letters of intent, term
sheets, agreements, arrangements or understandings with respect to the direct or indirect
acquisition or disposition by the Company, the Operating Partnership or any other subsidiary,
of interests in assets or real property that is required to be described in the Time of Sale
Prospectus that is not already so described.
(z) Tax Law Compliance. The Company and its subsidiaries have filed all necessary
federal, state and foreign income and franchise tax returns (or valid extensions to such
filings have been obtained) and have paid all taxes required to be paid by any of them and, if
due and payable, any related or similar assessment, fine or penalty levied against any of them,
other than those being contested in good faith, except in any case in which failure to file
such tax returns or pay such taxes and other assessments, fines or penalties would not
reasonably be expected to cause a Material Adverse Change. The Company has made adequate
charges, accruals and reserves in the applicable financial statements referred to in
Section 1(i) above in respect of all federal, state and foreign income and franchise taxes for
all periods as to which the tax liability of the Company or any of its subsidiaries has not
been finally determined. No tax deficiency has been asserted in writing against the Company or
any subsidiary, nor does the Company know of any tax deficiency that is likely to be asserted
and, if determined adversely to the Company or any subsidiary, would reasonably be expected to
have a Material Adverse Change.
(aa) REIT Status. Commencing with the Company’s short taxable year ending December 31,
2010, the Company will be organized and will operate in conformity with the requirements for
qualification and taxation as a “real estate investment trust” (a “REIT”) under Sections 856
through 860 of the Internal Revenue Code of 1986, as amended (the “Code”); and the Company’s
proposed method of operation as described in the Time of Sale Prospectus will enable the
Company to meet the requirements for qualification and taxation as a REIT under the Code.
(bb) Material Federal Income Tax Considerations. The description of the Company’s
organization and current and proposed method of operation set forth in the Time of Sale
Prospectus under the heading “Material Federal Income Tax Considerations” is correct in all
material respects.
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(cc) Proper Tax Classification. Each of the Operating Partnership and any other
subsidiary that is a partnership or a limited liability company has been properly classified
either as a partnership or as an entity disregarded as separate from the Company for federal
income tax purposes throughout the period from its formation through the date hereof.
(dd) Company Not an “Investment Company”. The Company has been advised of the rules and
requirements under the Investment Company Act of 1940, as amended (the “Investment Company
Act”). The Company is not, and will not be, either after receipt of payment for the Offered
Shares or after the application of the proceeds therefrom as described under “Use of Proceeds”
in each Applicable Prospectus, an “investment company” within the meaning of Investment Company
Act and will conduct its business in a manner so that it will not become subject to the
Investment Company Act.
(ee) Insurance. Each of the Company and its subsidiaries are insured by recognized,
financially sound and reputable institutions with policies in such amounts and with such
deductibles and covering such risks as are generally deemed adequate and customary for their
businesses including, but not limited to, policies covering real and personal property owned or
leased by the Company and its subsidiaries against theft, damage, destruction, acts of
vandalism and earthquakes and policies covering the Company and its subsidiaries for product
liability claims and clinical trial liability claims. The Company has no reason to believe
that it or any subsidiary will not be able (i) to renew its existing insurance coverage as and
when such policies expire or (ii) to obtain comparable coverage from similar institutions as
may be necessary or appropriate to conduct its business as now conducted and at a cost that
would not result in a Material Adverse Change. Neither of the Company nor any subsidiary has
been denied any insurance coverage which it has sought or for which it has applied.
(ff) No Price Stabilization or Manipulation; Compliance with Regulation M. The Company
has not taken, directly or indirectly, any action designed to or that might be reasonably
expected to cause or result in stabilization or manipulation of the price of the Shares or any
other “reference security” (as defined in Rule 100 of Regulation M under the Exchange Act
(“Regulation M”)) whether to facilitate the sale or resale of the Offered Shares or otherwise,
and has taken no action which would directly or indirectly violate Regulation M.
(gg) Related Party Transactions. There are no business relationships or related-party
transactions involving the Company or any of its subsidiaries or any other person required to
be described in each Applicable Prospectus which have not been described as required. (The
Time of Sale Prospectus contains in all material respects the same description of the matters
set forth in the preceding sentence contained in the Prospectus.)
(hh) FINRA Matters. All of the information provided to the Underwriters or to counsel for
the Underwriters by the Company, its officers and directors and the holders of any securities
(debt or equity) or options to acquire any securities of the Company in connection with
letters, filings or other supplemental information provided to FINRA pursuant to FINRA Conduct
Rule 5110 and 5190 is true, complete and correct.
(ii) Parties to Lock-Up Agreements. Each of the Company’s directors and executive
officers listed in Exhibit D has executed and delivered to Jefferies a lock-up agreement in the
form of Exhibit E hereto. Exhibit D hereto contains a true, complete and correct list of all
directors and officers of the Company. If any additional persons shall become directors or
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executive officers of the Company prior to the end of the Company Lock-up Period (as defined
below), the Company shall cause each such person, prior to or contemporaneously with their
appointment or election as a director or executive officer of the Company, to execute and
deliver to Jefferies an agreement in the form attached hereto as Exhibit E.
(jj) Statistical and Market-Related Data. The statistical, demographic and market-related
data included in the Registration Statement and each Applicable Prospectus are based on or
derived from sources that the Company and the Operating Partnership believes to be reliable and
accurate or represent the Company’s and the Operating Partnership’s good faith estimates that
are made on the basis of data derived from such sources.
(kk) No Unlawful Contributions or Other Payments. Neither the Company nor any of its
subsidiaries nor, to the best of the Company’s and the Operating Partnership’s knowledge, any
employee or agent of the Company or any subsidiary, has made any contribution or other payment
to any official of, or candidate for, any federal, state or foreign office in violation of any
law or of the character required to be disclosed in the Registration Statement and each
Applicable Prospectus.
(ll) Disclosure Controls and Procedures; Deficiencies in or Changes to Internal Control
Over Financial Reporting. The Company has established and maintains disclosure controls and
procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)), which (i) are designed
to ensure that material information relating to the Company, including its consolidated
subsidiaries, is made known to the Company’s principal executive officer and its principal
financial officer by others within those entities, particularly during the periods in which the
periodic reports required under the Exchange Act are being prepared; (ii) have been evaluated
by management of the Company for effectiveness as of the end of the Company’s most recent
fiscal quarter; and (iii) are effective in all material respects to perform the functions for
which they were established. The Company is not aware of (i) any significant deficiencies or
material weaknesses in the design or operation of internal control over financial reporting
which are reasonably likely to adversely affect the Company’s ability to record, process,
summarize and report financial information or (ii) any fraud, whether or not material, that
involves management or other employees who have a significant role in the Company’s internal
control over financial reporting. The Company is not aware of any change in its internal
control over financial reporting that has occurred during its most recent fiscal quarter that
has materially affected, or is reasonably likely to materially affect, the Company’s internal
control over financial reporting.
(mm) Compliance with Environmental Laws. Except as described in each Applicable Prospectus and except as would not, singly or in
the aggregate, result in a Material Adverse Change, (i) neither the Company nor any of its
subsidiaries is in violation of any federal, state, local or foreign statute, law, rule,
regulation, ordinance, code, policy or rule of common law or any judicial or administrative
interpretation thereof, including any judicial or administrative order, consent, decree or
judgment, relating to pollution or protection of human health, the environment (including,
without limitation, ambient air, surface water, groundwater, land surface or subsurface strata)
or wildlife, including, without limitation, laws and regulations relating to the release or
threatened release of chemicals, pollutants, contaminants, wastes, toxic substances, hazardous
substances, petroleum or petroleum products (collectively, “Hazardous Materials”) or to the
manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling
of Hazardous Materials (collectively, “Environmental Laws”), (ii) the Company and its
subsidiaries have all permits, authorizations and approvals required under any applicable
Environmental Laws and
- 14 -
are each in compliance with their requirements, (iii) there are no
pending or threatened administrative, regulatory or judicial actions, suits, demands, demand
letters, claims, liens, notices of noncompliance or violation, investigation or proceedings
relating to any Environmental Law against the Company or any of its subsidiaries and (iv) there
are no events or circumstances that might reasonably be expected to form the basis of an order
for clean-up or remediation, or an action, suit or proceeding by any private party or
governmental body or agency, against or affecting the Company or any of its subsidiaries
relating to Hazardous Materials or any Environmental Laws.
(nn) Periodic Review of Costs of Environmental Compliance. In the ordinary course of its
business, the Company will conduct a periodic review of the effect of Environmental Laws on the
business, operations and properties of the Company and its subsidiaries, in the course of which
it will identify and evaluate associated costs and liabilities (including, without limitation,
any capital or operating expenditures required for clean-up, closure of properties or
compliance with Environmental Laws or any permit, license or approval, any related constraints
on operating activities and any potential liabilities to third parties). On the basis of such
review and the amount of any established reserves, the Company will reasonably be able to
conclude that such associated costs and liabilities would not, individually or in the
aggregate, result in a Material Adverse Change.
(oo) ERISA Compliance. The Company and its subsidiaries and any “employee benefit plan”
(as defined under the Employee Retirement Income Security Act of 1974, as amended, and the
regulations and published interpretations thereunder (collectively, “ERISA”)) established or
maintained by the Company, its subsidiaries or their “ERISA Affiliates” (as defined below) are
in compliance in all material respects with ERISA. “ERISA Affiliate” means, with respect to
the Company or a subsidiary, any member of any group of organizations described in
Sections 414(b),(c),(m) or (o) of the Internal Revenue Code of 1986, as amended, and the
regulations and published interpretations thereunder (the “Code”) of which the Company or such
subsidiary is a member. No “reportable event” (as defined under ERISA) has occurred or is
reasonably expected to occur with respect to any “employee benefit plan” established or
maintained by the Company, its subsidiaries or any of their ERISA Affiliates. No “employee
benefit plan” established or maintained by the Company, its subsidiaries or any of their ERISA
Affiliates, if such “employee benefit plan” were
terminated, would have any “amount of unfunded benefit liabilities” (as defined under
ERISA). Neither the Company, its subsidiaries nor any of their ERISA Affiliates has incurred
or reasonably expects to incur any liability under (i) Title IV of ERISA with respect to
termination of, or withdrawal from, any “employee benefit plan” or (ii) Sections 412, 4971,
4975 or 4980B of the Code. Each “employee benefit plan” established or maintained by the
Company, its subsidiaries or any of their ERISA Affiliates that is intended to be qualified
under Section 401(a) of the Code is so qualified and nothing has occurred, whether by action or
failure to act, which would cause the loss of such qualification.
(pp) Brokers. Except for the underwriting discounts and commissions payable to the
Underwriters as described in the Time of Sale Prospectus, there is no broker, finder or other
party that is entitled to receive from the Company any brokerage or finder’s fee or other fee
or commission as a result of any transactions contemplated by this Agreement.
(qq) No Outstanding Loans or Other Extensions of Credit. Since the adoption of Section
13(k) of the Exchange Act, neither the Company nor any of its subsidiaries has extended or
maintained credit, arranged for the extension of credit, or renewed any extension of credit, in
the form of a personal loan, to or for any director or executive officer (or equivalent
thereof)
- 15 -
of the Company and/or such subsidiary except for such extensions of credit as are
expressly permitted by Section 13(k) of the Exchange Act.
(rr) Compliance with Laws. The Company has not been advised, and has no reason to
believe, that it and each of its subsidiaries are not conducting business in compliance with
all applicable laws, rules and regulations of the jurisdictions in which it is conducting
business, except where failure to be so in compliance would not result in a Material Adverse
Change.
(ss) Directed Share Program. (i) The Registration Statement, the Prospectus, the Time of
Sale Prospectus and any preliminary prospectus comply, and any further amendments or
supplements thereto will comply, with any applicable laws or regulations of foreign
jurisdictions in which the Prospectus, Time of Sale Prospectus or any preliminary prospectus,
as amended or supplemented, if applicable, are distributed in connection with the Directed
Share Program, and (ii) no authorization, approval, consent, license, order registration or
qualification of or with any government, governmental instrumentality or court, other than such
as have been obtained, is necessary under the securities laws and regulations of foreign
jurisdictions in which the Directed Shares are offered outside the United States. The Company
has not offered, or caused the Underwriters to offer, any Offered Shares to any person pursuant
to the Directed Share Program with the intent to unlawfully influence (i) a customer or
supplier of the Company to alter the customer’s or supplier’s level or type of business with
the Company or (ii) a trade journalist or publication to write or publish favorable information
about the Company or its products.
(tt) Dividend Restrictions. No subsidiary of the Company is prohibited or restricted, directly or indirectly, from
paying dividends to the Company, or from making any other distribution with respect to such
subsidiary’s equity securities or from repaying to the Company or any other subsidiary of the
Company any amounts that may from time to time become due under any loans or advances to such
subsidiary from the Company or from transferring any property or assets to the Company or to
any other subsidiary.
(uu) Compliance with Applicable Health Care Laws. Except as would not, individually or in
the aggregate, result in a Material Adverse Change, (A) the Company, the Operating Partnership
and the subsidiaries have timely filed all claims and reports required to be filed prior to the
date of this Agreement with respect to the Government Programs, all fiscal intermediaries
and/or carriers and other private payors, and (B) all such claims and reports are complete and
accurate and have been prepared in compliance with all applicable Health Care Laws (as defined
below) governing reimbursement and payment claims. Except as would not, individually or in the
aggregate, result in a Material Adverse Change, the Company, the Operating Partnership and the
subsidiaries have paid or caused to be paid all known and undisputed refunds, overpayments,
discounts or adjustments which have become due pursuant to such claims and reports, and have
not, to the knowledge of the Company and the Operating Partnership, claimed or received
reimbursement from any Government Program or any private payor in excess of the amounts
permitted by applicable law.
“Health Care Laws” means all federal statutes, regulations, rules and other program
requirements relating to the operation of a skilled nursing facility or relating to other
current health care operations of the Company or its subsidiaries. These laws include, but are
not limited to, the federal Medicare and Medicaid statutes (which include, but are not limited
to, Sections 1320a 7a, 1320a 7b and 1395nn of Title 42 of the United States Code), the Federal
CHAMPUS/TRICARE statute, the Federal False Claims Act (31 U.S.C. §3729), and the regulations
promulgated pursuant to such federal statutes.
- 16 -
(vv) Foreign Corrupt Practices Act. Neither the Company nor any of its subsidiaries nor,
to the knowledge of the Company and the Operating Partnership, any director, officer, agent,
employee, affiliate or other person acting on behalf of the Company or any of its subsidiaries
is aware of or has taken any action, directly or indirectly, that has resulted or would result
in a violation of the Foreign Corrupt Practices Act of 1977, as amended, and the rules and
regulations thereunder (the “FCPA”), including, without limitation, making use of the mails or
any means or instrumentality of interstate commerce corruptly in furtherance of an offer,
payment, promise to pay or authorization of the payment of any money, or other property, gift,
promise to give, or authorization of the giving of anything of value to any “foreign official”
(as such term is defined in the FCPA) or any foreign political party or official thereof or any
candidate for foreign political office, in contravention of the FCPA; and the Company and its
subsidiaries and, to the knowledge of the Company and the Operating Partnership, the Company’s
affiliates have conducted their respective businesses in compliance with the FCPA and have
instituted and maintain policies and procedures designed to ensure, and which are reasonably
expected to continue to ensure, continued compliance therewith.
(ww) Money Laundering Laws. The operations of the Company and its subsidiaries are, and
have been conducted at all times, in compliance with applicable financial recordkeeping and
reporting
requirements of the Currency and Foreign Transactions Reporting Act of 1970, as amended,
the money laundering statutes of all applicable jurisdictions, the rules and regulations
thereunder and any related or similar applicable rules, regulations or guidelines, issued,
administered or enforced by any governmental agency (collectively, the “Money Laundering Laws”)
and no action, suit or proceeding by or before any court or governmental agency, authority or
body or any arbitrator involving the Company or any of its subsidiaries with respect to the
Money Laundering Laws is pending or, to the best knowledge of the Company and the Operating
Partnership, threatened.
(xx) OFAC. Neither the Company nor any of its subsidiaries nor, to the knowledge of the
Company and the Operating Partnership, any director, officer, agent, employee, affiliate or
person acting on behalf of the Company or any of its subsidiaries is currently subject to any
U.S. sanctions administered by the Office of Foreign Assets Control of the U.S. Treasury
Department (“OFAC”); and the Company will not directly or indirectly use the proceeds of this
offering, or lend, contribute or otherwise make available such proceeds to any subsidiary,
joint venture partner or other person or entity, for the purpose of financing the activities of
any person currently subject to any U.S. sanctions administered by OFAC.
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 and the Operating Partnership to each Underwriter as
to the matters covered thereby.
Each of the Company and the Operating Partnership acknowledges that the Underwriters and,
for purposes of the opinions to be delivered pursuant to Section 6 hereof, counsel to the
Company and counsel to the Underwriters, will rely upon the accuracy and truthfulness of the
foregoing representations and hereby consents to such reliance.
Section 2. Purchase, Sale and Delivery of the Offered Shares.
(a) The Firm Shares. Upon the terms herein set forth, (i) the Company agrees to issue
and sell to the several Underwriters an aggregate of [___] Firm Shares. On the basis of the
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representations, warranties and agreements herein contained, and upon the terms but subject to
the conditions herein set forth, the Underwriters agree, severally and not jointly, to purchase
from the Company the respective number of Firm Shares set forth opposite their names on
Schedule A. The purchase price per Firm Share to be paid by the several Underwriters to the
Company shall be $[ ] per share.
(b) The First Closing Date. Delivery of certificates for the Firm Shares to be purchased
by the Underwriters and payment therefor shall be made at the offices of Jefferies, 000 Xxxxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx (or such other place as may be agreed to by the Company and the
Representatives) at 9:00 a.m. New York time, on [___], or such other time and date not later
than 1:30 p.m. New York time, on [___] as the Representatives shall designate by
notice to the Company (the time and date of such closing are called the “First Closing
Date”). The Company hereby acknowledges that circumstances under which the Representatives may
provide notice to postpone the First Closing Date as originally scheduled include, but are in
no way limited to, any determination by the Company or the Representatives to recirculate to
the public copies of an amended or supplemented Prospectus or a delay as contemplated by the
provisions of Section 11.
(c) The Optional Shares; Option Closing Date. In addition, on the basis of the
representations, warranties and agreements herein contained, and upon the terms but subject to
the conditions herein set forth, the Company hereby grants an option to the several
Underwriters to purchase, severally and not jointly, up to an aggregate of [___] Optional
Shares from the Company at the purchase price per share to be paid by the Underwriters for the
Firm Shares. The option granted hereunder is for use by the Underwriters solely in covering
any over-allotments in connection with the sale and distribution of the Firm Shares. The
option granted hereunder may be exercised at any time and from time to time in whole or in part
upon notice by the Representatives to the Company, which notice may be given at any time within
30 days from the date of this Agreement. Such notice shall set forth (i) the aggregate number
of Optional Shares as to which the Underwriters are exercising the option, (ii) the names and
denominations in which the certificates for the Optional Shares are to be registered and
(iii) the time, date and place at which such certificates will be delivered (which time and
date may be simultaneous with, but not earlier than, the First Closing Date; and in the event
that such time and date are simultaneous with the First Closing Date, the term “First Closing
Date” shall refer to the time and date of delivery of certificates for the Firm Shares and such
Optional Shares). Any such time and date of delivery, if subsequent to the First Closing Date,
is called an “Option Closing Date” and shall be determined by the Representatives and shall not
be earlier than three nor later than five full business days after delivery of such notice of
exercise. If any Optional Shares are to be purchased, each Underwriter agrees, severally and
not jointly, to purchase the number of Optional Shares (subject to such adjustments to
eliminate fractional shares as the Representatives may determine) that bears the same
proportion to the total number of Optional Shares to be purchased as the number of Firm Shares
set forth on Schedule A opposite the name of such Underwriter bears to the total number of Firm
Shares. The Representatives may cancel the option at any time prior to its expiration by giving
written notice of such cancellation to the Company.
(d) Public Offering of the Offered Shares. The Representatives hereby advise the Company
that the Underwriters intend to offer for sale to the public, initially on the terms set forth
in the Time of Sale Prospectus and the Prospectus, their respective portions of the Offered
Shares as soon after this Agreement has been executed and the Registration
- 18 -
Statement has been
declared effective as the Representatives, in their sole judgment, have determined is advisable
and practicable.
(e) Payment for the Offered Shares. Payment for the Offered Shares shall be made at the
First Closing Date (and, if applicable, at each Option Closing Date) by wire transfer of
immediately available funds to the order of the Company.
It is understood that the Representatives have been authorized, for their own account and
the accounts of the several Underwriters, to accept delivery of and receipt for, and make
payment of the purchase price for, the Firm Shares and any Optional Shares the Underwriters
have agreed to purchase. Jefferies, individually and not as a Representative of the
Underwriters, may (but shall not be obligated to) make payment for any Offered Shares to be
purchased by any Underwriter whose funds shall not have been received by the Representatives by
the First Closing Date or the applicable Option Closing Date, as the case may be, for the
account of such Underwriter, but any such payment shall not relieve such Underwriter from any
of its obligations under this Agreement.
(f) Delivery of the Offered Shares. The Company shall deliver, or cause to be delivered,
to the Representatives for the accounts of the several Underwriters certificates for the Firm
Shares at the First Closing Date, against the irrevocable release of a wire transfer of
immediately available funds for the amount of the purchase price therefor. The Company shall
also deliver, or cause to be delivered, to the Representatives for the accounts of the several
Underwriters, certificates for the Optional Shares the Underwriters have agreed to purchase at
the First Closing Date or the applicable Option Closing Date, as the case may be, against the
irrevocable release of a wire transfer of immediately available funds for the amount of the
purchase price therefor. The certificates for the Offered Shares shall be in definitive form
and registered in such names and denominations as the Representatives shall have requested at
least two full business days prior to the First Closing Date (or the applicable Option Closing
Date, as the case may be) and shall be made available for inspection on the business day
preceding the First Closing Date (or the applicable Option Closing Date, as the case may be) at
a location in New York City as the Representatives may designate. Time shall be of the
essence, and delivery at the time and place specified in this Agreement is a further condition
to the obligations of the Underwriters.
Section 3. Additional Covenants of the Company and the Operating Partnership.
Each of the Company and the Operating Partnership further covenants and agrees with each
Underwriter as follows:
(a) Delivery of Registration Statement, Time of Sale Prospectus and Prospectus. The
Company shall furnish to you, without charge, three copies of the Registration Statement, any
amendments thereto and any Rule 462(b) Registration Statement (including exhibits thereto) and
for delivery to each other Underwriter a conformed copy of the Registration Statement, any
amendments thereto and any Rule 462(b) Registration Statement (without exhibits thereto) and
shall furnish to you in New York City, without charge, prior to 10:00 a.m. New York City time
on the business day next succeeding the date of this Agreement and during the period mentioned
in Section 3(e) or 3(f) below, as many copies of the Time of Sale Prospectus, the Prospectus
and any supplements and amendments thereto or to the Registration Statement as you may
reasonably request.
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(b) Representatives’ Review of Proposed Amendments and Supplements. Prior to amending or supplementing the Registration Statement (including any
registration statement filed under Rule 462(b) under the Securities Act), any preliminary
prospectus, the Time of Sale Prospectus or the Prospectus, the Company shall furnish to the
Representatives for review, a reasonable amount of time prior to the proposed time of filing or
use thereof, a copy of each such proposed amendment or supplement, and the Company shall not
file or use any such proposed amendment or supplement without the Representatives’ consent, and
to file with the Commission within the applicable period specified in Rule 424(b) under the
Securities Act any prospectus required to be filed pursuant to such Rule.
(c) Free Writing Prospectuses. The Company shall furnish to the Representatives for
review, a reasonable amount of time prior to the proposed time of filing or use thereof, a copy
of each proposed free writing prospectus or any amendment or supplement thereto to be prepared
by or on behalf of, used by, or referred to by the Company and the Company shall not file, use
or refer to any proposed free writing prospectus or any amendment or supplement thereto without
the Representatives’ consent. The Company shall furnish to each Underwriter, without charge,
as many copies of any free writing prospectus prepared by or on behalf of, or used by the
Company, as such Underwriter may reasonably request. If at any time when a prospectus is
required by the Securities Act (including, without limitation, pursuant to Rule 173(d)) to be
delivered in connection with sales of the Offered Shares (but in any event if at any time
through and including the First Closing Date) there occurred or occurs an event or development
as a result of which any free writing prospectus prepared by or on behalf of, used by, or
referred to by the Company conflicted or would conflict with the information contained in the
Registration Statement or included or would include an untrue statement of a material fact or
omitted or would omit to state a material fact necessary in order to make the statements
therein, in the light of the circumstances prevailing at that subsequent time, not misleading,
the Company shall promptly amend or supplement such free writing prospectus to eliminate or
correct such conflict or so that the statements in such free writing prospectus as so amended
or supplemented 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 prevailing at such subsequent time, not misleading, as the case may be; provided,
however, that prior to amending or supplementing any such free writing prospectus, the Company
shall furnish to the Representatives for review, a reasonable amount of time prior to the
proposed time of filing or use thereof, a copy of such proposed amended or supplemented free
writing prospectus and the Company shall not file, use or refer to any such amended or
supplemented free writing prospectus without the Representatives’ consent.
(d) Filing of Underwriter Free Writing Prospectuses. The Company shall not to take any
action that would result in an Underwriter or the Company being required to file with the
Commission pursuant to Rule 433(d) under the Securities Act a free writing prospectus prepared
by or on behalf of the Underwriter that the Underwriter otherwise would not have been required
to file thereunder.
(e) Amendments and Supplements to Time of Sale Prospectus. If the Time of Sale Prospectus
is being used to solicit offers to buy the Shares at a time when the Prospectus is not yet
available to prospective purchasers and any event shall occur or condition exist as a result of
which it is necessary to amend or
supplement the Time of Sale Prospectus so that the Time of Sale Prospectus does 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 when delivered to a
prospective purchaser, not misleading, or if any event shall
- 20 -
occur or condition exist as a
result of which the Time of Sale Prospectus conflicts with the information contained in the
Registration Statement, or if, in the opinion of counsel for the Underwriters, it is necessary
to amend or supplement the Time of Sale Prospectus to comply with applicable law, including the
Securities Act, the Company shall (subject to Sections 3(b) and 3(c)) forthwith prepare, file
with the Commission and furnish, at its own expense, to the Underwriters and to any dealer upon
request, either amendments or supplements to the Time of Sale Prospectus so that the statements
in the Time of Sale Prospectus as so amended or supplemented 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 when delivered to a prospective
purchaser, not misleading or so that the Time of Sale Prospectus, as amended or supplemented,
will no longer conflict with the Registration Statement, or so that the Time of Sale
Prospectus, as amended or supplemented, will comply with applicable law including the
Securities Act.
(f) Securities Act Compliance. After the date of this Agreement, the Company shall
promptly advise the Representatives in writing (i) of the receipt of any comments of, or
requests for additional or supplemental information from, the Commission, (ii) of the time and
date of any filing of any post-effective amendment to the Registration Statement, any Rule
462(b) Registration Statement or any amendment or supplement to any preliminary prospectus, the
Time of Sale Prospectus, any free writing prospectus or the Prospectus, (iii) of the time and
date that any post-effective amendment to the Registration Statement or any Rule 462(b)
Registration Statement becomes effective and (iv) of the issuance by the Commission of any stop
order suspending the effectiveness of the Registration Statement or any post-effective
amendment thereto, any Rule 462(b) Registration Statement or any amendment or supplement to any
Preliminary Prospectus, the Time of Sale Prospectus or the Prospectus or of any order
preventing or suspending the use of any preliminary prospectus, the Time of Sale Prospectus,
any free writing prospectus or the Prospectus, or of any proceedings to remove, suspend or
terminate from listing or quotation the Shares from any securities exchange upon which they are
listed for trading or included or designated for quotation, or of the threatening or initiation
of any proceedings for any of such purposes. If the Commission shall enter any such stop order
at any time, the Company will use its best efforts to obtain the lifting of such order at the
earliest possible moment. Additionally, the Company agrees that it shall comply with the
provisions of Rule 424(b), Rule 433 and Rule 430A, as applicable, under the Securities Act and
will use its reasonable efforts to confirm that any filings made by the Company under such Rule
424(b) or Rule 433 were received in a timely manner by the Commission.
(g) Amendments and Supplements to the Prospectus and Other Securities Act Matters. If any
event shall occur or condition exist as a result of which it is necessary to amend or
supplement the Prospectus so that the Prospectus does 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 when the Prospectus is delivered to a purchaser, not
misleading, or if in the opinion of the Representatives or counsel for the Underwriters it is
otherwise necessary to amend or supplement the Prospectus to comply with applicable law,
including the Securities Act, the Company agrees (subject to Section 3(b) and
3(c)) to promptly prepare, file with the Commission and furnish at its own expense to the
Underwriters and to dealers, amendments or supplements to the Prospectus so that the statements
in the Prospectus as so amended or supplemented will not 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 when the Prospectus is delivered to a purchaser, be
misleading or so that the Prospectus, as amended or supplemented, will comply
- 21 -
with applicable
law including the Securities Act. Neither the Representatives’ consent to, or delivery of, any
such amendment or supplement shall constitute a waiver of any of the Company’s obligations
under Sections 3(b) or (c).
(h) Blue Sky Compliance. The Company shall cooperate with the Representatives and counsel
for the Underwriters to qualify or register the Offered Shares for sale under (or obtain
exemptions from the application of) the state securities or blue sky laws or Canadian
provincial securities laws (or other foreign laws) of those jurisdictions designated by the
Representatives, shall comply with such laws and shall continue such qualifications,
registrations and exemptions in effect so long as required for the distribution of the Offered
Shares. The Company shall not be required to qualify as a foreign corporation or to take any
action that would subject it to general service of process in any such jurisdiction where it is
not presently qualified or where it would be subject to taxation as a foreign corporation. The
Company will advise the Representatives promptly of the suspension of the qualification or
registration of (or any such exemption relating to) the Offered Shares for offering, sale or
trading in any jurisdiction or any initiation or threat of any proceeding for any such purpose,
and in the event of the issuance of any order suspending such qualification, registration or
exemption, the Company shall use its best efforts to obtain the withdrawal thereof at the
earliest possible moment.
(i) Use of Proceeds. The Company shall apply the net proceeds from the sale of the
Offered Shares sold by it in the manner described under the caption “Use of Proceeds” in each
Applicable Prospectus.
(j) Transfer Agent. The Company shall engage and maintain, at its expense, a registrar
and transfer agent for the Shares.
(k) Earnings Statement. As soon as practicable, but in any event no later than twelve
months after the date of this Agreement, the Company will make generally available to its
security holders and to the Representatives an earnings statement (which need not be audited)
covering a period of at least twelve months beginning with the first fiscal quarter of the
Company occurring after the date of this Agreement which shall satisfy the provisions of
Section 11(a) of the Securities Act and the rules and regulations of the Commission thereunder.
(l) Periodic Reporting Obligations. The Company shall file, on a timely basis, with the Commission and the New York Stock
Exchange all reports and documents required to be filed under the Exchange Act. Additionally,
the Company shall report the use of proceeds from the issuance of the Offered Shares as may be
required under Rule 463 under the Securities Act.
(m) Directed Share Program. In connection with the Directed Share Program, the Company
will ensure that the Directed Shares will be restricted to the extent required by the FINRA or
the FINRA rules from sale, transfer, assignment, pledge or hypothecation for a period of three
months following the date of the effectiveness of the Registration Statement. Jefferies will
notify the Company as to which Participants will need to be so restricted. The Company will
direct the transfer agent to place stop transfer restrictions upon such securities for such
period of time. Should the Company release, or seek to release, from such restrictions any of
the Directed Shares, the Company agrees to reimburse the Underwriters for any reasonable
expenses (including, without limitation, legal expenses) they incur in connection with such
release.
- 22 -
(n) Listing. The Company will use its best efforts to list, subject to notice of
issuance, the Offered Shares on the New York Stock Exchange and to maintain the listing of the
Shares on the New York Stock Exchange.
(o) Company to Provide Copy of the Prospectus in Form That May be Downloaded from the
Internet. The Company shall cause to be prepared and delivered, at its expense, within one
business day from the effective date of this Agreement, to Jefferies an “electronic Prospectus”
to be used by the Underwriters in connection with the offering and sale of the Offered Shares.
As used herein, the term “electronic Prospectus” means a form of Time of Sale Prospectus, and
any amendment or supplement thereto, that meets each of the following conditions: (i) it shall
be encoded in an electronic format, satisfactory to Jefferies, that may be transmitted
electronically by Jefferies and the other Underwriters to offerees and purchasers of the
Offered Shares; (ii) it shall disclose the same information as the paper Time of Sale
Prospectus, except to the extent that graphic and image material cannot be disseminated
electronically, in which case such graphic and image material shall be replaced in the
electronic Prospectus with a fair and accurate narrative description or tabular representation
of such material, as appropriate; and (iii) it shall be in or convertible into a paper format
or an electronic format, satisfactory to Jefferies, that will allow investors to store and have
continuously ready access to the Time of Sale Prospectus at any future time, without charge to
investors (other than any fee charged for subscription to the Internet as a whole and for
on-line time). The Company hereby confirms that it has included or will include in the
Prospectus filed pursuant to XXXXX or otherwise with the Commission and in the Registration
Statement at the time it was declared effective an undertaking that, upon receipt of a request
by an investor or his or her representative, the Company shall transmit or cause to be
transmitted promptly, without charge, a paper copy of the Time of Sale Prospectus.
(p) Agreement Not to Offer or Sell Additional Shares. During the period commencing on and including the date hereof and ending on and including
the 180th day following the date of the Prospectus (as the same may be extended as described
below, the “Lock-up Period”), the Company will not, without the prior written consent of
Jefferies (which consent may be withheld at the sole discretion of Jefferies), directly or
indirectly, sell (including, without limitation, any short sale), offer, contract or grant any
option to sell, pledge, transfer or establish an open “put equivalent position” within the
meaning of Rule 16a-1(h) under the Exchange Act, or otherwise dispose of or transfer, or
announce the offering of, or file any registration statement under the Securities Act in
respect of, any Shares, options, rights or warrants to acquire Shares or securities
exchangeable or exercisable for or convertible into Shares, including without limitation, OP
Units (other than as contemplated by this Agreement with respect to the Offered Shares) or
publicly announce the intention to do any of the foregoing; provided, however, that the Company
may issue Shares or options to purchase Shares, or issue Shares upon exercise of options,
pursuant to any stock option, stock bonus or other stock plan or arrangement described in each
Applicable Prospectus, but only if the holders of such shares, options, or shares issued upon
exercise of such options, agree in writing not to sell, offer, dispose of or otherwise transfer
any such shares or options during such Lock-up Period without the prior written consent of
Jefferies (which consent may be withheld at the sole discretion of Jefferies). Notwithstanding
the foregoing, if (i) during the last 17 days of the Lock-up Period, the Company issues an
earnings release or material news or a material event relating to the Company occurs or (ii)
prior to the expiration of the Lock-up Period, the Company announces that it will release
earnings results during the 16-day period beginning on the last day of the Lock-up Period, then
in each case the Lock-up Period will be extended until the expiration of the 18-day period
beginning on the date of the issuance of the earnings release or the occurrence of the material
news or material event, as
- 23 -
applicable, unless Jefferies waives, in writing, such extension
(which waiver may be withheld at the sole discretion of Jefferies), except that such extension
will not apply if, (i) within three business days prior to the 15th calendar day before the
last day of the Lock-up Period, the Company delivers a certificate, signed by the Chief
Financial Officer or Chief Executive Officer of the Company, certifying on behalf of the
Company that (i) the Shares are “actively traded securities” (as defined in Regulation M), (ii)
the Company meets the applicable requirements of paragraph (a)(1) of Rule 139 under the
Securities Act in the manner contemplated by NASD Conduct Rule 2711(f)(4) of FINRA, and (iii)
the provisions of NASD Conduct Rule 2711(f)(4) of FINRA are not applicable to any research
reports relating to the Company published or distributed by any of the Underwriters during the
15 days before or after the last day of the Lock-up Period (before giving effect to such
extension). The Company will provide the Representatives with prior notice of any such
announcement that gives rise to an extension of the Lock-up Period.
(q) Future Reports to the Representative. During the period of three years hereafter the
Company will furnish to Jefferies at 000 Xxxxxxx Xxxxxx, Xxx Xxxx,
Xxx Xxxx 00000, Attention:
Xxxxx Xxxxxxx: (i) as soon as practicable after the end of each fiscal year,
copies of the Annual Report of the Company containing the balance sheet of the Company as of
the close of such fiscal year and statements of income, stockholders’ equity and cash flows for
the year then ended and the opinion thereon of the Company’s independent public or certified
public accountants; (ii) as soon as practicable after the filing thereof, copies of each proxy
statement, Annual Report on Form 10-K, Quarterly Report on Form 10-Q, Current Report on Form
8-K containing historical or pro forma financial statements filed by the Company with the Commission; and (iii) as soon as available,
copies of any report or communication of the Company mailed generally to holders of its
capital stock.
(r) Investment Limitation. The Company shall not invest, or otherwise use the proceeds
received by the Company from its sale of the Offered Shares in such a manner as would require
the Company or any of its subsidiaries to register as an investment company under the
Investment Company Act.
(s) No Stabilization or Manipulation; Compliance with Regulation M. The Company will not
take, directly or indirectly, any action designed to or that might be reasonably expected to
cause or result in stabilization or manipulation of the price of the Shares or any other
reference security, whether to facilitate the sale or resale of the Offered Shares or
otherwise, and the Company will, and shall cause each of its affiliates to, comply with all
applicable provisions of Regulation M. If the limitations of Rule 102 of Regulation M (“Rule
102”) do not apply with respect to the Offered Shares or any other reference security pursuant
to any exception set forth in Section (d) of Rule 102, then promptly upon notice from the
Representatives (or, if later, at the time stated in the notice), the Company will, and shall
cause each of its affiliates to, comply with Rule 102 as though such exception were not
available but the other provisions of Rule 102 (as interpreted by the Commission) did apply.
(t) Existing Lock-Up Agreements. During the lock-up Period, the Company will enforce all
existing agreements between the Company and any of its security holders that prohibit the sale,
transfer, assignment, pledge or hypothecation of any of the Company’s securities in connection
with the Company’s initial public offering. In addition, the Company will direct the transfer
agent to place stop transfer restrictions upon any such securities of the Company that are
bound by such existing “lock-up” agreements for the duration of the periods contemplated in
such agreements, including, without limitation, “lock-up” agreements entered into by the
Company’s officers and directors pursuant to Section 6(h).
- 24 -
Jefferies, on behalf of the several Underwriters, may, in its sole discretion, waive in
writing the performance by the Company or the Operating Partnership or any one or more of the
foregoing covenants or extend the time for their performance.
Section 4. Payment of Expenses. The Company and the Operating Partnership agree to pay
all costs, fees and expenses incurred in connection with the performance of their obligations
hereunder and in connection with the transactions contemplated hereby, including without
limitation (i) all expenses incident to the issuance and delivery of the Offered Shares
(including all printing and engraving costs), (ii) all agreed upon fees and expenses of the
registrar and transfer agent of the Shares, (iii) all necessary issue, transfer and other stamp
taxes in connection with the issuance and sale of the Offered Shares to the Underwriters,
(iv) all fees and expenses of the Company’s counsel, independent public or certified public
accountants and other advisors, (v) all costs and expenses incurred in connection with the
preparation, printing, filing, shipping and distribution of the Registration Statement
(including financial statements,
exhibits, schedules, consents and certificates of experts), the Time of Sale Prospectus,
the Prospectus, any free writing prospectus prepared by or on behalf of, used by, or referred
to by the Company, and each preliminary prospectus, and all amendments and supplements thereto,
and this Agreement, (vi) all filing fees, attorneys’ fees and expenses incurred by the Company
or the Underwriters in connection with qualifying or registering (or obtaining exemptions from
the qualification or registration of) all or any part of the Offered Shares for offer and sale
under the state securities or blue sky laws or the provincial securities laws of Canada, and,
if requested by the Representatives, preparing and printing a “Blue Sky Survey” or memorandum
and a “Canadian wrapper”, and any supplements thereto, advising the Underwriters of such
qualifications, registrations, determinations and exemptions, (vii) the filing fees incident
to, and the reasonable fees and expenses of counsel for the Underwriters in connection with,
the FINRA’s review, if any, and approval of the Underwriters’ participation in the offering and
distribution of the Offered Shares, (viii) the costs and expenses of the Company relating to
investor presentations on any “road show” undertaken in connection with the marketing of the
offering of the Shares, including, without limitation, expenses associated with the preparation
or dissemination of any electronic road show, expenses associated with the production of road
show slides and graphics, fees and expenses of any consultants engaged in connection with the
road show presentations with the prior approval of the Company, travel and lodging expenses of
the representatives, employees and officers of the Company and of the Representatives and any
such consultants, and the cost of any aircraft chartered in connection with the road show,
(ix) the fees and expenses associated with listing the Shares on the New York Stock Exchange,
(ix) all other fees, costs and expenses of the nature referred to in Item 31 of Part II of the
Registration Statement, and (x) all costs and expenses of the Underwriters, including the fees
and disbursements of counsel for the Underwriters, in connection with matters related to the
Directed Shares which are designated by the Company for sale to Participants. Except as
provided in this Section 4, Section 7, Section 9 and Section 10 hereof, the Underwriters shall
pay their own expenses, including the fees and disbursements of their counsel.
Section 5. Covenant of the Underwriters. Each Underwriter severally and not jointly,
covenants with the Company not to take any action that would result in the Company being
required to file with the Commission pursuant to Rule 433(d) under the Securities Act a free
writing prospectus prepared by or on behalf of such Underwriter that otherwise would not be
required to be filed by the Company thereunder, but for the action of the Underwriter.
- 25 -
Section 6. Conditions of the Obligations of the Underwriters. The obligations of the
several Underwriters to purchase and pay for the Offered Shares as provided herein on the First
Closing Date and, with respect to the Optional Shares, each Option Closing Date, shall be
subject to the accuracy of the representations and warranties on the part of the Company and
the Operating Partnership set forth in Section 1 hereof as of the date hereof and as of the
First Closing Date as though then made and, with respect to the Optional Shares, as of each
Option Closing Date as though then made, to the timely performance by the Company and the
Operating Partnership of their respective covenants and other obligations hereunder, and to
each of the following additional conditions:
(a) Accountants’ Comfort Letters. On the date hereof, the Representatives shall have received from each of KPMG LLP,
independent public or certified public accountants for the Company and WSL Holdings IV LLC and
McGladrey and Xxxxxx LLP, independent public or certified public accountants for Senior
Lifestyle 2004 Portfolio and Senior Lifestyle Jupiter, L.P., (i) a letter dated the date hereof
addressed to the Underwriters, in form and substance satisfactory to the Representatives,
containing statements and information of the type ordinarily included in accountant’s “comfort
letters” to underwriters, delivered according to Statement of Auditing Standards No. 72 (or any
successor bulletin), with respect to the audited and unaudited financial statements and certain
financial information contained in the Registration Statement, Time of Sale Prospectus, and
each free writing prospectus, if any, and, with respect to each letter dated the date hereof
only, the Prospectus (and the Representatives shall have received an additional [___] conformed
copies of such accountants’ letter for each of the several Underwriters), and (ii) confirming
that they are (A) independent public or certified public accountants as required by the
Securities Act and (B) in compliance with the applicable requirements relating to the
qualification of accountants under Rule 2-01 of Regulation S-X.
(b) Compliance with Registration Requirements; No Stop Order; No Objection from FINRA.
For the period from and after effectiveness of this Agreement and prior to the First Closing
Date and, with respect to the Optional Shares, each Option Closing Date:
(i) the Company shall have filed the Prospectus with the Commission (including the
information required by Rule 430A under the Securities Act) in the manner and within the
time period required by Rule 424(b) under the Securities Act;
(ii) no stop order suspending the effectiveness of the Registration Statement, any
Rule 462(b) Registration Statement, or any post-effective amendment to the Registration
Statement, shall be in effect and no proceedings for such purpose shall have been
instituted or threatened by the Commission; and
(iii) FINRA shall have raised no objection to the fairness and reasonableness of the
underwriting terms and arrangements.
(c) No Material Adverse Change or Ratings Agency Change. For the period from and after
the date of this Agreement and through and including the First Closing Date and, with respect
to the Optional Shares, each Option Closing Date:
(i) in the judgment of the Representatives there shall not have occurred any Material
Adverse Change; and
- 26 -
(ii) there shall not have occurred any downgrading, nor shall any notice have been
given of any intended or potential downgrading or of any review for a possible change that
does not indicate the direction of the possible change, in the rating accorded any
securities of the Company or any of its subsidiaries by any “nationally recognized
statistical rating organization” as such term is defined for purposes of Rule 436(g)(2)
under the Securities Act.
(d) Opinion of Counsel for the Company. On each of the First Closing Date and each Option Closing Date the Representatives
shall have received (i) a corporate opinion, a negative assurance letter and a tax opinion of
Hunton & Xxxxxxxx LLP, counsel for the Company, dated as of such Closing Date, the forms of
which are attached as Exhibits X-0, X-0 xxx X-0, respectively, (ii) an opinion of Xxxxxxx LLP,
Maryland counsel for the Company, dated as of such Closing Date, the form of which is attached
as Exhibit B and (iii) an opinion of Broad & Xxxxxxx LLP, Florida counsel for the Company,
dated as of such Closing Date, the form of which is attached as Exhibit C and to such further
effect as counsel for the Underwriters shall reasonably request (and the Representatives shall
have received an additional [___] signed copies of such counsel’s legal opinion for each of the
several Underwriters).
(e) Opinion of Counsel for the Underwriters. On each of the First Closing Date and each
Option Closing Date the Representatives shall have received the opinion of Xxxxxxxx Chance US
LLP, counsel for the Underwriters, in form and substance satisfactory to the Underwriters,
dated as of such Closing Date.
(f) Officers’ Certificate. On each of the First Closing Date and each Option Closing Date
the Representatives shall have received a written certificate executed by the Chief Executive
Officer of the Company and the Chief Financial Officer of the Company, dated as of such Closing
Date, to the effect set forth in subsections (b)(ii) and (c)(ii) of this Section 6, and further
to the effect that:
(i) for the period from and including the date of this Agreement through and including
such Closing Date, there has not occurred any Material Adverse Change;
(ii) the representations, warranties and covenants of the Company and the Operating
Partnership set forth in Section 1 of this Agreement are true and correct with the same
force and effect as though expressly made on and as of such Closing Date; and
(iii) the Company and the Operating Partnership have complied with all the agreements
hereunder and satisfied all the conditions on their respective part to be performed or
satisfied hereunder at or prior to such Closing Date.
(g) Chief Financial Officer’s Certificate. On the date hereof and on each of the First
Closing Date and each Option Closing Date the Representatives shall have received a written
certificate executed by the Executive Vice President and Chief Financial Officer of the
Company, dated as of the date hereof and such Closing Date, respectively, the form of which is
attached as Exhibit F.
(h) Bring-down Comfort Letters. On each of the First Closing Date and each Option Closing
Date the Representatives shall have received from each of KPMG LLP, independent public or
certified public accountants for the Company and WSL Holdings IV LLC and McGladrey and Xxxxxx
LLP, independent public or certified public accountants for Senior
- 27 -
Lifestyle 2004 Portfolio and Senior Lifestyle Jupiter, L.P., a letter dated such date, in
form and substance satisfactory to the Representatives, to the effect that they reaffirm the
statements made in the letter furnished by them pursuant to subsection (a) of this Section 6,
except that the specified date referred to therein for the carrying out of procedures shall be
no more than three business days prior to the First Closing Date or the applicable Option
Closing Date, as the case may be (and the Representatives shall have received an additional
[ ] conformed copies of such accountants’ letter for each of the several Underwriters).
(i) Lock-Up Agreement from Certain Securityholders of the Company. On or prior to the
date hereof, the Company shall have furnished to the Representatives and agreement in the form
of Exhibit E hereto from the persons listed on Exhibit D hereto, and such agreement shall be in
full force and effect on each of the First Closing Date and each Option Closing Date.
(j) Private Placement. Prior to the First Closing Date, the Representatives and counsel
for the Underwriters shall have received satisfactory evidence of completion of the Concurrent
Private Placement.
(k) Additional Documents. On or before each of the First Closing Date and each Option
Closing Date, the Representatives and counsel for the Underwriters shall have received such
information, documents and opinions as they may reasonably request for the purposes of enabling
them to pass upon the issuance and sale of the Offered Shares as contemplated herein, or in
order to evidence the accuracy of any of the representations and warranties, or the
satisfaction of any of the conditions or agreements, herein contained; and all proceedings
taken by the Company and the Operating Partnership in connection with the issuance and sale of
the Offered Shares as contemplated herein and in connection with the other transactions
contemplated by this Agreement shall be satisfactory in form and substance to the
Representatives and counsel for the Underwriters.
If any condition specified in this Section 6 is not satisfied when and as required to be
satisfied, this Agreement may be terminated by the Representatives by notice to the Company at
any time on or prior to the First Closing Date and, with respect to the Optional Shares, at any
time on or prior to the applicable Option Closing Date, which termination shall be without
liability on the part of any party to any other party, except that Section 4, Section 6,
Section 8 and Section 9 shall at all times be effective and shall survive such termination.
Section 7. Reimbursement of Underwriters’ Expenses. If this Agreement is terminated by
the Representatives pursuant to Section 6, Section 8 or Section 12, or if the sale
to the Underwriters of the Offered Shares on the First Closing Date is not consummated because
of any refusal, inability or failure on the part of the Company or the Operating Partnership to
perform any agreement herein or to comply with any provision hereof, the Company and the
Operating Partnership agree to reimburse the Representatives and the other Underwriters (or
such Underwriters as have terminated this Agreement with respect to themselves), severally,
upon demand for all out-of-pocket expenses that shall have been reasonably incurred by the
Representatives and the Underwriters in connection with the proposed purchase and the offering
and sale of the Offered Shares, including but not limited to fees and disbursements of counsel,
printing expenses, travel expenses, postage, facsimile and telephone
charges.
- 28 -
Section 8. Effectiveness of this Agreement. This Agreement shall not become effective
until the later of (i) the execution of this Agreement by the parties hereto and
(ii) notification by the Commission to the Company and the Representatives of the effectiveness
of the Registration Statement under the Securities Act. Prior to such effectiveness, this
Agreement may be terminated by any party by notice to each of the other parties hereto, and any
such termination shall be without liability on the part of (a) the Company to any Underwriter,
except that the Company and the Operating Partnership shall be obligated to reimburse the
expenses of the Representatives and the Underwriters pursuant to Sections 4 and 7 hereof,
(b) of any Underwriter to the Company, or (c) of any party hereto to any other party except
that the provisions of Section 9 and Section 10 shall at all times be effective and shall
survive such termination.
Section 9. Indemnification.
(a) Indemnification of the Underwriters. Each of the Company and the Operating
Partnership, jointly and severally, agrees to indemnify and hold harmless each Underwriter, its
officers and employees, and each person, if any, who controls any Underwriter within the
meaning of the Securities Act or the Exchange Act against any loss, claim, damage, liability or
expense, as incurred, to which such Underwriter or such officer, employee or controlling person
may become subject, under the Securities Act, the Exchange Act, other federal or state
statutory law or regulation, or the laws or regulations of foreign jurisdictions where Offered
Shares have been offered or sold or at common law or otherwise (including in settlement of any
litigation), insofar as such loss, claim, damage, liability or expense (or actions in respect
thereof as contemplated below) arises out of or is based upon:
(A) (i) any untrue statement or alleged untrue statement of a material fact contained in
the Registration Statement, or any amendment thereto, including any information deemed to be a
part thereof pursuant to Rule 430A under the Securities Act, or the omission or alleged
omission therefrom of a material fact required to be stated therein or necessary to make the
statements therein not misleading; or (ii) any untrue statement or alleged untrue statement of
a material fact contained in any preliminary prospectus, the Time of Sale Prospectus, any free
writing prospectus, any Road Show, that the Company has used, referred to or filed, or is
required to file, pursuant to Rule 433(d) of the Securities Act or the Prospectus (or any
amendment or supplement thereto) or any prospectus wrapper material distributed in Canada in
connection with the reservation and sale of Directed Shares to the Participants, 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; or (iii) any act or failure to act or any alleged act or failure to act by any
Underwriter in connection with, or relating in any manner to, the Shares or the offering
contemplated hereby, and which is included as part of or referred to in any loss, claim,
damage, liability or action arising out of or based upon any matter covered by clause (i) or
(ii) above, provided that the Company and the Operating Partnership shall not be liable under
this clause (iii) to the extent that a court of competent jurisdiction shall have determined by
a final judgment that such loss, claim, damage, liability or action resulted directly from any
such acts or failures to act undertaken or omitted to be taken by such Underwriter through its
bad faith or willful misconduct; or
- 29 -
(B) the violation by the Company or the Operating Partnership of any laws or regulations
of foreign jurisdictions where Offered Shares have been offered or sold;
and to reimburse each Underwriter and each such officer, employee and controlling person for
any and all expenses (including the fees and disbursements of counsel chosen by Jefferies) as
such expenses are reasonably incurred by such Underwriter or such officer, employee or
controlling person in connection with investigating, defending, settling, compromising or
paying any such loss, claim, damage, liability, expense or action; provided, however, that the
foregoing indemnity agreement shall not apply to any loss, claim, damage, liability or expense
to the extent, but only to the extent, arising out of or based upon any untrue statement or
alleged untrue statement or omission or alleged omission made in reliance upon and in
conformity with written information furnished to the Company by the Representatives expressly
for use in the Registration Statement, any preliminary prospectus, the Time of Sale Prospectus,
any Road Show, any such free writing prospectus or the Prospectus (or any amendment or
supplement thereto), it being understood and agreed that the only such information furnished by
the Representatives to the Company consists of the information described in subsection (b)
below. The indemnity agreement set forth in this Section 9(a) shall be in addition to any
liabilities that the Company and the Operating Partnership may otherwise have.
(b) Indemnification of the Company, its Directors and Officers and the Operating
Partnership. Each Underwriter agrees, severally and not jointly, to indemnify and hold
harmless the Company, each of its directors, each of its officers who signed the Registration
Statement, the Operating Partnership and each person, if any, who controls the Company within
the meaning of the Securities Act or the Exchange Act, against any loss, claim, damage,
liability or expense, as incurred, to which the Company, or any such director, officer or
controlling person may become subject, under the Securities Act, the Exchange Act, or other
federal or state statutory law or regulation, or at common law or otherwise (including in
settlement of any litigation, if such settlement is effected with the written consent of such
Underwriter), insofar as such loss, claim, damage, liability or expense (or actions in respect
thereof as contemplated below) arises out of or is based upon any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement, any preliminary
prospectus, the Time of Sale Prospectus, any Road Show, any free writing prospectus that the
Company has used, referred to or filed, or is required to file, pursuant to Rule 433(d) of the
Securities Act or the Prospectus (or such amendment or supplement thereto), or arises out of or
is based upon the omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue statement or
omission or alleged omission was made in the Registration Statement, such preliminary
prospectus, the Time of Sale Prospectus, such Road Show, such free writing prospectus that the
Company has used, referred to or filed, or is required to file, pursuant to Rule 433(d) of the
Securities Act, the Prospectus (or such amendment or supplement thereto), in reliance upon and
in conformity with written information furnished to the Company by the Representatives
expressly for use therein; and to reimburse the Company, or any such director, officer, or
controlling person for any legal and other expense reasonably incurred by the Company, or any
such director, officer or controlling person in connection with investigating, defending,
settling, compromising or paying any such loss, claim, damage, liability, expense or action.
Each of the Company and the Operating Partnership hereby acknowledges that the only information
that the Representatives and the Underwriters have furnished to the Company and the Operating
Partnership expressly for use in the Registration Statement, any preliminary prospectus, the
Time of Sale Prospectus, any Road Show, any
- 30 -
free writing prospectus that the Company has filed, or is required to file, pursuant to
Rule 433(d) of the Securities Act or the Prospectus (or any amendment or supplement thereto)
are the statements set forth in the [first paragraph under the caption “Underwriting—Commission
and Expenses,” the paragraph under the caption “Underwriting—Option to Purchase Additional
Shares” and the paragraph under the caption “Underwriting—Stabilization”] in the Time of Sale
Prospectus and the Prospectus, only insofar as such statements relate to the amount of selling
concession and reallowance or to over-allotment and stabilization activities that may be
undertaken by the Underwriters. The indemnity agreement set forth in this Section 9(b) shall
be in addition to any liabilities that each Underwriter may otherwise have.
(c) Notifications and Other Indemnification Procedures. Promptly after receipt by an
indemnified party under this Section 9 of notice of the commencement of any action, such
indemnified party will, if a claim in respect thereof is to be made against an indemnifying
party under this Section 9, notify the indemnifying party in writing of the commencement
thereof, but the omission so to notify the indemnifying party will not relieve it from any
liability which it may have to any indemnified party for contribution or otherwise than under
the indemnity agreement contained in this Section 9 or to the extent it is not prejudiced as a
proximate result of such failure. In case any such action is brought against any indemnified
party and such indemnified party seeks or intends to seek indemnity from an indemnifying party,
the indemnifying party will be entitled to participate in, and, to the extent that it shall
elect, jointly with all other indemnifying parties similarly notified, by written notice
delivered to the indemnified party promptly after receiving the aforesaid notice from such
indemnified party, to assume the defense thereof with counsel reasonably satisfactory to such
indemnified party; provided, however, if the defendants in any such action include both the
indemnified party and the indemnifying party and the indemnified party shall have reasonably
concluded that a conflict may arise between the positions of the indemnifying party and the
indemnified party in conducting the defense of any such action or that there may be legal
defenses available to it and/or other indemnified parties which are different from or
additional to those available to the indemnifying party, the indemnified party or parties shall
have the right to select separate counsel to assume such legal defenses and to otherwise
participate in the defense of such action on behalf of such indemnified party or parties. Upon
receipt of notice from the indemnifying party to such indemnified party of such indemnifying
party’s election so to assume the defense of such action and approval by the indemnified party
of counsel, the indemnifying party will not be liable to such indemnified party under this
Section 9 for any legal or other expenses subsequently incurred by such indemnified party in
connection with the defense thereof unless (i) the indemnified party shall have employed
separate counsel in accordance with the proviso to the preceding sentence (it being understood,
however, that the indemnifying party shall not be liable for the fees and expenses of more than
one separate counsel (together with local counsel), representing the indemnified parties who
are parties to such action), which counsel (together with any local counsel) for the
indemnified parties shall be selected by Jefferies (in the case of counsel for the indemnified
parties referred to in Section 8(a) above) or by the Company (in the case of counsel for the
indemnified parties referred to in Section 8(b) above)) (ii) the indemnifying party shall not
have employed counsel satisfactory to the indemnified party to represent the indemnified party
within a reasonable time after notice of commencement of the action or (iii) the indemnifying
party has authorized in writing the employment of counsel for the indemnified party at the
expense of the indemnifying party, in each of which cases the fees and expenses of counsel
shall be at the expense of the indemnifying party and shall be paid as they are incurred.
(d) Settlements. The indemnifying party under this Section 9 shall not be liable for any
settlement of any proceeding effected without its written consent, but if settled with such
- 31 -
consent or if there be a final judgment for the plaintiff, the indemnifying party agrees
to indemnify the indemnified party against any loss, claim, damage, liability or expense by
reason of such settlement or judgment. Notwithstanding the foregoing sentence, if at any time
an indemnified party shall have requested an indemnifying party to reimburse the indemnified
party for fees and expenses of counsel as contemplated by Section 9(c) hereof, the indemnifying
party agrees that it shall be liable for any settlement of any proceeding effected without its
written consent if (i) such settlement is entered into more than 30 days after receipt by such
indemnifying party of the aforesaid request and (ii) such indemnifying party shall not have
reimbursed the indemnified party in accordance with such request prior to the date of such
settlement. No indemnifying party shall, without the prior written consent of the indemnified
party, effect any settlement, compromise or consent to the entry of judgment in any pending or
threatened action, suit or proceeding in respect of which any indemnified party is or could
have been a party and indemnity was or could have been sought hereunder by such indemnified
party, unless such settlement, compromise or consent includes an unconditional release of such
indemnified party from all liability on claims that are the subject matter of such action, suit
or proceeding.
(e) Indemnification for Directed Shares. In connection with the offer and sale of the
Directed Shares, the Company and the Operating Partnership agree, promptly upon a request in
writing, to indemnify and hold harmless the Underwriters from and against any and all losses,
liabilities, claims, damages and expenses incurred by them as a result of the failure of the
Participants to pay for and accept delivery of Directed Shares which, by the end of the first
business day following the date of this Agreement, were subject to a properly confirmed
agreement to purchase. The Company and the Operating Partnership agree to indemnify and hold
harmless Jefferies, its officer and employees, and each person, if any, who controls Jefferies
within the meaning of the Securities Act or the Exchange Act against any loss, claim, damage,
liability or expense, as incurred, to which Jefferies or such controlling person may become
subject, which is (i) caused by any untrue statement or alleged untrue statement of a material
fact contained in any material prepared by or with the consent of the Company and the Operating
Partnership for distribution to Participants in connection with the Directed Share Program or
caused by any omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading; (ii) caused by the
failure of any Participant to pay for and accept delivery of Directed Shares that such
Participant agreed to purchase; or (iii) related to, arising out of, or in connection with the
Directed Share Program. The indemnity agreement set forth in this paragraph shall be in
addition to any liabilities that the Company and the Operating Partnership may otherwise have.
Section 10. Contribution. If the indemnification provided for in Section 9 is for any
reason held to be unavailable to or otherwise insufficient to hold harmless an indemnified
party in respect of any losses, claims, damages, liabilities or expenses referred to therein,
then each indemnifying party shall contribute to the aggregate amount paid or payable by such
indemnified party, as incurred, as a result of any losses, claims, damages, liabilities or
expenses referred to therein (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company and the Operating Partnership, on the one hand, and the
Underwriters, on the other hand, from the offering of the Offered Shares pursuant to this
Agreement or (ii) if the allocation provided by clause (i) above is not permitted by applicable
law, in such proportion as is appropriate to reflect not only the relative benefits referred to
in clause (i) above but also the relative fault of the Company and the Operating Partnership,
on the one hand, and the Underwriters, on the other hand, in connection with the statements or
omissions which resulted in such losses, claims, damages, liabilities or expenses, as well as
- 32 -
any other relevant equitable considerations. The relative benefits received by the
Company and the Operating Partnership, on the one hand, and the Underwriters, on the other
hand, in connection with the offering of the Offered 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 Offered Shares pursuant to this Agreement (before deducting expenses) received by the
Company and the Operating Partnership, and the total underwriting discounts and commissions
received by the Underwriters, in each case as set forth on the front cover page of the
Prospectus bear to the aggregate initial public offering price of the Offered Shares as set
forth on such cover. The relative fault of the Company and the Operating Partnership, on the
one hand, and the Underwriters, on the other hand, shall be determined by reference to, among
other things, whether any such untrue or alleged untrue statement of a material fact or
omission or alleged omission to state a material fact relates to information supplied by the
Company or the Operating Partnership, on the one hand, or the Underwriters, on the other hand,
and the parties’ relative intent, knowledge, access to information and opportunity to correct
or prevent such statement or omission.
The amount paid or payable by a party as a result of the losses, claims, damages,
liabilities and expenses referred to above shall be deemed to include, subject to the
limitations set forth in Section 9(c), any legal or other fees or expenses reasonably incurred
by such party in connection with investigating or defending any action or claim. The
provisions set forth in Section 9(c) with respect to notice of commencement of any action shall
apply if a claim for contribution is to be made under this Section 10; provided, however, that
no additional notice shall be required with respect to any action for which notice has been
given under Section 9(c) for purposes of indemnification.
The Company, the Operating Partnership and the Underwriters agree that it would not be
just and equitable if contribution pursuant to this Section 10 were determined by pro rata
allocation (even if the Underwriters were treated as one entity for such purpose) or by any
other method of allocation which does not take account of the equitable considerations referred
to in this Section 10.
Notwithstanding the provisions of this Section 10, no Underwriter shall be required to
contribute any amount in excess of the underwriting discounts and commissions received by such
Underwriter in connection with the Offered Shares underwritten by it and distributed to the
public. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f)
of the Securities Act) shall be entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation. The Underwriters’ obligations to contribute pursuant to
this Section 19 are several, and not joint, in proportion to their respective underwriting
commitments as set forth opposite their respective names on Schedule A. For purposes of this
Section 10, each officer and employee of an Underwriter and each person, if any, who controls
an Underwriter within the meaning of the Securities Act or the Exchange Act shall have the same
rights to contribution as such Underwriter, and each director of the Company, each officer of
the Company who signed the Registration Statement, and each person, if any, who controls the
Company with the meaning of the Securities Act and the Exchange Act shall have the same rights
to contribution as the Company.
Section 11. Default of One or More of the Several Underwriters. If, on the First Closing
Date or the applicable Option Closing Date, as the case may be, any one or more of the several
Underwriters shall fail or refuse to purchase Offered Shares that it or they have agreed to
purchase hereunder on such date, and the aggregate number of Offered Shares
- 33 -
which such defaulting Underwriter or Underwriters agreed but failed or refused to purchase
does not exceed 10% of the aggregate number of the Offered Shares to be purchased on such date,
the Representatives may make arrangements satisfactory to the Company for the purchase of such
Offered Shares by other persons, including any of the Underwriters, but if no such arrangements
are made by such Closing Date, the other Underwriters shall be obligated, severally and not
jointly, in the proportions that the number of Firm Shares set forth opposite their respective
names on Schedule A bears to the aggregate number of Firm Shares set forth opposite the names
of all such non-defaulting Underwriters, or in such other proportions as may be specified by
the Representatives with the consent of the non-defaulting Underwriters, to purchase the
Offered Shares which such defaulting Underwriter or Underwriters agreed but failed or refused
to purchase on such date. If, on the First Closing Date or the applicable Option Closing Date,
as the case may be, any one or more of the Underwriters shall fail or refuse to purchase
Offered Shares and the aggregate number of Offered Shares with respect to which such default
occurs exceeds 10% of the aggregate number of Offered Shares to be purchased on such date, and
arrangements satisfactory to the Representatives and the Company for the purchase of such
Offered Shares are not made within 48 hours after such default, this Agreement shall terminate
without liability of any party to any other party except that the provisions of Section 4,
Section 7, Section 9 and Section 10 shall at all times be effective and shall survive such
termination. In any such case either the Representatives or the Company shall have the right
to postpone the First Closing Date or the applicable Option Closing Date, as the case may be,
but in no event for longer than seven days in order that the required changes, if any, to the
Registration Statement and the Prospectus or any other documents or arrangements may be
effected.
As used in this Agreement, the term “Underwriter” shall be deemed to include any person
substituted for a defaulting Underwriter under this Section 11. Any action taken under this
Section 11 shall not relieve any defaulting Underwriter from liability in respect of any
default of such Underwriter under this Agreement.
Section 12. Termination of this Agreement. Prior to the purchase of the Firm Shares by
the Underwriters on the First Closing Date this Agreement may be terminated by the
Representatives by notice given to the Company if at any time (i) trading or quotation in any
of the Company’s securities shall have been suspended or limited by the Commission or by the
NYSE, or trading in securities generally on either the Nasdaq Stock Market or the New York
Stock Exchange shall have been suspended or limited, or minimum or maximum prices shall have
been generally established on any of such stock exchanges by the Commission or FINRA; (ii) a
general banking moratorium shall have been declared by any of federal, New York, California or
Maryland authorities; (iii) there shall have occurred any outbreak or escalation of national or
international hostilities or any crisis or calamity, or any change in the United States or
international financial markets, or any substantial change or development involving a
prospective substantial change in United States’ or international political, financial or
economic conditions, as in the judgment of the Representatives is material and adverse and
makes it impracticable to market the Offered Shares in the manner and on the terms described in
the Time of Sale Prospectus or the Prospectus or to enforce contracts for the sale of
securities; (iv) in the judgment of the Representatives there shall have occurred any Material
Adverse Change; or (v) the Company or the Operating Partnership shall have sustained a loss by
strike, fire, flood, earthquake, accident or other calamity of such character as in the
judgment of the Representatives may interfere materially with the conduct of the business and
operations of the Company or the Operating Partnership regardless of whether or not such loss
shall have been insured. Any termination pursuant to this Section 12 shall be without
liability on the part of (a) the Company or the Operating Partnership to any
- 34 -
Underwriter, except that the Company and the Operating Partnership shall be obligated to
reimburse the expenses of the Representatives and the Underwriters pursuant to Sections 4 and 7
hereof, (b) any Underwriter to the Company or the Operating Partnership, or (c) of any party
hereto to any other party except that the provisions of Section 9 and Section 10 shall at all
times be effective and shall survive such termination.
Section 13. No Advisory or Fiduciary Relationship. Each of the Company and the Operating
Partnership acknowledges and agrees that (a) the purchase and sale of the Offered Shares
pursuant to this Agreement, including the determination of the public offering price of the
Offered Shares and any related discounts and commissions, is an arm’s-length commercial
transaction between the Company and the Operating Partnership, on the one hand, and the several
Underwriters, on the other hand, (b) in connection with the offering contemplated hereby and
the process leading to such transaction each Underwriter is and has been acting solely as a
principal and is not the agent or fiduciary of the Company or the Operating Partnership, or its
stockholders, creditors, employees or any other party, (c) no Underwriter has assumed or will
assume an advisory or fiduciary responsibility in favor of the Company or the Operating
Partnership with respect to the offering contemplated hereby or the process leading thereto
(irrespective of whether such Underwriter has advised or is currently advising the Company or
the Operating Partnership on other matters) and no Underwriter has any obligation to the
Company or the Operating Partnership with respect to the offering contemplated hereby except
the obligations expressly set forth in this Agreement, (d) the Underwriters and their
respective affiliates may be engaged in a broad range of transactions that involve interests
that differ from those of the Company and the Operating Partnership, and (e) the Underwriters
have not provided any legal, accounting, regulatory or tax advice with respect to the offering
contemplated hereby and the Company and the Operating Partnership have consulted its own legal,
accounting, regulatory and tax advisors to the extent it deemed appropriate.
Section 14. Representations and Indemnities to Survive Delivery. The respective
indemnities, agreements, representations, warranties and other statements of the Company, of
its officers, of the Operating Partnership and of the several Underwriters set forth in or made
pursuant to this Agreement will remain in full force and effect, regardless of any
investigation made by or on behalf of any Underwriter or the Company or any of its or their
partners, officers or directors or any controlling person, or the Operating Partnership as the
case may be, and, anything herein to the contrary notwithstanding, will survive delivery of and
payment for the Offered Shares sold hereunder and any termination of this Agreement.
Section 15. Notices. All communications hereunder shall be in writing and shall be
mailed, hand delivered or telecopied and confirmed to the parties hereto as follows:
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If to the Representatives:
Xxxxxxxxx & Company, Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile: (000) 000-0000
Attention: General Counsel
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile: (000) 000-0000
Attention: General Counsel
and
Xxxxxx, Xxxxxxxx & Company, Incorporated
000 Xxxxx Xxxxxxxx
Xx. Xxxxx, Xxxxxxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxxxxxx
000 Xxxxx Xxxxxxxx
Xx. Xxxxx, Xxxxxxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxxxxxx
with a copy to:
Xxxxxx, Xxxxxxxx & Company, Incorporated
Xxx Xxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxxx, Esq.
Xxx Xxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxxx, Esq.
If to the Company or the Operating Partnership:
Legacy Healthcare Properties Trust Inc.
000 Xxxxx Xxxxxx Xxxxxx
Xxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxxxx III
000 Xxxxx Xxxxxx Xxxxxx
Xxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxxxx III
with a copy to:
Hunton & Xxxxxxxx LLP
Riverfront Plaza, East Tower
000 Xxxx Xxxx Xxxxxx
Xxxxxxxx, Xxxxxxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxxx X. XxXxx
Riverfront Plaza, East Tower
000 Xxxx Xxxx Xxxxxx
Xxxxxxxx, Xxxxxxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxxx X. XxXxx
Any party hereto may change the address for receipt of communications by giving written notice
to the others.
Section 16. Successors. This Agreement will inure to the benefit of and be binding upon
the parties hereto, including any substitute Underwriters pursuant to Section 11 hereof, and to
the benefit of the employees, officers and directors and controlling persons referred to in
Section 9 and Section 10, and in each case their respective successors, and personal
representatives, and no other person will have any right or obligation hereunder. The term
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“successors” shall not include any purchaser of the Offered Shares as such from any of the
Underwriters merely by reason of such purchase.
Section 17. Partial Unenforceability. The invalidity or unenforceability of any Section,
paragraph or provision of this Agreement shall not affect the validity or enforceability of any
other Section, paragraph or provision hereof. If any Section, paragraph or provision of this
Agreement is for any reason determined to be invalid or unenforceable, there shall be deemed to
be made such minor changes (and only such minor changes) as are necessary to make it valid and
enforceable.
Section 18. Governing Law Provisions. This Agreement shall be governed by and construed
in accordance with the internal laws of the State of New York applicable to agreements made and
to be performed in such state. Any legal suit, action or proceeding arising out of or based
upon this Agreement or the transactions contemplated hereby (“Related Proceedings”) may be
instituted in the federal courts of the United States of America located in the Borough of
Manhattan in the City of New York or the courts of the State of New York in each case located
in the Borough of Manhattan in the City of New York (collectively, the “Specified Courts”), and
each party irrevocably submits to the exclusive jurisdiction (except for proceedings instituted
in regard to the enforcement of a judgment of any such court (a “Related Judgment”), as to
which such jurisdiction is non-exclusive) of such courts in any such suit, action or
proceeding. Service of any process, summons, notice or document by mail to such party’s
address set forth above shall be effective service of process for any suit, action or other
proceeding brought in any such court. The parties irrevocably and unconditionally waive any
objection to the laying of venue of any suit, action or other proceeding in the Specified
Courts and irrevocably and unconditionally waive and agree not to plead or claim in any such
court that any such suit, action or other proceeding brought in any such court has been brought
in an inconvenient forum.
Section 19. General Provisions. This Agreement constitutes the entire agreement of the
parties to this Agreement and supersedes all prior written or oral and all contemporaneous oral
agreements, understandings and negotiations with respect to the subject matter hereof. This
Agreement may be executed in two or more counterparts, each one of which shall be an original,
with the same effect as if the signatures thereto and hereto were upon the same instrument.
This Agreement may not be amended or modified unless in writing by all of the parties hereto,
and no condition herein (express or implied) may be waived unless waived in writing by each
party whom the condition is meant to benefit. The Table of Contents and the Section headings
herein are for the convenience of the parties only and shall not affect the construction or
interpretation of this Agreement.
Each of the parties hereto acknowledges that it is a sophisticated business person who was
adequately represented by counsel during negotiations regarding the provisions hereof,
including, without limitation, the indemnification provisions of Section 9 and the contribution
provisions of Section 10, and is fully informed regarding said provisions. Each of the parties
hereto further acknowledges that the provisions of Sections 9 and 10 hereto fairly allocate the
risks in light of the ability of the parties to investigate the Company and the Operating
Partnership, their affairs and their business in order to assure that adequate disclosure has
been made in the Registration Statement, any preliminary prospectus, the Time of Sale
Prospectus, each Road Show, each free writing prospectus and the Prospectus (and any amendments
and supplements thereto), as required by the Securities Act and the Exchange Act.
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If the foregoing is in accordance with your understanding of our agreement, kindly sign
and return to the Company the enclosed copies hereof, whereupon this instrument, along with all
counterparts hereof, shall become a binding agreement in accordance with its terms.
| Very truly yours, LEGACY HEALTHCARE PROPERTIES TRUST INC. |
||||
| By: | ||||
| Name: | ||||
| Title: | ||||
| LEGACY HEALTHCARE PROPERTIES, L.P. |
||||
| By: | Legacy Healthcare Properties Trust Inc., its General Partner |
|||
| By: | ||||
| Name: | ||||
| Title: | ||||
- 38 -
The foregoing Underwriting Agreement is hereby confirmed and accepted by the
Representatives in New York, New York as of the date first above written.
| XXXXXXXXX & COMPANY, INC. XXXXXX, XXXXXXXX & COMPANY, INCORPORATED |
||||
| Acting as Representatives of the several Underwriters named in the attached Schedule X. |
||||
| XXXXXXXXX & COMPANY, INC. | ||||
By:
|
||||
| Name: | ||||
| Title: | ||||
| XXXXXX, XXXXXXXX & COMPANY, INCORPORATED | ||||
By: |
||||
| Name: | ||||
| Title: | ||||
- 39 -
EXHIBIT E
[ ], 2010
Xxxxxxxxx & Company, Inc.
Xxxxxx, Xxxxxxxx & Company, Incorporated
As Representatives of the Several Underwriters
c/x Xxxxxxxxx & Company, Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Xxxxxx, Xxxxxxxx & Company, Incorporated
As Representatives of the Several Underwriters
c/x Xxxxxxxxx & Company, Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
| RE: | Legacy Healthcare Properties Trust Inc. (the “Company”) |
Ladies & Gentlemen:
The undersigned is an owner of record or beneficially of certain shares of common stock, par value
$0.01 per share, of the Company (“Shares”) or securities convertible into or exchangeable or
exercisable for Shares. The Company proposes to carry out a public offering of Shares (the
“Offering”) for which you will act as the representatives of the underwriters. The undersigned
recognizes that the Offering will be of benefit to the undersigned and will benefit the Company by,
among other things, raising additional capital for its operations. The undersigned acknowledges
that you and the other underwriters are relying on the representations and agreements of the
undersigned contained in this letter agreement in carrying out the Offering and in entering into
underwriting arrangements with the Company and Legacy Healthcare Properties, LP (the “Operating
Partnership”) with respect to the Offering.
In consideration of the foregoing, the undersigned hereby agrees that the undersigned will not,
(and will cause any spouse or immediate family member of the spouse or the undersigned living in
the undersigned’s household not to), without the prior written consent of Xxxxxxxxx & Company, Inc.
(which consent may be withheld in its sole discretion), directly or indirectly, sell, offer,
contract or grant any option to sell (including without limitation any short sale), pledge,
transfer, establish an open “put equivalent position” within the meaning of Rule 16a-1(h) under the
Securities Exchange Act of 1934, as amended, or otherwise dispose of any Shares, options or
warrants to acquire Shares, or securities exchangeable or exercisable for or convertible into
Shares, including, without limitation, units of partnership interests in the Operating Partnership
(the “OP Units”) currently or hereafter owned either of record or beneficially (as defined in Rule
13d-3 under the Securities Exchange Act of 1934, as amended) by the undersigned (or such spouse or
family member), or publicly announce an intention to do any of the foregoing, for a period
commencing on the date hereof and continuing through the close of trading on the date that is 180
days after the date of the Prospectus (as defined in the Underwriting Agreement relating to the
Offering to which the Company is a party) (the “Lock-up Period”); provided, that if (i) during the
last 17 days of the Lock-up Period, the Company issues an earnings release or material news or a
material event relating to the Company occurs or (ii) prior to the expiration of the Lock-up
Period, the Company announces that it will release earnings results during the 16-day period
beginning on the last day of the Lock-up Period, then in each case the Lock-up Period will be
extended until the expiration of the 18-day period beginning on the date of the issuance of the
earnings release or the occurrence of the material news or material event, as applicable, unless
Xxxxxxxxx & Company, Inc. waives, in writing, such extension, except that such extension will not
apply if, (i) within three business days prior to the 15th calendar day before the last day of the
Lock-up Period, the Company delivers a certificate, signed by the Chief Financial Officer or Chief
Executive Officer of the Company, certifying on behalf of the Company that (i) the Shares are
“actively traded securities” (as defined in Regulation M), (ii) the Company meets the applicable
requirements of paragraph (a)(1) of Rule 139 under the Securities Act in the manner
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contemplated by NASD Conduct Rule 2711(f)(4) of FINRA, and (iii) the provisions of NASD
Conduct Rule 2711(f)(4) of FINRA are not applicable to any research reports relating to the Company
published or distributed by any of the Underwriters during the 15 days before or after the last day
of the Lock-up Period (before giving effect to such extension); provided, further, that the
foregoing restrictions shall not apply to the transfer of any or all of the Shares owned by the
undersigned, either during is lifetime or on death, by gift, will or intestate succession to the
immediate family of the undersigned or to a trust the beneficiaries of which are exclusively the
undersigned and/or a member or members of his immediate family; provided, however, that in any such
case, it shall be a condition to such transfer that the transferee executes and delivers to
Xxxxxxxxx & Company, Inc. an agreement stating that the transferee is receiving and holding the
Shares subject to the provisions of this letter agreement, and there shall be no further transfer
of such Shares, except in accordance with this letter agreement. The undersigned hereby
acknowledges and agrees that written notice of any extension of the Lock-up Period pursuant to the
preceding sentence will be delivered by Xxxxxxxxx & Company, Inc. to the Company and that any such
notice properly delivered will be deemed to have been given to, and received by, the undersigned.
The undersigned also agrees and consents to the entry of stop transfer instructions with the
Company’s transfer agent and registrar against the transfer of Shares or securities convertible
into or exchangeable or exercisable for Shares held by the undersigned except in compliance with
the foregoing restrictions.
With respect to the Offering only, the undersigned waives any registration rights relating to
registration under the Securities Act of any Shares owned either of record or beneficially by the
undersigned, including any rights to receive notice of the Offering.
This agreement is irrevocable and will be binding on the undersigned and the respective successors,
heirs, personal representatives, and assigns of the undersigned.
| Printed Name of Holder | ||||
By: |
||||
| Printed Name of Person Signing | ||||
| (and indicate capacity of person signing if | ||||
| signing as custodian, trustee, or on behalf | ||||
| of an entity) | ||||
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