EXHIBIT 1.1
MEDICAL PROPERTIES TRUST, INC.
SHARES OF COMMON STOCK
FORM OF UNDERWRITING AGREEMENT
___________, 2005
FRIEDMAN, BILLINGS, ▇▇▇▇▇▇ & CO., INC.
▇.▇. ▇▇▇▇▇▇ SECURITIES INC.
WACHOVIA CAPITAL MARKETS, LLC
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & COMPANY, INCORPORATED
c/o FRIEDMAN, BILLINGS, ▇▇▇▇▇▇ & CO., INC.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
Medical Properties Trust, Inc., a Maryland corporation (the
"Company"), MPT Operating Partnership, L.P., a Delaware limited partnership (the
"Operating Partnership"), and certain stockholders of the Company listed on
Schedule I hereto (the "Selling Stockholders"), each confirms their agreement
with each of the Underwriters listed on Schedule II hereto (collectively, the
"Underwriters"), for whom Friedman, Billings, ▇▇▇▇▇▇ & Co., Inc. ("FBR") is
acting as representative (in such capacity, the "Representative"), with respect
to (i) the sale by the Company and the Selling Stockholders of _____________
shares (the "Initial Shares") of Common Stock, par value $0.001 per share, of
the Company ("Common Shares") in the respective numbers of shares set forth
opposite the names of the Company and each such Selling Stockholder in Schedule
I hereto, and the purchase by the Underwriters, acting severally and not
jointly, of the respective number of Initial Shares set forth opposite the names
of the Underwriters in Schedule II hereto, and (ii) the grant of the option
described in Section 1(b) hereof to purchase all or any part of ___________
additional Common Shares to cover over-allotments (the "Option Shares"), if any,
from the Company to the Underwriters, acting severally and not jointly, in
amounts proportionate to the respective numbers of Initial Shares set forth
opposite the names of the Underwriters in Schedule II hereto. The Initial Shares
to be purchased by the Underwriters and all or any part of the Option Shares are
hereinafter called, collectively, the "Shares."
The Company understands that the Underwriters propose to make a
public offering of the Shares as soon as the Underwriters deem advisable after
this Agreement has been executed and delivered.
The Company has filed with the Securities and Exchange
Commission (the Commission"), a registration statement on Form S-11 (No.
333-119957) and a related preliminary prospectus for the registration of the
Shares under the Securities Act of 1933, as amended (the "Securities Act"), and
the rules and regulations thereunder (the "Securities Act Regulations"). The
Company has prepared and filed such amendments thereto, if any, and such amended
preliminary prospectuses, if any, as may have been required to the date hereof,
and will
file such additional amendments thereto and such amended prospectuses as may
hereafter be required. The registration statement has been declared effective
under the Securities Act by the Commission. The registration statement as
amended at the time it became effective (including all information deemed to be
a part of the registration statement at the time it became effective pursuant to
Rule 430A(b) of the Securities Act Regulations) is hereinafter called the
"Registration Statement," except that, if the Company files a post-effective
amendment to such registration statement which becomes effective prior to the
First Closing Date (as defined below), "Registration Statement" shall refer to
such registration statement as so amended. Any registration statement filed by
the Company pursuant to Rule 462(b) of the Securities Act Regulations is
hereinafter called the "Rule 462(b) Registration Statement" and from and after
the date and time of filing the Rule 462(b) Registration Statement, the term
Registration Statement shall include the Rule 462(b) Registration Statement.
Each prospectus included in the Registration Statement, or amendments thereof or
supplements thereto, before it became effective under the Securities Act and any
prospectus filed with the Commission by the Company with the consent of the
Underwriters pursuant to Rule 424(a) of the Securities Act Regulations is
hereinafter called the "Preliminary Prospectus." The term "Prospectus" means the
final prospectus, as first filed with the Commission pursuant to Rule 424(b) of
the Securities Act Regulations, and any amendments thereof or supplements
thereto. The Commission has not issued any order preventing or suspending the
use of any Preliminary Prospectus.
The Operating Partnership or a Subsidiary owns a portfolio of
eight operating facilities and three facilities that are under development (the
"Current Properties"). The Operating Partnership or a Subsidiary (as defined
below) has entered into agreements (the "Acquisition Agreements") as described
in the prospectus to acquire or develop six additional properties (the "Pending
Acquisition Properties").
Each Selling Stockholder has executed and delivered a (i)
Custody Agreement signed by such Selling Stockholder and American Stock Transfer
& Trust Co., as custodian (the "Custodian"), in the form attached hereto as
Exhibit A, pursuant to which each Selling Stockholder party thereto has placed
the Initial Shares to be sold by it pursuant to this Agreement in custody (the
"Custody Agreement") and a (ii) Power of Attorney, in the form attached hereto
as Exhibit B (the "Power of Attorney"), appointing certain individuals named
therein as such Selling Stockholder's attorneys-in-fact (each, an
"Attorney-in-Fact," and collectively, the "Committee") with the authority to
execute and deliver this Agreement on behalf of such Selling Stockholder and to
take certain other actions with respect thereto and to the extent set forth
therein relating to the transactions contemplated by this Agreement and by the
Prospectus.
The Company, each of the Selling Stockholders and the
Underwriters agree as follows:
1. Sale and Purchase:
(a) Initial Shares. Upon the basis of the representations and
warranties and other terms and conditions herein set forth at a purchase price
per share of $____________, the Company agrees to sell to the Underwriters the
number of Initial Shares set forth in Schedule I opposite its name, and each
Selling Stockholder agrees to sell to the Underwriters the number of Initial
Shares set forth in Schedule I opposite such Selling Stockholder's name, and
each
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Underwriter agrees, severally and not jointly, to purchase from the Company and
the Selling Stockholders the number of Initial Shares set forth in Schedule II
opposite such Underwriter's name, plus any additional number of Initial Shares
which such Underwriter may become obligated to purchase pursuant to the
provisions of Section 8 hereof, subject in each case, to such adjustments among
the Underwriters as the Representative, in its sole discretion, shall make to
eliminate any sales or purchases of fractional shares.
(b) Option Shares. In addition, upon the basis of the
representations and warranties and other terms and conditions herein set forth,
at the purchase price per share set forth in Section 1(a) hereof, the Company
hereby grants an option to the Underwriters, acting severally and not jointly,
to purchase from the Company all or any part of the Option Shares, plus any
additional number of Option Shares which such Underwriter may become obligated
to purchase pursuant to the provisions of Section 8 hereof. The option hereby
granted will expire 30 days after the date hereof and may be exercised in whole
or in part from time to time only for the purpose of covering over-allotments
which may be made in connection with the offering and distribution of the
Initial Shares upon notice by the Representative to the Company setting forth
the number of Option Shares as to which the several Underwriters are then
exercising the option and the time and date of payment and delivery for such
Option Shares. Any such time and date of delivery (an "Option Closing Date")
shall be determined by the Representative, and may be the First Closing Date (as
hereinafter defined), but otherwise shall not be later than five full business
days after the exercise of such option, nor in any event prior to the First
Closing Date, as hereinafter defined. If the option is exercised as to all or
any portion of the Option Shares, the Company will sell the total number of
Option Shares then being purchased and each of the Underwriters, acting
severally and not jointly, will purchase that proportion of the total number of
Option Shares then being purchased which the number of Initial Shares set forth
in Schedule II opposite the name of such Underwriter bears to the total number
of Initial Shares, subject in each case to such adjustments among the
Underwriters as the Representative, in its sole discretion, shall make to
eliminate any sales or purchases of fractional shares.
2. Payment and Delivery:
(a) Initial Shares. The Shares to be purchased by each Underwriter
hereunder, in definitive form, and in such authorized denominations and
registered in such names as the Representative may request upon prior notice to
the Company and the Selling Stockholders shall be delivered by or on behalf of
the Company and the Selling Stockholders to the Representative, including, at
the option of the Representative, through the facilities of The Depository Trust
Company ("DTC") for the account of such Underwriter, against payment by or on
behalf of such Underwriter of the purchase price therefor by wire transfer of
Federal (same-day) funds to the account specified to the Representative by the
Company and each of the Selling Stockholders, upon prior notice. The Company
will cause any certificates representing the Initial Shares to be made available
for checking and packaging at least forty-eight hours prior to the First Closing
Date (as defined below) with respect thereto at the office of Friedman,
Billings, ▇▇▇▇▇▇ & Co., Inc., ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
or at the office of DTC or its designated custodian, as the case may be (the
"Designated Office"). The time and date of such delivery and payment shall be
9:30 a.m., New York City time, on the third (fourth, if pricing occurs after
4:30 p.m., New York City time) business day after the date hereof (unless
another time and date shall
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be agreed to by the Representative and the Company). The time and date at which
such payment and delivery are actually made is hereinafter called the "First
Closing Date."
(b) Option Shares. Any Option Shares to be purchased by each
Underwriter hereunder, in definitive form, and in such authorized denominations
and registered in such names as the Representative may request upon prior notice
to the Company shall be delivered by or on behalf of the Company to the
Representative, including, at the option of the Representative, through the
facilities of DTC for the account of such Underwriter, against payment by or on
behalf of such Underwriter of the purchase price therefor by wire transfer of
Federal (same-day) funds to the account specified to the Representative by the
Company upon prior notice. The Company will cause any certificates representing
the Option Shares to be made available for checking and packaging at least
twenty-four hours prior to an Option Closing Date with respect thereto at the
Designated Office. The time and date of such delivery and payment shall be 9:30
a.m., New York City time, on the date specified by the Representative in the
notice given by the Representative to the Company of the Underwriters' election
to purchase such Option Shares or on such other time and date as the Company and
the Representative may agree upon in writing.
(c) Directed Shares. It is understood that approximately __________
shares of the Initial Shares ("Directed Shares") initially will be reserved by
the Underwriters for offer and sale to employees and persons having business
relationships with the Company ("Directed Share Participants") upon the terms
and conditions set forth in the Prospectus and in accordance with the rules and
regulations of the National Association of Securities Dealers, Inc. (the
"Directed Share Program"). Under no circumstances will the Representative or any
Underwriter be liable to the Company or to any Directed Share Participant for
any action taken or omitted to be taken in good faith in connection with such
Directed Share Program. To the extent that any Directed Shares are not
affirmatively reconfirmed for purchase by any Directed Share Participant on or
immediately after the date of this Agreement, such Directed Shares may be
offered to the public as part of the public offering contemplated herein.
Each of the Company and the Selling Stockholders acknowledges
and agrees that the Underwriters are acting solely in the capacity of an arm's
length contractual counterparty to the Company and the Selling Stockholders with
respect to the offering of Shares contemplated hereby (including in connection
with determining the terms of the offering) and not as a financial advisor or a
fiduciary to, or an agent of, the Company, the Selling Stockholders or any other
person. Additionally, neither the Representative nor any other Underwriter is
advising the Company, the Selling Stockholders or any other person as to any
legal, tax, investment, accounting or regulatory matters in any jurisdiction.
The Company and the Selling Stockholders shall consult with their own advisors
concerning such matters and shall be responsible for making their own
independent investigation and appraisal of the transactions contemplated hereby,
and the Underwriters shall have no responsibility or liability to the Company or
the Selling Stockholders with respect thereto. Any review by the Underwriters of
the Company, the transactions contemplated hereby or other matters relating to
such transactions will be performed solely for the benefit of the Underwriters
and shall not be on behalf of the Company or the Selling Stockholders.
3. Representations and Warranties:
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The Company and the Operating Partnership represent and warrant to each
Underwriter that:
(a) the authorized shares of capital stock of the Company conform in
all material respects to the description thereof contained in the Prospectus;
the Company has an authorized, issued and outstanding capitalization as set
forth in the Prospectus under the caption "Capitalization"; at the First Closing
Date, __________ Common Shares will be issued and outstanding and no other
shares of preferred stock or any other class of capital stock will be issued and
outstanding; the outstanding shares of capital stock of the Company and the
outstanding capital stock, limited liability company membership interests and
units of limited partnership interest of each subsidiary of the Company (each,
including the Operating Partnership, except where noted, a "Subsidiary" and,
collectively, "Subsidiaries") including Common Shares owned by Selling
Stockholders have been duly and validly authorized and issued and are fully paid
and nonassessable, have been issued in compliance with federal and state
securities laws, and all of the outstanding capital stock, units of limited
partnership interest and limited liability company membership interests of the
Subsidiaries, excluding the Operating Partnership, are directly or indirectly
owned of record and beneficially by the Company; except as disclosed in the
Prospectus, there are no outstanding (i) securities or obligations of the
Company or any of the Subsidiaries convertible into or exchangeable for any
capital stock of the Company or any such Subsidiary, (ii) warrants, rights or
options to subscribe for or purchase from the Company or any such Subsidiary any
such capital stock or any such convertible or exchangeable securities or
obligations, or (iii) obligations of the Company or any such Subsidiary to issue
any shares of capital stock, any such convertible or exchangeable securities or
obligation, or any such warrants, rights or options; 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 the Prospectus
accurately and fairly presents the information required to be shown with respect
to such plans, arrangements, options and rights;
(b) the Company has been duly formed and is validly existing as a
corporation under and by virtue of the laws of the State of Maryland and is in
good standing with the State Department of Assessments and Taxation of Maryland,
with all requisite corporate power and authority to own, lease and operate its
properties, and conduct its business as described in the Registration Statement
and the Prospectus, and is duly qualified as a foreign corporation to transact
business or licensed and is in good standing in each jurisdiction in which the
nature or conduct of its business requires such qualification or license; except
as disclosed in the Prospectus, all of the issued and outstanding shares of
beneficial interest, capital stock, limited liability company membership
interests or units of limited partnership interests of each Subsidiary is owned
by the Company directly or through subsidiaries, free and clear of any security
interest, mortgage, pledge, lien, encumbrance or claim; except as disclosed in
the Prospectus, no Subsidiary 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 capital stock or from repaying to
the Company or any other Subsidiary any amounts which may from time to time
become due under any loans or advances to such Subsidiary from the Company or
such other Subsidiary, or from transferring any such Subsidiary's property or
assets to the Company or to any other Subsidiary; other than as disclosed in the
Prospectus and the next paragraph, the Company does not own, directly or
indirectly, any capital stock or other equity
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securities of any other corporation or any ownership interest in any
partnership, joint venture or other association;
(c) upon completion of the offering of the Shares (i) the Company
will be a holder of units of limited partnership interest in the Operating
Partnership (the "Units") representing an approximate _____% interest in the
Operating Partnership, (ii) Medical Properties Trust, LLC (the "General
Partner") will be the holder of Units representing an approximate ___% interest
in the Operating Partnership, as its sole general partner, and (iii) the Company
will own a 100% membership interest in the General Partner; the Subsidiaries
(all of which are named in Exhibit 21.1 to the Registration Statement) have been
duly incorporated, formed or organized, as the case may be, and are validly
existing as a corporation, limited liability company, general partnership or
limited partnership, as the case may be, in good standing under the laws of
their respective jurisdictions of incorporation, formation or organization, as
applicable, with all requisite power and authority to own, lease and operate
their respective properties and to conduct their respective businesses as
described in the Registration Statement and the Prospectus; each Subsidiary is
duly qualified as a foreign corporation, foreign limited partnership or foreign
limited liability company, as applicable, to transact business or licensed and
is in good standing in each jurisdiction in which the conduct or nature of their
business requires such qualification or license;
(d) the First Amended and Restated Agreement of Limited Partnership
of the Operating Partnership, as further amended and/or restated (the
"Partnership Agreement"), has been duly and validly authorized, executed and
delivered by or on behalf of the partners of the Operating Partnership and
constitutes a valid and binding agreement of the parties thereto, enforceable in
accordance with its terms, except as enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
creditors' rights generally or by general principles of equity;
(e) the Company has delivered to the Representative two complete
manually signed copies of the Registration Statement and of each consent and
certificate of experts filed as a part thereof, and conformed copies of the
Registration Statement (with exhibits) and the Preliminary Prospectus, as
amended or supplemented, in such quantities and at such places as the
Representative have reasonably requested for each of the Underwriters;
(f) the Company has not distributed and will not distribute, prior
to the later of the last Option Closing Date or the completion of the
Underwriters' distribution of the Shares, any offering material in connection
with the offering and sale of the Shares other than a Preliminary Prospectus,
the Prospectus and the Registration Statement;
(g) the Company and the Subsidiaries are in compliance in all
material respects with all applicable laws, rules, regulations, orders, decrees
and judgments, including those relating to transactions with affiliates;
(h) the Company is not in violation of its Second Articles of
Amendment and Restatement, as amended or restated, (the "Articles of Amendment")
or Bylaws; the Operating Partnership is not in violation of its Certificate of
Limited Partnership or the Partnership Agreement, and no Subsidiary is in
violation of its applicable organizational documents
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(including, without limitation limited liability company agreements); neither
the Company nor any Subsidiary is in breach of or default in (nor has any event
occurred which with notice, lapse of time, or both would constitute a breach of,
or default in) the performance or observance of any obligation, agreement,
contract, franchise, covenant or condition contained in any license, indenture,
mortgage, deed of trust, loan or credit agreement, lease or other agreement or
instrument to which the Company or any Subsidiary is a party or by which any of
them or their respective properties is bound;
(i) the execution, delivery and performance of this Agreement and
the Acquisition Agreements and the issuance, sale and delivery by the Company of
the Shares and the consummation of the transactions contemplated herein and
therein will not (A) conflict with, or result in any breach or constitute a
default (nor constitute any event which with notice, lapse of time, or both
would constitute a breach or default) (i) by the Company of any provision of its
Articles of Amendment or Bylaws, by the Operating Partnership of any provision
under its Certificate of Limited Partnership or Partnership Agreement, by any
Subsidiary (excluding the Operating Partnership) of any provision of its
applicable organizational documents, or (ii) of any provision of any obligation,
agreement, contract, franchise, license, indenture, mortgage, deed of trust,
loan or credit agreement, lease or other agreement or instrument to which the
Company or any Subsidiary is a party or by which any of them or their respective
properties may be bound or affected, or (iii) under any federal, state, local or
foreign law, regulation or rule or any decree, judgment or order applicable to
the Company or any Subsidiary; or (B) result in the creation or imposition of
any lien, charge, claim or encumbrance upon any property or asset of the Company
or any Subsidiary;
(j) the Company or a Subsidiary, as applicable, has the full legal
right, corporate power and authority to enter into this Agreement and the
Acquisition Agreements and to consummate the transactions contemplated herein
and therein; the Company has the corporate power to issue, sell and deliver the
Shares as provided herein; this Agreement and each of the Acquisition Agreements
has been duly authorized, executed and delivered by the Company and each is a
legal, valid and binding agreement of the Company enforceable in accordance with
its terms;
(k) the Operating Partnership or a Subsidiary, as applicable, has
the full legal right, power and authority to enter into this Agreement and the
Acquisition Agreements and to consummate the transactions contemplated herein
and therein; this Agreement and each of the Acquisition Agreements has been duly
authorized, executed and delivered by the Operating Partnership or a Subsidiary,
as applicable, and each constitutes the valid and binding agreement of the
Operating Partnership or a Subsidiary, as applicable, enforceable against the
Operating Partnership or a Subsidiary, as applicable, in accordance with its
terms;
(l) no approval, authorization, consent or order of, or registration
or filing with any federal, state or local governmental or regulatory
commission, board, body, authority or agency is required for the Company's,
Operating Partnership's or a Subsidiary's execution, delivery and performance of
this Agreement and the Acquisition Agreements and their consummation of the
transactions contemplated herein and in the Prospectus, including the sale and
delivery of the Shares, other than (A) such as have been obtained, or will have
been obtained before the First Closing Date or the applicable Option Closing
Date, as the case may be, under the Securities Act
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and the Securities Exchange Act of 1934, as amended (the "Exchange Act") and (B)
any necessary qualification under the securities or blue sky laws of the various
jurisdictions in which the Shares are being offered by the Underwriters;
(m) each of the Company and the Subsidiaries and to the best
knowledge of the Company, each tenant or proposed tenant of the Current
Facilities and the Pending Acquisition Facilities has all necessary licenses,
permits, authorizations, consents and approvals, possess valid and current
certificates, has made all necessary filings required under any federal, state
or local law, regulation or rule, and has obtained all necessary authorizations,
consents and approvals from other persons, required in order to conduct their
respective businesses and own their respective properties and other assets as
described in the Prospectus, except to the extent that any failure to have any
such licenses, permits, authorizations, consents or approvals, to make any such
filings or to obtain any such authorizations, consents or approvals could not,
individually or in the aggregate, have a material adverse effect on the assets,
business, operations, earnings, prospects, properties or condition (financial or
otherwise), present or prospective, of the Company and the Subsidiaries taken as
a whole (any such effect or change, where the context so requires, is
hereinafter called a "Material Adverse Effect" or "Material Adverse Change");
neither the Company nor any of the Subsidiaries and to the best knowledge of the
Company, each tenant or proposed tenant of the Current Facilities and the
Pending Acquisition Facilities is required by any applicable law to obtain
accreditation or certification from any governmental agency or authority in
order to conduct the business and own the properties and other assets which it
currently provides or owns or which it proposes to provide or own as described
in the Prospectus, except for such accreditations and certifications described
in the Prospectus, all of which have been obtained; neither the Company nor any
of the Subsidiaries and to the best knowledge of the Company, each tenant or
proposed tenant of the Company's facilities and the Pending Acquisition
Facilities is in violation of, in default under, or has received any notice
regarding a possible violation, default or revocation of any such certificate,
license, permit, authorization, consent or approval or any federal, state, local
or foreign law, regulation or rule or any decree, order or judgment applicable
to the Company or any of the Subsidiaries the effect of which could result in a
Material Adverse Change; and no such license, permit, authorization, consent or
approval contains a materially burdensome restriction that is not adequately
disclosed in the Registration Statement and the Prospectus;
(n) each of the Registration Statement and any Rule 462(b)
Registration Statement has been declared effective under the Securities Act by
the Commission and no stop order suspending the effectiveness of the
Registration Statement or any Rule 462(b) Registration Statement has been issued
under the Securities Act and no proceedings for that 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, and the
Company has complied to the Commission's satisfaction with any request on the
part of the Commission for additional or supplemental information;
(o) the Preliminary Prospectus and the Registration Statement
comply, and the Prospectus and any further amendments or supplements thereto
will, when they have become effective or are filed with the Commission, as the
case may be, comply, in all material respects with the requirements of the
Securities Act and the Securities Act Regulations; the Registration Statement
did not, and any amendment thereto will not, in each case as of the applicable
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effective date, contain an untrue statement of a material fact or omit to state
a material fact required to be stated therein or necessary to make the
statements therein in light of the circumstances under which they were made not
misleading; and the Preliminary Prospectus does not, and the Prospectus or any
amendment or supplement thereto will not, as of the applicable filing date and
on the First Closing Date and on each Option Closing Date (if any), contain an
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading; provided, however,
that the Company makes no warranty or representation with respect to any
statement contained in the Registration Statement, the Preliminary Prospectus or
the Prospectus, or any amendments or supplements thereto, in reliance upon and
in conformity with the information concerning the Underwriters and furnished in
writing by or on behalf of the Underwriters through the Representative to the
Company expressly for use in the Registration Statement or the Prospectus, or
any amendments or supplements thereto (that information being limited to that
described in the penultimate sentence of the first paragraph of Section 9(c)
hereof);
(p) the Preliminary Prospectus was, and the Prospectus delivered to
the Underwriters for use in connection with this offering will be, identical to
the versions of the Preliminary Prospectus and Prospectus transmitted to the
Commission for filing via the Electronic Data Gathering Analysis and Retrieval
System ("▇▇▇▇▇"), except to the extent permitted by Regulation S-T;
(q) there are no actions, suits, proceedings, inquiries or
investigations pending or, to the knowledge of the Company and the Operating
Partnership, threatened (i) against or affecting the Company or any of the
Subsidiaries, or (ii) which has the subject thereof any of the respective
officers and directors of the Company or any officers, directors, managers or
partners of its Subsidiaries, or to which the properties, assets or rights of
any such entity are subject, at law or in equity, before or by any federal,
state, local or foreign governmental or regulatory commission, board, body,
authority, arbitral panel or agency, or (iii) relating to environmental or
discrimination matters, where in any such case (A) there is a reasonable
possibility that such action, suit or proceeding might be determined adversely
to the Company or such Subsidiary and (B) if so determined adversely, could
result in a judgment, decree, award or order having a Material Adverse Effect or
could adversely affect the consummation of the transactions contemplated by this
Agreement;
(r) the financial statements, including the notes thereto, included
in the Registration Statement and the Prospectus present fairly the consolidated
financial position of the entities to which such financial statements relate
(the "Covered Entities") as of the dates indicated and the consolidated results
of operations and changes in financial position and cash flows of the Covered
Entities for the periods specified; the supporting schedules included in the
Registration Statement fairly present the information required to be stated
therein; such financial statements have been prepared in conformity with
generally accepted accounting principles as applied in the United States
("GAAP") and on a consistent basis during the periods involved (except as may be
expressly stated in the related notes thereto) and in accordance with Regulation
S-X promulgated by the Commission; the financial data set forth in the
Registration Statement and in the Prospectus under the captions "Summary -
Summary Financial Information," "Selected Financial Information," and
"Capitalization" fairly present the information shown therein and have been
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compiled on a basis consistent with the financial statements included in the
Registration Statement and the Prospectus; no other financial statements or
supporting schedules are required to be included in the Registration Statement;
no other pro forma financial information is required to be included in the
Registration Statement; the unaudited pro forma financial information (including
the related notes) included in the Prospectus and any Preliminary Prospectus
complies as to the form in all material respects with the applicable accounting
requirements of the Securities Act and the Securities Act Regulations, and
management of the Company believes that the assumptions underlying the pro forma
adjustments are reasonable; such pro forma adjustments have been properly
applied to the historical amounts in the compilation of the information and such
information fairly presents with respect to the Company and the Subsidiaries,
the financial position, results of operations and other information purported to
be shown therein at the respective dates and for the respective periods
specified;
(s) (i) KPMG LLP, who have audited certain financial statements of
the Company and its consolidated subsidiaries and expressed their opinions in
reports with respect to the consolidated financial statements of the Company and
the Subsidiaries filed with the Commission as part of the Registration Statement
and Prospectus are, and were during the periods covered by its reports,
independent public accountants with respect to the Company as required by the
Securities Act and the Securities Act Regulations and the Exchange Act and the
rules and regulations thereunder (the "Exchange Act Regulations"); and (ii) to
the Company's and the Operating Partnership's knowledge, KPMG LLP is not in
violation of the auditor independence requirements of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of
2002, as amended, and the rules and regulations promulgated by the Commission
thereunder (the "▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act");
(t) subsequent to the respective dates as of which information is
given in the Registration Statement and the Prospectus, and except as may be
otherwise stated in the Registration Statement or Prospectus, there has not been
(A) any Material Adverse Change or any development that could reasonably be
expected to result in a Material Adverse Change, whether or not arising in the
ordinary course of business, (B) any transaction that is material to the Company
and the Subsidiaries taken as a whole, contemplated or entered into by the
Company or any of the Subsidiaries or any material liability or obligation,
indirect, direct or contingent, not in the ordinary course of business, (C) any
obligation, contingent or otherwise, directly or indirectly incurred by the
Company or any Subsidiary that is material to the Company and Subsidiaries taken
as a whole or (D) any 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 its capital stock or
repurchase or redemption by the Company or any of its Subsidiaries of any class
of capital stock;
(u) the Shares conform in all material respects to the description
thereof contained in the Registration Statement and the Prospectus;
(v) there are no persons with registration or other similar rights
to have any equity or debt securities, including securities that are convertible
into or exchangeable for equity securities, registered pursuant to the
Registration Statement or otherwise registered by the Company under the
Securities Act, (i) except for certain of the Selling Stockholders, to the
extent of the equity securities to be offered and sold by such Selling
Stockholders as contemplated by this Agreement, and (ii) except for those
registration or similar rights that have
10
been waived with respect to the offering contemplated by this Agreement, all of
which registration or similar rights described in clauses (i) and (ii) are
fairly summarized in the Prospectus; no person has a right of participation or
first refusal with respect to the sale of the Shares by the Company;
(w) the issuance and sale of the Shares to the Underwriters
hereunder have been duly authorized by the Company, and, when issued and duly
delivered against payment therefor as contemplated by this Agreement, will be
validly issued, fully paid and nonassessable, free and clear of any pledge,
lien, encumbrance, security interest or other claim, and the issuance and sale
of the Shares by the Company is not subject to preemptive or other similar
rights arising by operation of law, under the organizational documents of the
Company or under any agreement to which the Company or any Subsidiary is a party
or otherwise; except as contemplated herein or as otherwise disclosed in the
Registration Statement and the Prospectus, there are no contracts, agreements or
understandings between the Company and any person or entity granting such person
or entity the right to require the Company to file a registration statement
under the Securities Act with respect to any securities of the Company;
(x) the Shares have been registered pursuant to Section 12(b) of the
Exchange Act and the Shares have been approved for listing on the New York Stock
Exchange, subject only to official notice of issuance;
(y) the Company has not taken, and will not take, directly or
indirectly, any action which is designed to or which has constituted or which
might reasonably be expected to cause or result in stabilization or manipulation
of the price of any security of the Company to facilitate the sale or resale of
the Shares;
(z) neither the Company nor any of its affiliates is (i) required to
register as a "broker" or "dealer" in accordance with the provisions of the
Exchange Act or the Exchange Act Regulations, (ii) an affiliate of a broker or
dealer or (iii) a person associated with a member of the NASD (within the
meaning of Article I of the Bylaws of the NASD);
(aa) the Company has not relied upon the Representative or legal
counsel for the Underwriters for any legal, tax or accounting advice in
connection with the offering and sale of the Shares;
(bb) the form of certificate used to evidence the Common Shares
complies in all material respects with all applicable statutory requirements,
with any applicable requirements of the Articles of Amendment and Bylaws of the
Company and the requirements of the New York Stock Exchange;
(cc) the Company and the Subsidiaries have good and marketable title
in fee simple to all real property, and good title to all personal property,
owned by them, in each case free and clear of all liens, security interests,
pledges, charges, encumbrances, encroachments, restrictions, mortgages and other
defects, except such as are disclosed in the 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 and the
Subsidiaries; any real property, improvements, equipment and personal property
held under lease by the Company or any
11
Subsidiary are held under valid, existing and enforceable leases, with such
exceptions as are disclosed in the Prospectus or are not material and do not
interfere with the use made or proposed to be made of such real property,
improvements, equipment or 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 include only
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, 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;
(dd) all real property owned or leased by the Company or any
Subsidiary, including the Current Facilities, whether owned in fee simple or
through a joint venture or other partnership, (each, a "Property" and
collectively "Properties"), is free of any material structural defects and all
building systems contained therein are in good working order in all material
respects, subject to ordinary wear and tear or, in each instance, the Company or
any Subsidiary, as the case may be, has created an adequate reserve to effect
reasonably required repairs, maintenance and capital expenditures; water, storm
water, sanitary sewer, electricity and telephone service are all available at
the property lines of such property over duly dedicated streets or perpetual
easements of record benefiting such property; except as described in the
Prospectus, there is no pending or, to the knowledge of the Company, the
Partnership or any Subsidiary, threatened special assessment, tax reduction
proceeding or other action that could reasonably be expected to materially
increase the real property taxes and assessments of any Property; the personal
property (including, but not limited to furniture, equipment, bedding and
towels) owned by the Company and its Subsidiaries immediately prior to the First
Closing Date is adequate to enable the Company and its Subsidiaries to continue
to conduct the operations of the Properties in the manner in which such
operations have normally been conducted;
(ee) each of the properties listed in the Prospectus as a property
with respect to which the Company or one of its Subsidiaries has a leasehold
interest is the subject of a lease that has been duly and validly authorized,
executed and delivered by or on behalf of the Company and the Partnership, and
to the knowledge of the Company and the Partnership, by each of the other
parties thereto and each such lease constitutes a valid and binding agreement of
the parties thereto, enforceable in accordance with its terms, except as
enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting creditors' rights generally or by general
principles of equity;
(ff) the descriptions in the Registration Statement and the
Prospectus of legal or governmental proceedings, contracts, leases and other
legal documents are accurate and present fairly the information required to be
shown, and there are no legal or governmental proceedings, contracts, leases, or
other documents of a character required to be described in the Registration
Statement or the Prospectus or to be filed as exhibits to the Registration
Statement that are not described or filed as required; all agreements between
the Company or any of the Subsidiaries and third parties expressly referenced in
the Registration Statement and the Prospectus are legal,
12
valid and binding obligations of the Company or one or more of the Subsidiaries,
enforceable in accordance with their respective terms;
(gg) there are no real property interests or loans in respect of real
property that any of the Company and the Subsidiaries directly or indirectly
intends to acquire, lease, originate or underwrite or any contracts, letters of
intent, term sheets, agreements, arrangements or understandings with respect to
the direct or indirect acquisition, disposition, origination or underwriting by
the Company or the Subsidiaries of interests in real property or loans in
respect of real property that are required to be described in the Registration
Statement or the Prospectus and are not so described;
(hh) the Company and each Subsidiary owns or possesses, adequate and
sufficient licenses or other rights to use all patents, trademarks, service
marks, trade names, copyrights, domain names, software and design licenses,
approvals, trade secrets, manufacturing processes, other intangible property
rights and know-how (collectively "Intellectual Property Rights") necessary to
entitle the Company, the General Partner and each Subsidiary to conduct its
business as described in the Prospectus, and the expected expiration of any of
such Intellectual Property Rights would not result in a Material Adverse Change;
neither the Company nor any Subsidiary has received notice of infringement of or
conflict with (and the Company knows of no such infringement of or conflict
with) asserted rights of others with respect to any Intellectual Property
Rights; the Company nor any Subsidiary is 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 in all material respects; none of the technology employed by
the Company or any Subsidiary has been obtained or is being used by the Company
or any Subsidiary in violation of any contractual obligation binding on the
Company or any Subsidiary or, to the Company's and the Operating Partnership's
knowledge, any of the officers, directors, managers, partners, directors or
employees of the Company or any Subsidiary, or otherwise in violation of the
rights of any persons;
(ii) The Company has established and maintains disclosure controls
and procedures (as such term is defined in Rule 13a-15(e) under the Exchange
Act) which (i) are designed to ensure that material information relating to the
Company, including the Subsidiaries, is made known to the Company's principal
executive officer and principal financial officer by others within those
entities, particularly during the preparation of the Registration Statement;
(ii) have been evaluated for effectiveness as of each date of filing of the
Registration Statement with the Commission; and (iii) are effective to ensure
that information required to be disclosed by the Company in the Registration
Statement is recorded, processed, summarized and reported in a manner that
allows timely decisions regarding required disclosure;
(jj) the Company and each of the Subsidiaries maintain a system of
internal accounting controls sufficient to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of
financial statements for external purposes in accordance with generally accepted
accounting principles and includes those policies and procedures that (i)
pertain to the maintenance of records that in reasonable detail accurately and
fairly reflect the transactions and dispositions of the assets of the Company;
(ii) provide reasonable assurance that transactions are recorded as necessary to
permit preparation of financial statements in accordance with generally accepted
accounting principles, and that
13
receipts and expenditures of the Company are being made only in accordance with
authorizations of management and directors of the Company; and (iii) provide
reasonable assurance regarding prevention or timely detection of unauthorized
acquisition, use or disposition of the Company's assets that could have a
material effect on the financial statements;
(kk) the Company is not aware of any (i) control deficiency,
significant deficiency or material weakness in the design or operation of
internal control over financial reporting which is reasonably likely to
adversely affect the Company's ability to record, process, summarize and report
financial information or (ii) fraud, whether or not material, that involves
management or other employees of the Company who have a significant role in the
Company's internal control over financial reporting;
(ll) each of the Company, the General Partner, and the Subsidiaries
has filed on a timely basis all necessary federal, state, local and foreign
income and franchise tax returns required to be filed through the date hereof or
have properly requested extensions thereof, and have paid all taxes shown as due
thereon, and if due and payable, any related or similar assessment, fine or
penalty levied against the Company, the General Partner, or any of the
Subsidiaries; no tax deficiency has been asserted against any such entity, nor
does the Company or any of the Subsidiaries know of any tax deficiency which is
likely to be asserted against any such entity; all tax liabilities are
adequately provided for on the respective books of such entities;
(mm) each of the Company and the Subsidiaries maintains insurance,
issued by insurers of recognized financial responsibility, of the types and with
policies in such amounts and with such deductibles and covering such risks as
are generally deemed adequate for their respective businesses and consistent
with insurance coverage maintained by similar companies in similar businesses,
including, but not limited to, insurance covering real and personal property
owned or leased by the Company and the Subsidiaries against theft, damage,
destruction, environmental liabilities, acts of vandalism, terrorism,
earthquakes, floods and all other risks customarily insured against, all of
which insurance is in full force and effect; 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;
(nn) except as otherwise disclosed in the Prospectus, (i) none of the
Operating Partnership, the Company, any of the Subsidiaries nor, to the best
knowledge of the Operating Partnership and the Company, any other owners,
tenants or proposed tenants of the Current Facilities or the Pending Acquisition
Facilities at any time, used, handled, stored, treated, transported,
manufactured, spilled, leaked, or discharged, dumped, transferred or otherwise
disposed of or dealt with, Hazardous Materials (as defined below) on, in, under
or affecting any real property currently leased or owned or by any means
controlled by the Company or any of the Subsidiaries, or to be leased or owned
or by any means to be controlled by the Company or any of the Subsidiaries,
including any real property underlying any loan held by the Company or the
Subsidiaries (collectively, the "Real Property"), except in connection with the
ordinary use of residential, retail or commercial properties owned by the
Operating Partnership; (ii) the Operating Partnership and the Company do not
intend to use the Real Property or any
14
subsequently acquired properties for the purpose of using, handling, storing,
treating, transporting, manufacturing, spilling, leaking, discharging, dumping,
transferring or otherwise disposing of or dealing with Hazardous Materials other
than in connection with the ordinary use of residential, retail or commercial
properties owned by the Operating Partnership; (iii) there has not been and
currently is no seepage, leak, discharge, release, emission, spill, or dumping
of Hazardous Materials originating on, in or under the Real Property into waters
on or adjacent to the Real Property, or onto lands from which Hazardous
Materials might seep, flow or drain into such waters; (iv) none of the Operating
Partnership, the Company, nor any of the other Subsidiaries has received any
notice of, or has any knowledge of, any occurrence or circumstance which, with
notice or passage of time or both, would give rise to a claim under or pursuant
to any federal, state or local environmental statute or regulation or under
common law, pertaining to Hazardous Materials on or originating from any of the
Real Property or any assets described in the Prospectus (or, the most recent
Preliminary Prospectus) or any other real property owned or occupied by any such
party or arising out of the conduct of any such party, including without
limitation a claim under or pursuant to any Environmental Statute; (v) the Real
Property is not included or proposed for inclusion on the National Priorities
List issued pursuant to CERCLA (as defined below) by the United States
Environmental Protection Agency (the "EPA") or, to the best of the Operating
Partnership's and the Company's knowledge, proposed for inclusion on any similar
list or inventory issued pursuant to any other Environmental Statute or issued
by any other Governmental Authority (as defined below); in the operation of the
Company's and the Operating Partnership's businesses, the Company acquires
before acquisition and conducts periodically an environmental assessment of the
Real Property and, to the extent they become aware of (a) any condition that
would reasonably be expected to result in liability associated with the presence
or release of a Hazardous Material, or (b) any violation or potential violation
of any Environmental Statute, the Company and the Operating Partnership take all
commercially reasonable action necessary or advisable (including any capital
improvements) for clean-up, closure or other compliance with such Environmental
Statute;
As used herein, "Hazardous Material" shall include, without limitation,
any flammable explosive, radioactive material, hazardous substance, hazardous
material, hazardous waste, toxic substance, asbestos or related material, as
defined by any federal, state or local environmental law, ordinance, rule or
regulation including without limitation, the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980, as amended, 42 U.S.C.
Sections 9601-9675 ("CERCLA"), the Hazardous Materials Transportation Act, as
amended, 49 U.S.C. Sections 1801-1819, the Resource Conservation and Recovery
Act, as amended, 42 U.S.C. Sections 6901-6992K, the Emergency Planning and
Community Right-to-Know Act of 1986, 42 U.S.C. Sections 11001-11050, the Toxic
Substances Control Act, 15 U.S.C. Sections 2601-2671, the Federal Insecticide,
Fungicide and Rodenticide Act, 7 U.S.C. Sections 136-136y, the Clean Air Act, 42
U.S.C. Sections 7401-7642, the Clean Water Act (Federal Water Pollution Control
Act), 33 U.S.C. Sections 1251-1387, the Safe Drinking Water Act, 42 U.S.C.
Sections 300f-300j-26, and the Occupational Safety and Health Act, 29 U.S.C.
Sections 651-678, as any of the above statutes may be amended from time to time,
and in the regulations promulgated pursuant to each of the foregoing
(individually, an "Environmental Statute") or by any federal, state or local
governmental authority having or claiming jurisdiction over the properties and
assets described in the Prospectus (a "Governmental Authority");
15
(oo) there are no costs or liabilities associated with any
Environmental Statute (including, without limitation, any capital or operating
expenditures required for clean-up, closure of properties or compliance with any
Environmental Statute or any permit, license or approval, any related
constraints on operating activities and any potential liabilities to third
parties) which would, individually or in the aggregate, have a Material Adverse
Effect;
(pp) none of the entities which prepared appraisals of the Real
Property, nor the entities which prepared Phase I or other environmental
assessments with respect to the Real Property, was employed for such purpose on
a contingent basis or has any substantial interest in the Company or any of the
Subsidiaries, and none of their directors, officers or employees is connected
with the Company or any of the Subsidiaries as a promoter, selling agent,
director, officer, director or employee;
(qq) neither the Company nor any Subsidiary is in violation of or has
received notice of any violation with respect to any federal or state law, rule
or regulation, including without limitation any federal or state law relating to
discrimination in the hiring, termination, promotion, terms or conditions of
employment or pay of employees, nor any applicable federal or state wages and
hours law, nor any state law precluding the denial of credit due to the
neighborhood in which a property is situated, the violation of any of which
could have a Material Adverse Effect;
(rr) the Company, the Subsidiaries and their "ERISA Affiliates" (as
defined below) 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, the Subsidiaries or their ERISA Affiliates or to
which the Company, the Subsidiaries or their ERISA Affiliates contribute or are
required to contribute are in compliance in all material respects with ERISA;
"ERISA Affiliate" means any trade or business, whether or not incorporated,
which with the Company or a Subsidiary is treated as a single employer under
Section 414(b), (c), (m) or (o) of the Internal Revenue Code of 1986, as
amended, and the rules and regulations promulgated thereunder and the
corresponding provisions of state income tax codes (the "Code"); no such
employee benefit plan is subject to Section 412 of the Code, Section 302 of
ERISA or Title IV of ERISA; all contributions required to have been made under
each such employee benefit plan have been made on a timely basis; there has been
no "prohibited transaction" (as defined in Section 4975 of the Code or Section
406 or 407 of ERISA) for which the Company, the Subsidiaries or their ERISA
Affiliates have any liability; each such employee benefit plan 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;
(ss) neither the Company nor any of the Subsidiaries nor any officer,
director, manager or director purporting to act on behalf of the Company or any
of the Subsidiaries has at any time (i) made any contributions to any candidate
for political office, or failed to disclose fully any such contributions, in
violation of law, (ii) made any payment to any state, federal or foreign
governmental officer or official, or other person charged with similar public or
quasi-public duties, other than payments required or allowed by applicable law,
(iii) made any payment outside the ordinary course of business to any investment
officer or loan broker or person charged with similar duties of any entity to
which the Company or any of the Subsidiaries sells or from which the Company or
any of the Subsidiaries buys loans or servicing arrangements for
16
the purpose of influencing such agent, officer, broker or person to buy loans or
servicing arrangements from or sell loans to the Company or any of the
Subsidiaries, or (iv) engaged in any transactions, maintained any bank account
or used any corporate funds except for transactions, bank accounts and funds
which have been and are reflected in the normally maintained books and records
of the Company and the Subsidiaries;
(tt) there are no material outstanding loans or advances or material
guarantees of indebtedness by the Company or any of the Subsidiaries to or for
the benefit of any of the officers, directors, managers or directors of the
Company or any of the Subsidiaries or any of the members of the families of any
of them;
(uu) there is and has been no failure on the part of the Company or
any of the Company's directors or officers, in their capacities as such, to
comply with any provision of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act, including Section 402
related to loans and Sections 302 and 906 related to certifications;
(vv) neither the Company nor any of its Subsidiaries nor, to the
knowledge of the Company, any director, officer, agent, employee or affiliate of
the Company or any of its Subsidiaries is aware of or has taken any action,
directly or indirectly, that would result in a violation by such Persons of 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, its
Subsidiaries, and to the knowledge of the Company, its affiliates have conducted
their 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. "FCPA" means Foreign Corrupt
Practices Act of 1977, as amended, and the rules and regulations thereunder;
(ww) 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 jurisdictions, the rules and regulations thereunder and any related or
similar 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, threatened;
(xx) neither the Company nor any of its Subsidiaries nor, to the
knowledge of the Company, any director, officer, agent, employee or affiliate 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 the 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
17
financing the activities of any person currently subject to any U.S. sanctions
administered by OFAC;
(yy) except as disclosed in the Registration Statement and the
Prospectus, the Company (i) does not have any material lending or other
relationship with any bank or lending affiliate of any Underwriter and (ii) does
not intend to use any of the proceeds from the sale of the Shares hereunder to
repay any outstanding debt owed to any affiliate of any Underwriter;
(zz) neither the Company nor any of the Subsidiaries nor, to the best
knowledge of the Company or the Operating Partnership, any officer, director,
employee or agent of the Company or any of the Subsidiaries, has made any
payment of funds of the Company or of any Subsidiary or received or retained any
funds in violation of any law, rule or regulation or of a character required to
be disclosed in the Prospectus and which has not been properly described
therein;
(aaa) all securities issued by the Company, any of the Subsidiaries or
any trusts established by the Company or any Subsidiary, have been issued and
sold in compliance with (i) all applicable federal and state securities laws,
(ii) the laws of the applicable jurisdiction of incorporation of the issuing
entity and, (iii) to the extent applicable to the issuing entity, the
requirements of the New York Stock Exchange;
(bbb) none of the Operating Partnership, 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 including the Current Facilities
or the Pending Acquisition Facilities (collectively, for purposes of this
subsection only, the "Properties") or any part thereof which could have a
Material Adverse Effect; the Company has disclosed in the Prospectus with an
adequate amount of detail all options and rights of first refusal to purchase
all or part of any Property or any interest therein; each of the Properties
complies with all applicable zoning laws, ordinances, regulations 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 of any of the Properties and will not result in a forfeiture or reversion
of title; none of the Operating Partnership, 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 none of
the Operating Partnership, the Company nor any Subsidiary knows of any such
condemnation or zoning change which is threatened and which if consummated could
have a Material Adverse Effect; 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 Subsidiaries that are
required to be described in the Prospectus (or, the most recent Preliminary
Prospectus) are disclosed therein; no lessee 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 such defaults
that could not have a Material Adverse Effect; and no tenant under any lease
pursuant to which the Operating Partnership or any of the 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, except as
such options or rights of first refusal which, if exercised, could not have a
Material Adverse Effect;
18
(ccc) each healthcare facility of the Company described in the
Prospectus is accredited by the Joint Commission on Accreditation of Healthcare
Organizations ("JCAHO"). To the Company's best knowledge, there are no known
deficiencies currently in existence that would preclude any of the Current
Facilities' or the Pending Acquisition Facilities unconditional accreditation by
the JCAHO. The facilities, equipment, staffing and operation of each Current
Facility and Pending Acquisition Facility satisfy, without exception, the
applicable general hospital licensing requirements and a new license should
issue to each tenant if resurveyed. No notice or warning from any authority with
respect to the suspension, revocation or termination of any license, permit,
order, approval, authorization or accreditation required of the Company, any
tenant of the Company, any Current Facility or Pending Acquisition/Facility
owned or leased by the Company has been issued or given. The Company has no
knowledge of the proposed or threatened issuances of any such notice or warning;
(ddd) the mortgages and deeds of trust encumbering the real property
owned by the Company and its Subsidiaries are not convertible nor will the
Company or the Partnership hold a participating interest therein and such
mortgages and deeds of trust are not cross-defaulted or cross-collateralized to
any property not to be owned directly or indirectly by the Company or the
Partnership;
(eee) in connection with this offering, the Company has not offered
and will not offer its Common Shares or any other securities convertible into or
exchangeable or exercisable for Common Shares in a manner in violation of the
Securities Act; the Company has not distributed and will not distribute any
prospectus or other offering material, other than the Preliminary Prospectus and
the Prospectus, in connection with the offer and sale of the Shares;
(fff) the Company has complied and will comply with all the provisions
of Florida Statutes, Section 517.075 (Chapter 92-198, Laws of Florida); neither
the Company nor any of the Subsidiaries or affiliates does business with the
government of Cuba or with any person or affiliate located in Cuba;
(ggg) except as otherwise disclosed in the Prospectus, the Company has
not incurred any liability for any broker's or finder's fees or similar payments
in connection with the transactions herein contemplated;
(hhh) no business relationship, direct or indirect, exists between or
among the Company or any of the Subsidiaries on the one hand, and the directors,
officers, directors, managers, shareholders, partners, customers or suppliers of
the Company or any of the Subsidiaries on the other hand, that is required by
the Securities Act and the Securities Act Regulations to be described in the
Registration Statement and the Prospectus and which is not so described;
(iii) the board of directors of the Company has determined that each
of the directors of the Company described as an "Independent Director" in the
Prospectus is "independent" in accordance with the rules and regulations of the
New York Stock Exchange;
(jjj) neither the Company nor any of the Subsidiaries is and, after
giving effect to the offering and sale of the Shares, will not be an "investment
company" or an entity "controlled" by
19
an "investment company," as such terms are defined in the Investment Company Act
of 1940, as amended (the "Investment Company Act");
(kkk) there are no existing or, to the knowledge of the Company or the
Operating Partnership, threatened labor disputes with the employees of the
Company or any of the Subsidiaries which are likely to have individually or in
the aggregate a Material Adverse Effect;
(lll) no consent, approval, authorization or order of, or
qualification with, any governmental body or agency, other than those obtained,
is required in connection with the offering of the Directed Shares in any
jurisdiction where the Directed Shares are being offered; the Company has not
offered, or caused the Representative to offer, Shares to any person pursuant to
the Directed Share Program with the specific 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;
(mmm) the statistical and market related data included in the
Prospectus and the Registration Statement are based on or derived from sources
that the Company believes to be reliable and accurate;
(nnn) the Company has qualified to be taxed as a real estate
investment trust pursuant to Sections 856 through 860 of the Code for its
taxable year ended December 31, 2004, and its current and proposed method of
operation as described in the Prospectus will enable the Company to continue to
meet the requirements for qualification and taxation as a real estate investment
trust under the Code for its taxable year ending December 31, 2005 and
thereafter; the Company intends to continue to qualify as a real estate
investment trust under the Code this year and for all subsequent years, and the
Company does not know of any event that would cause or is likely to cause the
Company to fail to qualify as a real estate investment trust under the Code at
any time;
(ooo) the factual description of, and the assumptions and
representations regarding, the Company's organization and actual and proposed
method of operation set forth in the Prospectus under the heading "Federal
Income Tax Consequences Of Our Status As A REIT" are accurate and present fairly
the matters referred to therein;
(ppp) the conduct of business by the Company and the Subsidiaries as
presently and proposed to be conducted is not subject to continuing oversight,
supervision, regulation or examination by any governmental official or body of
the United States or any other jurisdiction wherein the Company or the
Subsidiaries conducts or proposes to conduct such business, except as described
in the Prospectus and except such regulation as is applicable to commercial
enterprises generally;
(qqq) the pro forma financial data included in the Prospectus have
been properly compiled on the pro forma basis described therein and are based
upon good faith estimates and assumptions believed by the Company and the
Operating Partnership to be reasonable;
(rrr) neither the Company, any of its Subsidiaries, nor any Real
Property owned, directly or indirectly, by the Company has sustained, since the
Company's inception, any loss or
20
interference with its business from fire, explosion, flood, hurricane, accident
or other calamity, whether or not covered by insurance, or from any labor
dispute or arbitrators' or court or governmental action, order or decree that
would, individually or in the aggregate, have a Material Adverse Effect,
otherwise than as set forth in the Prospectus;
(sss) No Subsidiary is currently prohibited, directly or indirectly,
from paying any dividends to the Company, from making any other distribution on
such Subsidiary's capital stock or other equity interests, from repaying to the
Company any loans or advances to such Subsidiary from the Company or, except as
described in the Prospectus, from transferring any of such Subsidiary's property
or assets to the Company or any other Subsidiary; and
(ttt) any certificate signed by any officer of the Company or any
Subsidiary delivered to the Representative or to legal counsel for the
Underwriters pursuant to or in connection with this Agreement shall be deemed a
representation and warranty by the Company to each Underwriter as to the matters
covered thereby.
Each Selling Stockholder severally and not jointly represents
and warrants to the Underwriters that:
(a) such Selling Stockholder has full legal power and authority to
enter into this Agreement; this Agreement has been duly authorized, executed and
delivered by or on behalf of such Selling Stockholder and is a valid and binding
agreement of such Selling Stockholder, enforceable in accordance with its terms;
(b) such Selling Stockholder has full legal power and authority to
enter into each of the Custody Agreement and the Power of Attorney; the Custody
Agreement and the Power of Attorney of such Selling Stockholder has been duly
authorized, executed and delivered by such Selling Stockholder and is a valid
and binding agreement of such Selling Stockholder, and is enforceable against
such Selling Stockholder in accordance with the terms thereof;
(c) certificates, or book entries, in negotiable form for the Shares
to be sold hereunder by such Selling Stockholder have been placed in custody
under and may be transferred under the Custody Agreement and the Power of
Attorney for such Selling Stockholder; such Selling Stockholder agrees that the
Shares represented by the certificates held in custody for him or it under the
Custody Agreement are for the benefit of and coupled with and subject to the
interest hereunder of the Custodian, the Committee, the Underwriters, each other
Selling Stockholder and the Company; and that the Power of Attorney, the
arrangements made by such Selling Stockholder for such custody and the
appointment of the Custodian and the Committee by such Selling Stockholder are
irrevocable; and that the obligations of such Selling Stockholder hereunder
shall not be terminated by operation of law, whether by the death, disability,
incapacity or liquidation of any Selling Stockholder or the occurrence of any
other event; if any Selling Stockholder should die, become disabled or
incapacitated or be liquidated or if any other such event should occur before
the delivery of the Shares hereunder; certificates for the Shares shall be
delivered by the Custodian in accordance with the terms and conditions of this
Agreement and actions taken by the Committee and the Custodian pursuant to the
Custody Agreement and the Power of Attorney shall be as valid as if such death,
liquidation, incapacity or
21
other event had not occurred, regardless of whether or not the Custodian or the
Committee, or either of them, shall have received notice thereof;
(d) such Selling Stockholder now has, and before the First Closing
Date or the applicable Option Closing Date will have, (i) good and marketable
title to the Shares to be sold by such Selling Stockholder hereunder, free and
clear of all liens, encumbrances and claims whatsoever (other than pursuant to
the Custody Agreement and the Power of Attorney), and (ii) full legal right and
power, and all authorizations and approvals required by law and under its
organizational documents, if applicable, to enter into this Agreement and the
Custody Agreement and the Power of Attorney, to sell, transfer and deliver such
Shares to the Underwriters hereunder and to make the representations, warranties
and agreements made by such Selling Stockholder herein; upon the delivery of and
payment for such Shares hereunder, such Selling Stockholder will deliver good,
valid and marketable title thereto, free and clear of any pledge, lien,
mortgage, encumbrance, security interest or other claim;
(e) before the First Closing Date or the applicable Option Closing
Date, all stock transfer or other taxes (other than income taxes) which are
required to be paid in connection with the sale and transfer of the Shares to be
sold by such Selling Stockholder to the Underwriters hereunder will have been
fully paid or provided for by such Selling Stockholder and all laws imposing
such taxes will have been fully complied with;
(f) the execution and delivery by such Selling Stockholder of, and
the performance by such Selling Stockholder of its obligations under, this
Agreement, the Custody Agreement and the Power of Attorney will not contravene
or conflict with, result in a breach of, or constitute a default under (nor
constitute any event which with notice, lapse of time, or both would constitute
a breach of, or default under), or require the consent of any other party to,
(i) any provision of the organizational documents of such Selling Stockholder,
if applicable, or any other agreement or instrument to which such Selling
Stockholder is a party or by which it is bound or under which it is entitled to
any right or benefit, (ii) any provision of applicable law or any judgment,
order, decree or regulation applicable to such Selling Stockholder of any court,
regulatory body, administrative agency, governmental body or arbitrator having
jurisdiction over such Selling Stockholder, or (iii) any provision of any
license, indenture, mortgage, deed of trust, loan or credit agreement or other
agreement or instrument to which the Selling Stockholder is a party or by which
it or its properties may be bound or affected, or under any federal, state,
local or foreign law, regulation or rule or any decree, judgment or order
applicable to the Selling Stockholder; or result in the creation or imposition
of any lien, charge, claim or encumbrance upon any property or asset of the
Selling Stockholder;
(g) no approval, authorization, consent or order of, or registration
or filing with any federal, state or local governmental or regulatory
commission, board, body, authority or agency is required for the Selling
Stockholder's execution, delivery and performance of this Agreement, its
consummation of the transactions contemplated herein, and its sale and delivery
of the Shares, other than (i) such as have been obtained, or will have been
obtained before the First Closing Date or the applicable Option Closing Date, as
the case may be, under the Securities Act and the Exchange Act, and from the
NASD, (ii) such approvals as have been obtained in connection with the approval
of the listing of the Shares on the New York Stock Exchange and (iii) any
necessary
22
qualification under the securities or blue sky laws of the various jurisdictions
in which the Shares are being offered by the Underwriters;
(h) such Selling Stockholder (i) has carefully reviewed the
representations and warranties of the Company contained in this Agreement and
has no reason to believe that such representations and warranties are untrue or
incorrect; (ii) is familiar with the Registration Statement and the Prospectus
and has no knowledge of any material fact, condition or information not
disclosed in the Registration Statement or the Prospectus which has had or may
have a Material Adverse Effect and (iii) is not prompted to sell Shares by any
information concerning the Company which is not set forth in the Registration
Statement or the Prospectus;
(i) all material information with respect to such Selling
Stockholder contained in the Registration Statement and the Prospectus (as
amended or supplemented, if the Company shall have filed with the Commission any
amendment or supplement thereto) complied and will comply in all material
respects with all applicable provisions of the Securities Act and the Securities
Act Regulations, contains and will contain all statements of material fact
required to be stated therein in accordance with the Securities Act and the
Securities Act Regulations, and does not and will not contain an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary in order to make the statements therein not
misleading; such Selling Stockholder confirms as accurate the number of shares
of Common Shares set forth opposite such Selling Stockholder's name in the
Prospectus under the caption "Principal and Selling Stockholders" (both prior to
and after giving effect to the sale of the Shares);
(j) other than as permitted by the Securities Act and the Securities
Act Regulations, such Selling Stockholder has not distributed and will not
distribute any Preliminary Prospectus, the Prospectus or any other offering
material in connection with the offering and sale of the Shares; such Selling
Stockholder has not taken, directly or indirectly, any action intended, or which
might reasonably be expected, to cause or result in, under the Securities Act,
the Securities Act Regulations or otherwise, or which has constituted,
stabilization or manipulation of the price of any security of the Company to
facilitate the sale or resale of the Shares;
(k) such Selling Stockholder has not relied upon the Representative
or legal counsel for the Underwriters for any legal, tax or accounting advice in
connection with the offering and sale of the Shares;
(l) such Selling Stockholder does not have any registration or other
similar rights to have any equity or debt securities registered for sale by the
Company under the Registration Statement or included in the offering
contemplated by this Agreement, except for such rights as are described in the
Prospectus under "Shares Eligible for Future Sale;"
(m) no consent, approval or waiver is required under any instrument
or agreement to which such Selling Stockholder is a party or by which it is
bound or under which it is entitled to any right or benefit, in connection with
the offering, sale or purchase by the Underwriters of any of the Shares which
may be sold by such Selling Stockholder under this Agreement or the consummation
by such Selling Stockholder of any of the other transactions contemplated
hereby;
23
(n) such Selling Stockholder does not have any preemptive right,
co-sale right or right of first refusal or other similar right to purchase any
of the Shares that are to be sold by the Company or any of the other Selling
Stockholders to the Underwriters pursuant to this Agreement; and such Selling
Stockholder does not own any warrants, options or similar rights to acquire, and
does not have any right or arrangement to acquire, any capital stock, right,
warrants, options or other securities from the Company, other than those
described in the Registration Statement and the Prospectus;
(o) except as otherwise disclosed to the Underwriters in writing,
such Selling Stockholder nor any of its affiliates is (i) required to register
as a "broker" or "dealer" in accordance with the provisions of the Exchange Act
or the Exchange Act Regulations, (ii) an affiliate of a broker or dealer or
(iii) a member or a person associated with a member of the NASD (within the
meaning of Article I of the Bylaws of the NASD);
(p) such Selling Stockholder purchased the Shares in the ordinary
course of its business; and
(q) at the time of the purchase of the Shares, such Selling
Stockholder had no arrangement or understanding, directly or indirectly, with
any person, or any intent, to distribute the Shares.
4. Certain Covenants:
The Company and the Operating Partnership hereby agree with each
Underwriter:
(a) that the Company shall cooperate with the Representative and
legal counsel for the Underwriters and furnish such information as may be
required to qualify or register the 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 Representative, shall comply with such laws and shall continue
such qualifications, registrations and exemptions in effect so long as required
for the distribution of the Shares; provided that 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; and that the Company shall use its best efforts to prevent the
suspension of the qualification or registration of (or any such exemption
relating to) the Shares for offering, sale or trading in any jurisdiction and
will advise the Representative promptly of such suspension or any initiation or
threat of any proceeding for any such purpose; and that, 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;
(b) that if, at the time this Agreement is executed and delivered,
it is necessary for a post-effective amendment to the Registration Statement to
be declared effective before the offering of the Shares may commence, the
Company will use its best efforts to cause such post-effective amendment to
become effective as soon as possible;
(c) to prepare the Prospectus in a form approved by the Underwriters
and file such Prospectus (or a term sheet as permitted by Rule 434) with the
Commission pursuant to Rule
24
424(b) under the Securities Act not later than 10:00 a.m. (New York City time),
on the day following the execution and delivery of this Agreement or on such
other day as the parties may mutually agree and to furnish promptly and with
respect to the initial delivery of such Prospectus, not later than 10:00 a.m.
(New York City time) on the day following the execution and delivery of this
Agreement, or on such other day as the parties may mutually agree, to the
Underwriters copies of the Prospectus (or of the Prospectus as amended or
supplemented if the Company shall have made any amendments or supplements
thereto after the effective date of the Registration Statement) in such
quantities and at such locations as the Underwriters may reasonably request for
the purposes contemplated by the Securities Act Regulations, which Prospectus
and any amendments or supplements thereto furnished to the Underwriters will be
identical to the version transmitted to the Commission for filing via ▇▇▇▇▇,
except to the extent permitted by Regulation S-T;
(d) to advise the Representative promptly and (if requested by the
Representative) to confirm such advice in writing, when any post-effective
amendment to the Registration Statement becomes effective under the Securities
Act Regulations;
(e) that, after the date of this Agreement, the Company shall
promptly advise the Representative in writing (i) of the receipt of any comments
of, or requests for additional or supplemental information from, the Commission,
(ii) of the time and date of any filing of any post-effective amendment to the
Registration Statement or any amendment or supplement to any preliminary
prospectus or the Prospectus, (iii) of the time and date that any post-effective
amendment to the Registration Statement becomes effective and (iv) of the
issuance by the Commission of any stop order suspending the effectiveness of the
Registration Statement or any post-effective amendment thereto or of any order
preventing or suspending the use of any preliminary prospectus or the
Prospectus, or of any proceedings to remove, suspend or terminate from listing
the Common Shares from the New York Stock Exchange, or of the threatening or
initiation of any proceedings for any of such purposes; and that the Company
shall use its best efforts to prevent the issuance of any such order or
suspension, removal or termination from listing, and, 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; the Company
shall advise the Representative promptly of any proposal to amend or supplement
the Registration Statement or Prospectus and to file no such amendment or
supplement to which the Representative shall reasonably object; additionally,
the Company agrees that it shall comply with the provisions of Rules 424(b),
430A and 434, as applicable, under the Securities Act and will use its
reasonable efforts to confirm that any filings made by the Company under such
Rule 424(b) were received in a timely manner by the Commission;
(f) to furnish to the Underwriters for a period of five years from
the date of this Agreement (i) as soon as available, copies of all annual,
quarterly and current reports or other communications supplied to holders of
Common Shares, (ii) as soon as practicable after the filing thereof, copies of
all reports filed by the Company with the Commission, the NASD or any securities
exchange and (iii) such other information as the Underwriters may reasonably
request regarding the Company and the Subsidiaries;
(g) to advise the Underwriters promptly of the happening of any
event known to the Company within the time during which a Prospectus relating to
the Shares is required to be
25
delivered under the Securities Act Regulations which, in the judgment of the
Company or in the reasonable opinion of the Representative or legal counsel for
the Underwriters, would require the making of any change in the Prospectus then
being used so that the Prospectus would not include an untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, or if it is necessary at any time to
amend or supplement the Prospectus to comply with any law and, during such time,
to promptly prepare and furnish to the Underwriters copies of the proposed
amendment or supplement before filing any such amendment or supplement with the
Commission and thereafter promptly furnish at the Company's own expense to the
Underwriters and to dealers, copies in such quantities and at such locations as
the Representative may from time to time reasonably request of an appropriate
amendment to the Registration Statement or supplement to the Prospectus so that
the Prospectus as so amended or supplemented will not, in the light of the
circumstances when it is so delivered, be misleading, or so that the Prospectus,
as amended or supplemented, will comply with the law;
(h) to file promptly with the Commission any amendment to the
Registration Statement or the Prospectus or any supplement to the Prospectus
that may, in the judgment of the Company or the Representative, be required by
the Securities Act or requested by the Commission;
(i) that, prior to filing with the Commission any amendment to the
Registration Statement or supplement or amendment to the Prospectus or any
Prospectus pursuant to Rule 424 under the Securities Act, the Company shall
furnish to the Representative and counsel for the Underwriters for review a copy
of each such proposed amendment or supplement, and the Company shall not file
any such proposed amendment or supplement to which the Representative reasonably
object;
(j) to furnish promptly to each Representative a signed copy of the
Registration Statement, as initially filed with the Commission, and of all
amendments or supplements thereto (including all exhibits filed therewith or
incorporated by reference therein) and such number of conformed copies of the
foregoing as the Representative may reasonably request;
(k) to furnish to each Representative, not less than two business
days before filing with the Commission subsequent to the effective date of the
Prospectus and during the period referred to in paragraph (f) above, a copy of
any document proposed to be filed with the Commission pursuant to Section 13,
14, or 15(d) of the Exchange Act and during such period to file all such
documents in the manner and within the time periods required by the Exchange
Act, the Exchange Act Regulations and the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act;
(l) to apply the net proceeds from the sale of the Shares in the
manner described under the caption "Use of Proceeds" in the Prospectus;
(m) to make generally available to its security holders and to
deliver to the Representative as soon as practicable, but in any event not later
than the end of the fiscal quarter first occurring after the first anniversary
of the effective date of the Registration Statement an earnings statement
complying with the provisions of Section 11(a) of the Securities Act (in form,
at the option of the Company, complying with the provisions of Rule 158 of the
Securities Act
26
Regulations,) covering a period of 12 months beginning after the effective date
of the Registration Statement;
(n) to use its best efforts to maintain the listing of the Shares
on, and comply at all times with the published rules and regulations of, the New
York Stock Exchange and to file with the New York Stock Exchange all documents
and notices required by the New York Stock Exchange of companies that have
securities for which quotations are reported by the New York Stock Exchange;
(o) to engage and maintain, at its expense, a registrar and transfer
agent for the Shares;
(p) to refrain during a period of 180 days from the date of the
Prospectus, without the prior written consent of the Representative (which
consent may be withheld at the sole discretion of the Representative), from,
directly or indirectly, (i) offering, pledging, selling, contracting to sell,
selling any option or contract to purchase, purchasing any option or contract to
sell, granting any option for the sale of, establishing an open "put equivalent
position" within the meaning of Rule 16a-1(h) under the Exchange Act, or
otherwise disposing of or transferring, (or entering into any transaction or
device which is designed to, or could be expected to, result in the disposition
by any person at any time in the future of), any Common Shares or any securities
convertible into or exercisable or exchangeable for Common Shares, or filing any
registration statement under the Securities Act with respect to any of the
foregoing, or (ii) entering into any swap or any other agreement or any
transaction that transfers, in whole or in part, directly or indirectly, the
economic consequence of ownership of the Common Shares, whether any such swap or
transaction described in clause (i) or (ii) above is to be settled by delivery
of Common Shares or such other securities, in cash or otherwise; provided,
however, that the Company may issue its Common Shares or options to purchase its
Common Shares, or Common Shares upon exercise of options, pursuant to any stock
option, stock bonus or other stock plan or arrangement described in the
Prospectus, but only if the holders of such shares, options, or shares issued
upon exercise of such options, agree in writing not to sell, offer, dispose of
or otherwise transfer any such shares or options during such 180 day period
without the prior written consent of the Representative (which consent may be
withheld at the sole discretion of the Representative). Notwithstanding the
foregoing, if (1) during the last 17 days of the 180-day restricted period, the
Company issues an earnings release or material news or a material event relating
to the Company occurs; or (2) prior to the expiration of the 180-day restricted
period, the Company announces that it will release earnings results during the
16-day period beginning on the last day of the 180-day period, the restrictions
imposed by this Agreement shall continue to apply until the expiration of the
18-day period beginning on the issuance of the earnings release or the
occurrence of the material news or material event;
(q) not to, and to use its best efforts to cause its officers,
directors, partners and affiliates, as applicable, not to, (i) take, directly or
indirectly prior to termination of the underwriting syndicate contemplated by
this Agreement, any action designed to stabilize or manipulate the price of any
security of the Company, or which may cause or result in, or which might in the
future reasonably be expected to cause or result in, the stabilization or
manipulation of the price of any security of the Company, to facilitate the sale
or resale of any of the Shares, (ii) sell, bid for, purchase or pay anyone any
compensation for soliciting purchases of the Shares
27
or (iii) pay or agree to pay to any person any compensation for soliciting any
order to purchase any other securities of the Company;
(r) (i) to cause each 1% or greater stockholder, officer and
director of the Company to furnish to the Representative, prior to the First
Closing Date, a letter agreement substantially in the form of Exhibit B hereto,
pursuant to which each such person shall agree not to, directly or indirectly,
(1) offer for sale, sell, pledge or otherwise dispose of (or enter into any
transaction or device which is designed to, or could be expected to, result in
the disposition by any person at any time in the future of) any Common Shares or
securities convertible into or exchangeable for Common Shares or (2) enter into
any swap or other derivatives transaction that transfers to another, in whole or
in part, any of the economic benefits or risks of ownership of such Common
Shares, whether any such transaction described in clause (1) or (2) above is to
be settled by delivery of Common Shares or other securities, in cash or
otherwise, in each case for a period of 180 days from the date of the
Prospectus, without the prior written consent of the Representative on behalf of
the Underwriters; to 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 April 2004 private placement; to 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. Notwithstanding the foregoing, if (1) during
the last 17 days of the 180-day restricted period, the Company issues an
earnings release or material news or a material event relating to the Company
occurs; or (2) prior to the expiration of the 180-day restricted period, the
Company announces that it will release earnings results during the 16-day period
beginning on the last day of the 180-day period, the restrictions imposed by
this Agreement shall continue to apply until the expiration of the 18-day period
beginning on the issuance of the earnings release or the occurrence of the
material news or material event;
(s) that during the time which a Prospectus relating to the Shares
is required to be delivered under the Securities Act Regulations, the Company
shall file, on a timely basis, with the Commission and the New York Stock
Exchange] all reports and documents in the manner required by the Exchange Act,
the Exchange Act Regulations and the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act; additionally, the
Company shall report the use of proceeds from the issuance of the Shares as may
be required under Rule 463 under the Securities Act;
(t) if at any time during the 90-day period after the Registration
Statement becomes effective any rumor, publication or event relating to or
affecting the Company shall occur as a result of which, in the reasonable
opinion of the Representative, the market price of the Common Shares has been or
is likely to be materially affected (regardless of whether such rumor,
publication or event necessitates a supplement to or amendment of the
Prospectus) and after written notice from the Representative advising the
Company to the effect set forth above, to forthwith prepare, consult with the
Representative concerning the substance of, and disseminate a press release or
other public statement, reasonably satisfactory to the Representative,
responding to or commenting on such rumor, publication or event;
(u) that the Company will comply with all of the provisions of any
undertakings in the Registration Statement;
28
(v) that the Company will continue to meet the requirements to
qualify as a REIT under the Code;
(w) that the Company shall not invest, or otherwise use the proceeds
received by the Company from its sale of the 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; and
(x) that, in connection with the Directed Share Program, the Company
will ensure that the Directed Shares will be restricted to the extent required
by the NASD or the NASD rules from sale, transfer, assignment, pledge or
hypothecation for a period of three months following the date of the
effectiveness of the Registration Statement; that the Representative will notify
the Company as to which participants will need to be so restricted; and that the
Company will direct the transfer agent to place stop transfer restrictions upon
such securities for such period of time; and that, 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.
Each Selling Stockholder hereby agrees with each Underwriter:
(y) to deliver to the Representative prior to the First Closing Date
a properly completed and executed United States Treasury Department Form W-8 (if
the Selling Stockholder is a non-United States person, within the meaning of the
Code) or Form W-9 (if the Selling Stockholder is a United States person, within
the meaning of the Code).
(z) to furnish to the Representative, prior to the First Closing
Date, a lock-up agreement, substantially in the form of Exhibit B hereto.
(aa) if, at any time prior to the date on which the distribution of
the Shares as contemplated herein and in the Prospectus has been completed, as
determined by the Representative, such Selling Stockholder has knowledge of the
occurrence of any event as a result of which the Prospectus or the Registration
Statement, in each case as then amended or supplemented, would include an untrue
statement of a material fact or omit to state any material fact necessary to
make the statements therein, in the light of the circumstances under which they
were made, not misleading, that such Selling Stockholder will promptly notify
the Company and the Representative.
(bb) to deliver to the Company or the Underwriters such documentation
as the Company or the Underwriters or any of their respective counsel may
reasonably request in order to effectuate any of the provisions of this
Agreement.
(cc) to refrain during a period of 60 days from the date of the
Prospectus, without the prior written consent of the Representative (which
consent may be withheld at the sole discretion of the Representative), from,
directly or indirectly, (i) offering, pledging, selling, contracting to sell,
selling any option or contract to purchase, purchasing any option or contract to
sell, granting any option for the sale of, establishing an open "put equivalent
position" within the meaning of Rule 16a-1(h) under the Exchange Act, or
otherwise disposing of or transferring (or entering into any transaction or
device which is designed to, or could be expected to, result in the disposition
by any person at any time in the future of), any Common Shares or any securities
convertible
29
into or exercisable or exchangeable for Common Shares, or requesting the filing
of any registration statement under the Securities Act with respect to any of
the foregoing (provided that the Company may file a registration statement
solely for the resale of Common Shares), or (ii) entering into any swap or any
other agreement or any transaction that transfers, in whole or in part, directly
or indirectly, the economic consequence of ownership of the Common Shares,
whether any such swap or transaction described in clause (i) or (ii) above is to
be settled by delivery of Common Shares or such other securities, in cash or
otherwise; provided, however, that such Selling Stockholder may sell the Shares
contemplated to be sold pursuant to this Agreement. Notwithstanding the
foregoing, if (1) during the last 17 days of the 60-day restricted period, the
Company issues an earnings release or material news or a material event relating
to the Company occurs; or (2) prior to the expiration of the 60-day restricted
period, the Company announces that it will release earnings results during the
16-day period beginning on the last day of the 60-day period, the restrictions
imposed by this Agreement shall continue to apply until the expiration of the
18-day period beginning on the issuance of the earnings release or the
occurrence of the material news or material event.
5. Payment of Expenses:
(a) The Company agrees to pay all costs and expenses incident to the
performance of its obligations under this Agreement, whether or not the
transactions contemplated hereunder are consummated or this Agreement is
terminated, including expenses, fees and taxes in connection with (i) the
preparation and filing of the Registration Statement (including financial
statements, exhibits, schedules, consents and certificates of experts), each
Preliminary Prospectus, the Prospectus, and any amendments or supplements
thereto, and the printing and furnishing of copies of each thereof to the
Underwriters and to dealers (including costs of mailing and shipment), (ii) the
preparation, issuance and delivery of the certificates for the Shares to the
Underwriters, including any stock or other transfer taxes or duties payable upon
the sale of the Shares to the Underwriters, (iii) all necessary issue, transfer
and other stamp taxes in connection with the issuance and sale of the Shares to
the Underwriters, (iv) all fees and expenses of the Company's counsel,
independent public or certified public accountants and other advisors, (v) the
printing of this Agreement and any dealer agreements and furnishing of copies of
each to the Underwriters and to dealers (including costs of mailing and
shipment), (vi) the qualification of the Shares for offering and sale under
state laws that the Company and the Representative have mutually agreed are
appropriate and the determination of their eligibility for investment under
state law as aforesaid (including the legal fees and filing fees and other
disbursements of counsel for the Underwriters assuming that the Common Shares
are approved for listing on the New York Stock Exchange and the printing and
furnishing of copies of any blue sky surveys or legal investment surveys to the
Underwriters and to dealers, (vii) filing for review of the public offering of
the Shares by the NASD (including the legal fees and filing fees and other
disbursements of counsel for the Underwriters relating thereto), (viii) the fees
and expenses of any transfer agent or registrar for the Shares and miscellaneous
expenses referred to in the Registration Statement, (ix) the fees and expenses
incurred in connection with the inclusion of the Shares for trading on the New
York Stock Exchange, (x) all costs and expenses incident to the travel and
accommodation of the Company's employees in making road show presentations with
respect to the offering of the Shares, (xi) preparing and distributing bound
volumes of transaction documents for the Representative and its legal counsel
and (xii) the performance of
30
the Company's other obligations hereunder. Upon the request of the
Representative, the Company will provide funds in advance for filing fees.
(b) The Selling Stockholders agree with each Underwriter to pay
(directly or by reimbursement) all fees and expenses incident to the performance
of their obligations under this Agreement which are not otherwise specifically
provided for herein, including, but not limited to, (i) fees and expenses of
counsel and other advisors for such Selling Stockholders, (ii) fees and expenses
of the Custodian and (iii) expenses and taxes incident to the sale and delivery
of the Shares to be sold by such Selling Stockholder to the Underwriters
hereunder (which taxes, if any, may be deducted by the Custodian).
(c) If this Agreement shall be terminated by the Underwriters, or
any of them, pursuant to Section 7 hereof, the Company will reimburse the
Underwriters or such Underwriters as have so terminated this Agreement with
respect to themselves, severally, for all out-of-pocket expenses (such as
printing, facsimile, courier service, accommodations, travel and the fees and
disbursements of Underwriters' counsel) and any other advisors, accountants,
appraisers, etc. reasonably incurred by such Underwriters in connection with
this Agreement or the transactions contemplated herein.
6. Conditions of the Underwriters' Obligations:
(a) The obligations of the Underwriters hereunder to purchase Shares
on the First Closing Date or on each Option Closing Date, as applicable, are
subject to the accuracy of the representations and warranties on the part of the
Company and the Selling Stockholders hereunder and under the Custody Agreement
and the Power of Attorney on the date hereof and on the First Closing Date and
on each Option Closing Date, as applicable, the performance by the Company and
the Selling Stockholders of their respective covenants and other obligations
hereunder and under the Custody Agreement and the Power of Attorney and to the
satisfaction of the following further conditions at the First Closing Date or on
each Option Closing Date, as applicable:
(b) The Company shall furnish to the Underwriters on the First
Closing Date and on each Option Closing Date an opinion of Baker, Donelson,
Bearman, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, PC, counsel for the Company and the Subsidiaries,
in substantially the form attached hereto as Exhibit D and addressed to the
Underwriters and dated the First Closing Date and each Option Closing Date, as
applicable, and the final form and substance of each such opinion shall be
satisfactory to Hunton & ▇▇▇▇▇▇▇▇, counsel for the Underwriters.
(c) Each Selling Stockholder shall furnish to the Underwriters at
the First Closing Date and on each Option Closing Date an opinion of counsel for
the Selling Stockholders, in substantially the form attached hereto as
Exhibit E, addressed to the Underwriters and dated the First Closing Date and
each Option Closing Date, as applicable, the form and substance of which shall
be satisfactory to Hunton & ▇▇▇▇▇▇▇▇ LLP.
(d) The Underwriters shall have received from KPMG LLP, letters
dated, respectively, as of the date of this Agreement, the First Closing Date
and each Option Closing Date, as the case may be, addressed to the Underwriters,
in form and substance satisfactory to the
31
Representative and counsel for the Underwriters, containing statements to the
effect that they are independent accountants with respect to the Company within
the meaning of Rule 101 of the AICPA's Code of Professional Conduct, and
statements and information of the type ordinarily included in accountant's
"comfort letters" to underwriters, delivered according to Statement of Auditing
Standards No. 72 (or any successor bulletin), with respect to the audited and
unaudited financial statements and certain financial information contained in
the Registration Statement and the Prospectus (and the Representative shall have
received an additional six conformed copies of such accountants' letter for each
of the several Underwriters);
In the event that the letters referred to above set forth any
changes in indebtedness, decreases in total assets or retained earnings or
increases in borrowings, it shall be a further condition to the obligations of
the Underwriters that (A) such letters shall be accompanied by a written
explanation of the Company as to the significance thereof, unless the
Representative and counsel for the Underwriters deem such explanation
unnecessary, and (B) such changes, decreases or increases do not, in the sole
judgment of the Representative and counsel for the Underwriters, make it
impractical or inadvisable to proceed with the purchase and delivery of the
Shares as contemplated by the Registration Statement.
(e) At the First Closing Date and each Option Closing Date, the
Representative shall have received from KPMG LLP, independent public or
certified public accountants for the Company, a letter dated such date, in form
and substance satisfactory to the Representative and counsel for the
Underwriters, to the effect that they reaffirm the statements made in the letter
furnished by them pursuant to subsection (d) of this Section 6, except that the
specified date referred to therein for the carrying out of procedures shall be
no more than two business days prior to the First Closing Date or Option Closing
Date, as the case may be (and the Representative shall have received an
additional six conformed copies of such accountants' letter for each of the
several Underwriters).
(f) The Representative shall have received at the First Closing Date
and on each Option Closing Date, as applicable, the favorable opinion of Hunton
& ▇▇▇▇▇▇▇▇ LLP, dated the First Closing Date or such Option Closing Date,
addressed to the Underwriters and in form and substance satisfactory to the
Representative.
(g) No amendment or supplement to the Registration Statement or
Prospectus shall have been filed to which the Underwriters shall have objected
in writing.
(h) Prior to the First Closing Date and each Option Closing Date (i)
no stop order suspending the effectiveness of the Registration Statement or any
post-effective amendment to the Registration Statement or any order preventing
or suspending the use of any Preliminary Prospectus or Prospectus has been
issued or is in effect, and no proceedings for such purpose shall have been
initiated or threatened, by the Commission, and no suspension of the
qualification of the Shares for offering or sale in any jurisdiction, or the
initiation or threatening of any proceedings for any of such purposes, has
occurred; (ii) all requests for additional information on the part of the
Commission shall have been complied with to the reasonable satisfaction of the
Representative and counsel to the Underwriters; and (iii) the Registration
Statement and the Prospectus shall not contain an untrue statement of a material
fact or omit to
32
state a material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.
(i) Prior to the First Closing Date and each Option Closing Date,
the Company shall have filed the Prospectus with the Commission (including the
information required by Rule 430A under the Securities Act) in the manner and
within the time period required by Rule 424(b) under the Securities Act; or the
Company shall have filed a post-effective amendment to the Registration
Statement containing the information required by such Rule 430A, and such
post-effective amendment shall have become effective; or, if the Company elected
to rely upon Rule 434 under the Securities Act and obtained the Representative'
consent thereto, the Company shall have filed a term sheet with the Commission
in the manner and within the time period required by such Rule 424(b).
(j) Between the time of execution of this Agreement and the First
Closing Date or the relevant Option Closing Date there shall not have been any
Material Adverse Change, and (ii) no transaction which is material and
unfavorable to the Company shall have been entered into by the Company or any of
the Subsidiaries, in each case, which in the Representative's sole judgment,
makes it impracticable or inadvisable to proceed with the public offering of the
Shares as contemplated by the Registration Statement.
(k) The Shares shall have been approved for listing on the New York
Stock Exchange.
(l) The NASD shall not have raised any objection with respect to the
fairness and reasonableness of the underwriting terms and arrangements.
(m) The Representative shall have received lock-up agreements from
each 1% shareholder and each officer and director of the Company substantially
in the form of Exhibit B attached hereto, and such lock-up agreements shall be
in full force and effect.
(n) The Representative shall have received, at the First Closing
Date and on each Option Closing Date, a certificate of duly authorized officers
of the Company and the Operating Partnership, dated as of such First Closing
Date or Option Closing Date, to the effect that the signers of such certificates
have carefully examined the Prospectus, any amendment or supplement to the
Prospectus and this Agreement, and that:
(i) the representations and warranties of the
Company and the Operating Partnership in this Agreement are true
and correct, as if made on and as of the date hereof, and the
Company has complied with all the agreements and satisfied all
the conditions on its part to be performed or satisfied at or
prior to the date hereof;
(ii) no stop order suspending the effectiveness of
the Registration Statement or any post-effective amendment
thereto has been issued and no proceedings for that purpose have
been instituted or are pending or threatened under the
Securities Act;
33
(iii) when the Registration Statement became effective
and at all times subsequent thereto up to the date hereof, the
Registration Statement and the Prospectus, and any amendments or
supplements thereto contained all material information required
to be included therein by the Securities Act or the Exchange Act
and the applicable rules and regulations of the Commission
thereunder, as the case may be, and in all material respects
conformed to the requirements of the Securities Act or the
Exchange Act and the applicable rules and regulations of the
Commission thereunder, as the case may be; the Registration
Statement and the Prospectus, and any amendments or supplements
thereto, did not and do not include 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, in
the light of the circumstances under which they were made, not
misleading; and, since the effective date of the Registration
Statement, there has occurred no event required to be set forth
in an amendment or supplemented Prospectus which has not been so
set forth; and
(iv) subsequent to the respective dates as of which
information is given in the Registration Statement and the
Prospectus, there has not been (a) any Material Adverse Change,
(b) any transaction that is material to the Company and the
Subsidiaries considered as one enterprise, (c) any obligation,
direct or contingent, that is material to the Company and the
Subsidiaries considered as one enterprise, incurred by the
Company or the Subsidiaries, (d) any change in the
capitalization of the Company or any Subsidiary that is material
to the Company and the Subsidiaries considered as one
enterprise, (e) any dividend or distribution of any kind
declared, paid or made on the capital stock of the Company or
the capital stock, limited liability company membership
interests or units of limited partnership interest of any
Subsidiary, or (f) any loss or damage (whether or not insured)
to the property of the Company or any Subsidiary which has been
sustained or will have been sustained which has a Material
Adverse Effect.
(o) The Representative shall receive, at the First Closing Date and
on each Option Closing Date, a certificate of the Secretary of the Company
certifying as to (i) the Articles of Amendment and any amendments thereto, (ii)
the Bylaws and any amendments thereto, (iii) resolutions of the Board of
Directors of the Company authorizing the execution and delivery of this
Agreement and the other offering documents, (iv) the Certificate of Limited
Partnership of the Operating Partnership and the Partnership Agreement and any
amendments thereto, (v) correspondence with the Commission, (vi) a specimen
Common Shares certificate, (vii) the number of Common Shares authorized and
reserved for issuance by the Company and (viii) the minute books of the Company.
(p) Each Selling Stockholder will, at the First Closing Date and on
each Option Closing Date, deliver to the Underwriters a certificate, to the
effect that:
(i) the representations and warranties of such
Selling Stockholder set forth in this Agreement, the Custody
Agreement and the Power of Attorney are true and correct as of
such date as if made on such date; and
34
(ii) such Selling Stockholder has complied with all
the agreements and satisfied all the conditions on its part to
be performed or satisfied hereunder and under this Agreement,
the Custody Agreement and the Power of Attorney at or prior to
such date.
(q) On the date hereof, the Company and the Selling Stockholders
shall have furnished for review by the Representative copies of the Custody
Agreement and the Power of Attorney executed by each of the Selling Stockholders
and such further information, certificates and documents as the Representative
may reasonably request.
(r) The Company, the Operating Partnership and the Selling
Stockholders, as applicable, shall have furnished to the Underwriters such other
documents, certificates and opinions as to the accuracy and completeness of any
statement in the Registration Statement and the Prospectus, the representations,
warranties and statements of the Company, the Operating Partnership and the
Selling Stockholders contained herein, in the Custody Agreement and in the Power
of Attorney, and the performance by the Company, the Operating Partnership and
the Selling Stockholders of their respective covenants contained herein and
therein, and the fulfillment of any conditions contained herein or therein, as
of the First Closing Date or any Option Closing Date, as the Underwriters may
reasonably request.
7. Termination:
The obligations of the several Underwriters hereunder shall be
subject to termination in the absolute discretion of the Representative, at any
time prior to the First Closing Date or any Option Closing Date, if (i) the
Company or any Selling Stockholder is unable or unwilling to perform its
obligations under this Agreement, (ii) any of the conditions specified in
Section 6 shall not have been fulfilled when and as required by this Agreement
to be fulfilled, or (iii) if there has been, in the judgment of the
Representative, since the respective dates as of which information is given in
the Registration Statement, any Material Adverse Change, or any development
involving a prospective Material Adverse Change, or material change in
management of the Company or any Subsidiary, whether or not arising in the
ordinary course of business, or (iv) if there has occurred any outbreak or
escalation of national or international hostilities, other national or
international calamity or crisis (including without limitation any terrorist or
similar attack), any change in the United States or international financial
markets, or any substantial change in United States' or international economic,
political, financial or other conditions, the effect of which on the financial
markets of the United States is such as to make it, in the sole judgment of the
Representative, impracticable to market the Shares in the manner and on the
terms described in the Prospectus or enforce contracts for the sale of the
Shares, or (v) if trading or quotation in any securities of the Company has been
suspended by the Commission or by the New York Stock Exchange, or if trading
generally on the New York Stock Exchange or Nasdaq Stock Market has been
suspended (including an automatic halt in trading pursuant to market-decline
triggers, other than those in which solely program trading is temporarily
halted), or limitations on prices for trading (other than limitations on hours
or numbers of days of trading) have been fixed, or maximum ranges for prices for
securities have been required, by such exchange or the NASD or by order of the
Commission or any other governmental authority, or (vi) a general banking
moratorium shall have been declared by any federal, New York, Alabama or
Maryland authorities or (vii) any federal or state statute, regulation, rule or
order of
35
any court or other governmental authority has been enacted, published, decreed
or otherwise promulgated which, in the opinion of the Representative, materially
adversely affects or will materially adversely affect the business or operations
of the Company, or (viii) any action has been taken by any federal, state or
local government or agency in respect of its monetary or fiscal affairs which,
in the opinion of the Representative, has a material adverse effect on the
securities markets in the United States, or (ix) the Company shall have
sustained a loss by strike, fire, flood, earthquake, accident or other calamity
of such character as in the judgment of the Representative may interfere
materially with the conduct of the business and operations of the Company
regardless of whether or not such loss shall have been insured.
If the Representative elect to terminate this Agreement as
provided in this Section 7, the Company and the Underwriters shall be notified
promptly by telephone, promptly confirmed by facsimile.
If the sale to the Underwriters of the Shares, as contemplated
by this Agreement, is not carried out by the Underwriters for any reason
permitted under this Agreement or if such sale is not carried out because the
Company shall be unable to comply in all material respects with any of the terms
of this Agreement, the Company and the Selling Stockholders shall not be under
any obligation or liability under this Agreement (except as provided in Sections
5 and 9 hereof) and the Underwriters shall be under no obligation or liability
to the Company and the Selling Stockholders under this Agreement (except as
provided in Section 9 hereof) or to one another hereunder.
8. Increase in Underwriters' Commitments:
If any Underwriter shall default at the First Closing Date or on
an Option Closing Date in its obligation to take up and pay for the Shares to be
purchased by it under this Agreement on such date, the Representative shall have
the right, within 48 hours after such default, to make arrangements for one or
more of the non-defaulting Underwriters, or any other underwriters, to purchase
all, but not less than all, of the Shares which such Underwriter shall have
agreed but failed to take up and pay for (the "Defaulted Shares"). Absent the
completion of such arrangements within such 36-hour period, (i) if the total
number of Defaulted Shares does not exceed 10% of the total number of Shares to
be purchased on such date, each non-defaulting Underwriter shall take up and pay
for (in addition to the number of Shares which it is otherwise obligated to
purchase on such date pursuant to this Agreement) the portion of the total
number of Shares agreed to be purchased by the defaulting Underwriter on such
date in the proportion that its underwriting obligations hereunder bears to the
underwriting obligations of all non-defaulting Underwriters; and (ii) if the
total number of Defaulted Shares exceeds 10% of the total number of Shares to be
purchased on such date, the Representative may terminate this Agreement by
notice to the Company, without liability of any party to any other party except
that the provisions of Section 9 hereof shall at all times be effective and
shall survive such termination.
Without relieving any defaulting Underwriter from its
obligations hereunder, the Company agrees with the non-defaulting Underwriters
that it will not sell any Shares hereunder on such date unless all of the Shares
to be purchased on such date are purchased on such date by the Underwriters (or
by substituted Underwriters selected by the Representative with the approval of
the Company or selected by the Company with the approval of the Representative).
36
If a new Underwriter or Underwriters are substituted for a
defaulting Underwriter in accordance with the foregoing provision, the Company
or the non-defaulting Underwriters shall have the right to postpone the First
Closing Date or the relevant Option Closing Date for a period not exceeding
seven business days in order that any necessary changes in the Registration
Statement and Prospectus and other documents may be effected.
The term "Underwriter" as used in this Agreement shall refer to
and include any Underwriter substituted under this Section 8 with the same
effect as if such substituted Underwriter had originally been named in this
Agreement.
9. Indemnity and Contribution by the Company, the Operating
Partnership, the Selling Stockholders and the Underwriters:
(a) The Company and the Operating Partnership, jointly and
severally, agree to indemnify, defend and hold harmless each Underwriter, its
officers and employees, and any person who controls any Underwriter within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act,
from and against any loss, liability, damage, claim (including the reasonable
cost of investigation) or expense, as incurred, which, jointly or severally, any
such Underwriter or controlling person may incur under the Securities Act, the
Exchange Act or other federal or state statutory law or regulation, or the laws
or regulations of foreign jurisdictions where Directed Shares have been offered
or at common law or otherwise (including in settlement of any litigation, if
such settlement is effected with the written consent of the Company), insofar as
such loss, expense, liability, damage, claim or expense arises out of or is
based upon in whole or in part (A) (i) any inaccuracy or any breach of any
representation, warranty or covenant of the Company or the Operating Partnership
contained herein, (ii) in whole or in part upon any failure on the part of the
Company or the Operating Partnership to perform their obligations hereunder or
to comply with any applicable law, rule or regulation relating to the offering
of securities being made pursuant to the Prospectus, (iii) any untrue statement
or alleged untrue statement of a material fact contained in the Registration
Statement (or in the Registration Statement as amended by any post-effective
amendment thereof by the Company, including any information deemed to be a part
thereof pursuant to Rule 430A or Rule 434 under the Securities Act), the
Prospectus (the term Prospectus for the purpose of this Section 9 being deemed
to include any Preliminary Prospectus, the Prospectus, as amended or
supplemented by the Company, and any prospectus wrapper material distributed in
_____ in connection with the reservation and sale of Directed Shares to the
Participants), (iv) any application or other document, or any amendment or
supplement thereto, executed by the Company or based upon written information
furnished by or on behalf of the Company filed in any jurisdiction (domestic or
foreign) in order to qualify the Shares under the securities or blue sky laws
thereof or filed with the Commission or any securities association or securities
exchange (each an "Application"), (v) any omission or alleged omission to state
a material fact required to be stated in any such Registration Statement,
Prospectus or any Application or necessary to make the statements made therein,
in the light of the circumstances under which they were made, not misleading, or
(vi) any untrue statement or alleged untrue statement of any material fact
contained in any audio or visual materials used in connection with the marketing
of the Shares, including, without limitation, slides, videos, films and tape
recordings, or (vii) 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, liability,
37
damage, claim, expense or action arising out of or based upon any matter covered
by clauses (i), (ii), (iii), (iv), (v) or (vi) above, provided that the Company
and the Operating Partnership shall not be liable under this clause (vii) to the
extent that a court of competent jurisdiction shall have determined by a final
judgment that such loss, liability, damage, claim, expense 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 and (B) the
violation of any applicable laws or regulations of foreign jurisdictions where
Directed Shares have been offered. The indemnity agreement set forth in this
Section 9(a) shall be in addition to any liability which the Company and any
Selling Stockholders may otherwise have.
(b) Each Selling Stockholder, severally and not jointly, agrees to
indemnify, defend and hold harmless each Underwriter and any person who controls
any Underwriter within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act from and against any loss, liability, claim
(including the reasonable cost of investigation) or expense, as incurred, which,
jointly or severally, any such Underwriter or controlling person may incur under
the Securities Act, the Exchange Act or other federal or state statutory law or
regulation, or the laws or regulations of foreign jurisdictions where Directed
Shares have been offered or at common law or otherwise (including in settlement
of any litigation, if such settlement is effected with the written consent of
the Company), insofar as such loss, liability, damage, claim or expense arises
out of or is based upon in whole or in part, (i) any breach of any
representation, warranty or covenant of such Selling Stockholder contained
herein, in the Custody Agreement or in the Power of Attorney, (ii) any failure
on the part of such Selling Stockholder to comply with any applicable law, rule
or regulation relating to the offering of securities being made pursuant to the
Prospectus, (iii) any untrue statement or alleged untrue statement of a material
fact contained in the Registration Statement (or in the Registration Statement
as amended by any post-effective amendment thereof by the Company, including any
information deemed to be a part thereof pursuant to Rule 430A or Rule 434 under
the Securities Act), the Prospectus (the term Prospectus for the purpose of this
Section 9 being deemed to include any Preliminary Prospectus, the Prospectus and
the Prospectus as amended or supplemented by the Company), or any Application or
(iv) any omission or alleged omission to state a material fact required to be
stated in either such Registration Statement, Prospectus or any Application, or
necessary to make the statements made therein, in the light of the circumstances
under which they were made, not misleading; but with respect to (iii) and (iv)
hereof only insofar as any such loss, liability, damage, claim or expense arises
out of or is based upon any untrue statement or alleged untrue statement or
omission or alleged omission of a material fact contained in and in conformity
with information furnished in writing by such Selling Stockholder to the Company
expressly for use in such Registration Statement, Prospectus or Application;
provided, however, that the indemnity agreement contained in this subsection (b)
shall not require any such Selling Stockholder to reimburse the Underwriters for
amounts in excess of the gross sale price of the Shares sold by such Selling
Stockholder pursuant to this Agreement. The indemnity agreement set forth in
this Section 9(b) shall be in addition to any liability that the Selling
Stockholders may otherwise have.
If any action is brought against an Underwriter or controlling
person in respect of which indemnity may be sought against the Company or any
Selling Stockholder pursuant to subsection (a) or (b) above, such Underwriter
shall promptly notify the Company or such Selling Stockholder, as applicable, in
writing of the institution of such action, and the Company or such Selling
Stockholder, as applicable, shall assume the defense of such action, including
the employment of counsel and payment of expenses; provided, however, that any
failure or delay to so notify the Company or such
38
Selling Stockholder, as applicable, will not relieve the Company or such Selling
Stockholder, as applicable, of any obligation hereunder, except to the extent
that its ability to defend is actually impaired by such failure or delay. Such
Underwriter or controlling person shall have the right to employ its or their
own counsel in any such case, but the fees and expenses of such counsel shall be
at the expense of such Underwriter or such controlling person unless the
employment of such counsel shall have been authorized in writing by the Company
or such Selling Stockholder, as applicable, in connection with the defense of
such action, or the Company or such Selling Stockholder, as applicable, shall
not have employed counsel to have charge of the defense of such action within a
reasonable time or such Underwriter or controlling person shall have reasonably
concluded (based on the advice of counsel) that there may be defenses available
to it or them that are different from or additional to those available to the
Company or such Selling Stockholder, as applicable (in which case the Company
and such Selling Stockholder shall not have the right to direct the defense of
such action on behalf of the indemnified party or parties), in any of which
events such fees and expenses shall be borne by the Company or the Selling
Stockholder, as applicable, and paid as incurred (it being understood, however,
that the Company nor any Selling Stockholder shall not be liable for the
expenses of more than one separate firm of attorneys for the Underwriters or
controlling persons in any one action or series of related actions in the same
jurisdiction (other than local counsel in any such jurisdiction) representing
the indemnified parties who are parties to such action).
If any action is brought against an Underwriter or controlling
person in respect of which indemnity may be sought against the Company, the
Operating Partnership or any Selling Stockholder pursuant to subsection (a) or
(b) above, such Underwriter shall promptly notify the Company or such Selling
Stockholder, as applicable, in writing of the institution of such action, and
the Company or such Selling Stockholder, as applicable, shall assume the defense
of such action, including the employment of counsel and payment of expenses;
provided, however, that any failure or delay to so notify the Company or such
Selling Stockholder, as applicable, will not relieve the Company or such Selling
Stockholder, as applicable, of any obligation hereunder, except to the extent
that its ability to defend is actually impaired by such failure or delay. Such
Underwriter or controlling person shall have the right to employ its or their
own counsel in any such case, but the fees and expenses of such counsel shall be
at the expense of such Underwriter or such controlling person unless the
employment of such counsel shall have been authorized in writing by the Company,
the Operating Partnership or such Selling Stockholder, as applicable, in
connection with the defense of such action, or the Company, the Operating
Partnership or such Selling Stockholder, as applicable, shall not have employed
counsel to have charge of the defense of such action within a reasonable time or
such Underwriter or controlling person shall have reasonably concluded (based on
the advice of counsel) that there may be defenses available to it or them that
are different from or additional to those available to the Company, the
Operating Partnership or such Selling Stockholder, as applicable, (in which case
the Company, the Operating Partnership and such Selling Stockholder shall not
have the right to direct the defense of such action on behalf of the indemnified
party or parties), in any of which events such fees and expenses shall be borne
by the Company, the Operating Partnership or the Selling Stockholder, as
applicable, and paid as incurred (it being understood, however, that the
Company, the Operating Partnership nor any Selling Stockholder shall not be
liable for the
39
expenses of more than one separate firm of attorneys for the Underwriters or
controlling persons in any one action or series of related actions in the same
jurisdiction (other than local counsel in any such jurisdiction) representing
the indemnified parties who are parties to such action).
(c) Each Underwriter agrees, severally and not jointly, to
indemnify, defend and hold harmless the Company, the Operating Partnership, each
Selling Stockholder, the Company's directors, the Company's officers that signed
the Registration Statement, and any person who controls the Company or any
Selling Stockholder within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act, from and against any loss, liability, damage,
claim (including the reasonable cost of investigation) or expense, as incurred,
which, jointly or severally, the Company, the Operating Partnership, the Selling
Stockholder or any such person may incur 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), but only insofar as such
loss, expense, liability, damage or claim arises out of or is based upon (A) any
untrue statement or alleged untrue statement of a material fact contained in and
in conformity with information furnished in writing by such Underwriter through
the Representative to the Company expressly for use in the Registration
Statement (or in the Registration Statement as amended by any post-effective
amendment thereof by the Company) or the Prospectus, or (B) any omission or
alleged omission to state a material fact in connection with such information
required to be stated either in such Registration Statement or Prospectus
necessary to make such information, in the light of the circumstances under
which made, not misleading; and to reimburse the Company, the Operating
Partnership each Selling Stockholder, any such director or officer of the
Company or any such controlling person for any legal and other expense
reasonably incurred by the Company, the Operating Partnership each Selling
Stockholder, any such director or officer of the Company or any such controlling
person in connection with investigating, defending, settling, compromising or
paying any such loss, claim, damage, liability, expense or action. The indemnity
agreement set forth in this Section 9(c) shall be in addition to any liability
that such Underwriter may otherwise have. The Company, the Operating Partnership
and each of the Selling Stockholders, hereby acknowledges that the statements
set forth in paragraphs 17 and 23 and the first sentence of paragraph 3 under
the caption "Underwriting" in the Preliminary Prospectus and the Prospectus (to
the extent such statements relate to the Underwriters) constitute the only
information furnished by or on behalf of any Underwriter through the
Representative to the Company for purposes of the Company's representations and
warranties in Section 3(o) hereof and for purposes of this Section 9.
If any action is brought against the Company, the Operating
Partnership, any such director or officer of the Company, any Selling
Stockholder or any such person in respect of which indemnity may be sought
against any Underwriter pursuant to the foregoing paragraph, the Company, the
Operating Partnership, such director or officer of the Company, the Selling
Stockholder or such person shall promptly notify the Representative in writing
of the institution of such action and the Representative, on behalf of the
Underwriters, shall assume the defense of such action, including the employment
of counsel and payment of expenses; provided, however, that any failure or delay
to so notify the Representative will not relieve the Underwriters of any
obligation hereunder, except to the extent that its ability to defend is
actually impaired by such failure or delay. The Company, the Operating
Partnership, each Selling Stockholder, such director or officer of the Company
or such controlling person shall have the right to employ its
40
own counsel in any such case, but the fees and expenses of such counsel shall be
at the expense of the Company, the Operating Partnership, such director or
officer of the Company, the Selling Stockholder or such person unless the
employment of such counsel shall have been authorized in writing by the
Representative in connection with the defense of such action or the
Representative shall not have employed counsel to have charge of the defense of
such action within a reasonable time or the Company, the Operating Partnership,
such director or officer of the Company, such Selling Stockholder or such person
shall have reasonably concluded (based on the advice of counsel) that there may
be defenses available to it or them that are different from or additional to
those available to the Underwriters (in which case the Representative shall not
have the right to direct the defense of such action on behalf of the indemnified
party or parties), in any of which events such fees and expenses shall be borne
by such Underwriter and paid as incurred (it being understood, however, that the
Underwriters shall not be liable for the expenses of more than one separate firm
of attorneys in any one action or series of related actions in the same
jurisdiction (other than local counsel in any such jurisdiction) representing
the indemnified parties who are parties to such action).
(d) 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 consent or if there be a final judgment for the plaintiff,
the indemnifying party agrees to indemnify the indemnified party against any
loss, liability, damage, claim 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 this Section 9, 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) If the indemnification provided for in this Section 9 is
unavailable or insufficient to hold harmless an indemnified party under
subsections (a), (b), (c) and (d) of this Section 9 in respect of any losses,
expenses, liabilities, damages or claims referred to therein, then each
applicable indemnifying party, in lieu of indemnifying such indemnified party,
shall contribute to the aggregate amount paid or payable by such indemnified
party as a result of such losses, expenses, liabilities, damages or claims (i)
in such proportion as is appropriate to reflect the relative benefits received
by the Company, the Operating Partnership and the Selling Stockholders, on the
one hand, and the Underwriters, on the other hand, from the offering of the
Shares pursuant to this Agreement or (ii) if (but only if) the allocation
provided by clause (i) above is not available for any reason, 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, the Operating
Partnership and the Selling Stockholders, on the one hand, and of the
Underwriters, on the other hand, in connection with the statements or omissions
which resulted in such losses,
41
expenses, liabilities, damages or claims, as well as any other relevant
equitable considerations. The relative benefits received by the Company, the
Operating Partnership and the Selling Stockholders, on the one hand, and the
Underwriters, on the other hand, in connection with the offering of the Shares
pursuant to this Agreement shall be deemed to be in the same proportion as the
total proceeds from the offering (net of underwriting discounts and commissions
but before deducting expenses) received by the Company (which, for purposes of
this subsection, account for the relative benefits received by the Operating
Partnership) or the Selling Stockholders, as applicable, bear to the
underwriting discounts and commissions received by the Underwriters. The
relative fault of the Company, of the Operating Partnership, of the Selling
Stockholders and of the Underwriters shall be determined by reference to, among
other things, whether the untrue statement or alleged untrue statement of a
material fact or omission or alleged omission or any such inaccurate or alleged
inaccurate representation or warranty relates to information supplied by the
Company, the Operating Partnership, and the Selling Stockholders, on one hand,
or by 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 and liabilities referred to above shall be deemed to
include any legal or other fees or expenses reasonably incurred by such party in
connection with investigating or defending any claim or action. The provisions
set forth in Sections 9(b) and (c) with respect to notice of commencement of any
action shall apply if a claim for contribution is to be made under this Section
9(e); provided, however, that no additional notice shall be required with
respect to any action for which notice has been given under Sections 9(b) and
(c) for purposes of indemnification.
(f) The Company, the Operating Partnership, the Selling Stockholders
and the Underwriters agree that it would not be just and equitable if
contribution pursuant to this Section 9 were determined by pro rata allocation
(even if the Underwriters were treated as one entity for such purpose) or by any
other method of allocation which does not take account of the equitable
considerations referred to in subsection (e)(i) and, if applicable (ii), above.
Notwithstanding the provisions of this Section 9, no Underwriter shall be
required to contribute any amount in excess of the underwriting discounts and
commissions applicable to the Shares purchased by such Underwriter as set forth
on Schedule II hereof and any Option Shares and no Selling Stockholder shall be
required to contribute any amount in excess of the gross sale price of the
Shares sold by such Selling Stockholder pursuant to this Agreement as set forth
in Schedule I hereof [and any Option Shares]. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Underwriters' obligations to contribute
pursuant to this Section 9 are several in proportion to their respective
underwriting commitments and not joint. For purposes of this Section 9, each
officer and employee of an Underwriter and each person, if any, who controls an
Underwriter within the meaning of the Section 15 of the Securities Act and
Section 20 of 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 Section 15 of the Securities Act and Section 20 of
the Exchange Act shall have the same rights to contribution as the Company.
(g) The Company and the Operating Partnership also agree to
indemnify and hold harmless in accordance with this Section 9 each Underwriter
and its affiliates and each person, if
42
any, who controls each Underwriter and its affiliates within the meaning of
either Section 15 of the Securities Act or Section 20 of the Exchange Act, from
and against any loss, liability, damage, claim or expense (including, without
limitation, any legal or other expenses reasonably incurred in connection with
defending or investigating any such action or claim) (i) caused by any untrue
statement or alleged untrue statement of a material fact contained in any
material prepared 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) as a result of the failure of any
participant to pay for and accept delivery of Directed Shares that the
participant has agreed to purchase; or (iii) related to, arising out of, or in
connection with the Directed Share Program.
10. Failure of One or More of the Selling Stockholders to Sell and
Deliver Shares:
If one or more of the Selling Stockholders shall fail to sell
and deliver to the Underwriters the Shares to be sold and delivered by such
Selling Stockholders at the First Closing Date [or any Option Closing Date]
pursuant to this Agreement, then the Underwriters may at their option, by
written notice from the Representative to the Company and the Selling
Stockholders, either (i) terminate this Agreement without any liability on the
part of any Underwriter or, except as provided in Section 5 and 9 hereof, the
Company or the Selling Stockholders, or (ii) purchase the Shares which the
Company and the other Selling Stockholders have agreed to sell and deliver in
accordance with the terms hereof. If one or more of the Selling Stockholders
shall fail to sell and deliver to the Underwriters the Shares to be sold and
delivered by such Selling Stockholders pursuant to this Agreement at the First
Closing Date [or any Option Closing Date, then the Underwriters shall have the
right, by written notice from the Representative to the Company and the Selling
Stockholders, to postpone the First Closing Date or the 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.
11. Qualified Independent Underwriter:
The Company hereby confirms that at its request ▇.▇. ▇▇▇▇▇▇
Securities Inc. has without compensation acted as "qualified independent
underwriter" (in such capacity, the "QIU" within the meaning of Rule 2720 of the
Conduct Rules of the NASD in connection with the offering of the Shares. The
Company, the Operating Partnership and the Selling Stockholders will severally
and not jointly indemnify and hold harmless the QIU against any losses,
expenses, liabilities, damages or claims, joint or several, to which the QIU may
become subject, under the Securities Act or otherwise, insofar as such losses,
expenses, liabilities, damages or claims (or actions in respect thereof) arise
out of or are based upon the QIU's acting (or alleged failing to act) as such
"qualified independent underwriter" and will reimburse the QIU for any legal or
other expenses reasonably incurred by the QIU in connection with investigating
or defending any such loss, expense, liability, damage or claim or action as
such expenses are incurred; and provided, however, that each Selling Stockholder
shall only be subject to liability under this Section 11 to the extent such
liability arises out of or is based upon (i) any untrue statement or alleged
untrue statement or upon an omission or alleged omission based upon information
furnished in writing to the Representative by such Selling Stockholder, (ii) a
breach of a
43
representation or warranty given by such Selling Stockholder in this Agreement,
the Power of Attorney or the Custody Agreement or (iii) any failure on the part
of such Selling Stockholder to comply with any applicable law, rule or
regulation relating to the offering of securities being made pursuant to the
Prospectus; and provided, further, that the liability under this Section 11 of
each Selling Stockholder shall be limited to an amount equal to the aggregate
gross proceeds to such Selling Stockholder from the sale of Shares sold by such
Selling Stockholder hereunder.
12. Survival:
The respective indemnities, agreements, representations,
warranties and other statements of the Company, of the Operating Partnership,
their respective officers and directors, of the Selling Stockholders and of the
several Underwriters set forth in or made pursuant to this Agreement will remain
in full force and effect, regardless of any investigation made by or on behalf
of any Underwriter, the Company, the Operating Partnership or any of its or
their partners, officers, directors, directors or any controlling person, or the
Selling Stockholders, as the case may be, and will survive delivery of and
payment for the Shares sold hereunder and any termination of this Agreement.
13. Notices:
Except as otherwise herein provided, all statements, requests,
notices and agreements shall be in writing or by telegram and, if to the
Underwriters, shall be sufficient in all respects if delivered to Friedman,
Billings, ▇▇▇▇▇▇ & Co., Inc., ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
Attention: Syndicate Department, with a copy to Hunton & ▇▇▇▇▇▇▇▇ LLP,
Riverfront Plaza, East Tower, ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esquire; if to the Company, shall be sufficient in
all respects if delivered to the Company at the offices of the Company at
Medical Properties Trust, Inc., ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇,
▇▇, ▇▇▇▇▇, Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esquire, with a copy to Baker,
Donelson, Bearman, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, PC, Suite 1600, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇, Esquire; or if to a Selling
Stockholder, c/o ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇.
14. Governing Law; Headings:
THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK. The section headings in this Agreement
have been inserted as a matter of convenience of reference and are not a part of
this Agreement.
15. Partial Unenforceability:
The invalidity or unenforceability of any Section, paragraph or
provision of this Agreement shall not affect the validity or enforceability of
any other Section, paragraph or provision hereof. If any Section, paragraph or
provision of this Agreement is for any reason determined to be invalid or
unenforceable, there shall be deemed to be made such minor changes (and only
such minor changes) as are necessary to make it valid and enforceable.
16. Parties at Interest:
44
The Agreement herein set forth has been and is made solely for
the benefit of the Underwriters, the Company, the Operating Partnership, the
Selling Stockholders and the controlling persons, directors and officers
referred to in Section 9 hereof, and their respective successors, assigns,
executors and administrators. No other person, partnership, association or
corporation (including a purchaser, as such purchaser, from any of the
Underwriters) shall acquire or have any right under or by virtue of this
Agreement.
17. Entire Agreement; Amendments, Modifications and Waivers:
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 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.
18. Counterparts and Facsimile Signatures:
This Agreement may be signed by the parties in counterparts
which together shall constitute one and the same agreement among the parties. A
facsimile signature shall constitute an original signature for all purposes.
If the foregoing correctly sets forth the understanding among
the Company, the Operating Partnership, the Selling Stockholders and the
Underwriters, please so indicate in the space provided below for the purpose,
whereupon this Agreement shall constitute a binding agreement among the Company,
the Operating Partnership, the Selling Stockholders and the Underwriters.
Very truly yours,
MEDICAL PROPERTIES TRUST, INC.
By:
-----------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
Title: Chairman, President and Chief Executive
Officer
MPT OPERATING PARTNERSHIP, L.P.
By: Medical Properties Trust, LLC,
its sole general partner
By:
-----------------------------------
Name:
Title:
SELLING SHAREHOLDERS LISTED ON
SCHEDULE I ATTACHED HERETO
By: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
as Attorney-in-Fact
-------------------------------
45
Accepted and agreed to as
of the date first above written:
FRIEDMAN, BILLINGS, ▇▇▇▇▇▇ & CO., INC.
By:
-----------------------------------
Name:
Title:
For itself and as Representative of the several
Underwriters named on Schedule II hereto.
[Signature page to Underwriting Agreement]
46