EXHIBIT 1.1
SENIOR HOUSING PROPERTIES
TRUST
5,600,000 Shares of
Beneficial Interest
(par value $0.01 per share)
UNDERWRITING
AGREEMENT
February 21,
2008
UNDERWRITING
AGREEMENT
February 21, 2008
UBS Securities
LLC
Merrill Lynch, Pierce, Fenner &
Smith
Incorporated
Morgan
Stanley & Co. Incorporated
RBC Capital Markets
Corporation
Robert W.
Baird & Co. Incorporated
Ferris, Baker Watts,
Incorporated
Janney Montgomery Scott
LLC
Morgan
Keegan & Company, Inc.
Oppenheimer &
Co. Inc.
Raymond James and
Associates, Inc.
Stifel,
Nicolaus & Company, Incorporated
As Managing
Underwriters
c/o UBS Securities
LLC
299 Park Avenue
New York, New York 10171
c/o Merrill Lynch,
Pierce, Fenner & Smith
Incorporated
4 World Financial
Center, 16th floor
New York, NY
10080
c/o Morgan
Stanley & Co. Incorporated
1585
Broadway
New York, New York
10036
Ladies and
Gentlemen:
Senior Housing Properties Trust, a real estate
investment trust organized under the laws of the State of Maryland
(the “Company”), proposes to issue and sell to the
underwriters named in Schedule A annexed hereto (the
“Underwriters”) an aggregate of 5,600,000 common shares
(the “Firm Shares”) of beneficial interest, par value
$0.01 per share (the “Common Shares”) of the
Company . In addition, solely for the purpose
of covering over-allotments, the Company proposes to grant to the
Underwriters the option to purchase up to an additional 840,000
Common Shares (the “Additional Shares”). The Firm
Shares and the Additional Shares are hereinafter collectively
sometimes referred to as the “Shares.” The Shares are
described in the Prospectus which is referred to below.
The
Company has prepared and filed with the Securities and
Exchange Commission (the “Commission”), in accordance
with the provisions of the Securities Act
2
of 1933, as amended, and the rules and
regulations of the Commission thereunder (collectively, the
“Act”), a registration statement (File
No. 333-135716) on Form S-3 under the Act (the
“ shelf registration statement”), including a
prospectus relating to, among other things, Common Shares,
preferred shares of beneficial interest, depository shares,
guarantees, debt securities and warrants for such securities of the
Company, and such amendments to such registration statement, as may
have been required prior to the date hereof, have been similarly
prepared and have been filed with the Commission. Such shelf
registration statement, as so amended, and any post-effective
amendments thereto, have become effective under the Act.
The Company will
next file with the Commission pursuant to
Rule 424(b) under the Act a final prospectus supplement
to the basic prospectus included in the shelf registration
statement, as so amended, describing the Shares and the offering
thereof, in such form as has been provided to or discussed with,
and approved by, the Underwriters.
Except where the
context otherwise requires, the term “Registration
Statement” as used in this Agreement means the shelf
registration statement, as amended at the time it became effective
for purposes of Section 11 of the Act, as such section applies
to the respective Underwriters (the “Effective Time”),
including (i) all documents filed as part thereof or
incorporated by reference or deemed to be incorporated by reference
therein and (ii) any information contained or incorporated by
reference in a prospectus filed with the Commission pursuant to
Rule 424(b) under the Act, to the extent such information
is deemed, pursuant to Rule 430B or Rule 430C under the
Act, to be part of the registration statement at the Effective
Time.
Except where the context otherwise requires,
the term “Basic Prospectus” as used in this Agreement
means the prospectus dated July 12, 2006, as filed with the
Commission pursuant to Rule 424(b) and included in
the shelf registration statement. Except where the
context otherwise requires, the term “Prepricing
Prospectus” as used in this Agreement means each preliminary
form of the Prospectus (as defined herein) subject to completion,
if any, used in connection with the offering of the Shares.
Except where the context otherwise requires, the term
“Prospectus Supplement” as used in this Agreement means
any final prospectus supplement specifically relating to the
Shares, in the form filed with, or transmitted for filing to, the
Commission pursuant to Rule 424 under the Act. Except
where the context otherwise requires, the term
“Prospectus” as used in this Agreement means the Basic
Prospectus together with the Prospectus Supplement, except that if
such Basic Prospectus is amended or supplemented on or prior to the
date on which the Prospectus Supplement was first filed pursuant to
Rule 424, the term “Prospectus” shall refer to the
Basic Prospectus as so amended or supplemented and as supplemented
by the Prospectus Supplement.
“Permitted
Free Writing Prospectuses,” as used herein, means the
documents listed on Schedule B attached hereto and each “road
show” (as defined in Rule 433 under the Act), if any,
related to the offering of the Shares contemplated hereby that is a
“written communication” (as defined in Rule 405
under the Act) (each such road show, a “Road
Show”).
3
“Disclosure
Package,” as used herein, means the Basic Prospectus,
including without limitation the documents incorporated by
reference therein as of the time this agreement is entered into,
together with any Prepricing Prospectus and any combination of one
or more of the Permitted Free Writing Prospectuses, if
any.
Any
reference in this Agreement to the shelf registration
statement, the Registration Statement, the Basic Prospectus, any
Prepricing Prospectus, any Prospectus Supplement, the Prospectus or
any Permitted Free Writing Prospectus shall be deemed to refer to
and include the documents incorporated by reference therein, in
each case as amended (as amended, the “Incorporated
Documents”), including, unless the context otherwise
requires, the documents, if any, filed as exhibits to such
Incorporated Documents. Any reference in this Agreement to
the term “amend,” “amendment” or
“supplement” with respect to the shelf registration
statement, the Registration Statement, the Basic Prospectus, any
Prepricing Prospectus, any Prospectus Supplement, any Prospectus or
any Permitted Free Writing Prospectus shall be deemed to refer to
and include any documents filed under the Securities Exchange Act
of 1934, as amended (the “Exchange Act”), on or after
the initial effective date of the Registration Statement, or the
date of such Basic Prospectus, such Prepricing Prospectus, the
Prospectus Supplement, the Prospectus or such Permitted Free
Writing Prospectus, as the case may be, and deemed to be
incorporated therein by reference.
The Company and
the Underwriters agree as follows:
1.
Sale and Purchase . Upon the basis of the
representations and warranties and subject to the terms and
conditions herein set forth, the Company agrees to issue and sell
to each Underwriter, and, upon the basis of the representations,
warranties and agreements of the Company herein contained and
subject to all the terms and conditions set forth herein, each
Underwriter agrees, severally and not jointly, to purchase from the
Company the number of Firm Shares set forth opposite the name of
such Underwriter in Schedule A attached hereto (subject to
adjustment in accordance with Section 9 hereof) at a purchase
price of $20.86675 per share (the “Purchase Price Per
Share”).
The Company is
advised by you that the Underwriters intend (i) to make a
public offering of their respective portions of the Firm Shares as
soon after the date hereof as in your judgment is advisable and
(ii) initially to offer the Firm Shares upon the terms set
forth in the Prospectus. You may from time to time increase
or decrease the public offering price after the initial public
offering to such extent as you may determine.
In addition, the
Company hereby grants to the several Underwriters the option to
purchase, and upon the basis of the representations, warranties and
agreements of the Company and subject to all the terms and
conditions herein set forth, the Underwriters shall have the right
to purchase, severally and not jointly, from the Company, ratably
in accordance with the number of Firm Shares to be purchased by
each of them (subject to such adjustment as you shall determine to
avoid fractional shares), all or a portion of the Additional Shares
as may be necessary to cover over-allotments made in connection
with the offering of the Firm Shares, at the Purchase Price Per
Share. This
4
option may be
exercised by you on behalf of the several Underwriters at any time
on or before the thirtieth day following the date hereof, by
written notice to the Company. Such notice shall set forth
the aggregate number of Additional Shares as to which the option is
being exercised, and the date and time when the Additional Shares
are to be delivered (such date and time being herein referred to as
the “additional time of purchase”); provided ,
however , that the additional time of purchase shall not be
earlier than the time of purchase (as defined below) nor earlier
than the second business day after the date on which the option
shall have been exercised nor later than the tenth business day
after the date on which the option shall have been exercised.
The number of Additional Shares to be sold to each Underwriter
shall be the number which bears the same proportion to the
aggregate number of Additional Shares being purchased as the number
of Firm Shares set forth opposite the name of such Underwriter on
Schedule A hereto bears to the total number of Firm Shares
(subject, in each case, to such adjustment as you may determine to
eliminate fractional shares).
As used herein,
“business day” shall mean a day on which the New York
Stock Exchange (the “NYSE”) is open for
trading.
2.
Payment and Delivery . Payment of the purchase price
for the Firm Shares shall be made to the Company by Federal Funds
wire transfer, against delivery of the Firm Shares to you through
the facilities of the Depository Trust Company (“DTC”)
for the respective accounts of the Underwriters. Such payment
and delivery shall be made at 10:00 A.M., New York City time,
on February 26, 2008 (unless another time shall be agreed to
by you or unless postponed in accordance with the provisions of
Section 9 hereof). The time at which such payment and
delivery are actually made is hereinafter sometimes called the
“time of purchase.” Certificates, if any, for the
Firm Shares shall be delivered to you in definitive form in such
names and in such denominations as you shall specify no later than
the second business day preceding the time of purchase. For
the purpose of expediting the checking of the certificates for the
Firm Shares by you, the Company agrees to make such certificates
available to you for such purpose at least one full business day
preceding the time of purchase.
Payment of the
purchase price for the Additional Shares shall be made at the
additional time of purchase in the same manner and at the same
office as the payment for the Firm Shares. Certificates, if
any, for the Additional Shares shall be delivered to you in
definitive form in such names and in such denominations as you
shall specify no later than the second business day preceding the
additional time of purchase. For the purpose of expediting
the checking of the certificates for the Additional Shares by you,
the Company agrees to make such certificates available to you for
such purpose at least one full business day preceding the
additional time of purchase.
Deliveries of the
documents described in Section 7 hereof with respect to the
purchase of the Shares shall be made at 9:00 A.M. at such
location(s) as shall be agreed upon by you and the Company on
the date of the closing of the purchase of the Firm Shares or the
Additional Shares, as the case may be.
5
3.
Representations and Warranties of the Company . The
Company represents and warrants to and agrees with each of the
Underwriters that:
(a)
no order preventing or suspending the use of the Basic Prospectus,
any Prepricing Prospectus, the Prospectus Supplement, the
Prospectus or any Permitted Free Writing Prospectus is in effect
and no proceedings for such purpose are pending or, to the
knowledge of the Company, threatened by the Commission or the
securities authority of any state or other jurisdiction. The
Registration Statement has become effective under the Act; no stop
order suspending the effectiveness of the Registration Statement is
in effect, and no proceedings for such purpose are pending before
or, to the knowledge of the Company, threatened by the Commission
or the securities authority of any state or other
jurisdiction;
(b)
(i) the Company is eligible to use Form S-3 and the
offering of the Shares complies and will comply with the
requirements of Rule 415 under the Act including, without
limitation, Rule 415(a)(5); (ii) each part of the
Registration Statement, when it became effective, complied, or with
respect to any part of the Registration Statement that has not yet
become effective, will comply at the time of effectiveness, and as
of the date hereof and, as amended or supplemented, at the time of
purchase and at all times during which a prospectus is required by
the Act to be delivered (whether physically or through compliance
with Rule 172 under the Act or any similar rule) in connection
with any sale of Shares, will comply, in all material respects,
with applicable requirements of the Act and the Exchange Act;
(iii) each part of the Registration Statement did not, as of
the Effective Time, contain any untrue statement of a material fact
or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading;
(iv) each Prepricing Prospectus, if any, complied, at the time
it was filed with the Commission, and complies as of the date
hereof, in all material respects with the requirements of the Act;
(v) the Disclosure Package, as of the time of execution of
this Agreement, did not include an untrue statement of a material
fact or omit to state a material fact necessary in order to make
the statements therein, in the light of the circumstances under
which they were made, not misleading; (vi) the Basic
Prospectus complied or will comply, at the time it was or will be
filed with the Commission, in all material respects with the
requirements of the Act; (vii) each of the Prospectus
Supplement and the Prospectus will comply, as of the date that it
is filed with the Commission, the date of the Prospectus
Supplement, the time of purchase and at all times during which a
prospectus is required by the Act to be delivered (whether
physically or through compliance with Rule 172 under the Act
or any similar rule) in connection with any sale of Shares, in all
material respects, with the requirements of the Act (in the case of
the Prospectus, including, without limitation,
Section 10(a) of the Act); (viii) at no time during
the period that begins on the earlier of the date of the Prospectus
Supplement and the date the Prospectus Supplement is filed with the
Commission and ends at the later of the time of purchase and the
end of the period during which a prospectus is required by the Act
to be delivered (whether physically or through compliance with
Rule 172 under the Act or any similar rule) in connection with
any sale of Shares did or will any Prospectus Supplement or the
Prospectus, as then amended or supplemented, include an untrue
statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of
the circumstances
6
under which
they were made, not misleading; (ix) at no time during the
period that begins on the date of such Permitted Free Writing
Prospectus and continues through the time of the filing of the
Prospectus with the Commission did or will any Permitted Free
Writing Prospectus include an untrue statement of a material fact
or omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which
they were made, not misleading, except that the representations and
warranties set forth in this paragraph (b) do not apply to
statements or omissions in the Registration Statement, the Basic
Prospectus, any Prepricing Prospectus, the Prospectus Supplement,
the Prospectus or any Permitted Free Writing Prospectus based upon
information relating to any Underwriter furnished to the Company by
such Underwriter through you expressly for use therein;
(c)
(i) the Company has not, directly or indirectly, distributed
and will not distribute any offering material in connection with
the offering or sale of the Shares other than the Basic Prospectus,
any Prepricing Prospectus, the Permitted Free Writing Prospectuses,
if any, and the Prospectus; (ii) the Company has not, directly
or indirectly, prepared, used or referred to any Permitted Free
Writing Prospectus except in compliance with Rule 163 or with
Rules 164 and 433 under the Act; (iii) assuming that such
Permitted Free Writing Prospectus is so sent or given after the
Registration Statement was filed with the Commission (and after
such Permitted Free Writing Prospectus was, if required pursuant to
Rule 433(d) under the Act, filed with the Commission),
the sending or giving, by any Underwriter, of any Permitted Free
Writing Prospectus will satisfy the provisions of Rule 164 or
Rule 433 (without reliance on subsections (b), (c) and
(d) of Rule 164), (iv) the conditions set forth in
one or more of subclauses (i) through (iv), inclusive, of
Rule 433(b)(1) under the Act are satisfied, (v) the
Prepricing Prospectus is a prospectus that, other than by reason of
Rule 433 or Rule 431 under the Act, satisfies the
requirements of Section 10 of the Act, (vi) neither the
Company nor the Underwriters are disqualified, by reason of
subsection (f) or (g) of Rule 164 under the Act,
from using, in connection with the offer and sale of the Shares,
“free writing prospectuses” (as defined in
Rule 405 under the Act) pursuant to Rules 164 and 433
under the Act, (vii) the Company is not an “ineligible
issuer” (as defined in Rule 405 under the Act) as of the
eligibility determination date for purposes of Rules 164 and
433 under the Act with respect to the offering of the Shares
contemplated by the Registration Statement, (viii) the parties
hereto agree and understand that the content of any and all
“road shows” (as defined in Rule 433 under the
Act) related to the offering of the Shares contemplated hereby is
solely the property of the Company;
(d)
the Incorporated Documents, when they were filed with the
Commission, complied in all material respects with the requirements
of the Exchange Act, and none of such documents, when they were
filed with the Commission, contained an untrue statement of a
material fact or omitted to state a material fact necessary to make
the statements therein not misleading; and any further documents so
filed and incorporated by reference in (i) the Registration
Statement, when such documents are filed with the Commission, will
conform in all material respects to the requirements of the
Exchange Act, as applicable, and will not contain an untrue
statement of a material fact or omit to state a material fact
necessary to make the statements therein not misleading, and
(ii) any Prepricing Prospectus, the Prospectus or any
Permitted Free
7
Writing
Prospectus, when such documents are filed with the Commission, will
conform in all material respects to the requirements of the
Exchange Act, as applicable, and will not contain an untrue
statement of a material fact or omit to state a material fact
necessary to make the statements therein, in the light of the
circumstances in which they were made, not misleading;
(e)
except for a contemplated increase of 5,000,000 authorized Common
Shares, as of the date of this Agreement, the Company has, and as
of the time of purchase the Company will have, an authorized
capitalization as set forth in the Registration Statement, any
Prepricing Prospectus and the Prospectus (and any similar
information, if any, contained in any Permitted Free Writing
Prospectus); as of the date of this Agreement the Company has an
outstanding capitalization as set forth in the Registration
Statement, any Prepricing Prospectus and the Prospectus and as of
the time of purchase there shall not have been any changes since
the date of this Agreement in the Company’s outstanding
capitalization, except for differences which are not material; all
of the issued and outstanding Common Shares of the Company have
been duly and validly authorized and issued and are fully paid and
non-assessable, have been issued in compliance with all federal and
state securities laws and were not issued in violation of any
preemptive or similar right;
(f)
the Company has been duly formed and is validly existing as a real
estate investment trust in good standing under the laws of the
State of Maryland, with trust power to own, lease and operate its
properties and conduct its business as described in the
Registration Statement, the Prepricing Prospectus, the Prospectus
and the Permitted Free Writing Prospectuses, if any, and to execute
and deliver this Agreement and to issue, sell and deliver the
Shares as contemplated herein;
(g)
the Company is duly qualified and is in good standing in each
jurisdiction in which the ownership or leasing of its properties or
the conduct of its business requires such qualification, except
where the failure to so qualify in any such jurisdiction would not
individually or in the aggregate have a material adverse effect on
the business, prospects, properties, condition (financial or
otherwise) or results of operations of the Company and the
Subsidiaries (as defined herein), taken as a whole (a
“Material Adverse Effect”);
(h)
the Company does not own, directly or indirectly, any shares of
stock or any other equity or long-term debt of any other
corporation or have any direct or indirect equity interest or
ownership of long-term debt in any firm, partnership, joint
venture, limited liability company, association or other entity
except for (i) the Company’s subsidiaries (as defined in
the Act) (the “Subsidiaries”) and (ii) the
Company’s ownership of 1,000,000 common shares of HRPT
Properties Trust and 35,000 common shares of Five Star Quality
Care, Inc. The Subsidiaries identified in Schedule C
attached hereto (each, a “Significant Subsidiary”) are
the only Subsidiaries of the Company that are significant
subsidiaries (as such term is defined by Rule 1-02(w) of
Regulation S-X) of the Company. Each Significant Subsidiary
has been duly incorporated or formed and is validly existing as a
corporation or other entity, as the case may be, in good standing
under the laws of the jurisdiction of its incorporation
or
8
organization,
with the requisite corporate, trust, partnership or other power to
acquire and own, lease and operate its properties and to conduct
its business, as described in the Registration Statement, the
Prepricing Prospectus, the Prospectus and the Permitted Free
Writing Prospectuses, if any; and each Significant Subsidiary is
duly qualified and in good standing to do business in each
jurisdiction in which the nature of its business or the ownership
or leasing of the property requires such qualification, except
where the failure to be so qualified would not individually or in
the aggregate have a Material Adverse Effect. Each of the
Significant Subsidiaries is duly qualified and in good standing to
do business in the jurisdictions set forth below the name of such
Significant Subsidiary on Schedule D hereto, such jurisdictions
being the only jurisdictions in which the nature of its business or
the ownership or leasing of the property requires such
qualification, except where the failure to be so qualified would
not individually or in the aggregate have a Material Adverse
Effect. Each Subsidiary that is not a Significant Subsidiary
has been duly incorporated or formed and is validly existing as a
corporation or other entity, as the case may be, in good standing
under the laws of the jurisdiction of its incorporation or
organization, with the requisite corporate, trust, partnership or
other power to acquire and own, lease and operate its properties
and to conduct its business, as described in the Registration
Statement, the Prepricing Prospectus, the Prospectus and the
Permitted Free Writing Prospectuses, if any; and each Subsidiary
that is not a Significant Subsidiary is duly qualified and in good
standing to do business in each jurisdiction in which the nature of
its business or the ownership or leasing of the property requires
such qualification, except where the failure to be so qualified
would not individually or in the aggregate have a Material Adverse
Effect;
(i)
this Agreement has been duly authorized, executed and delivered by
the Company;
(j)
the shares of beneficial interest of the Company, including the
Shares, conform in all material respects to each description
thereof, if any, included or incorporated by reference in the
Registration Statement, any Prepricing Prospectus, the Prospectus
or any Permitted Free Writing Prospectus. The certificates,
if any, evidencing the Shares are in due and proper form and
conform in all material respects to the requirements of the laws
relating to Maryland real estate investment trusts (“Maryland
REIT Law”);
(k)
the Shares have been duly and validly authorized and, when issued
and delivered against payment therefore as provided herein, will be
duly and validly issued, fully paid and non-assessable and free of
any preemptive or similar rights;
(l)
neither the Company nor any of the Subsidiaries is in breach or
violation of, or in default under (and no event has occurred which
with notice, lapse of time, or both would result in any breach or
violation of, or constitute a default under), (i) its
Declaration of Trust, charter or by-laws or other organizational
documents, (ii) any obligation, agreement, covenant or
condition contained in any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument to which the Company or
any Subsidiary is subject or by which any of them or any of their
properties is bound or affected or (iii) any order,
rule or regulation of any court or governmental agency or
body
9
having
jurisdiction over the Company or any of its or its
Subsidiaries’ properties, except, in the case of clauses
(ii) and (iii), for those breaches, violations or defaults
which, individually or in the aggregate, would not have a Material
Adverse Effect;
(m)
the issuance by the Company of the Shares, the compliance by the
Company with all of the provisions of this Agreement, the
execution, delivery and performance by the Company of this
Agreement, and the consummation of the transactions contemplated
herein (including, without limitation, the application of the net
proceeds of the offering by the Company as described in the
Prospectus) will not conflict with or result in a breach or
violation of any of the terms or provisions of, or constitute a
default under, or result in the creation or imposition of any lien,
charge or encumbrance upon the Shares or any property or assets of
the Company pursuant to (i) the provisions of the Declaration
of Trust or the bylaws of the Company or any Subsidiary or any of
the Company’s or any Subsidiary’s other organizational
documents, (ii) any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument to which the Company or
any Subsidiary is a party or by which the Company or any Subsidiary
is bound or to which any of the property or assets of the Company
or any Subsidiary is subject, or (iii) any applicable laws or
any order, rule or regulation of any court or governmental
agency or body having jurisdiction over the Company or any of its
or its Subsidiaries’ properties, other than, in the case of
clause (ii), as would not, individually or in the aggregate, have a
Material Adverse Effect or a material adverse effect on the ability
of the Company to consummate the transactions contemplated
hereby;
(n)
no approval, authorization, consent or order of or filing with any
federal, state or local or foreign governmental or regulatory
commission, board, body, authority or agency or with the New York
Stock Exchange (“NYSE”), or approval of the
shareholders of the Company, is required in connection with
the issuance and sale of the Shares or the consummation by
the Company of the transactions as contemplated hereby (including,
without limitation, the application of the net proceeds of the
offering by the Company as described in the Prepricing Prospectus
and the Prospectus), other than registration of the Shares under
the Act, which has been effected, and any necessary qualification
under the securities or blue sky laws of the various jurisdictions
in which the Shares are being offered by the Underwriters;
(o)
no person has the right, contractual or otherwise, to cause the
Company to issue to it, or register pursuant to the Act, any shares
of beneficial interest or other equity interests. No person
has preemptive rights, co-sale rights, rights of first refusal or
other rights to purchase any Common Shares. No person has the
right, contractual or otherwise, to cause the Company to register
under the Act any shares of beneficial interest or other equity
interests as a result of the filing or effectiveness of the
Registration Statement or the sale of Shares contemplated thereby,
except for such rights as have been complied with or
waived;
(p)
Ernst & Young LLP, whose report on the consolidated
financial statements of the Company and the Subsidiaries was filed
with the Commission as part of the Company’s Annual Report on
Form 10-K for the fiscal year ended December 31, 2006 and
is incorporated by reference in the Registration Statement, the
Prepricing
10
Prospectus,
the Prospectus and, if applicable, any Permitted Free Writing
Prospectuses, are independent public accountants as required by the
Act and by the rules of the Public Company Accounting
Oversight Board;
(q)
all legal or governmental proceedings, affiliate or other related
party transactions, off-balance sheet transactions (including,
without limitation, transactions related to, and the existence of,
“variable interest entities” within the meaning of
Financial Accounting Standards Board Interpretation No. 46),
contracts, leases or documents of a character required to be
described in the Registration Statement, the Prepricing Prospectus,
the Prospectus or any Incorporated Document, and all documents
required to be filed as an exhibit to the Registration Statement,
any Prepricing Prospectus, the Prospectus or any Incorporated
Document, have been so described or filed or will be filed prior to
the time of purchase as required;
(r)
except as otherwise described in the Registration Statement, each
Disclosure Package and the Prospectus, there are no legal or
governmental proceedings pending to which the Company or any of the
Subsidiaries is a party or of which any of the Company’s or
any of the Subsidiaries’ properties or assets is the subject,
the result of which would, individually or in the aggregate, have a
Material Adverse Effect or a material adverse effect on the ability
of the Company to consummate the transactions contemplated hereby,
and, to the Company’s knowledge, no such proceedings are
threatened or contemplated, except as disclosed in the Registration
Statement, each Disclosure Package and the Prospectus, the result
of which would, individually or in the aggregate, have a Material
Adverse Effect or a material adverse effect on the ability of the
Company to consummate the transactions contemplated hereby.
To the Company’s knowledge, there are no legal or
governmental proceedings pending or threatened to which any lessee,
sublessee or operator of any property of the Company or any
Subsidiary or portion thereof is a party, the result of which
would, individually or in the aggregate, have a Material Adverse
Effect, and no such proceedings are being threatened or
contemplated, except as disclosed in the Registration Statement,
each Disclosure Package and the Prospectus and the result of which
would, individually or in the aggregate, have a Material Adverse
Effect. Neither the Company nor any of the Subsidiaries has
received from any governmental authority notice of any violation of
any local, state or federal law, rule or regulation (including
without limitation any such law, rule or regulation applicable
to the health care industry (“Health Care Laws”) or
relating to human health or safety or the environment or any
hazardous or toxic substances or wastes, pollutants or contaminants
(“Environmental Laws”)), except as disclosed in the
Registration Statement, each Disclosure Package and the Prospectus,
the result of which would, individually or in the aggregate, have a
Material Adverse Effect, and to the Company’s knowledge,
there is no such violation, or any occurrence or circumstance that
would give rise to a claim under or pursuant to any local, state or
federal law, rule or regulation (including without limitation
any Health Care Laws or Environmental Laws), which would,
individually or in the aggregate, have a Material Adverse
Effect. To the Company’s knowledge, there is no
violation of any local, state or federal law, rule or
regulation (including without limitation Health Care Laws and
Environmental Laws) by any person from whom the Company or any of
the Subsidiaries acquired any of its properties (a
“seller”), or any lessee, sublessee or operator of any
of their respective
11
properties or
any part thereof, the result of which would, individually or in the
aggregate, have a Material Adverse Effect, and to the
Company’s knowledge, there is no such violation, or any
occurrence or circumstance that would give rise to a claim under or
pursuant to any local, state or federal law, rule or
regulation (including without limitation any Health Care Laws or
Environmental Laws), which would, individually or in the aggregate,
have a Material Adverse Effect, except as disclosed in the
Registration Statement, each Disclosure Package and the
Prospectus. Neither the Company nor any of the Subsidiaries
has received from any governmental authority any written notice of
any condemnation of or zoning change affecting the properties or
any part thereof of the Company or any of the Subsidiaries that
individually or in the aggregate would have a Material Adverse
Effect and the Company does not know of any such condemnation or
zoning change which is threatened and which if consummated
individually or in the aggregate would have a Material Adverse
Effect. Nothing has come to the Company’s attention
that any seller, lessee, sublessee or operator of any property of
the Company or any of the Subsidiaries, or portion thereof has,
received from any governmental authority any written notice of any
condemnation of or zoning change affecting the Properties (as
defined in Section 3(s) below) or any part thereof of the
Company or any of the Subsidiaries that individually or in the
aggregate would have a Material Adverse Effect;
(s)
as of the respective dates at which such information is given, each
of the Company and the Subsidiaries has good and marketable title
in fee simple or ground leases to the properties disclosed in the
Registration Statement, each Disclosure Package and the Prospectus
as being owned by them (the “Properties”); and the
Properties are free and clear of all liens, encumbrances, claims,
mortgages, deeds of trust, restrictions, security interests and
defects (“Property Encumbrances”), except for:
(i) the leasehold interests of lessees in the Company’s
and the Subsidiaries’ properties held under lease (the
“Leases”), (ii) any other Property Encumbrances
that would not, individually or in the aggregate, have a Material
Adverse Effect and (iii) those Property Encumbrances set forth
in the Registration Statement, each Disclosure Package and the
Prospectus. All Property Encumbrances on or affecting the
properties of the Company or any of the Subsidiaries which are
required to be disclosed in the Registration Statement, each
Disclosure Package and the Prospectus are disclosed therein.
Except where it would not individually or in the aggregate have a
Material Adverse Effect, each of the Leases pertaining to the
properties of the Company or any of the Subsidiaries has been duly
authorized by the Company or one of the Subsidiaries, as
applicable, and is a valid and binding agreement of the Company or
one of the Subsidiaries, as applicable, and, to the Company’s
knowledge, each other party thereto, enforceable in accordance with
its terms, except as enforcement thereof may be limited by
bankruptcy, insolvency, moratorium, fraudulent conveyance or other
similar laws affecting the enforcement of creditors’ rights
generally and by general equitable principles. To the
Company’s knowledge, no lessee of any portion of any of the
properties of the Company or any of the Subsidiaries is in default
under its respective lease and there is no event which, but for the
passage of time or the giving of notice or both, would constitute a
default under any such lease, except as disclosed in the
Registration Statement, each Disclosure Package and the Prospectus
and except for such defaults that would not, individually or in the
aggregate, have a Material Adverse Effect;
12
(t)
the Company and each of the Subsidiaries and, to the
Company’s knowledge, each of the operators, lessees or
sublessees of any property or portion thereof of the Company or any
of the Subsidiaries have such permits, licenses, approvals,
certificates, franchises and authorizations of governmental or
regulatory authorities (“permits”), including, without
limitation, under any Health Care Laws or Environmental Laws, as
are necessary in the case of each such party to acquire and own,
lease or operate its properties and to conduct its business, except
where the failure to obtain such permits would not individually or
in the aggregate have a Material Adverse Effect; except as
described in the Registration Statement, each Disclosure Package
and the Prospectus, the Company and each of the Subsidiaries and,
to the Company’s knowledge, each of the lessees, sublessees
or operators of any property or portion thereof of the Company or
any of the Subsidiaries have fulfilled and performed all of their
obligations with respect to such permits and, except as disclosed
in the Registration Statement, each Disclosure Package and the
Prospectus, no event has occurred which allows, or after notice or
lapse of time would allow, revocation or termination thereof or
result in any other impairment of the rights of the holder of any
such permit, except where the failure to fulfill or perform, or the
resulting termination or impairment, would not, individually or in
the aggregate, have a Material Adverse Effect; and, except as
described in the Registration Statement, each Disclosure Package
and the Prospectus, such permits contain no restrictions that are
burdensome to the Company and the Subsidiaries, taken as a whole
and that would, individually or in the aggregate, have a Material
Adverse Effect;
(u)
the financial statements, together with the related schedules and
notes, forming a part of the Registration Statement, any Prepricing
Prospectus, the Prospectus or any Permitted Free Writing
Prospectus, present fairly the consolidated financial position of
the Company and the Subsidiaries as of the dates indicated and the
consolidated results of operations and cash flows of the Company
and the Subsidiaries for the periods specified. Such
financial statements have been prepared in conformity with
generally accepted accounting principles applied on a consistent
basis during the periods involved. Any pro forma financial
statements and other pro forma financial data included or
incorporated by reference in the Registration Statement, any
Prepricing Prospectus, the Prospectus or any Permitted Free Writing
Prospectus comply as to form in all material respects with the
applicable accounting requirements of Regulation S-X of the Act,
and the pro forma adjustments have been properly applied to the
historical amounts in the compilation of those statements. To
the extent applicable, all disclosures contained in the
Registration Statement, any Prepricing Prospectus, the Prospectus,
any Permitted Free Writing Prospectus or any Incorporated Document
regarding Non-GAAP Financial Measures (as such term is defined by
the rules and regulations of the Commission) comply, in all
material respects, with Regulation G of the Exchange Act and, if
applicable, Item 10 of Regulation S-K. The Company and the
Subsidiaries do not have any material liabilities or obligations,
direct or contingent (including any off-balance sheet obligations
or any “variable interest entities” within the meaning
of Financial Accounting Standards Board Interpretation
No. 46), not disclosed in the Registration Statement, each
Prepricing Prospectus and the Prospectus. The other financial
and statistical data set forth in the Registration Statement, any
Prepricing Prospectus, the Prospectus and any Permitted Free
Writing Prospectus are accurately presented and prepared on a basis
consistent with the financial statements and books and
13
records of the
Company. There are no financial statements (historical or pro
forma) that are required to be included in the Registration
Statement, any Prepricing Prospectus or the Prospectus that are not
included as required;
(v)
subsequent to the respective dates as of which information is given
in the Registration Statement, any Prepricing Prospectus, the
Prospectus and any Permitted Free Writing Prospectus, in each case
excluding any amendments or supplements to the foregoing made after
the execution of this Agreement, there has not been (i) any
material adverse change, or any prospective material adverse
change, in the business, properties, condition (financial or
otherwise) or results of operations of the Company and the
Subsidiaries taken as a whole, (ii) any transaction which is
material to the Company or the Subsidiaries, (iii) any
obligation, direct or contingent, which is material to the Company
and the Subsidiaries taken as a whole, incurred by the Company or
the Subsidiaries, (iv) any material change in the outstanding
shares of beneficial interest or material increase in the
outstanding indebtedness of the Company or the Subsidiaries or
(v) any dividend or distribution of any kind declared, paid or
made on the shares of beneficial interest of the Company or a
dividend distribution of any kind on any class of its shares of
beneficial interest (other than dividends or distributions from
wholly-owned subsidiaries of the Company) other than
(A) regular quarterly dividends, declared, paid or made and
(B) the issuance of common shares of beneficial interest to
the trustees and officers of the Company and directors, officers
and employees of Reit Management & Research LLC, the
Company’s investment manager (“RMR”), pursuant to
the Company’s Incentive Share Award Plan and to RMR in
payment of its incentive fee in accordance with the Company’s
advisory agreement with RMR filed as an exhibit to the Registration
Statement. None of the Company nor the Subsidiaries has any
material contingent obligation which is not disclosed in the
Registration Statement;
(w)
each of the Company and the Subsidiaries are insured by insurers of
recognized financial responsibility against such losses and risks
and in such amount as are customary in the business in which they
are engaged, except as described in the Registration Statement,
each Disclosure Package and the Prospectus. Except as would
not, individually or in the aggregate, have a Material Adverse
Effect, all policies of insurance insuring the Company and the
Subsidiaries or any of their businesses, assets, employees,
officers, directors and trustees are in full force and effect, and
the Company and the Subsidiaries are in compliance with the terms
of such policies in all material respects. Except as would
not, individually or in the aggregate, have a Material Adverse
Effect, there are no claims by the Company or any of the
Subsidiaries under any such policy or instrument as to which any
insurance company is denying liability or defending under a
reservation of rights clause;
(x)
except as disclosed in the Registration Statement, each Disclosure
Package and the Prospectus, neither the Company nor any of the
Subsidiaries has either sent or received any communication
regarding termination of, or intent not to renew, any of the
contracts or agreements referred to or described in, or filed as an
exhibit to, the Registration Statement, any Prepricing Prospectus,
the Prospectus, any Permitted Free Writing Prospectus or any
Incorporated Document, and no such termination or non-
14
renewal has
been threatened by the Company or any of the Subsidiaries or any
other party to any such contract or agreement;
(y)
the Company has obtained for the benefit of the Underwriters the
agreement (a “Lock-Up Agreement”), in the form set
forth as Exhibit A hereto, of its managing trustees
(Messrs. Barry M. Portnoy and Adam D. Portnoy) and executive
officers (Messrs. David J. Hegarty and Richard A. Doyle);
(z)
neither the Company nor any of the Subsidiaries or any of their
respective affiliates has taken, directly or indirectly, any action
designed to or which has constituted or which might reasonably be
expected to cause or result, under the Exchange Act or otherwise,
in the stabilization or manipulation of the price of any security
of the Company to facilitate the sale or resale of the Shares;
(aa)
the Company and the Subsidiaries have not sustained since the date
of the latest audited financial statements included in the
Registration Statement, any Prepricing Prospectus and the
Prospectus any loss or interference with their businesses from
fire, explosion, flood or other calamity, whether or not covered by
insurance, or from any labor dispute or court or governmental
action, order or decree, otherwise than as disclosed in the
Prospectus or other than any loss or interference, which would not
individually or in the aggregate have a Material Adverse
Effect;
(bb)
the Company and the Subsidiaries
|
