1
EXHIBIT 1.1
AMERICAN HEALTH PROPERTIES, INC.
(A DELAWARE CORPORATION)
PREFERRED STOCK, DEPOSITARY SHARES,
COMMON STOCK AND COMMON STOCK WARRANTS
UNDERWRITING AGREEMENT BASIC PROVISIONS
October 17, 1995
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Dear Sirs:
1. Introductory. American Health Properties, Inc., a Delaware
corporation (the "Company"), proposes to issue and sell, common stock, par
value $.01 per share (the "Common Stock"), or warrants to purchase a number of
shares of Common Stock (the "Common Stock Warrants"), or both, or preferred
stock, par value $.01 per share (the "Preferred Stock"), from time to time, in
one or more offerings on terms to be determined at the time of sale. The
Preferred Stock may be offered in the form of depositary shares (the
"Depositary Shares") represented by depositary receipts (the "Depositary
Receipts"). The Common Stock Warrants will be issued pursuant to a Warrant
Agreement (the "Warrant Agreement") between the Company and a warrant agent
(the "Warrant Agent"). Except as provided under Delaware law and in the
Company's Restated Certificate of Incorporation, as amended (the "Articles"),
each series of Preferred Stock may vary as to the specific number of shares,
title, stated value, liquidation preference, issuance price, ranking, dividend
rate or rates (or method of calculation), dividend payment dates, any
redemption or sinking fund requirements, any conversion provisions and any
other variable terms as set forth in the Articles relating to such Preferred
Stock. As used herein, "Securities" shall mean the shares of Common Stock and
the Common Stock Warrants, the Preferred Stock, the Depositary Shares and the
Depositary Receipts; and "Warrant Securities" shall mean the shares of Common
Stock issuable upon exercise of Common Stock Warrants. As used herein, "you"
and "your", unless the context otherwise requires, shall mean the parties to
whom this Agreement is addressed together with the other parties, if any,
identified in the applicable Terms Agreement (as hereinafter defined) as
additional co-managers with respect to Underwritten Securities purchased
pursuant thereto and "Underwritten Securities" shall mean the Securities
specified in the applicable Terms Agreement.
2
Whenever the Company determines to make an offering of Securities
through you or through an underwriting syndicate managed by you, the Company
will enter into an agreement (the "Terms Agreement") providing for the sale of
such Securities (the "Underwritten Securities") to, and the purchase and
offering thereof by, you and such other underwriters, if any, selected by you
as have authorized you to enter into such Terms Agreement on their behalf (the
"Underwriters", which term shall include you whether acting alone in the sale
of the Underwritten Securities or as a member of an underwriting syndicate and
any Underwriter substituted pursuant to Section 11 hereof). The Terms
Agreement relating to the offering of Underwritten Securities shall specify the
number of Underwritten Securities of each class or series to be initially
issued, including the number of Common Stock Warrants, if any (the "Initial
Underwritten Securities"), whether the Initial Underwritten Securities shall be
in the form of Depositary Shares and the fractional amount of Preferred Stock
represented by each Depositary Share, the names of the Underwriters
participating in such offering (subject to substitution as provided in Section
11 hereof), the number of Initial Underwritten Securities that each such
Underwriter severally agrees to purchase, the names of the Underwriters acting
as co-managers, if any, in connection with such offering, the price at which
the Initial Underwritten Securities are to be purchased by the Underwriters
from the Company, the initial public offering price, the time, date and place
of delivery and payment, any delayed delivery arrangements and any other
variable terms of the Initial Underwritten Securities (including, but not
limited to, current ratings in the case of Preferred Stock and Depositary
Shares only). In addition, each Terms Agreement shall specify whether the
Company has agreed to grant to the Underwriters an option to purchase
additional Underwritten Securities to cover overallotments, if any, and the
number of Underwritten Securities subject to such option (the "Option
Securities"). As used herein, the term "Underwritten Securities" shall include
the Initial Underwritten Securities and all or any portion of the Option
Securities agreed to be purchased by the Underwriters as provided herein, if
any. The Terms Agreement, which shall be substantially in the form of Exhibit
A hereto, may take the form of an exchange of any standard form of written
telecommunication between you and the Company. Each offering of Underwritten
Securities through you or through an underwriting syndicate managed by you will
be governed by this Agreement, as supplemented by the applicable Terms
Agreement.
2. Representations and Warranties.
(a) The Company represents and warrants to you, as of the date
hereof, and to you and each other Underwriter named in the applicable Terms
Agreement, as of the date thereof (such latter date being referred to herein as
a "Representation Date"), that:
-2-
3
(i) A registration statement on Form S-3 (No. 33-61895)
for the registration of the Securities (including the Underwritten
Securities) and Warrant Securities and certain of the Company's debt
securities, under the Securities Act of 1933, as amended (the "1933
Act"), and the offering thereof from time to time in accordance with
Rule 415 of the rules and regulations of the Securities and Exchange
Commission (the "Commission") under the 1933 Act (the "1933 Act
Regulations"), has heretofore been delivered to you, has been prepared
by the Company in all material respects in conformity with the
requirements of the 1933 Act and the 1933 Act Regulations and has been
filed with the Commission under the 1933 Act. One or more amendments
to such registration, as may have been required and copies of which
have heretofore been delivered to you, have been so prepared and filed
prior to the execution of the applicable Terms Agreement. Such
registration statement (as amended, if applicable) has been declared
effective by the Commission. Copies of such registration statement
and any post-effective amendment thereto, excluding exhibits thereto
but including all documents incorporated by reference in the
prospectus contained therein, have been provided to you for each of
the other Underwriters; no other document with respect to such
registration statement or document incorporated by reference therein
has heretofore been filed with the Commission; and no stop order
suspending the effectiveness of such registration statement has been
issued and no proceeding for that purpose has been initiated or
threatened by the Commission. Such registration statement (as amended
or supplemented, if applicable), on the one hand, and the prospectus
constituting a part thereof and each prospectus supplement relating to
the offering of Underwritten Securities provided to the Underwriters
for use (whether or not such prospectus supplement is required to be
filed by the Company pursuant to Rule 424(b) of the 1933 Act
Regulations) (the "Prospectus Supplement"), on the other hand,
including all documents incorporated therein by reference, as from
time to time amended or supplemented pursuant to the 1933 Act, the
Securities Exchange Act of 1934, as amended (the "1934 Act"), or
otherwise, are referred to herein as the "Registration Statement" and
the "Prospectus", respectively; provided, however, that a Prospectus
Supplement shall be deemed to have supplemented the Prospectus only
with respect to the offering of Underwritten Securities to which it
relates. If the Company elects to rely on Rule 434 under the 1933 Act
Regulations, all references to the Prospectus shall be deemed to
include, without limitation, the form of prospectus and the
abbreviated term sheet, taken together, provided to the Underwriters
by the Company in reliance on Rule 434 under the 1933 Act (the "Rule
434 Prospectus"). If the Company files a registration statement to
register a portion of the Securities and relies on Rule 462(b) for
such registration statement to
-3-
4
become effective upon filing with the Commission (the "Rule 462
Registration Statement"), then any reference to "Registration
Statement" herein shall be deemed to be both the registration
statement referred to above (No. 33-61895) and the Rule 462
Registration Statement, as each such registration statement may be
amended pursuant to the 1933 Act. All references in this Agreement to
financial statements and schedules and other information that is
"contained," "included" or "stated" in the Registration Statement or
the Prospectus (and all other references of like import) shall be
deemed to mean and include all such financial statements and schedules
and other information that is or is deemed to be incorporated by
reference in the Registration Statement or the Prospectus, as the case
may be; and all references in this Agreement to amendments or
supplements to the Registration Statement or the Prospectus shall be
deemed to mean and include, without limitation, the filing of any
document under the 1934 Act that is or is deemed to be incorporated by
reference in the Registration Statement or the Prospectus, as the case
may be.
(ii) At the time the Registration Statement became
effective, the Registration Statement and the Prospectus conformed,
and as of the applicable Representation Date will conform, in all
material respects to the requirements of the 1933 Act and the 1933 Act
Regulations. At the time the Registration Statement became effective,
the Registration Statement did not, and as of the applicable
Representation Date, will not, contain an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading.
The Prospectus, as of the date hereof does not, and as of the
applicable Representation Date and at Closing Time (as hereinafter
defined) will not, include an untrue statement of a material fact or
omit to state a material fact necessary in order to make the
statements therein, in light of the circumstances under which they
were made, not misleading; provided, however, that the foregoing
representations and warranties shall not apply to information
contained in or omitted from the Registration Statement or the
Prospectus in reliance upon, and in conformity with, written
information furnished to the Company by or on behalf of any
Underwriter, directly or through you, specifically for use in
preparation thereof.
(iii) No order preventing or suspending the use of any
preliminary prospectus included in such registration statement or
filed with the Commission pursuant to Rule 424(a) of the 1933 Act
Regulations (a "Preliminary Prospectus") has been issued by the
Commission, and each Preliminary Prospectus, at the time of filing
thereof, conformed in all material respects
-4-
5
to the requirements of the 1933 Act and the 1933 Act Regulations, and
did not contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which
they were made, not misleading; provided, however, that the foregoing
representations and warranties shall not apply to information
contained in or omitted from such Preliminary Prospectus in reliance
upon, and in conformity with, written information furnished to the
Company by or on behalf of any Underwriter, directly or indirectly
through you, specifically for use in preparation thereof.
(iv) The documents incorporated or deemed to be
incorporated by reference in the Prospectus pursuant to Item 12 of
Form S-3 under the 1933 Act, at the time they were or hereafter are
filed with the Commission or declared effective, complied and will
comply in all material respects with the requirements of the 1933 Act
or the 1934 Act, as applicable, and the 1933 Act Regulations or rules
and regulations of the Commission under the 1934 Act (the "1934 Act
Regulations"), as applicable, and, when read together with the other
information in the Prospectus, at the time the Registration Statement
became effective and as of the applicable Representation Date or
Closing Time or during the period specified in Section 4(f), did not
and will not include an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances under
which they were made, not misleading.
(v) Since the date of the latest audited financial
statements included or incorporated by reference in the Registration
Statement and the Prospectus, except as otherwise stated or
incorporated by reference therein, (A) there has been no material
adverse change in the condition, financial or otherwise, of the
Company and its subsidiaries considered as one enterprise (provided
that, whenever reference is made in this Agreement to any material
adverse change, or material adverse effect, or similar items,
affecting the Company and its subsidiaries considered as one
enterprise, such reference shall also be deemed to include a separate
reference to a material adverse change, or effect, or other applicable
item, affecting the Core Group (as defined in subsection (vi) below)
considered as one enterprise), or in the earnings, business affairs or
business prospects of the Company and its subsidiaries considered as
one enterprise, whether or not arising in the ordinary course of
business, (B) there have been no transactions entered into by the
Company or its subsidiaries that are material with respect to the
Company and its subsidiaries considered as one enterprise other than
those
-5-
6
in the ordinary course of business, and (C) except for regular
quarterly dividends on the Company's common stock and dividends paid
on the Company's Psychiatric Group Preferred Stock, par value $0.01
per share (the "Psychiatric Group Preferred Stock"), there has been no
dividend or distribution of any kind declared, paid or made by the
Company on any class of its capital stock.
(vi) The consolidated financial statements and supporting
schedules of the Company and the combined financial statements of the
"Core Group" and the "Psychiatric Group" (as each such term is defined
in the Prospectus) included in, or incorporated by reference into, the
Registration Statement and the Prospectus present fairly the financial
position of the Company and its consolidated subsidiaries, and the
Core Group, and the Psychiatric Group, respectively, as of the dates
indicated and the results of their operations for the periods
specified; except as otherwise stated in the Registration Statement
and the Prospectus, said financial statements have been prepared in
conformity with generally accepted accounting principles applied on a
consistent basis; the supporting schedules included or incorporated by
reference in the Registration Statement and the Prospectus present
fairly in all material respects the information required to be stated
therein; and the selected financial data (for the Company
consolidated, the Core Group and the Psychiatric Group, as the case
may be) set forth in the Prospectus and in the Company's Annual Report
on Form 10-K for the fiscal year ended December 31, 1994 and the
selected financial data set forth in the Company's Current Report on
Form 8-K dated August 14, 1995, incorporated by reference in the
Prospectus, are derived from the financial statements and notes
thereto of the Company, the Core Group and the Psychiatric Group and
Management's Discussion and Analysis of Financial Condition and
Results of Operations for the Company, the Core Group and the
Psychiatric Group on the basis stated in the Registration Statement
and such Annual Report and Current Report.
(vii) Neither the Company nor any of its officers or
directors has taken nor will any of them take, directly or indirectly,
any action resulting in a violation of Rule 10b-6 under the 1934 Act,
or designed to cause or result in, or which has constituted or which
reasonably might be expected to constitute, the stabilization or
manipulation of the price of the Company's Common Stock or
facilitation of the sale or resale of the Common Stock.
(viii) Except as disclosed in the Prospectus, the Company is
not a party to any material contract or agreement relating to any
purchase of real property or the borrowing of funds secured by real
property.
-6-
7
(ix) To the knowledge of the Company, all of the material
leases, guarantees and mortgages to which the Company is a party are
the legal, valid and binding obligations of all parties thereto and
the Company knows of no default by it or its subsidiaries or defenses
against the Company's or its subsidiaries' rights to enforce such
obligations currently existing with respect thereto.
(x) All documents delivered or to be delivered by the
Company or any of its directors or officers to you, the Commission or
any state securities law administrator in connection with the issuance
and sale of the Underwritten Securities were, on the dates on which
they were delivered, and will be, on the dates on which they are
delivered, true, complete and correct in all material respects.
(xi) ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP, who have expressed their opinion
on the audited consolidated financial statements of the Company and
the audited combined financial statements of the Core Group and the
Psychiatric Group and related schedules included in, or incorporated
by reference into, the Registration Statement, are independent public
accountants within the meaning of the 1933 Act and the applicable 1933
Act Regulations.
(xii) The Company has been duly organized and is validly
existing and in good standing as a corporation under the laws of the
State of Delaware, with power and authority (corporate and other) to
own or lease its properties and to conduct its business as described
in the Registration Statement and the Prospectus; the Company is in
possession of, and operating in all material respects in compliance
with, all material franchises, grants, authorizations, licenses,
permits, easements, consents, certificates and orders required for the
conduct of its business, all of which are valid and in full force and
effect; and the Company is duly qualified to do business and in good
standing as a foreign corporation in all other jurisdictions where its
ownership or leasing of properties or the conduct of its business
requires such qualification, except where failure to qualify and be in
good standing would not have a material adverse effect on the
condition, financial or otherwise, or on the earnings, business
affairs or business prospects of the Company and its subsidiaries
considered as one enterprise.
(xiii) Each subsidiary of the Company has been duly
incorporated or organized and is validly existing as a corporation or
a partnership, as the case may be, in good standing under the laws of
the jurisdiction of its incorporation or organization, has power and
authority (corporate or partnership) to own or lease its properties
and
-7-
8
to conduct its business and is duly qualified as a foreign corporation
or partnership, as the case may be, to transact business and is in
good standing in each jurisdiction in which such qualification is
required, whether by reason of the ownership or leasing of property or
the conduct of business, except where the failure to so qualify would
not have a material adverse effect on the condition, financial or
otherwise, or the earnings, business affairs or business prospects of
the Company and its subsidiaries considered as one enterprise.
(xiv) The capitalization of the Company is as set forth in
the Prospectus; the issued and outstanding Common Stock of the Company
and shares of Psychiatric Group Preferred Stock have each been duly
authorized and validly issued and are fully paid and non-assessable,
are not subject to preemptive or other similar rights and are duly
listed on the New York Stock Exchange (the "NYSE") and the National
Association of Securities Dealers Automated Quotations National Market
(the "NASDAQ/NM"), respectively; and all of the issued and outstanding
capital stock of the Company's subsidiaries has been duly authorized
and validly issued, is fully paid and non-assessable and is owned
directly or indirectly by the Company (except as otherwise noted in
the Prospectus), free and clear of any security interest, mortgage,
pledge, lien, encumbrance, claim or equity; and the Company, through
its wholly-owned subsidiaries, AHP of Kansas, Inc. and AHP of
Fayetteville, Inc., has an aggregate 97% interest in each respective
partnership (each a "Partnership") in which each such subsidiary is
the sole general partner and a limited partner; and the Company,
through each such subsidiary, is entitled to all distributions of
Additional Rent (as defined in each related agreement of partnership)
and 97% of all other distributions other than with respect to Net
Percentage Rent (as defined in each related agreement of partnership).
(xv) The Underwritten Securities being sold pursuant to
the applicable Terms Agreement and, if applicable, the deposit of the
Preferred Stock in accordance with the provisions of a Deposit
Agreement (each, a "Deposit Agreement"), among the Company, the
financial institution named in the Deposit Agreement (the "Preferred
Stock Depositary") and the holders of the Depositary Receipts issued
thereunder, have, as of each Representation Date, been duly authorized
by the Company and such Underwritten Securities have been duly
authorized by the Company for issuance and sale pursuant to this
Agreement and, when issued and delivered pursuant to this Agreement
against payment of the consideration therefor specified in the
applicable Terms Agreement or any Delayed Delivery Contract (as
hereinafter defined), will be validly issued, fully paid and
non-assessable; the Preferred Stock, if applicable,
-8-
9
conform to the provisions of the Articles; and the Underwritten
Securities being sold pursuant to the applicable Terms Agreement
conform in all material respects to all statements relating thereto
contained in the Prospectus; and the issuance of the Underwritten
Securities is not subject to preemptive or other similar rights.
(xvi) If applicable, the Common Stock Warrants have been
duly authorized and, when issued and delivered pursuant to this
Agreement and countersigned by the Warrant Agent as provided in the
Warrant Agreement, will have been duly executed, countersigned, issued
and delivered and will constitute valid and legally binding
obligations of the Company entitled to the benefits provided by the
Warrant Agreement under which they are to be issued; the issuance of
the Warrant Securities upon exercise of the Common Stock Warrants will
not be subject to preemptive or other similar rights; and the Common
Stock Warrants conform in all material respects to all statements
relating thereto contained in the Prospectus.
(xvii) If applicable, the Common Stock issuable upon
conversion of any of the Preferred Stock or the Depositary Shares, or
the Warrant Securities, will have been duly and validly authorized and
reserved for issuance upon such conversion or exercise by all
necessary corporate action and such shares, when issued upon such
conversion or exercise will be duly and validly issued and will be
fully paid and nonassessable, and the issuance of such shares upon
such conversion or exercise will not be subject to preemptive or other
similar rights; the Common Stock so issuable upon conversion of any of
the Preferred Stock or the Depositary Shares, or the Warrant
Securities will conform in all material respects, as of the applicable
Representation Date, to all statements relating thereto contained in
the Prospectus.
(xviii) The applicable Warrant Agreement, if any, and the
applicable Deposit Agreement, if any, will have been duly authorized,
executed and delivered by the Company prior to the issuance of any
applicable Underwritten Securities, and each constitutes a valid and
legally binding agreement of the Company enforceable in accordance
with its terms, except as enforcement thereof may be limited by
bankruptcy, insolvency or other similar laws relating to or affecting
creditors' rights generally and by general equity principles
(regardless of whether enforcement is considered in a proceeding in
equity or at law); and the Warrant Agreement, if any, conforms in all
material respects to all statements relating thereto contained in the
Prospectus.
-9-
10
(xix) If applicable, upon execution and delivery thereof
pursuant to the terms of the Deposit Agreement, the persons in whose
names the Depositary Receipts are registered will be entitled to the
rights specified therein and in the Deposit Agreement, except as
enforcement of such rights may be limited by bankruptcy, insolvency or
other similar laws relating to or affecting creditors' rights
generally and by general equity principles (regardless of whether
enforcement is considered in a proceeding in equity or at law).
(xx) There is no action, suit or proceeding before or by
any court or governmental agency or body, domestic or foreign, now
pending, or, to the knowledge of the Company (knowledge of the Company
being as defined in subsection xxix below), threatened, against or
affecting the Company or its subsidiaries, which is required to be
disclosed in the Prospectus (other than as disclosed therein), or
which would result in any material adverse change in the condition,
financial or otherwise, business affairs or business prospects of the
Company and its subsidiaries considered as one enterprise, or which
might materially and adversely affect the consummation of this
Agreement, the applicable Terms Agreement, the applicable Warrant
Agreement, if any, or the transactions contemplated herein and
therein; all pending legal or governmental proceedings to which the
Company or any of its subsidiaries is a party or of which any of their
respective property is the subject that are not described in the
Prospectus, including routine litigation incidental to the business,
are, considered in the aggregate, not material; and there are no
material contracts or documents of the Company or its subsidiaries
that are required to be filed as exhibits to the Registration
Statement by the 1933 Act or by the Rules and Regulations that have
not been so filed.
(xxi) Neither the Company nor any of its subsidiaries is in
violation of its articles of incorporation, or other form of charter
(or, in the case of subsidiaries that are not corporations, other
organizational documents), as the case may be, or in default in the
performance or observance of any material obligation, agreement,
covenant or condition contained in any contract, indenture, mortgage,
loan agreement, note, lease or other instrument to which it is a party
or by which it or its properties may be bound, where such defaults
would have a material adverse effect on the condition, financial or
otherwise, or on the earnings, business affairs or business prospects
of the Company and its subsidiaries considered as one enterprise; and
the execution and delivery of this Agreement, the applicable Terms
Agreement, and the applicable Warrant Agreement, if any, or the
applicable Deposit Agreement, if any, and the consummation of the
transactions contemplated herein and therein have been
-10-
11
duly authorized by all necessary corporate action and compliance by
the Company with its obligations hereunder and thereunder will not
conflict with or constitute a breach of, or default under, or result
in the creation or imposition of any lien, charge or encumbrance upon
any property or assets of the Company or its subsidiaries pursuant to,
any contract, indenture, mortgage, loan agreement, note, lease or
other instrument to which the Company or any of its subsidiaries is a
party or by which it may be bound or to which any of the property or
assets of the Company or any of its subsidiaries is subject, nor will
such action result in any violation of the provisions of the articles
of incorporation or code of regulations of the Company or its
subsidiaries or, to the best of its knowledge, any law, administrative
regulation or administrative or court order or decree; and no consent,
approval, authorization or order of any court or governmental
authority or agency is required for the consummation by the Company of
the transactions contemplated by this Agreement, the applicable Terms
Agreement or the applicable Warrant Agreement, if any, or the
applicable Deposit Agreement, if any, except such as has been obtained
or as may be required under the 1933 Act, the 1934 Act, state
securities or Blue Sky laws or real estate syndication laws in
connection with the purchase and distribution of the Underwritten
Securities by the Underwriters.
(xxii) The Company has full right, power and authority to
enter into this Agreement, the applicable Terms Agreement and the
Delayed Delivery contracts, if any, and this Agreement has been, and
as of the applicable Representation Date, the applicable Terms
Agreement and the Delayed Delivery Contracts, if any, will have been
duly authorized, executed and delivered by the Company.
(xxiii) The Company qualified as a "real estate investment
trust" (a "REIT") under Sections 856 through 860 of the Internal
Revenue Code of 1986, as amended (the "Code"), for its taxable year
ended December 31, 1994, and for each of its prior taxable years ended
on or after December 31, 1989 that are open to assessment by the
Internal Revenue Service (the "Service"). The Company is organized
and carries on its business so as to qualify as a REIT under the Code,
and no transaction or other event has occurred that would cause the
Company not to continue to qualify as a REIT for its current taxable
year or for future taxable years.
(xxiv) Neither the Company nor any of its subsidiaries is
required to be registered under the Investment Company Act of 1940, as
amended (the "1940 Act").
(xxv) [Reserved.]
-11-
12
(xxvi) If applicable, the Underwritten Securities have been
approved for listing, subject to official notice of issuance, on the
New York Stock Exchange.
(xxvii) The Company and its subsidiaries have good and
marketable title to all real property and good and marketable title to
all personal property owned by them, respectively, in each case free
and clear of all liens, encumbrances and defects or any conditional
sale agreement or other title retention agreement except such as are
described in the Prospectus or such as do not materially affect the
value of such property and do not interfere with the use made and
proposed to be made of such property by the Company and its
subsidiaries; the mortgages that the Company holds on the properties
situated in Katonah, New York, and Saratoga Springs, Saratoga County,
New York, are valid and binding and each constitutes a valid first
mortgage lien for the benefit of the Company on such property and any
real property and buildings held under lease by the Company and its
subsidiaries are held by them under valid, subsisting and enforceable
leases with such exceptions as are not material and do not interfere
with the use made and proposed to be made of such property and
buildings by the Company and its subsidiaries.
(xxviii) The Company and its subsidiaries have title insurance
on all real property owned by them in an amount at least equal to the
cost of acquisition of such real property; each of the joint ventures
or partnerships owning real property in which the Company has a joint
venture or partnership interest has title insurance on its respective
property in an amount at least equal to the cost of acquisition of the
interest by such joint venture or partnership.
(xxix) The Company has no knowledge of (A) the unlawful
presence of any hazardous substances, hazardous materials, toxic
substances or waste materials (collectively, "Hazardous Materials") on
any of the real property owned by it or of (B) any unlawful spills,
release, discharges or disposal of Hazardous Materials that have
occurred or are presently occurring from the Properties as a result of
any construction on or operation and use of the Properties, which
presence or occurrence would materially adversely affect the
condition, financial or otherwise, or the earnings, business affairs
or business prospects of the Company and its subsidiaries considered
as one enterprise. In connection with the construction on or
operation and use of any real property owned by it, the Company
represents that, as of the date of this Agreement, the Company has no
knowledge of any material failure to comply with all applicable local,
state and federal environmental laws, regulations, ordinances and
administrative
-12-
13
and judicial orders relating to the generation, recycling, reuse,
sale, storage, handling, transport and disposal of any Hazardous
Materials that would have a material adverse effect on the condition,
financial or otherwise, or on the earnings, business affairs or
business prospects of the Company and its subsidiaries considered as
one enterprise. For purposes of this Agreement, the knowledge of the
Company shall mean actual knowledge of the relevant facts and
circumstances by any of the executive officers (as defined in Rule 405
under the ▇▇▇▇ ▇▇▇) of the Company.
(b) Any certificate signed by any officer of the Company and
delivered to you or to counsel for the Underwriters shall be deemed a
representation and warranty by the Company, as the case may be, to each
Underwriter participating in such offering as to the matters covered thereby on
the date of such certificate and, unless subsequently amended or supplemented,
at the applicable Representation Date subsequent thereto.
3. Purchase by, and Sale and Delivery to, Underwriters.
(a) The several commitments of the Underwriters to purchase the
Underwritten Securities pursuant to the applicable Terms Agreement shall be
deemed to have been made on the basis of the representations and warranties
herein contained and shall be subject to the terms and conditions herein set
forth.
(b) In addition, on the basis of the representations and
warranties herein contained and subject to the terms and conditions herein set
forth, the Company may grant, if so provided in the applicable Terms Agreement
relating to the Initial Underwritten Securities, an option to the Underwriters
named in such Terms Agreement, severally and not jointly, to purchase up to the
number of Option Securities set forth therein at the same price per Option
Security as is applicable to the Initial Underwritten Securities, less an
amount equal to any dividend paid by the Company and payable on any Initial
Underwritten Securities and not payable on such Option Securities. Such
option, if granted, will expire 30 days (or such lesser number of days as may
be specified in the applicable Terms Agreement) after the Representation Date
relating to the Initial Underwritten Securities, and may be exercised in whole
or in part from time to time only for the purpose of covering over-allotments
that may be made in connection with the offering and distribution of the
Initial Underwritten Securities upon notice by you to the Company setting forth
the number of Option Securities as to which the several Underwriters are then
exercising the option and the time and date of payment and delivery for such
Option Securities. Any such time, date and place of delivery (a "Date of
Delivery") shall be determined by you, but shall not be later than five full
business days and not be earlier than two full business days after the exercise
of said option, nor in any event prior to
-13-
14
Closing Time, unless otherwise agreed upon by you and the Company. If the
option is exercised as to all or any portion of the Option Securities, each of
the Underwriters, acting severally and not jointly, will purchase that
proportion of the total number of Option Securities then being purchased that
the number of Initial Underwritten Securities each such Underwriter has
severally agreed to purchase as set forth in the applicable Terms Agreement
bears to the total number of Initial Underwritten Securities (except as
otherwise provided in the applicable Terms Agreement).
(c) Payment of the purchase price for, and delivery of, the
Underwritten Securities to be purchased by the Underwriters shall be made at
the office of ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
or at such other place as shall be agreed upon by you and the Company, at 10:00
A.M., New York time, on the third business day (unless postponed in accordance
with the provisions of Section 11 hereof) following the date of the applicable
Terms Agreement, or if such Terms Agreement is executed subsequent to 4:30 P.M.
on the date of its execution, on the fourth business day, or at such other time
as shall be agreed upon by you and the Company (each such time and date of
payment and delivery being referred to herein as the "Closing Time"). In
addition, in the event that any or all of the Option Securities are purchased
by the Underwriters, payment of the purchase price for, and delivery of
certificates representing, such Option Securities, shall be made at the
above-mentioned offices of ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, or at such other place as shall
be agreed upon by you and the Company on each Date of Delivery as specified in
the notice from you to the Company. Unless otherwise specified in the
applicable Terms Agreement, payment shall be made to the Company by certified
or official bank check or checks in New York Clearinghouse or similar next-day
funds payable to the order of the Company against delivery to you for the
respective accounts of the Underwriters for the Underwritten Securities to be
purchased by them. The Underwritten Securities or, if applicable, Depositary
Receipts evidencing the Depositary Shares, shall be in such authorized
denominations and registered in such names as you may request in writing at
least two business days prior to the Closing Time or Date of Delivery, as the
case may be. The Underwritten Securities, which may be in temporary form, will
be made available for examination and packaging by you on or before the first
business day prior to the Closing Time or the Date of Delivery, as the case may
be.
If authorized by the applicable Terms Agreement, the Underwriters
named therein may solicit offers to purchase Underwritten Securities from the
Company pursuant to delayed delivery contracts ("Delayed Delivery Contracts")
substantially in the form of Exhibit B hereto with such changes therein as the
Company may approve. As compensation for arranging Delayed Delivery Contracts,
the Company will pay to you at Closing Time, for the respective accounts of the
Underwriters, a fee specified in
-14-
15
the applicable Terms Agreement for each of the Underwritten Securities for
which Delayed Delivery Contracts are made at the Closing Time as is specified
in the applicable Terms Agreement. Any Delayed Delivery Contracts are to be
with institutional investors of the types described in the Prospectus. At the
Closing Time, the Company will enter into Delayed Delivery Contracts (for not
less than the minimum number of Underwritten Securities per Delayed Delivery
Contract specified in the applicable Terms Agreement) with all purchasers
proposed by the Underwriters and previously approved by the Company as provided
below, but not for an aggregate number of Underwritten Securities in excess of
that specified in the applicable Terms Agreement. The Underwriters will not
have any responsibility for the validity or performance of Delayed Delivery
Contracts.
You shall submit to the Company, at least two business days prior to
the Closing Time, the names of any institutional investors with which it is
proposed that the Company will enter into Delayed Delivery Contracts and the
number of Underwritten Securities to be purchased by each of them, and the
Company will advise you, at least one business day prior to the Closing Time,
of the names of the institutions with which the making of Delayed Delivery
Contracts is approved by the Company and the number of Underwritten Securities
to be covered by each such Delayed Delivery Contract.
The number of Underwritten Securities agreed to be purchased by the
several Underwriters pursuant to the applicable Terms Agreement shall be
reduced by the number of Underwritten Securities covered by Delayed Delivery
Contracts, as to each Underwriter as set forth in a written notice delivered by
you to the Company; provided, however, that the total number of Underwritten
Securities to be purchased by all Underwriters shall be the total number of
Underwritten Securities covered by the applicable Terms Agreement, less the
number of Underwritten Securities covered by Delayed Delivery Contracts.
4. Covenants and Agreements of the Company. The Company
covenants with the several Underwriters participating in the offering of
Underwritten Securities that:
(a) Promptly following the execution of the applicable Terms
Agreement, the Company will prepare a Prospectus Supplement setting forth the
number of Underwritten Securities covered thereby and their terms not otherwise
specified in the Prospectus or the applicable Warrant Agreement, if any, as the
case may be, pursuant to which the Underwritten Securities are being issued,
the names of the Underwriters participating in the offering and the number of
Underwritten Securities that each severally has agreed to purchase, the names
of the Underwriters acting as co-managers in connection with the offering, the
price at which the Underwritten Securities are to be purchased by the
Underwriters from the Company, the
-15-
16
initial public offering price, if any, the selling concession and reallowance,
if any, any delayed delivery arrangements, and such other information as you
and the Company deem appropriate in connection with the offering of the
Underwritten Securities; and the Company will promptly transmit copies of the
Prospectus Supplement to the Commission for filing pursuant to Rule 424(b) of
the 1933 Act Regulations.
(b) The Company will advise you promptly after it learns of the
issuance by the Commission of any stop order suspending the effectiveness of
the Registration Statement or of the institution of any proceedings for that
purpose, and will use its best efforts to prevent the issuance of any such stop
order and to obtain as soon as possible the lifting thereof, if issued. The
Company will advise you promptly of the transmittal to the Commission for
filing of any Prospectus Supplement or other supplement or amendment to the
Prospectus or any document to be filed pursuant to the ▇▇▇▇ ▇▇▇. The Company
will advise you promptly of any request by the Commission for any amendment of
or supplement to the Registration Statement or the Prospectus or for additional
information.
(c) If the Company elects to rely on Rule 434 under the 1933 Act
Regulations, the Company will prepare an abbreviated term sheet that complies
with the requirements of Rule 434 under the 1933 Act Regulations and the
Company will provide the Underwriters with copies of the form of Rule 434
Prospectus, in such number as the Underwriters may reasonably request, and file
or transmit for filing with the Commission the form of Prospectus complying
with Rule 434(c)(2) of the 1933 Act in accordance with Rule 424(b) of the 1933
Act by the close of business in New York on the business day immediately
succeeding the date of the Terms Agreement.
(d) At any time when the Prospectus is required to be delivered
under the 1933 Act or the 1934 Act in connection with sales of the Underwritten
Securities, the Company will give you notice of its intention to file any
amendment to the Registration Statement or any amendment or supplement to the
Prospectus, whether pursuant to the 1933 Act, 1934 Act or otherwise, and will
furnish you with copies of any such amendment or supplement a reasonable amount
of time prior to such proposed filing, and will not file any such amendment or
supplement or other documents in a form to which you or counsel for the
Underwriters shall reasonably object in writing or which is not in material
compliance with the 1933 Act, the 1933 Act Regulations, the 1934 Act or the
1934 Act Regulations as applicable.
(e) The Company will deliver to each Underwriter a signed copy of
the Registration Statement as originally filed and of each amendment thereto
(including exhibits filed therewith and documents incorporated by reference
therein pursuant to Item 12 of Form S-3 under the ▇▇▇▇ ▇▇▇) and will also
deliver to such Underwriter a
-16-
17
conformed copy of the Registration Statement as originally filed and of each
amendment thereto (including documents incorporated by reference but without
exhibits).
(f) The Company will furnish to each Underwriter, from time to
time during the period when the Prospectus is required to be delivered under
the 1933 Act or the 1934 Act in connection with sales of the Underwritten
Securities, such number of copies of the Prospectus (as amended or
supplemented) as such Underwriter may reasonably request for the purposes
contemplated by the 1933 Act, the 1933 Act Regulations, the 1934 Act or the
1934 Act Regulations.
(g) If at any time after the effective date of the Registration
Statement when a prospectus relating to the Underwritten Securities is required
to be delivered under the 1933 Act or the 1934 Act any event relating to or
affecting the Company occurs as a result of which the Prospectus or any other
prospectus as then in effect would include an untrue statement of a material
fact, or omit to state any material fact necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading, or if it is necessary at any time to amend the Registration
Statement or the Prospectus to comply with the 1933 Act or the 1934 Act, the
Company will promptly notify you thereof and will amend or supplement the
Registration Statement or the Prospectus to correct such statement or omission
whether by filing documents pursuant to the 1933 Act, the 1934 Act or
otherwise.
(h) The Company will cooperate with the Underwriters to enable the
Underwritten Securities, the Warrant Securities, if any, and the Common Stock
issuable upon conversion of the Preferred Stock or the Depositary Shares, if
any, to be qualified for sale under the securities laws and real estate
syndication laws of such jurisdictions as you may designate after consultation
with the Company and at the request of the Underwriters will make such
applications and furnish such information as may be required of it as the
issuer of the Underwritten Securities, the Warrant Securities, if any, and the
Common Stock issuable upon conversion of the Preferred Stock or the Depositary
Shares, if any, for that purpose; provided, however, that the Company shall not
be required to qualify to do business or to file a general consent to service
of process in any such jurisdiction. The Company will, from time to time,
prepare and file such statements and reports as are or may be required of it as
the issuer of the Underwritten Securities, the Warrant Securities, if any, and
the Common Stock issuable upon exercise of the Warrant Securities, if any, and
the Common Stock issuable upon conversion of the Preferred Stock or the
Depositary Shares, if any, to continue such qualifications in effect for so
long a period as the Underwriters may reasonably request for the distribution
of the Underwritten Securities; and in each jurisdiction in which the
Underwritten Securities, the Warrant
-17-
18
Securities, if any, and the Common Stock issuable upon conversion of the
Preferred Stock or the Depositary Shares, if any, have been so qualified, the
Company will file such statements and reports as may be required by the laws of
such jurisdiction to continue such qualification in effect for so long as may
be required for the distribution of the Underwritten Securities, the Warrant
Securities, if any, and the Common Stock issuable upon conversion of the
Preferred Stock or the Depositary Shares, if any; provided, however, that the
Company shall not be obligated to qualify as a foreign corporation in any
jurisdiction where it is not so qualified.
(i) With respect to each sale of Underwritten Securities, the
Company will make generally available to its security holders as soon as
practicable, but in any event no later than 90 days after the close of the
period covered thereby, an earnings statement (in form complying with the
provisions of Rule 158 of the 1933 Act Regulations) that will be in reasonable
detail (but which need not be audited) and that will comply with Section 11(a)
of the 1933 Act covering a period of at least twelve months beginning not later
than the first day of the Company's fiscal quarter next following the
"effective date" (as defined in said Rule 158) of the Registration Statement.
(j) The Company will furnish to its shareholders annual reports
containing financial statements certified by independent public accountants and
with quarterly summary financial information in reasonable detail which may be
unaudited. During the period of three years from the date hereof, the Company
will deliver to you and, upon request, to each of the other Underwriters, (i)
copies of each annual report of the Company and each other report furnished by
the Company to its shareholders; and will deliver to you, (ii) as soon as they
are available, copies of any other reports (financial or other) which the
Company shall publish or otherwise make available to any of its security
holders as such, and (iii) as soon as they are available, copies of any reports
and financial statements furnished to or filed with the Commission or any
national securities exchange. In the event the Company has active
subsidiaries, such financial statements will be on a consolidated basis to the
extent the accounts of the Company and its subsidiaries are consolidated in
reports furnished to its shareholders generally. Separate financial statements
shall be furnished for all subsidiaries whose accounts are not consolidated but
which at the time are significant subsidiaries as defined in the 1933 Act
Regulations.
(k) The Company will use the net proceeds received by it from the
sale of Underwritten Securities in all material respects consistent with the
description thereof in the Prospectus under "Use of Proceeds."
-18-
19
(l) The Company will use its best efforts to continue to meet the
requirements to qualify as a "real estate investment trust" under the Code for
the taxable year in which sales of the Underwritten Securities have occurred or
are to occur.
(m) The Company, during the period when the Prospectus is required
to be delivered under the 1933 Act or the 1934 Act in connection with sales of
the Underwritten Securities, will file promptly all documents required to be
filed with the Commission pursuant to Section 13, 14 or 15 of the 1934 Act
within the time periods prescribed by the 1934 Act and the 1934 Act
Regulations.
(n) The Company will not, for 90 days from the date of the
applicable Prospectus Supplement, except with your prior written consent,
offer, sell, contract to sell or otherwise dispose of any of its debt or equity
securities or register for sale under the 1933 Act any of its debt or equity
securities, other than pursuant to this Agreement, employee benefit plans
existing on the date of this Agreement and conversion or exercise of securities
outstanding on the date of this Agreement. The Company further agrees that it
will cause its officers and directors to observe a similar restriction
respecting securities of the Company owned by them.
(o) If the Preferred Stock or Depositary Shares are convertible
into Common Stock or if Common Stock Warrants are issued, the Company will
reserve and keep available at all times, free of preemptive or other similar
rights, a sufficient number of shares of Common Stock or Preferred Stock, as
the case may be, for the purpose of enabling the Company to satisfy, any
obligations to issue such shares upon conversion of the Preferred Stock or the
Depositary Shares, as the case may be, or upon exercise of the Common Stock
Warrants.
(p) If the Preferred Stock or Depositary Shares are convertible
into Common Stock or if the Common Stock Warrants are exercised, the Company
will use its best efforts to list the shares of Common Stock issuable upon
conversion of the Preferred Stock or Depositary Shares or upon exercise of the
Common Stock Warrants on the New York Stock Exchange or such other national
exchange on which the Company's shares of Common Stock are then listed.
(q) The Company has complied and will comply with all of the
provisions of Florida H.B. 1771, Section 1, 117,130 of the Florida Securities
and Investors Act, and all regulations thereunder relating to issuers doing
business with Cuba.
5. Payment of Expenses. The Company will pay, directly or by
reimbursement, all expenses incident to the performance of its obligations
under this Agreement or the applicable Terms Agreement, including (a) the
printing and filing of the Registration Statement as originally filed and of
each amendment thereto, (b) the cost of
-19-
20
printing or preparing, filing and distributing to the Underwriters copies of
this Agreement and the applicable Terms Agreement, (c) the preparation,
issuance and delivery of the Underwritten Securities to the Underwriters and
the Warrant Securities, if any, (d) the fees and disbursements of the Company's
counsel and accountants, (e) the qualification of the Underwritten Securities
and the Warrant Securities, if any, and the Common Stock issuable upon
conversion of the Preferred Stock or the Depositary Shares, if any, under
securities laws and real estate syndication laws in accordance with the
provisions of Section 4(h), including filing fees and the fees and
disbursements of counsel for the Underwriters in connection therewith and in
connection with the preparation of the Blue Sky Survey, (f) the printing and
delivery to the Underwriters of copies of the Registration Statement as
originally filed and of each amendment thereto, any of the Prospectus and any
amendments or supplements thereto including the abbreviated term sheet
delivered by the Company pursuant to Rule 434 of the 1933 Act Regulations, (g)
the cost of reproducing and distributing to the Underwriters copies of the
applicable Deposit Agreement, if any and the applicable Warrant Agreement, if
any, (h) the cost of reproducing and delivering to the Underwriters copies of
the Blue Sky Survey, (i) the fees and expenses, if any, incurred with respect
to the listing of the Underwritten Securities or the Warrant Securities, if
any, or the Common Stock issuable upon conversion of the Preferred Stock or the
Depositary Shares, if any, on any national securities exchange, (j) the fees
and expenses, if any, incurred with respect to any filing with the National
Association of Securities Dealers, Inc. and (k) the cost of providing any CUSIP
or other identification numbers for the Underwritten Securities or the Common
Stock issuable upon exercise of the Warrant Securities, or the Common Stock
issuable upon conversion of the Preferred Stock or the Depositary Shares, if
applicable. It is understood, however, that except as provided in this
Section, Section 6 and Section 10 hereof, the Underwriters will pay all of
their own costs and expenses, including the fees of their counsel, transfer
taxes on resale of any of the Securities by them, and any advertising expenses
connected with any offers they may make.
6. Indemnification and Contribution.
(a) The Company agrees to indemnify and hold harmless each
Underwriter, and each person, if any, who controls any Underwriter within the
meaning of Section 15 of the 1933 Act, against any losses, claims, damages,
liabilities or expenses (including the reasonable cost of investigating and
defending against any claims therefor and reasonable counsel fees incurred in
connection therewith), joint or several, as incurred, which may be based upon
the 1933 Act, or any other statute or at common law, arising out of any untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement (or any amendment thereto),
-20-
21
or the omission or alleged omission therefrom of a material fact required to be
stated therein or necessary to make the statements therein not misleading or
arising out of any untrue statement or alleged untrue statement of a material
fact contained in any preliminary prospectus or the Prospectus (or any
amendment or supplement thereto including the abbreviated term sheet delivered
by the Company pursuant to Rule 434 of the 1933 Act Regulations) or the
omission or alleged omission therefrom of a material fact necessary in order to
make the statements therein, in the light of the circumstances under which they
were made, not misleading, unless any such statement or omission was made in
reliance upon, and in conformity with, written information furnished to the
Company by any Underwriter, directly or through you or any other Underwriter,
specifically for use in the preparation thereof; provided, however, that the
Company shall not be liable with respect to any claims made against any
Underwriter or any such controlling person under this subsection unless such
Underwriter or controlling person shall have notified the Company in writing
within a reasonable time after the summons or other first legal process giving
information of the nature of the claim shall have been served upon such
Underwriter or controlling person, but failure to notify the Company of any
such claim shall not relieve the Company from any liability which it may have
to such Underwriter or controlling person otherwise than on account of the
indemnity agreement contained in this paragraph. The Company will be entitled
to participate at its own expense in the defense, or, if it so elects, to
assume the defense of any suit brought to enforce any such liability, and, if
the Company elects to assume the defense, such defense shall be conducted by
counsel chosen by it. In the event the Company elects to assume the defense of
any such suit and retain such counsel, the Underwriter or Underwriters or
controlling person or persons, defendant or defendants in the suit, may retain
additional counsel but shall bear the fees and expenses of such counsel unless
(i) the Company shall have specifically authorized the retaining of such
counsel or (ii) the parties to such suit include such Underwriter or
Underwriters or controlling person or persons and the Company and such
Underwriter or Underwriters or controlling person or persons have been advised
by counsel that one or more legal defenses may be available to it or to them
which may not be available to the Company, in which case the Company shall not
be entitled to assume the defense of such suit notwithstanding their obligation
to bear the fees and expenses of such counsel. The Company shall not be liable
to indemnify any person for any settlement of any such claim effected without
the Company's written consent. This indemnity agreement will be in addition to
any liability which the Company might otherwise have.
(b) Each Underwriter severally agrees to indemnify and hold
harmless the Company, each of its directors, each of the Company's officers who
signed the Registration Statement and each person, if any, who controls the
Company within the meaning of Section 15 of
-21-
22
the 1933 Act against any losses, claims, damages, liabilities or expenses
(including the reasonable cost of investigating and defending against any
claims therefor and reasonable counsel fees incurred in connection therewith),
joint or several, as incurred, which may be based upon the 1933 Act, or any
other statute or at common law, arising out of any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement (or
any amendment thereto,) or the omission or alleged omission therefrom of a
material fact required to be stated therein or necessary to make the statements
therein not misleading or arising out of any untrue statement or alleged untrue
statement of a material fact contained in any preliminary prospectus or the
Prospectus (or any amendment or supplement thereto) or the omission or alleged
omission therefrom of a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, but only insofar as any such statement or omission was made in
reliance upon, and in conformity with, written information furnished to the
Company by such Underwriter, directly or through you or any other Underwriter,
specifically for use in the preparation thereof; provided, however, that an
Underwriter shall not be liable with respect to any claims made against the
Company or any person against whom the action is brought unless the Company or
such person shall have notified such Underwriter in writing within a reasonable
time after the summons or other first legal process giving information of the
nature of the claim shall have been served upon the Company or such person, but
failure to notify such Underwriter of such claim shall not relieve it from any
liability which it may have to the Company or such person otherwise than on
account of its indemnity agreement contained in this paragraph. Such
Underwriter shall be entitled to participate at its own expense in the defense,
or, if it so elects, to assume the defense of any suit brought to enforce any
such liability, but, if such Underwriter elects to assume the defense, such
defense shall be conducted by counsel chosen by it. In the event that any
Underwriter elects to assume the defense of any such suit and retain such
counsel, the Company, said officers and directors and other Underwriter or
Underwriters or controlling person or persons, defendant or defendants in the
suit, shall bear the fees and expenses of any additional counsel retained by
them, respectively, unless (i) such Underwriter shall have specifically
authorized the retaining of such counsel or (ii) the parties to such suit
include any indemnified party and such Underwriter, and any such indemnified
party has been advised by counsel that one or more legal defenses may be
available to it which may not be available to such Underwriter, in which case
such Underwriter shall not be entitled to assume the defense of such suit
notwithstanding its obligation to bear the fees and expenses of such counsel.
The Underwriter against whom indemnity may be sought shall not be liable to
indemnify any person for any settlement of any such claim effected without such
Underwriter's consent. This indemnity
-22-
23
agreement will be in addition to any liability which such Underwriter might
otherwise have.
(c) If the indemnification provided for in this Section 6 is
unavailable or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above in respect of any losses, claims, damages,
liabilities or expenses (or actions in respect thereof) referred to herein,
then each indemnifying party shall contribute to the amount paid or payable by
such indemnified party as a result of such losses, claims, damages, liabilities
or expenses (or actions in respect thereof), as incurred, in such proportion as
is appropriate to reflect the relative benefits received by the Company on the
one hand and the Underwriters on the other from the offering of the
Underwritten Securities. If, however, the allocation provided by the
immediately preceding sentence is not permitted by applicable law, then each
indemnifying party shall contribute to such amount paid or payable by such
indemnified party, as incurred, in such proportion as is appropriate to reflect
not only such relative benefits but also the relative fault of the Company on
the one hand and the Underwriters on the other in connection with the
statements or omissions which resulted in such losses, claims, damages,
liabilities or expenses (or actions in respect thereof), as well as any other
relevant equitable considerations. The relative benefits received by the
Company on the one hand and the Underwriters on the other shall be deemed to be
in the same proportion as the total net proceeds from the offering (before
deducting expenses) received by the Company bear to the total underwriting
discounts and commissions received by the Underwriters, in each case as set
forth in the table on the cover page of the applicable Prospectus Supplement.
The relative fault shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company or the Underwriters and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The Company and the Underwriters agree that it would
not be just and equitable if contribution 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 above. The amount paid or payable by
an indemnified party as a result of the losses, claims, damages, liabilities or
expenses (or actions in respect thereof) referred to above shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any such claim.
Notwithstanding the provisions of this subsection (c), no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the Underwritten Securities purchased by it pursuant to the
applicable Terms Agreement and distributed to the public were offered to the
public
-23-
24
exceeds the amount of any damages which such Underwriter has otherwise been
required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the ▇▇▇▇ ▇▇▇) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations to contribute are several in
proportion to their respective underwriting obligations and not joint.
7. Survival of Indemnities, Representations, Warranties, etc.
The respective indemnities, covenants, agreements, representations, warranties
and other statements of the Company, and the several Underwriters, as set forth
in this Agreement or the applicable Terms Agreement or made by them,
respectively, pursuant to this Agreement or the applicable Terms Agreement,
shall remain in full force and effect, regardless of any investigation made by
or on behalf of any Underwriter or the Company or any of their officers or
directors or any controlling person, and shall survive delivery of and payment
for the Underwritten Securities.
8. Conditions of Underwriters' Obligations. The respective
obligations of the several Underwriters to purchase Underwritten Securities
pursuant to the applicable Terms Agreement are subject to the accuracy, at and
(except as otherwise stated herein) as of the date hereof, the Representation
Date, Closing Time and at each Date of Delivery, of the representations and
warranties made herein by the Company, to the accuracy of the statements of the
Company's officers or directors in any certificate furnished pursuant to the
provisions hereof, to compliance at and as of such Closing Time and at each
Date of Delivery by the Company, with its covenants and agreements herein
contained and other provisions hereof to be satisfied at or prior to such
Closing Time, or Date of Delivery, as the case may be, and to the following
additional conditions:
(a) At Closing Time, (i) no stop order suspending the
effectiveness of the Registration Statement shall have been issued and no
proceedings for that purpose shall have been initiated or, to the knowledge of
the Company or you, threatened by the Commission, and (ii) if Preferred Stock
or Depositary Shares are being offered, the rating assigned by any nationally
recognized statistical rating organization to any preferred stock of the
Company as of the date of the applicable Terms Agreement shall not have been
lowered since such date nor shall any such rating organization have publicly
announced that it has placed any preferred stock of the Company on what is
commonly termed a "watch list" for possible downgrading, and (iii) there shall
not have come to your attention any facts that would cause you to believe that
the Prospectus, together with the applicable Prospectus Supplement, at the time
it was required to be delivered to purchasers of the Underwritten Securities,
contained any untrue statement of a
-24-
25
material fact or omitted to state any material fact necessary in order to make
the statements therein, in the light of the circumstances existing at such
time, not misleading. For purposes of this Section 8(a) and Section 9(b), the
Company's Psychiatric Group Stock shall be deemed not to be preferred stock.
(b) At the time of execution of the applicable Terms Agreement,
you shall have received from ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP a letter, dated the date of
such execution, in form and substance satisfactory to you, to the effect that:
(i) they are independent accountants with respect to the
Company and its subsidiaries within the meaning of the 1933 Act and
the 1933 Act Regulations; (ii) it is their opinion that the
consolidated financial statements and supporting schedules of the
Company (provided that for all purposes respecting the accountants'
letters under this subsection (b), references to the financial
statements and other financial data of the Company, also include the
financial statements and other financial data of the Core Group and
the Psychiatric Group, respectively) included or incorporated by
reference in the Registration Statement and the Prospectus and covered
by their opinions therein comply in form in all material respects with
the applicable accounting requirements of the 1933 Act and the 1934
Act, and the related published rules and regulations; (iii) if
applicable, it is their opinion that the financial statements of the
properties acquired or proposed to be acquired by the Company
incorporated by reference in the Registration Statement and covered by
their opinions therein comply as to form with the applicable
accounting requirements of the 1933 Act and the 1934 Act with respect
to real estate operations acquired or to be acquired; (iv) they have
performed limited procedures, not constituting an audit, including a
reading of the latest available unaudited interim consolidated
financial statements of the Company and its subsidiaries, a reading of
the minute books of the Company and its subsidiaries, inquiries of
certain officials of the Company and its subsidiaries who have
responsibility for financial and accounting matters and such other
inquiries and procedures as may be specified in such letter, and on
the basis of such limited review and procedures nothing came to their
attention that caused them to believe that (A) the unaudited interim
consolidated financial statements and financial statement schedules of
the Company included or incorporated by the reference in the
Registration Statement and the Prospectus do not comply as to form in
all material respects with the applicable accounting requirements of
the 1934 Act and the related published rules and regulations
thereunder or that any material modification should be made to the
unaudited condensed interim financial statements included in or
incorporated by reference in the Registration Statement
-25-
26
and the Prospectus for them to be in conformity with generally
accepted accounting principles, (B) if applicable, the unaudited pro
forma condensed financial statements incorporated by reference in the
Registration Statement do not comply as to form in all material
respects with the applicable accounting requirements of Rule 11-02 of
Regulation S-X under the 1933 Act or that the pro forma adjustments
have not been properly applied to the historical amounts in the
compilation of such statements, (C) the information included or
incorporated by reference in the Registration Statement and the
applicable Prospectus which constitutes selected financial data did
not conform in all material respects with the disclosure requirements
of item 301 of Regulation S-K, or (D) at a specified date not more
than three days prior to the date of the applicable Terms Agreement,
there has been any change in the capital stock of the Company or in
the consolidated long term debt of the Company or any decrease in the
net assets of the Company, as compared with the amounts shown in the
most recent consolidated balance sheet included or incorporated by
reference in the Registration Statement and the Prospectus or, during
the period from the date of the most recent consolidated statement of
operations of the Company included or incorporated by reference in the
Registration Statement and the Prospectus to a specified date not more
than three days prior to the date of the applicable Terms Agreement,
there were any decreases, as compared with the corresponding period in
the preceding year, in consolidated revenues, or decrease in
consolidated net income or consolidated net income per share of the
Company, except in all instances for changes, increases or decreases
which the Registration Statement and the Prospectus disclose have
occurred or may occur; and (v) in addition to the audit referred to in
their opinions and the limited procedures referred to in clause (iv)
above, they have carried out certain specified procedures, not
constituting an audit, with respect to certain amounts, percentages
and financial information which are included or incorporated by
reference in the Registration Statement and the Prospectus and which
are specified by you, and have found such amounts, percentages and
financial information to be in agreement with the relevant accounting,
financial and other records of the Company and its subsidiaries
identified in such letter.
(c) At Closing Time, you shall have received from ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
LLP a letter, dated Closing Time, to the effect that such accountants reaffirm,
as of Closing Time, and as though made on such Closing Time, the statements
made in the letter furnished by such accountants pursuant to paragraph (b) of
this Section 8, except that the specified date will be a date not more than
three days prior to the Closing Date.
-26-
27
(d) At Closing Time, you shall have received from ▇▇▇▇▇, ▇▇▇▇▇▇ &
▇▇▇▇▇▇, L.L.C., counsel for the Company, an opinion, dated as of Closing Time,
to the effect that:
(i) The Company has been duly organized and is validly
existing as a corporation in good standing under the laws of the State
of Delaware.
(ii) The Company has full corporate power and authority to
own or lease its properties and to conduct its business as described
in the Prospectus.
(iii) The Company is duly qualified to transact business
and is in good standing in each jurisdiction in which it owns real
property except where the failure to qualify and be in good standing
would not have a material adverse effect on the condition, financial
or otherwise, or in the earnings or business affairs of the Company
and its subsidiaries considered as one enterprise.
(iv) Each subsidiary of the Company has been duly
incorporated or organized and is validly existing as a corporation or
a partnership, as the case may be, in good standing under the laws of
the jurisdiction of such entity's incorporation or organization, has
corporate or partnership power and authority to own or lease such
entity's properties and to conduct such entity's business, and is duly
qualified to transact business and is in good standing in each
jurisdiction in which such entity owns real property, except where the
failure to so qualify and be in good standing would not have a
material adverse effect on the condition, financial or otherwise, or
the earnings or business affairs of the Company and its subsidiaries
considered as one enterprise.
(v) The number of issued and outstanding shares of
capital stock of the Company is as set forth in the Prospectus and the
outstanding shares of capital stock have been duly authorized, validly
issued, fully paid and non-assessable. All of the issued and
outstanding shares of capital stock of the Company's subsidiaries have
been duly authorized and validly issued, are fully paid and
non-assessable and are owned by the Company, directly or indirectly,
free and clear of any security interest, mortgage, pledge, lien,
encumbrance, claim or equity (except as otherwise disclosed in the
Prospectus); and the Company, through its wholly-owned subsidiaries,
AHP of Kansas, Inc. and AHP of Fayetteville, Inc., has an aggregate
97% interest in each respective partnership (each a "Partnership") in
which each such subsidiary is the sole general partner and a limited
partner.
-27-
28
(vi) The Underwritten Securities being sold pursuant to
the applicable Terms Agreement and, if applicable, the deposit of the
Preferred Stock in accordance with the provisions of a Deposit
Agreement, have been duly and validly authorized by all necessary
corporate action and such Underwritten Securities have been duly
authorized for issuance and sale pursuant to this agreement and such
Underwritten Securities, when issued and delivered pursuant to this
Agreement against payment of the consideration therefor specified in
the applicable Terms Agreement or the Delayed Delivery Contracts, will
be validly issued, fully paid and non-assessable and the Preferred
Stock, if applicable, conforms to the provisions of the Articles.
(vii) The issuance of the Underwritten Securities is not
subject to preemptive or other similar rights arising by operation of
law or, to such counsel's knowledge, otherwise.
(viii) If applicable, the Common Stock Warrants have been
duly authorized and, when issued and delivered pursuant to this
Agreement and countersigned by the Warrant Agent as provided in the
Warrant Agreement, will have been duly executed, countersigned, issued
and delivered and will constitute valid and legally binding
obligations of the Company entitled to the benefits provided by the
Warrant Agreement under which they are to be issued except as
enforcement thereof may be limited by bankruptcy, insolvency,
fraudulent conveyance or other similar laws relating to or affecting
enforcement of creditors' rights generally or by general equity
principles (regardless of whether enforcement is considered in a
proceeding in equity or at law).
(ix) If applicable, the shares of Common Stock issuable
upon conversion of any of the Preferred Stock or Depositary Shares or
the Warrant Securities, have been duly and validly authorized and
reserved for issuance upon such exercise by all necessary corporate
action and such shares, when issued upon such exercise, will be duly
and validly issued and will be fully paid and nonassessable, and the
issuance of such shares upon such exercise will not be subject to
preemptive or other similar rights arising by operation of law or, to
such counsel's knowledge, otherwise.
(x) The applicable Warrant Agreement, if any, and the
applicable Deposit Agreement, if any, have been duly authorized,
executed and delivered by the Company, and (assuming due
authorization, execution and delivery by the Warrant Agent in the case
of the Warrant Agreement, and the Preferred Stock Depositary, in the
case of the Deposit Agreement), constitutes a valid and legally
binding agreement of the Company enforceable in accordance with its
terms except
-28-
29
as enforcement thereof may be limited by bankruptcy, insolvency,
fraudulent conveyance or other similar laws relating to or affecting
enforcement of creditors' rights generally or by general equity
principles (regardless of whether enforcement is considered in a
proceeding in equity or at law); and the Warrant Agreement, if any,
and the Deposit Agreement, if any, each conforms in all material
respects to all statements relating thereto contained in the
Prospectus.
(xi) If applicable, upon execution and delivery thereof
pursuant to the terms of the Deposit Agreement, the persons in whose
names the Depositary Receipts are registered will be entitled to the
rights specified therein and in the Deposit Agreement.
(xii) Each of this Agreement, the applicable Terms
Agreement and the Delayed Delivery Contracts, if any, has been duly
authorized, executed and delivered by the Company.
(xiii) The Registration Statement is effective under the
1933 Act and, to such counsel's knowledge, no stop order suspending
the effectiveness of the Registration Statement has been issued under
the 1933 Act or proceedings therefor initiated or threatened by the
Commission.
(xiv) The Registration Statement and the Prospectus,
excluding the documents incorporated by reference therein, as of their
respective effective or issue dates, comply as to form in all material
respects with the requirements therefor on Form S-3 under the 1933 Act
and the 1933 Act Regulations. If applicable, the 434 Prospectus
conforms in all material respects to the requirements of Rule 434 of
the 1933 Act Regulations. It being understood, however, that no
opinion need be rendered with respect to the financial statements,
schedules and other financial or statistical data included or
incorporated by reference in the Registration Statement or the
Prospectus.
(xv) Each document filed by the Company pursuant to the
1934 Act (other than the financial statements, schedules and other
financial or statistical data included therein, as to which no opinion
need be rendered) and incorporated or deemed to be incorporated by
reference in the Prospectus (the "Incorporated Documents") complied as
of the date of its filing as to form in all material respects with the
1934 Act and the 1934 Act Regulations.
(xvi) If applicable, the relative rights, preferences,
interests and powers of the Preferred Stock or Depositary Shares, as
the case may be, are as set forth in the Articles relating thereto,
and all such provisions are valid under
-29-
30
Delaware Law; and, as applicable, the form of certificate used to
evidence the Preferred Stock being represented by the Depositary
Shares and the form of certificate used to evidence the related
Depositary Receipts are in due and proper form under Delaware Law and
comply with all applicable statutory requirements.
(xvii) The Underwritten Securities, the Warrant Securities,
and the Common Stock issuable upon conversion of the Preferred Stock
or Depositary Shares, if applicable, conform in all material respects
to the statements relating thereto contained in the Prospectus and, if
applicable, have been approved for listing, subject to official notice
of issuance, on the New York Stock Exchange..
(xviii) Nothing has come to such counsel's attention that
would lead it to believe that the Registration Statement or any
amendment thereto (excluding the financial statements and financial
schedules and other financial or statistical data included or
incorporated by reference therein, as to which such counsel need
express no belief), at the time it became effective or at the later
time an Annual Report on Form 10-K was filed by the Company with the
Commission, or at the Representation Date, contained an untrue
statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading or that the Prospectus or any amendment or
supplement thereto (excluding the financial statements and financial
schedules and other financial or statistical data included or
incorporated by reference therein, as to which such counsel need
express no belief), at the Representation Date or at Closing Time,
included or includes an untrue statement of a material fact or omitted
or omits to state a material fact necessary in order to make the
statements therein, in light of the circumstances under which they
were made, not misleading.
(xix) [Reserved]
(xx) To such counsel's knowledge, there are no legal or
governmental proceedings pending against the Company or any of its
subsidiaries that are required to be disclosed in the Prospectus,
other than those disclosed therein, and, to such counsel's knowledge,
all pending legal or governmental proceedings to which the Company or
any of its subsidiaries is a party that are not described in the
Registration Statement, including ordinary routine litigation
incidental to the business of the Company, are, considered in the
aggregate, not material to the business of the Company and its
subsidiaries considered as one enterprise.
-30-
31
(xxi) To such counsel's knowledge, there are no contracts,
indentures, mortgages, loan agreements, notes, leases or other
instruments required to be filed as exhibits to the Registration
Statement or filed as exhibits to the documents under the 1934 Act
that are incorporated by reference therein, other than those filed as
exhibits thereto; the descriptions thereof or references thereto
included or incorporated by reference in the Registration Statement or
Prospectus are correct in all material respects, and, to such
counsel's knowledge, neither the Company nor any of the Company
Subsidiaries is in default under any material obligation, agreement,
covenant or condition contained in any contract, indenture, mortgage,
loan agreement, note, lease or other instrument filed as an exhibit to
the Incorporated Documents.
(xxii) No authorization, approval or consent of any court or
governmental authority or agency is required that has not been
obtained in connection with the consummation by the Company of the
transactions contemplated by this Agreement, the applicable Terms
Agreement, the applicable Deposit Agreement, if any, or the applicable
Warrant Agreement, if any, except such as may be required under the
1933 Act, the 1934 Act, and state securities laws or Blue Sky laws or
real estate syndication laws; the execution and delivery of this
Agreement, the Terms Agreement, and the Deposit Agreement, and the
consummation of the transactions contemplated herein and therein and
compliance by the Company with its obligations hereunder and
thereunder will not (A) constitute a breach of, or default under, or
result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Company or its
subsidiaries pursuant to, any contract, indenture, mortgage, loan
agreement, note, lease or other instrument filed as an exhibit to the
Registration Statement or filed as an exhibit to the Incorporation
Documents, to which the Company or any of its subsidiaries is a party
or by which they may be bound or to which any of the material property
or assets of the Company or any of its subsidiaries is subject, (B)
nor will such action result in violation of the provisions of the
certificates of incorporation or bylaws, as the case may be, of the
Company or its subsidiaries or any applicable law, administrative
regulation or administrative or court order or decree.
(xxiii) Neither the Company nor any of its subsidiaries is
required to be registered under the 1940 Act.
(xxiv) The information in the Prospectus, if applicable,
under the captions "Description of Common Stock and Psychiatric Group
Stock," "Description of Warrants," "Description of Preferred Stock"
and "Description of Depositary Shares" has
-31-
32
been reviewed by such counsel and is correct in all material respects.
(xxv) Such counsel shall further provide an opinion as to
certain tax matters substantially in the form of Exhibit B hereto.
If the Company shall, at the time of any Terms Agreement, have
an in-house general counsel, then you shall have received an opinion
from such counsel substantially to the effect that:
The Company and its subsidiaries (including
partnerships) have good and marketable title to all real
property owned by them, in each case free and clear of all
liens, encumbrances and defects except such as are described
in the Prospectus or such as do not materially affect the
value of such property and do not interfere with the use made
and proposed to be made of such property by the Company and
its subsidiaries; the mortgages that the Company holds on the
properties situated in Katonah, New York, and Saratoga
Springs, Saratoga County, New York, are valid and binding and
each constitutes a valid first mortgage lien for the benefit
of the Company on such property; and any real property and
buildings held under lease by the Company and its subsidiaries
are held by them under valid, subsisting and enforceable
leases with such exceptions as are not material and do not
interfere with the use made and proposed to be made of such
property and buildings by the Company and its subsidiaries (in
giving the opinion in this clause, such counsel may state that
no examination of record titles for the purpose of such
opinion has been made, and that such counsel is relying upon a
general review of the titles of the Company and its
subsidiaries, upon opinions of local counsel and abstracts,
reports and policies of title companies rendered or issued at
or subsequent to the time of acquisition of such property by
the Company or its subsidiaries, upon opinions of counsel to
the lessors of such property and, in respect of matters of
fact, upon certificates of officers of the Company or its
subsidiaries, provided that such counsel shall state that he
or she believes that both you and he or she are justified in
relying upon such opinions, abstracts, reports, policies and
certificates).
But if the Company shall not have such in-house general counsel at
that time, then you shall have received an officer's certificate to
substantially the same effect.
-32-
33
(e) The Representatives shall have received from ▇▇▇▇▇▇▇▇ &
▇▇▇▇▇▇▇▇, counsel for the Underwriters, their opinion or opinions dated Closing
Time with respect to the matters set forth in (i), (vi), (viii) to (xii),
inclusive, (xiv), (xvii) and (xviii) of subsection (d) of this Section, and the
Company shall have furnished to such counsel such documents as they may request
for the purpose of enabling them to pass upon such matters.
(f) At the Closing Time (i) the Registration Statement and the
Prospectus shall contain all statements that are required to be stated therein
in accordance with the 1933 Act, and the Rules and Regulations and in all
material respects shall conform to the requirements of the 1933 Act, and the
1933 Act Regulations and neither the Registration Statement nor the Prospectus
shall contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements
therein not misleading and no action, suit or proceeding at law or in equity
shall be pending or, to the knowledge of the Company, threatened against the
Company or its subsidiaries that would be required to be set forth in the
Registration Statement and the Prospectus other than as set forth therein, (ii)
there shall not have been, since the date of the applicable Terms Agreement or
since the respective dates as of which information is given in the Registration
Statement and the Prospectus, any material adverse change in the condition,
financial or otherwise, of the Company and its subsidiaries considered as one
enterprise or in its earnings, business affairs or business prospects, whether
or not arising in the ordinary course of business, from that set forth in the
Registration Statement and the Prospectus, (iii) no proceeding shall be pending
or, to the knowledge of the Company, threatened, against the Company or its
subsidiaries before or by any Federal, state or other commission, board or
administrative agency wherein an unfavorable decision, ruling or finding would
materially and adversely affect the business, property, financial condition or
income of the Company and its subsidiaries considered as one enterprise other
than as set forth in the Registration Statement and the Prospectus, (iv)
neither the Company nor any of its subsidiaries shall be in default in the
performance or observance of any contract to which it is a party, except such
defaults that would not have a material adverse effect on the condition,
financial or otherwise, of the Company and its subsidiaries considered as one
enterprise or on the earnings, business affairs or business prospects of the
Company and its subsidiaries considered as one enterprise, (v) no stop order
suspending the effectiveness of the Registration Statement shall have been
issued under the 1933 Act and no proceeding therefor shall have been instituted
or threatened by the Commission and (vi) you shall have received at Closing
Time a certificate of the President and the Chief Financial Officer of the
Company, dated as of Closing Time, evidencing compliance with the provisions of
this subsection (f). As used in this subsection (f), the term "Prospec-
-33-
34
tus" means the Prospectus in the form first used to confirm sales of the
Underwritten Securities.
(g) You shall have received certificates, dated as of Closing
Time, of the President and the Chief Financial Officer of the Company (or of
two other executive officers of the Company reasonably acceptable to you) to
the effect that the representations and warranties of the Company contained in
Section 2(a) are true and correct with the same force and effect as though
expressly made at and as of Closing Time.
(h) The Company shall have furnished to you such additional
certificates as you may have reasonably requested as to the accuracy, at and as
of Closing Time, of the representations and warranties made herein by them, as
to compliance, at and as of Closing Time, by them with their covenants and
agreements herein contained and other provisions hereof to be satisfied at or
prior to Closing Time, and as to other conditions to the obligations of the
Underwriters hereunder.
(i) In the event the Underwriters exercise their option provided
in a Terms Agreement as set forth in Section 3 hereof to purchase all or any
portion of the Option Securities, the representations and warranties of the
Company contained herein and the statements in any certificates furnished by
the Company hereunder shall be true and correct as of each Date of Delivery,
and you shall have received:
(i) A letter from ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & Co. in form and
substance satisfactory to you and dated such Date of Delivery,
substantially the same in scope and substance as the letter furnished
to you pursuant to Section 8(b), except that the specified date in the
letter furnished pursuant to this Section 8(i) shall be a date not
more than five days prior to such Date of Delivery.
(ii) The opinion of ▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇, L.L.C.,
counsel for the Company, in form and substance satisfactory to you,
dated such Date of Delivery, relating to the Option Securities and
otherwise to the same effect as the opinion required by Section 8(d).
(iii) The opinion of ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, counsel for the
Underwriters, dated such Date of Delivery, relating to the Option
Securities and otherwise to the same effect as the opinion required by
Section 8(e).
(iv) A certificate, dated such Date of Delivery, of the
President and the Chief Financial Officer of the Company (or of two
other executive officers of the Company reasonably acceptable to you)
confirming that the certificate or
-34-
35
certificates delivered at Closing Time pursuant to Section 8(f) and
Section 8(g) remains or remain, true as of such Date of Delivery.
(v) Such additional certificates, dated such Date of
Delivery, as you may have reasonably requested pursuant to Section
8(h).
If any of the conditions hereinabove provided for in this Section
shall not have been satisfied when and as required to be satisfied, the
applicable Terms Agreement may be terminated by you by notifying the Company of
such termination in writing or by telegram at or prior to Closing Time, but you
shall be entitled to waive any of such conditions.
9. Termination.
(a) This Agreement (excluding the applicable Terms Agreement) may
be terminated for any reason at any time by the Company or by you upon the
giving of 30 days' written notice of such termination to the other party
hereto.
(b) You may also terminate the applicable Terms Agreement, by
notice to the Company, at any time at or prior to the Closing Time if (i)
trading in any securities of the Company shall have been suspended by the
Commission or a national securities exchange or if trading generally on the New
York or American Stock Exchanges shall have been suspended or minimum or
maximum prices shall have been established on either such exchange, or a
banking moratorium shall have been declared by New York or United States
authorities; (ii) Preferred Stock or Depositary Shares are being offered and
the rating assigned by any nationally recognized statistical rating
organization to any preferred stock of the Company as of the date of the
applicable Terms Agreement shall have been lowered since such date or if any
such rating organization shall have publicly announced that it has placed any
preferred stock of the Company on what is commonly termed a "watch list" for
possible downgrading; (iii) there shall have been any material adverse change
in the financial markets in the United States or any outbreak or escalation of
hostilities between the United States and any foreign power, or of any other
insurrection or armed conflict involving the United States that, in your
judgment, makes it impracticable or inadvisable to offer or sell the
Underwritten Securities; (iv) there shall have been, since the date of the
applicable Terms Agreement or since the respective dates as to which
information is given in the Registration Statement and the Prospectus, any
material adverse change in the condition (financial or otherwise), or in the
earnings, business affairs or business prospects of the Company and its
subsidiaries considered as one enterprise; or (v) there shall be any litigation
pending against the Company or the Properties which, in your judgment, makes it
impracticable or
-35-
36
inadvisable to offer or deliver the Underwritten Securities on the terms
contemplated by the Prospectus. As used in this Section 9(b), the term
"Prospectus" means the Prospectus in the form first used to confirm sales of
the Underwritten Securities.
(c) In the event of any such termination, the covenants set forth
in Section 4 with respect to any offering of Underwritten Securities shall
remain in effect so long as any Underwriter owns any such Underwritten
Securities purchased from the Company pursuant to the applicable Terms
Agreement.
10. Reimbursement of Underwriters. Notwithstanding any other
provisions hereof, if this Agreement or the applicable Terms Agreement shall be
terminated by you under Section 8, Section 9 or Section 12, the Company will
bear and pay the expenses specified in Section 5 hereof and, in respect of each
applicable Terms Agreement, except when you terminate this Agreement and/or the
applicable Terms Agreement pursuant to clause (a), (b)(i), b(ii) (in the
circumstances it is to be included as specified below) or (b)(iii) of Section
9, the Company will reimburse the reasonable out-of-pocket expenses of the
several Underwriters (including reasonable fees and disbursements of counsel
for the Underwriters) incurred in connection with this Agreement and/or the
applicable Terms Agreement relating to the proposed purchase of the
Underwritten Securities under such Terms Agreement, and promptly upon demand
the Company will pay such amounts to you for and on behalf of such Underwriter.
In addition, and in any event, the provisions of Section 6 shall survive any
termination of this Agreement and/or the applicable Terms Agreement. It is
agreed that a Section 9(b)(ii) termination will be included for purposes of the
foregoing to the extent that the downgrade is a result of an industry-wide
event (e.g. medical regulations) but not to the extent it is a result of
Company actions (e.g. lower than expected earnings).
11. Default by Underwriters. If any Underwriter or Underwriters
shall default in its or their obligations to purchase Underwritten Securities
under the applicable Terms Agreement at the Closing Time and the aggregate
number of Underwritten Securities which such defaulting Underwriter or
Underwriters agreed but failed to purchase does not exceed 10% of the total
number of Underwritten Securities that the Underwriters are obligated to
purchase at the Closing Time, the other Underwriters shall be obligated
severally, in proportion to their respective commitments hereunder, to purchase
the full amount of the Underwritten Securities that such defaulting Underwriter
or Underwriters agreed but failed to purchase. If any Underwriter or
Underwriters shall so default and the aggregate number of Underwritten
Securities with respect to which such default or defaults occur is more than
10% of the total number of Underwritten Securities and arrangements
satisfactory to you and the Company for the purchase of such Underwritten
-36-
37
Securities by other persons are not made within 48 hours after such default,
the applicable Terms Agreement shall terminate.
If the remaining Underwriters or substituted underwriters are required
hereby or agree to take up all or part of the Underwritten Securities of a
defaulting Underwriter or Underwriters as provided in this Section 11, (i) the
Company shall have the right to postpone the Closing Time for a period of not
more than five full business days, in order that the Company may effect
whatever changes may thereby be made necessary in the Registration Statement or
the Prospectus, or in any other documents or arrangements, and the Company
agrees promptly to file any amendments to the Registration Statement or
supplements to the Prospectus that may thereby be made necessary, and (ii) the
respective numbers of Underwritten Securities to be purchased by the remaining
Underwriters or substituted underwriters shall be taken as the basis of their
underwriting obligation for all purposes of the applicable Terms Agreement.
Nothing herein contained shall relieve any defaulting Underwriter of its
liability to the Company or the Underwriters for damages occasioned by its
default hereunder. Any termination of the applicable Terms Agreements pursuant
to this Section 11 shall be without liability on the part of any non-defaulting
Underwriter or the Company, except for expenses to be paid or reimbursed
pursuant to Section 5 and except for the provisions of Section 6.
12. Default by the Company. If the Company shall fail at Closing
Time to sell and deliver the total number of Underwritten Securities that it is
obligated to sell pursuant to the applicable Terms Agreement, then such
agreement shall terminate without any liability on the part of any
non-defaulting party, other than obligations under Section 10 hereof. No
action taken pursuant to this Section 12 shall relieve the Company from
liability, if any, in respect of such default.
13. Notices. All communications hereunder shall be in writing
and, if sent to the Underwriters shall be mailed, delivered or telecopied and
confirmed to you, c/o ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Inc., at Two World Trade Center,
65th Floor, New York, New York 10048, Attention: [W. ▇▇▇▇▇ ▇▇▇▇▇], Managing
Director, except that notices given to an Underwriter pursuant to Section 6
hereof shall be sent to such Underwriter at the address furnished by you or if
sent to the Company shall be mailed, delivered or telegraphed and confirmed at
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇'▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, President and Chief Executive Officer.
14. Successors. This Agreement and the applicable Terms Agreement
shall inure to the benefit of and be binding upon you and the Company and any
Underwriter who becomes a party to such Terms Agreement, the Company and their
respective successors and legal
-37-
38
representatives. Nothing expressed or mentioned in this Agreement or the
applicable Terms Agreement is intended or shall be construed to give any person
other than the persons mentioned in the preceding sentence any legal or
equitable right, remedy or claim under or in respect of this Agreement, or any
provisions herein contained, this Agreement or such Terms Agreement and all
conditions and provisions hereof being intended to be and being for the sole
and exclusive benefit of such persons and for the benefit of no other person;
except that the representations, warranties, covenants, agreements and
indemnities of the Company, contained in this Agreement shall also be for the
benefit of the person or persons, if any, who control any Underwriter within
the meaning of Section 15 of the 1933 Act, and the indemnities given by the
several Underwriters shall also be for the benefit of each director of the
Company, each of the Company's officers who has signed the Registration
Statement and the person or persons, if any, who control the Company within the
meaning of Section 15 of the 1933 Act.
15. Applicable Law. This Agreement and the applicable Terms
Agreement shall be governed by and construed in accordance with the laws of the
State of New York applicable to agreements made and to be performed in said
state. Specified times of day refer to New York City time.
16. Counterparts. This Agreement and the applicable Terms
Agreement may be executed in one or more counterparts, and if executed in more
than one counterpart the executed counterparts shall constitute a single
instrument.
-38-
39
If the foregoing correctly sets forth our understanding, please
indicate your acceptance thereof in the space provided below for that purpose,
whereupon this letter and your acceptance shall constitute a binding agreement
between us.
Very truly yours,
AMERICAN HEALTH PROPERTIES, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
----------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: President and Chief
Executive Officer
Accepted and delivered, as of
the date first above written:
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ INC.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇
Title: Vice President
-39-