SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): February 12, 1998
HEALTH AND RETIREMENT PROPERTIES TRUST
(Exact name of registrant as specified in charter)
Maryland 1-9317 04-6558834
(State or other (Commission file (IRS employer
jurisdiction of number) identification no.)
incorporation)
400 Centre Street, Newton, Massachusetts 02158
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code: 617-332-3990
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Item 7. Financial Statements, Pro Forma Financial Information
and Exhibits.
(c) Exhibits.
1.1 Purchase Agreement dated February 12, 1998 between Health and
Retirement Properties Trust and Prudential Securities
Incorporated.
1.2 Purchase Agreement dated February 12, 1998 between Health and
Retirement Properties Trust and Smith Barney Inc.
8.1 Opinion of Sullivan & Worcester LLP re: tax matters.
23.1 Consent of Sullivan & Worcester LLP (contained in Exhibit
8.1).
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
HEALTH AND RETIREMENT PROPERTIES TRUST
By: /s/ Ajay Saini
Ajay Saini
Treasurer and Chief Financial Officer
Date: February 12,1998
EXHIBIT 1.1
HEALTH AND RETIREMENT PROPERTIES TRUST
(a Maryland real estate investment trust)
PURCHASE AGREEMENT
February 12, 1998
Prudential Securities Incorporated
One New York Plaza, 18th Floor
New York, New York 10292-2018
Ladies and Gentlemen:
Health and Retirement Properties Trust, a Maryland real estate
investment trust (the "Company"), confirms its agreement with you with respect
to the sale by the Company and the purchase by you of 1,504,996 shares of its
common shares of beneficial interest, with par value of $.01 per share, at a
price per share of $19.12 (the "Securities"). You intend to deposit the
Securities with the trustee of The National Equity Trust - Equity Portfolio
Series 2 (REIT Portfolio) (the "Trust"), a registered unit investment trust
under the Investment Company Act of 1940, as amended, to which you act as
sponsor and depositor, in exchange for units in the Trust.
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 (No. 333-26887) for the
registration of debt securities, preferred shares of beneficial interest,
depositary shares, common shares of beneficial interest and warrants under the
Securities Act of 1933, as amended (the "1933 Act"), and has filed such
amendments thereto, if any, as may have been required to the date hereof. Such
registration statement has been declared effective under the 1933 Act. Such
registration
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statement (as amended, if applicable) and the prospectus constituting a part
thereof, as supplemented by the prospectus supplement relating to the Securities
(including, in each case, all documents incorporated or deemed to be
incorporated by reference therein), 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 hereinafter referred to as the "Registration
Statement" and the "Prospectus", respectively. All references in this Agreement
to financial statements and schedules and other information which is
"contained", "included" or "stated" in the Registration Statement or the
Prospectus (and all other references of like import) shall be deemed to mean and
include all such financial statements and schedules and other information which
is or is deemed to be incorporated by reference in the Registration Statement or
in the Prospectus, as the case may be.
Section 1. Representations and Warranties.
(a) The Company represents and warrants to you as of the date hereof as
follows:
(i) At the time the Registration Statement became effective,
the Registration Statement complied in all material respects with the
requirements of the 1933 Act and the rules and regulations under the
1933 Act (the "1933 Act Regulations") and did not contain an untrue
statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein not
misleading. The Prospectus, at the date hereof (unless the term
"Prospectus" refers to a prospectus which has been provided to you by
the Company for use in connection with the offering of the Securities
which differs from the Prospectus on file at the Commission at the date
of effectiveness of the Registration Statement, in which case at the
time it is first provided to you for such use) and at the Closing Time
referred to in Section 2 hereof, does not and will not include an
untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances
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under which they were made, not misleading; provided, however, that the
representations and warranties in this subsection (i) shall not apply
to those parts of the Registration Statement or the Prospectus made in
reliance upon and in conformity with information furnished to the
Company in writing by you expressly for use in the Registration
Statement or the Prospectus.
(ii) The documents incorporated or deemed to be incorporated
by reference in the Prospectus, at the time they were or hereafter are
filed with the Commission, complied and will comply in all material
respects with the requirements of the 1934 Act and the rules and
regulations of the Commission under the 1934 Act (the "1934 Act
Regulations"), and, when read together with the other information in
the Prospectus, at the time the Registration Statement became effective
and at Closing Time, did not and will not include an untrue statement
of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading.
(iii) The Company is a Maryland real estate investment trust
duly organized, validly existing and in good standing under the laws of
the State of Maryland. Each of its subsidiaries has been duly organized
and is validly existing as a corporation or trust in good standing
under the laws of its jurisdiction of incorporation or organization.
Each of the Company and its subsidiaries has full power and authority
(corporate and other) to carry on its business as described in the
Registration Statement and in the Prospectus and to own, lease and
operate its properties. Each of the Company and its subsidiaries is
duly qualified and is in good standing as a foreign corporation or
trust, as the case may be, and is authorized to do business in each
jurisdiction in which the nature of its business or its ownership or
leasing of property requires such qualification, except where the
failure to be so qualified would not have a material adverse effect on
the Company and its subsidiaries, taken as a whole.
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(iv) The financial statements of the Company and its
subsidiaries and, to the Actual Knowledge of the Company (as defined in
paragraph (xi) of this Section 1(a)), of Marriott International, Inc.
(the "Operator") and Government Properties Investors, Inc. ("GPI") and
its consolidated subsidiaries, together with the related schedules and
notes thereto, included or incorporated by reference in the
Registration Statement and in the Prospectus, comply as to form in all
material respects with the requirements of the 1933 Act. Such financial
statements of the Company and, to the Actual Knowledge of the Company,
of the Operator and GPI, together with the related schedules and notes
thereto, present fairly the consolidated financial position, results of
operations, shareholders' equity and changes in financial position of
the foregoing entities at the respective dates or for the respective
periods therein specified and have been prepared in accordance with
generally accepted accounting principles ("GAAP") consistently applied
throughout the periods involved. The pro forma financial statements and
other pro forma financial information (including the notes thereto)
included or incorporated by reference in the Registration Statement and
in the Prospectus (i) present fairly the information shown therein,
(ii) have been prepared in accordance with the Commission's rules and
guidelines with respect to pro forma financial statements and (iii)
have been properly compiled on the basis described therein and the
assumptions used in the preparation of such pro forma financial
statements and other pro forma financial information (including the
notes thereto) are reasonable and the adjustments used therein are
appropriate to give effect to the transactions or circumstances
referred to therein. The adjusted pro forma financial statements and
other adjusted pro forma financial information (including the notes
thereto) included or incorporated by reference in the Registration
Statement and in the Prospectus (i) present fairly the information
shown therein and (ii) have been properly compiled on the basis
described therein and the assumptions used in the preparation of such
adjusted pro forma financial statements and other adjusted pro forma
financial information (including the notes thereto) are reasonable and
the adjustments used therein are appropriate to give effect to the
transactions or circumstances referred to therein.
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(v) The accountants who have certified the financial
statements of the Company and its subsidiaries and, to the Actual
Knowledge of the Company, of the Operator and its subsidiaries and of
GPI and its subsidiaries, included or incorporated by reference in the
Registration Statement and in the Prospectus are independent certified
accountants as required by the 1933 Act. The statements included in or
incorporated by reference in the Registration Statement and in the
Prospectus with respect to such accountants pursuant to Rule 509 of
Regulation S-K under the 1933 Act are true and correct in all material
respects.
(vi) All of the outstanding shares of beneficial interest of
the Company have been duly authorized and are validly issued, fully
paid, non-assessable (except as otherwise described in the Registration
Statement) and free of preemptive or similar rights or other rights to
subscribe for or to purchase securities provided for by law or by its
Declaration of Trust or bylaws; all of the outstanding shares of
beneficial interest of the Company and options to purchase shares of
beneficial interest of the Company have been issued in accordance with
applicable federal and state securities laws; all of the issued and
outstanding indebtedness of the Company is duly and validly authorized
and issued; the Securities to be issued and sold pursuant to this
Agreement have been duly authorized and, when issued and delivered to
you against payment therefor as provided hereunder, will have been
validly issued and will be fully paid, non-assessable (except as
otherwise described in the Registration Statement) and free of
preemptive or similar rights; all outstanding common shares of
beneficial interest (the "Common Shares"), except for shares issued
pursuant to the Company's Incentive Share Award Plan, are listed on the
New York Stock Exchange (the "NYSE") and the Company knows of no reason
or set of facts which is likely to result in the delisting of such
Common Shares or the inability to list the Securities; and there are no
rights of holders of securities of the Company to the registration of
Common Shares or other securities that would require inclusion of such
Common Shares or other securities in the offering of the Securities.
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(vii) The shares of beneficial interest of the Company and the
Securities conform to the descriptions thereof in the Registration
Statement and in the Prospectus.
(viii) Since the respective dates as of which information is
given in the Prospectus, and except as otherwise disclosed therein, (i)
there has been no material adverse change in the business, operations,
earnings, prospects, properties or condition (financial or otherwise)
of the Company and its subsidiaries, taken as a whole, or, to the
Actual Knowledge of the Company, of the Advisor (as defined in
paragraph (xi) of this Section 1(a)), in any case whether or not
arising in the ordinary course of business, (ii) there have been no
material transactions entered into by the Company and its subsidiaries,
on a consolidated basis, other than transactions in the ordinary course
of business, (iii) neither the Company nor its subsidiaries has
incurred any material liabilities or obligations, direct or contingent,
(iv) the Company and its subsidiaries, on a consolidated basis, have
not, (A) other than regular quarterly dividends, declared, paid or made
a dividend or distribution of any kind on any class of its shares of
beneficial interest (other than dividends or distributions from wholly
owned subsidiaries to the Company), (B) issued any shares of beneficial
interest of the Company or any of its subsidiaries or any options,
warrants, convertible securities or other rights to purchase the shares
of beneficial interest of the Company or any of its subsidiaries (other
than the issuance of Common Shares upon conversion of certain
convertible debentures of the Company) or (C) repurchased or redeemed
shares of beneficial interest, and (v) there has not been (A) any
material decrease in the Company's net worth or (B) any material
increase in the short-term or long-term debt (including capitalized
lease obligations but excluding borrowings under existing bank lines of
credit) of the Company and its subsidiaries, on a consolidated basis.
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(ix) The Company and each of its subsidiaries maintains a
system of internal accounting controls sufficient to provide reasonable
assurance that (i) transactions are executed in accordance with
management's general or specific authorizations; (ii) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with GAAP and to maintain asset accountability; (iii) access
to assets is permitted only in accordance with management's general or
specific authorization; and (iv) the recorded accountability for assets
is compared with the existing assets at reasonable intervals and
appropriate action is taken with respect to any differences.
(x) Except as otherwise disclosed in the Prospectus, neither
the Company nor any of its subsidiaries nor, to the Actual Knowledge of
the Company, the Advisor, is in violation of its respective charter or
by-laws or other organizational documents or in default in the
performance of any obligation, agreement or condition contained in any
bond, debenture, note or any other evidence of indebtedness or in any
other agreement, indenture or instrument to which the Company or any of
its subsidiaries or, to the Actual Knowledge of the Company, the
Advisor, is a party or by which any of their respective properties or
assets may be bound or affected, except for any such violation that
would not have a material adverse effect on the condition, financial or
otherwise or in the respective earnings, business affairs or business
prospects of the Company and its subsidiaries, taken as a whole.
Neither the Company nor, to the Actual Knowledge of the Company, the
Advisor, is in violation of any law, ordinance, governmental rule or
regulation or court decree to which it is subject, except for any such
violations that would not, individually or in the aggregate, have a
material adverse effect on the business, operations, earnings,
prospects, properties or condition (financial or otherwise) of any of
the Company and its subsidiaries, taken as a whole.
(xi) Except as disclosed in the Registration Statement or in
the Prospectus, there is not now pending or, to the knowledge of the
Company, threatened, any litigation, action, suit or proceeding to
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which the Company or, to the actual knowledge of the Company (including
without limitation, for purposes of this Agreement, its managing
trustees) without independent inquiry (the "Actual Knowledge of the
Company"), REIT Management & Research, Inc. (the "Advisor"), is or will
be a party before or by any court or governmental agency or body, which
(A) might result in any material adverse change in the condition,
financial or otherwise, or in the earnings, business affairs or
business prospects of the Company or (B) might materially and adversely
affect the property or assets of the Company or (C) concerns the
Company or, to the Actual Knowledge of the Company, the Advisor, and is
required to be disclosed in the Prospectus, or (D) could adversely
affect the consummation of this Agreement and the issuance, purchase
and sale of the Securities. No contract or other document is required
to be described in the Registration Statement or in the Prospectus or
to be filed as an exhibit to the Registration Statement that is not
described therein or filed as required.
(xii) The execution, delivery and performance by the Company
of this Agreement, the issuance, offering and sale by the Company of
the Securities as contemplated by the Registration Statement and by the
Prospectus and the consummation of the transactions contemplated hereby
and compliance with the terms and provisions hereof, will not violate
or conflict with or constitute a breach of any of the terms or
provisions of, or a default under, (i) the Amended and Restated
Declaration of Trust (the "Declaration of Trust") or the By-laws of the
Company or the charter or by-laws or other organizational documents of
any subsidiaries of the Company or, to the Actual Knowledge of the
Company, the respective charter or by-laws or other organizational
documents of the Advisor, or (ii) except as disclosed in the
Prospectus, any agreement, indenture or other instrument to which the
Company or any of its subsidiaries or, to the Actual Knowledge of the
Company, the Advisor, is a party or by which the Company or any of its
subsidiaries or, to the Actual Knowledge of the Company, the Advisor or
their respective properties or assets is bound, or (iii) any laws,
administrative regulations or rulings or decrees to which the Company
or any of its subsidiaries or, to the Actual Knowledge of the Company,
the Advisor or their respective properties or assets may be subject.
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(xiii) No consent, approval, authorization, order,
registration, filing, qualification, license or permit of or with any
court or any public, governmental or regulatory agency or body having
jurisdiction over the Company or any of its subsidiaries or any of
their respective properties or assets is required for the execution,
delivery and performance of this Agreement and the consummation of the
transactions contemplated hereby, including, without limitation, the
issuance, sale and delivery of the Securities pursuant to this
Agreement, except such as have been obtained and such as may be
required under foreign and state securities or "Blue Sky" laws.
(xiv) Except as otherwise disclosed in the Registration
Statement and in the Prospectus, the Company and each of its
subsidiaries has good and marketable title or ground leases, free and
clear of all liens, claims, encumbrances and restrictions, except liens
for taxes not yet due and payable and other liens and encumbrances
which do not, either individually or in the aggregate, materially and
adversely affect the current use or value thereof, to all property and
assets described in the Registration Statement and in the Prospectus as
being owned by them. Except as otherwise set forth in the Registration
Statement or in the Prospectus, all leases to which the Company and
each of its subsidiaries is a party relating to real property, and all
other leases which are material to the business of the Company and its
subsidiaries, taken as a whole, are valid and binding, and no default
(to the Company's knowledge, in the case of leases to which the Company
is a party as lessor, that would, individually or in the aggregate,
have a material adverse effect on the business, operations, earnings,
prospects, properties or condition (financial or otherwise) of the
Company and its subsidiaries, taken as a whole) has occurred and is
continuing thereunder, and the Company and each of its subsidiaries
enjoys peaceful and undisturbed possession under all such leases to
which it is a party as lessee. With respect to all properties owned or
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leased by the Company and each of its subsidiaries, the Company or such
subsidiary has such documents, instruments, certificates, opinions and
assurances, including without limitation, fee, leasehold owners or
mortgage title insurance policies (disclosing no encumbrances or title
exceptions which are material to the Company and its subsidiaries
considered as a whole, except as otherwise set forth in the
Registration Statement and in the Prospectus), legal opinions and
property insurance policies in each case in form and substance as are
usual and customary in transactions involving the purchase of similar
real estate and are appropriate for the Company or such subsidiary to
have obtained.
(xv) The Company and each of its subsidiaries owns, or
possesses adequate rights to use, all patents, trademarks, trade names,
service marks, copyrights, licenses and other rights necessary for the
conduct of their respective businesses as described in the Registration
Statement and in the Prospectus, and neither the Company nor any of its
subsidiaries has received any notice of conflict with, or infringement
of, the asserted rights of others with respect to any such patents,
trademarks, trade names, service marks, copyrights, licenses and other
such rights (other than conflicts or infringements that, if proven,
would not have a material adverse effect on the business, operations,
earnings, prospects, properties or condition (financial or otherwise)
of the Company and its subsidiaries, taken as a whole), and neither the
Company nor any of its subsidiaries knows of any basis therefor.
(xvi) All material tax returns required to be filed by the
Company and each of its subsidiaries in any jurisdiction have been
timely filed, other than those filings being contested in good faith,
and all material taxes, including withholding taxes, penalties and
interest, assessments, fees and other charges due pursuant to such
returns or pursuant to any assessment received by the Company or any of
its subsidiaries have been paid, other than those being contested in
good faith and for which adequate reserves have been provided.
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(xvii) Except for those matters which in the aggregate do not
have a material adverse effect on the business, operations, earnings,
prospects, properties or condition (financial or otherwise) of the
Company and its subsidiaries taken as a whole, and except for Hazardous
Materials (as defined below) or substances which are handled and/or
disposed of in compliance with all applicable federal, state and local
requirements, to the Company's knowledge, after due investigation, the
real property owned, leased or otherwise operated by the Company and
each of its subsidiaries in connection with the operation of their
respective businesses, including, without limitation, any subsurface
soils and ground water (the "Realty"), is free of contamination from
any Hazardous Materials. To the Company's knowledge, after due
investigation, the Realty does not contain any underground storage or
treatment tanks, active or abandoned water, gas or oil wells, or any
other underground improvements or structures, other than the
foundations, footings, or other supports for the improvements located
thereon which, based on present knowledge, could, in their present
condition, reasonably be expected to presently cause a material
detriment to or materially impair the beneficial use thereof by the
Company or constitute or cause a significant health, safety or other
environmental hazard to occupants or users thereof without regard to
any special conditions of such occupants or users. The Company
represents that, after due investigation, it has no knowledge of any
material violation, with respect to the Realty, of any Environmental
Law, or of any material liability on the part of the Company with
respect to the Realty, resulting from the presence, use, release,
threatened release, emission, disposal, pumping, discharge, generation
or processing of any Hazardous Materials. As used herein,
"Environmental Law" means any federal, state or local statute,
regulation, judgment, order or authorization relating to emissions,
discharges, releases or threatened releases of Hazardous Materials into
ambient air, surface water, ground water, publicly-owned treatment
works, septic systems or land, or otherwise relating to the pollution
or protection of public health or the environment, and "Hazardous
Materials" means any substance, material or waste which is regulated by
any federal, state or local government or quasi-government authority,
which is defined, used or listed as a "hazardous waste", "hazardous
substance", "toxic substance", "medical waste", "infectious waste" or
other similar terms as defined or used in any Environmental Law, or any
petroleum products, asbestos, lead-based paint, polychlorinated
biphenyls, flammable explosives or radioactive materials.
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(xviii) Each of the Company, its subsidiaries and, to the
Actual Knowledge of the Company, the Advisor, has such permits,
licenses, franchises and authorizations of governmental or regulatory
authorities (together, "permits"), including, without limitation, under
any applicable Environmental Law, as are necessary to own, lease and
operate its properties and to engage in the business currently
conducted by it, except such licenses and permits as to which the
failure to own or possess will not in the aggregate have a material
adverse effect on the business, operations, earnings, prospects,
properties or condition (financial or otherwise) of the Company, and
neither the Company nor, to the Actual Knowledge of the Company, the
Advisor, has any reason to believe that any governmental body or agency
is considering limiting, suspending or revoking any such license,
certificate, permit, authorization, approval, franchise or right; each
of the Company, its subsidiaries and, to the Actual Knowledge of the
Company, the Advisor, has fulfilled and performed all of its
obligations with respect to such permits and no event has occurred
which allows, or after notice or lapse of time would allow, revocation
or termination thereof or results in any other material impairment of
the rights of the holder of any such permit; and, except as described
in the Registration Statement and in the Prospectus, such permits
contain no restrictions that are materially burdensome to the Company
or any of its subsidiaries.
(xix) To the knowledge of the Company, no labor problem exists
or is imminent with employees of the Company or any of its subsidiaries
that could have a material adverse effect on the business, operations,
earnings, prospects, properties or condition (financial or otherwise)
of the Company and its subsidiaries, taken as a whole.
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(xx) Neither the Company nor any of its subsidiaries nor, to
the knowledge of the Company, any officer, trustee or director
purporting to act on behalf of the Company or any of its subsidiaries,
has at any time: (i) made any contributions to any candidate for
political office, or failed to disclose fully any such contributions,
in violation of law; (ii) made any payment of funds to, or received or
retained any funds from, any state, federal or foreign governmental
officer or official, or other person charged with similar public or
quasi-public duties, other than payments required or allowed by
applicable law; or (iii) engaged in any transactions, maintained any
bank accounts or used any corporate funds except for transactions, bank
accounts and funds, which have been and are reflected in the normally
maintained books and records of the Company and its subsidiaries.
(xxi) All of the outstanding shares of beneficial interest of,
or other ownership interests in, each of the Company's subsidiaries
have been duly authorized and validly issued and are fully paid and
nonassessable, and, except as disclosed in the Registration Statement
and in the Prospectus, are or will be owned by the Company free and
clear of any security interest, claim, lien, encumbrance or adverse
interest of any nature.
(xxii) Except as referred to or described in the Registration
Statement and in the Prospectus, none of the subsidiaries of the
Company owns any shares of stock or any other securities of any
corporation or has any equity interest in any firm, partnership,
association or other entity other than the issued capital shares of its
subsidiaries, and the Company does not own, directly or indirectly, any
shares of stock or any other securities of any corporation or have any
equity interest in any firm, partnership, association or other entity
other than the issued capital shares of its subsidiaries, except in
each case for non-controlling positions acquired in the ordinary course
of business.
(xxiii) Except as disclosed in the Registration Statement and
in the Prospectus, there are no material outstanding loans or advances
or material guarantees of indebtedness by the Company or any of its
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subsidiaries to or for the benefit of any of the officers, trustees or
directors of the Company or any of its subsidiaries or any of the
members of the families of any of them.
(xxiv) The Company and each of its subsidiaries maintains
insurance, duly in force, with insurers of recognized financial
responsibility; such insurance insures against such losses and risks as
are adequate in accordance with customary industry practice to protect
the Company and its subsidiaries and their respective businesses; and
neither the Company nor any such subsidiary has any reason to believe
that it will not be able to renew its existing insurance coverage as
and when such coverage expires or to obtain similar coverage from
similar insurers as may be necessary to continue its business at a cost
that would not materially and adversely affect the business,
operations, earnings, prospects, properties or condition (financial or
otherwise) of the Company and its subsidiaries, taken as a whole,
except as disclosed in or contemplated by the Registration Statement
and by the Prospectus.
(xxv) Neither the Company nor any of its officers and
directors (as defined in the 1933 Act Regulations) has taken or will
take, directly or indirectly, prior to the termination of the offering
contemplated by this Agreement, any action designed to stabilize or
manipulate the price of any security of the Company, or which has
caused or resulted in, or which might in the future reasonably be
expected to cause or result in, stabilization or manipulation of the
price of any security of the Company to facilitate the sale or resale
of the Securities.
(xxvi) Neither the Company nor any of its subsidiaries is an
"investment company" or an "affiliated person" of, or "promoter" or
"principal underwriter" for, an "investment company" as such terms are
defined in the Investment Company Act of 1940, as amended (the "1940
Act"), or an "investment adviser" as such term is defined in the
Investment Advisers Act of 1940, as amended.
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(xxvii) The Company is organized in conformity with the
requirements for qualification, and, as of the date hereof the Company
operates, and as of Closing Time the Company will operate, in a manner
that qualifies the Company as a "real estate investment trust" under
the Internal Revenue Code of 1986, as amended (the "Code"), and the
rules and regulations thereunder, for 1997 and subsequent years. The
Company qualified as a real estate investment trust under the Code for
each of its taxable years from 1987 through 1997.
(xxviii) No default exists, and no event has occurred which,
with notice or lapse of time or both, would constitute a default in the
due performance and observance of any term, covenant or condition of
any indenture, mortgage, deed of trust, lease or other agreement or
instrument to which the Company or any of its subsidiaries is a party
or by which the Company or any of its subsidiaries or any of their
respective properties is bound or may be affected, except such defaults
which, singly or in the aggregate, would not have a material adverse
effect on the business, operations, earnings, prospects, properties or
condition (financial or otherwise) of the Company and its subsidiaries,
considered as a whole, except as disclosed in the Registration
Statement and in the Prospectus.
(xxix) The Advisory Agreement, dated as of January 1, 1998,
between the Company and the Advisor (the "Advisory Agreement"), has
been duly authorized, executed and delivered by the parties thereto and
constitutes the valid agreement of the parties thereto, enforceable in
accordance with its terms, except as limited by (a) the effect of
bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer
or other similar laws relating to or affecting the rights or remedies
of creditors or (b) the effect of general principles of equity
(regardless of whether enforcement is sought in a proceeding in equity
or at law).
(b) Any certificate signed by any officer of the Company or any of its
subsidiaries and delivered to you or your counsel shall be deemed a
representation and warranty by the Company to you as to the matters covered
thereby.
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Section 2. Sale and Delivery to You; Closing.
(a) On the basis of the representations and warranties herein contained
and subject to the terms and conditions herein set forth, the Company agrees to
sell to you, and you agree to purchase from the Company, the Securities as set
forth on the first page of this Agreement.
(b) Payment of the purchase price for and delivery of the Securities
shall be made, subject to Section 9, on February 18, 1998 at 9:00 a.m. at the
offices of Sullivan & Worcester LLP in Boston, Massachusetts (such time and date
of payment and delivery being herein called "Closing Time"). Payment shall be
made by wire transfer of immediately available funds to the Company against
delivery to you of the Securities to be purchased by you. The Securities shall
be in such authorized denominations and registered in such names as you may
request in writing at least two business days before Closing Time. The
Securities will be made available for examination by you not later than 10:00
a.m. on the last business day prior to Closing Time.
Section 3. Covenants of the Company. The Company covenants with you as
follows:
(a) Immediately following the execution of this Agreement, the Company
will prepare a Prospectus Supplement setting forth the number of Securities
covered thereby and their terms not otherwise specified in the Prospectus, your
name, the price at which the Securities are to be purchased by you from the
Company, and such other information as you and the Company deem appropriate in
connection with the offering of the 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 and will furnish to you as
many copies of the Prospectus (including such Prospectus Supplement) as you
shall reasonably request.
(b) Until the termination of the initial offering of the Securities,
the Company will notify you immediately, and confirm the notice in writing, (i)
of the effectiveness of any amendment to the Registration Statement, (ii) of the
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transmittal to the Commission for filing of any supplement or amendment to the
Prospectus or any document to be filed pursuant to the 1934 Act, (iii) of the
receipt of any comments from the Commission with respect to the Securities, (iv)
of any request by the Commission for any amendment to the Registration Statement
or any amendment or supplement to the Prospectus with respect to the Securities
or for additional information relating thereto, and (v) of the issuance by the
Commission of any stop order suspending the effectiveness of the Registration
Statement or the initiation of any proceedings for that purpose. The Company
will make every reasonable effort to prevent the issuance of any such stop order
and, if any stop order is issued, to obtain the lifting thereof at the earliest
possible moment.
(c) The Company will give you notice of its intention to file or
prepare any post-effective amendment to the Registration Statement or any
amendment or supplement (including any document to be filed pursuant to the 1934
Act prior to the termination of the initial offering of the Securities) to the
Prospectus (including any revised prospectus which the Company proposes for use
by you in connection with the offering of the Securities which differs from the
prospectus on file at the Commission at the time that the Registration Statement
becomes effective, whether or not such revised prospectus is required to be
filed pursuant to Rule 424(b) of the 1933 Act Regulations), will furnish you
with copies of any such amendment or supplement a reasonable amount of time
prior to such proposed filing or use, as the case may be, and will not file any
such amendment or supplement or use any such prospectus to which your counsel
shall reasonably object.
(d) The Company will deliver to you a conformed copy of the
Registration Statement as originally filed and of each amendment thereto filed
prior to the termination of the initial offering of the Securities (including
exhibits filed therewith or incorporated by reference therein and the documents
incorporated by reference into the Prospectus pursuant to Item 12 of Form S-3).
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(e) The Company will furnish to you, from time to time during the
period when the Prospectus is required to be delivered under the 1933 Act or the
1934 Act, such number of copies of the Prospectus (as amended or supplemented)
as you may reasonably request for the purposes contemplated by the 1933 Act, the
1933 Act Regulations, the 1934 Act or 1934 Act Regulations.
(f) If any event shall occur as a result of which it is necessary, in
the opinion of your counsel, to amend or supplement the Prospectus in order to
make the Prospectus not misleading in the light of the circumstances existing at
the time it is delivered, the Company will either (i) forthwith prepare and
furnish to you an amendment of or supplement to the Prospectus or (ii) make an
appropriate filing pursuant to Section 13, 14 or 15 of the 1934 Act, in form and
substance reasonably satisfactory to your counsel, which will amend or
supplement the Prospectus so that it will not include an untrue statement of a
material fact or omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances existing at the time it is
delivered, not misleading.
(g) The Company will endeavor in good faith, in cooperation with you,
to qualify the Securities for offering and sale under the applicable securities
laws and real estate syndication laws of such states and other jurisdictions of
the United States as you may designate provided that, in connection therewith,
the Company shall not be required to qualify as a foreign corporation or trust
or to file any general consent to service of process. In each jurisdiction in
which the Securities have been so qualified the Company will file such
statements and reports as may be required by the laws of such jurisdiction to
continue such qualification in effect for so long as required for the
distribution of the Securities.
(h) The Company will make generally available to its security holders
as soon as reasonably practicable, but not later than 90 days after the close of
the period covered thereby, an earning statement of the Company (in form
complying with the provisions of Rule 158 of the 1933 Act Regulations) covering
a period of at least twelve months beginning not later than the first day of the
Company's fiscal quarter next following the effective date of the Registration
Statement. "Earning statement", "make generally available" and "effective date"
will have the meanings contained in Rule 158 of the 1933 Act Regulations.
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(i) The Company will use the net proceeds received by it from the sale
of the Securities in the manner specified in the Prospectus under the caption
"Use of Proceeds" in all material respects.
(j) The Company will use its best efforts to effect the listing of the
Securities on the NYSE.
(k) The Company currently intends to continue to elect to qualify as a
"real estate investment trust" under the Code, and use its best efforts to
continue to meet the requirements to qualify as a "real estate investment
trust".
(l) The Company will timely file any document which it is required to
file pursuant to the 1934 Act prior to the termination of the offering of the
Securities.
Section 4. Payment of Expenses. The Company will pay all expenses
incident to the performance of its obligations under this Agreement, including
(i) the preparation and filing of the Registration Statement as originally filed
and of each amendment thereto, (ii) the preparation and filing of this
Agreement, (iii) the preparation, issuance and delivery of the Securities to
you, (iv) the fees and disbursements of counsel for the Company, referred to in
Section 5(b) hereof, and the Company's accountants, (v) the qualification of the
Securities under securities laws and real estate syndication laws in accordance
with the provisions of Section 3(g) hereof, including filing fees and the fee
and disbursements of counsel for the Company in connection therewith and in
connection with the preparation of any Blue Sky Survey, (vi) the printing and
delivery to you of copies of the Registration Statement as originally filed and
of each amendment thereto, and of the Prospectus and any amendments or
supplements thereto, (vii) the fees and expenses incurred in connection with the
listing of the Securities on the NYSE, (viii) the cost of printing or
reproducing and delivering to you copies of any Blue Sky Survey, (ix) the cost
of providing any CUSIP or other identification numbers for the Securities, and
(x) any transfer taxes imposed on the sale of the Securities to you.
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If this Agreement is terminated by you in accordance with the
provisions of Section 5 or Section 9(a)(i), the Company shall reimburse you for
all of your out-of-pocket expenses, including the reasonable fees and
disbursements of your counsel.
Section 5. Conditions of Your Obligations. Your obligations hereunder
are subject to the accuracy of the representations and warranties of the Company
herein contained, to the performance by the Company of its obligations
hereunder, and to the following further conditions:
(a) At Closing Time no stop order suspending the effectiveness of the
Registration Statement shall have been issued under the 1933 Act or proceedings
therefor initiated or threatened by the Commission. The price of the Securities
and any other information previously omitted from the effective Registration
Statement pursuant to Rule 415 of the 1933 Act Regulations shall have been
transmitted to the Commission for filing pursuant to Rule 424(b) of the 1933 Act
Regulations within the prescribed time period, and prior to Closing Time the
Company shall have provided evidence satisfactory to you of such timely filing,
or a post-effective amendment providing such information shall have been filed
and declared effective in accordance with the requirements of the 1933 Act
Regulations.
(b) At Closing Time you shall have received the favorable opinion,
dated as of Closing Time, of Sullivan & Worcester LLP, counsel for the Company,
in form and substance satisfactory to your counsel, to the effect that:
(i) The Company is a Maryland real estate investment trust
duly organized, validly existing and in good standing under the laws of
the State of Maryland; each of its Significant Subsidiaries (as defined
in Rule 1-02 of Regulation S-X under the 1933 Act) has been duly
organized, is validly existing as a corporation or trust in good
standing under the laws of its jurisdiction of incorporation or
organization; each of the Company and its subsidiaries has the trust or
corporate (as applicable) power and authority to carry on its business
20
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as described in the Registration Statement and in the Prospectus and to
own, lease and operate its properties; each of the Company and its
subsidiaries is duly qualified and is in good standing as a foreign
corporation or trust, as the case may be, authorized to do business in
each jurisdiction in which its ownership or leasing of property
requires such qualification, except where the failure to be so
qualified would not have a material adverse effect on the Company and
its subsidiaries, taken as a whole.
(ii) All of the issued and outstanding shares of beneficial
interest of, or other ownership interests in, each of the Company's
subsidiaries have been duly authorized and validly issued and are fully
paid and non-assessable, and are owned by the Company free and clear of
any security interest or other adverse interest (within the meaning of
Article 8 of the Massachusetts Uniform Commercial Code).
(iii) The Registration Statement has become effective under
the 1933 Act, and, to the knowledge of such counsel, no stop order
suspending the effectiveness of the Registration Statement is in
effect, and no proceedings for such purpose are pending before or
threatened by the Commission; and any required filing of the Prospectus
pursuant to Rule 424 under the 1933 Act has been made in accordance
with said Rule 424.
(iv) The Company has the requisite trust power and authority
to enter into and perform this Agreement and to issue and deliver the
Securities.
(v) To such counsel's knowledge, except as disclosed in the
Registration Statement or in the Prospectus, there is not now pending
or threatened, any litigation, action, suit or proceeding to which the
Company or any of its subsidiaries or the Advisor is or will be a party
before or by any court or governmental agency or body, which (A) might
result in any material adverse change in the condition, financial or
otherwise, or in the business, operations, earnings, prospects or
properties of the Company and its subsidiaries, taken as a whole, or
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(B) might materially and adversely affect the property or assets of the
Company and its subsidiaries, taken as a whole, or (C) concerns the
Company or any of its subsidiaries or the Advisor and is required to be
disclosed in the Prospectus, or (D) could adversely affect the
consummation of this Agreement and the issuance of the Securities; to
such counsel's knowledge, no contract or other document is required to
be described in the Registration Statement or in the Prospectus or to
be filed as an exhibit to the Registration Statement that is not
described therein or filed as required.
(vi) Except as otherwise disclosed in the Prospectus, to such
counsel's knowledge, neither the Company, any of its subsidiaries nor
the Advisor is in violation of its respective charter or by-laws or
other organizational documents or in default in the performance of any
obligation, agreement or condition contained in any bond, debenture,
note or any other evidence of indebtedness or in any other material
agreement, indenture or instrument to which the Company, any of its
subsidiaries or the Advisor is a party or by which any of their
respective properties or assets may be bound or affected, except for
any such violation that would not have a material adverse effect on the
business, operations, earnings, business prospects, properties or
condition (financial or otherwise) of the Company and its subsidiaries
taken as a whole.
(vii) To such counsel's knowledge, each of the Company, its
subsidiaries and the Advisor has such permits, licenses, franchises and
authorizations of governmental or regulatory authorities (together,
"permits"), including, without limitation, under any applicable
Environmental Law, as are necessary to own, lease and operate its
properties and to engage in the business currently conducted by it,
except such licenses and permits as to which the failure to own or
possess will not in the aggregate have a material adverse effect on the
business, operations, earnings, business prospects, properties or
condition (financial or otherwise) of the Company and its subsidiaries,
taken as a whole.
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(viii) The execution, delivery and performance of this
Agreement, and the consummation of the transactions herein contemplated
will not conflict with or constitute a breach or violation of any of
the terms or provisions of, or constitute a default under, (A) the
Declaration of Trust or the By-laws of the Company or the charter or
by-laws or other organizational documents of the Advisor or any
Significant Subsidiary of the Company, or (B) except as disclosed in
the Prospectus, any material agreement, indenture or other instrument
to which the Company, any of its Significant Subsidiaries or the
Advisor or their respective material properties or assets is bound, or
(C) any laws, administrative regulations or rulings or decrees known to
such counsel to which the Company, any of its Significant Subsidiaries
or the Advisor or their respective material properties or assets may be
subject.
(ix) No consent, approval, authorization, order, registration,
filing, qualification, license or permit of or with any federal,
Massachusetts or Maryland court or public, governmental or regulatory
agency or body having jurisdiction over the Company or any of its
Significant Subsidiaries or the Advisor or any of their respective
material properties or assets is required for the Company's execution,
delivery and performance of this Agreement and the consummation of the
transactions contemplated hereby, including, without limitation, the
issuance, sale and delivery of the Securities pursuant to this
Agreement, except such as have been obtained and such as may be
required under foreign and state securities or "Blue Sky" laws.
(x) The Advisory Agreement has been duly authorized, executed
and delivered by the parties thereto and constitutes the valid
agreement of the parties thereto, enforceable in accordance with its
terms, except (a) as limited by the effect of bankruptcy, insolvency,
reorganization, fraudulent transfer, moratorium or other similar laws
relating to or affecting the rights or remedies of creditors, (b) as
limited by the effect of general principles of equity (regardless of
whether enforcement is sought in a proceeding in equity or at law) and
(c) insofar as the enforceability of the indemnity and contribution
provisions contained in such agreement may be limited by federal or
state securities laws and the public policy underlying such laws.
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(xi) The Advisor (A) is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware,
and (B) has the requisite corporate power and authority to conduct its
business as described in the Prospectus and to own and operate its
material properties.
(xii) The Company has qualified to be taxed as a real estate
investment trust pursuant to Sections 856-860 of the Code for each of
the fiscal years ended December 31, 1987 through December 31, 1997, and
the Company's current anticipated investments and its current plan of
operation will enable it to continue to meet the requirements for
qualification and taxation as a real estate investment trust under the
Code; actual qualification of the Company as a real estate investment
trust, however, will depend upon the Company's continued ability to
meet, and its meeting, through actual annual operating results and
distributions, the various qualification tests imposed under the Code.
(xiii) The Registration Statement and the Prospectus and any
supplements or amendments thereto (except for the financial statements
and the notes thereto and the schedules and other financial and
statistical data included therein and the Excluded Proceedings (as
defined in the last paragraph of this Section 5(b)), as to which such
counsel need not express any opinion) comply as to form in all material
respects with the requirements of the 1933 Act.
(xiv) Each document incorporated by reference in the
Registration Statement and in the Prospectus (except for the financial
statements and the notes thereto and the schedules and other financial
and statistical data included therein and the Excluded Proceedings (as
defined in the last paragraph of this Section 5(b)), as to which such
counsel need not express any opinion) complied as to form when filed
with the Commission in all material respects with the requirements of
the 1934 Act.
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(xv) The statements (a) in the Prospectus under the captions
"Description of Shares", "Redemption; Business Combinations and Control
Share Acquisitions" and "Limitation of Liability; Shareholder
Liability", (b) in Item 1 of the Company's Annual Report on Form 10-K
under the caption "Regulation and Reimbursement", (c) in Part B
("Authorization of Additional Common Shares of Beneficial Interest") of
Item 5 of the Company's Current Report on Form 8-K dated February 17,
1997 and (d) Item 5 of the Company's Current Report on Form 8-K dated
February 13, 1997 (excluding the statements under the caption "Legal
Proceedings"), in each case insofar as they purport to summarize
matters arising under Massachusetts or Maryland law or the federal law
of the United States, or provisions of documents to which the Company
is a party specifically referred to therein, are accurate summaries of
such legal matters or provisions.
(xvi) This Agreement has been duly authorized, executed and
delivered by the Company.
(xvii) All of the outstanding shares of beneficial interest of
the Company have been duly authorized and are validly issued, fully
paid and non-assessable (except as otherwise described in the
Registration Statement) and the Securities have been duly authorized
and, when issued and delivered to you against payment therefor in
accordance with the terms of this Agreement, will be validly issued,
fully paid and nonassessable, and will be free of any preemptive or, to
such counsel's knowledge, similar rights that entitle any person (other
than you, your successors and assigns) to acquire any Securities upon
the issuance thereof by the Company.
(xviii) The Company is not required to register as an
"investment company" within the meaning of the 1940 Act.
(xix) To the extent required to be described therein, the
Securities conform in all material respects to the descriptions in the
Registration Statement and the Prospectus.
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(xx) Although counsel has not undertaken, except as otherwise
indicated in their opinion, to determine independently, and does not
assume any responsibility for, the accuracy or completeness of the
statements in the Registration Statement, such counsel has participated
in the preparation of the Registration Statement and the Prospectus,
including review and discussion of the contents thereof (including
review and discussion of the contents of all documents incorporated by
reference in the Registration Statement and the Prospectus), and
nothing has come to the attention of such counsel that has caused them
to believe that the Registration Statement (including the documents
incorporated by reference therein) at the time the Registration
Statement became effective, or the Prospectus, as of its date and as of
Closing Time, as the case may be, contained an untrue statement of a
material fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein not misleading or
that any amendment or supplement to the Prospectus, as of its
respective date, and as of Closing Time, as the case may be, contained
any untrue statement of a material fact or omitted to state a material
fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading (it being
understood that such counsel need express no view with respect to (a)
the financial statements and the notes thereto and the schedules and
other financial and statistical data included or incorporated by
reference in the Registration Statement or in the Prospectus or (b) the
matters to be addressed in the opinion of Sherin & Lodgen LLP, special
counsel to the Company, described below.)
In rendering their opinion as aforesaid, Sullivan & Worcester
LLP may rely upon an opinion, dated as of Closing Time, of Piper &
Marbury L.L.P. as to matters governed by Maryland law, provided that
such reliance is expressly authorized by such opinion and a copy of
such opinion is delivered to you and is, in form and substance,
satisfactory to you and your counsel. In addition, in rendering such
opinion, such counsel may state that their opinion as to laws of the
State of Delaware is limited to the Delaware General Corporation Law
and that their opinion with respect to the qualification of the Company
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and its subsidiaries to do business in jurisdictions other than their
respective jurisdictions of organization is based solely upon
certificates to such effect issued by an appropriate official of the
applicable jurisdictions.
The opinion of Piper & Marbury L.L.P. described in the
paragraph above shall be rendered to you at the request of the Company
and shall so state therein.
In addition, you shall have received at Closing Time an
opinion (satisfactory to you and your counsel) of Sherin & Lodgen LLP,
special counsel for the Company, dated as of Closing Time, to the
effect that the statements describing the proceedings (the "Excluded
Proceedings") in Item 5 of the Company's Current Report on Form 8-K
dated February 13, 1997 under the caption "Legal Proceedings", insofar
as they purport to summarize legal proceedings constitute a fair
summary of such legal proceedings.
(c) You shall have received at Closing Time an opinion, dated as of
Closing Time, of Brown & Wood LLP, your counsel, as to the matters referred to
in clauses (iii), (xiii), (xvi), (xvii)(B), (xix) and (xx) of the foregoing
paragraph (b). In giving such opinion with respect to the matters covered by
clause (xx), such counsel may state that their opinion and belief are based upon
their participation in the preparation of the Registration Statement and the
Prospectus and any amendments or supplements thereto and review and discussion
of the contents thereof, but are without independent check or verification
except as specified.
In rendering their opinion as aforesaid, Brown & Wood LLP may rely upon
an opinion, dated as of Closing Time, of Piper & Marbury L.L P. as to matters
governed by Maryland law, and the opinion of Sullivan & Worcester LLP referred
to above as to matters governed by Massachusetts law. In addition, in rendering
such opinion, such counsel may state that their opinion as to laws of the State
of Delaware is limited to the Delaware General Corporation Law.
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(d) At Closing Time (i) the Registration Statement and the Prospectus
shall contain all statements which are required to be stated therein in
accordance with the 1933 Act and the 1933 Act Regulations and in all material
respects shall conform to the requirements of the 1933 Act and the 1933 Act
Regulations, and neither the Registration Statement nor the Prospectus shall
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein
not misleading and no action, suit or proceeding at law or in equity shall be
pending or to the knowledge of the Company threatened against the Company which
would be required to be set forth in the Prospectus other than as set forth
therein, (ii) there shall not have been, since the respective dates as of which
information is given in the Registration Statement and the Prospectus, any
material adverse change in the condition, financial or otherwise, of the Company
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 (iii) no proceedings shall be pending or, to the
knowledge of the Company, threatened against the Company before or by any
Federal, state or other commission, board or administrative agency wherein an
unfavorable decision, ruling or finding would materially and adversely affect
the business, property, financial condition or income of the Company other than
as set forth in the Prospectus; and you shall have received, at Closing Time, a
certificate of the President and Chief Operating Officer and the chief financial
officer of the Company, dated as of Closing Time, evidencing compliance with the
provisions of this subsection (c) and stating that the representations and
warranties set forth in Section 1(a) hereof are accurate as though expressly
made at and as of Closing Time.
(e) Concurrently with the execution and delivery of this Agreement, and
at Closing Time prior to payment and delivery of the Securities, Ernst & Young
LLP shall have furnished to you a letter, dated the date of its delivery,
addressed to you and in form and substance satisfactory to you, confirming that
they are independent accountants with respect to the Company as required by the
1933 Act and the 1933 Act Regulations and with respect to the financial and
other statistical and numerical information contained in the Registration
Statement and the Prospectus or incorporated by reference therein. Each such
letter shall contain information of the type customarily included in
accountants' comfort letters to underwriters.
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(f) At Closing Time your counsel shall have been furnished with such
documents and opinions as they may reasonably require for the purpose of
enabling them to pass upon the issuance and sale of the Securities as herein
contemplated and related proceedings, or in order to evidence the accuracy of
any of the representations or warranties, or the fulfillment of any of the
conditions, herein contained; and all proceedings taken by the Company in
connection with the issuance and sale of the Securities as herein contemplated
shall be reasonably satisfactory in form and substance to you and your counsel.
If any condition specified in this Section 5 shall not have been
fulfilled when and as required to be fulfilled, this Agreement may be terminated
by you by notice to the Company at any time at or prior to Closing Time, and
such termination shall be without liability of any party to any other party
except as provided in Section 4 hereof.
Section 6. Indemnification. (a) The Company hereby agrees to indemnify
and hold harmless you and each person, if any, who controls you within the
meaning of Section 15 of the 1933 Act as follows:
(1) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, arising out of any untrue statement or
alleged untrue statement of a material fact contained in the
Registration Statement (or any amendment thereto), or the omission or
alleged omission therefrom of a material fact required to be stated
therein or necessary to make the statements therein not misleading or
arising out of any untrue statement or alleged untrue statement of a
material fact included in any preliminary prospectus or the Prospectus
(or any amendment or supplement thereto), or the omission, or alleged
omission therefrom of a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made, not misleading:
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(2) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, to the extent of the aggregate amount
paid in settlement of any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or threatened,
or of any claim whatsoever based upon any such untrue statement or
omission, or any such alleged untrue statement or omission, if such
settlement is effected with the written consent of the Company; and
(3) against any and all expense whatsoever, as incurred
(including, subject to Section 6(c) hereof, the fees and disbursements
of your counsel), reasonably incurred in investigating, preparing or
defending against any litigation, or any investigation or proceedings
by any governmental agency or body, commenced or threatened, or any
claim whatsoever based upon any such untrue statement or omission, or
any such alleged untrue statement or omission, to the extent that any
such expense is not paid under paragraph (1) or (2) above;
provided, however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Company by you
expressly for use in the Registration Statement (or any amendment thereto) or
the Prospectus (or any amendment or supplement thereto); and provided, further,
that the foregoing indemnity agreement with respect to any preliminary
prospectus shall not inure to your benefit, or the benefit of any person
controlling you, if a copy of the Prospectus (as then amended or supplemented if
the Company shall have furnished any amendments or supplements thereto and
excluding documents incorporated or deemed to be incorporated by reference
therein) was not sent or given by or on behalf of you to such person asserting
any such losses, claims, damages or liabilities at or prior to the written
confirmation of the sale of such Securities to such person, if required by law
so to have been delivered, and if the Prospectus (as so amended or supplemented)
would have cured the defect giving rise to such loss, claim, damage or expense.
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(b) You agree to indemnify and hold harmless the Company, each of the
Company's trustees, each of the Company's officers who signed the Registration
Statement and each person, if any, who controls the Company within the meaning
of Section 15 of the 1933 Act against any and all loss, liability, claim, damage
and expense described in the indemnity contained in subsection (a) of this
Section 6, as incurred, but only with respect to untrue statements or omissions,
or alleged untrue statements or omissions, made in the Registration Statement
(or any amendment thereto) or the Prospectus (or any amendment or supplement
thereto) in reliance upon and in conformity with written information furnished
to the Company by you expressly for use in the Registration Statement (or any
amendment thereto) or the Prospectus (or any amendment or supplement thereto).
(c) Each indemnified party shall give notice as promptly as reasonably
practicable to each indemnifying party of any action commenced against it in
respect of which indemnity may be sought hereunder, but failure to so notify an
indemnifying party shall not relieve such indemnifying party from any liability
which it may have otherwise than on account of this indemnity agreement. An
indemnifying party may participate at its own expense in the defense of such
action. In no event shall the indemnifying parties be liable for fees and
expenses of more than one counsel (in addition to any local counsel) separate
from their own counsel for all indemnified parties in connection with any one
action or separate but similar or related actions in the same jurisdiction
arising out of the same general allegations or circumstances.
Section 7. Contribution. In order to provide for just and equitable
contribution in circumstances in which the indemnity agreement provided for in
Section 6 hereof is for any reason held to be unenforceable by the indemnified
parties although applicable in accordance with its terms, the Company and you
shall contribute to the aggregate losses, liabilities, claims, damages and
expenses of the nature contemplated by said indemnity agreement incurred by the
Company and you, as incurred, (i) in such proportion as is appropriate to
reflect the relative benefits received by the Company on the one hand and you on
the other hand from the offering of the Securities pursuant to this Agreement or
(ii) if the allocation provided by clause (i) is not permitted by applicable
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law, in such proportion as is appropriate to reflect not only the relative
benefits referred to in clause (i) above but also the relative fault of the
Company on the one hand and of you on the other hand in connection with the
statements or omissions which resulted in such losses, liabilities, claims,
damages or expenses, as well as any other relevant equitable considerations.
The relative benefits received by the Company on the one hand and you
on the other hand in connection with the offering of the Securities pursuant to
this Agreement shall be deemed to be in the same respective proportions as the
total net proceeds from the offering of the Securities pursuant to this
Agreement (before deducting expenses) received by the Company and the total
discount received by you, bear to the aggregate initial offering price of the
Securities.
The relative fault of the Company on the one hand and you on the other
hand shall be determined by reference to, among other things, whether any such
untrue or alleged untrue statement of a material fact or omission or alleged
omission to state a material fact relates to information supplied by the Company
or by you and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission.
The Company and you agree that it would not be just and equitable if
contribution pursuant to this Section 7 were determined by pro rata allocation
or by any other method of allocation which does not take into account the
equitable considerations referred to above in this Section 7. The aggregate
amount of losses, liabilities, claims, damages and expenses incurred by an
indemnified party and referred to above in this Section 7 shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue or alleged untrue
statement or omission or alleged omission.
No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the 1933 Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. Notwithstanding the
32
<PAGE>
provisions of this Section 7, you shall not be required to contribute any amount
in excess of the amount by which the total price at which the Securities
purchased from the Company by you were contributed to the Trust exceeds the
amount of any damages which you have otherwise been required to pay in respect
of such losses, liabilities, claims, damages and expenses. For purposes of this
Section 7, each person, if any, who controls you within the meaning of Section
15 of the 1933 Act shall have the same rights to contribution as you, and each
trustee of the Company, each officer of the Company who signed the Registration
Statement, and each person, if any, who controls the Company within the meaning
of Section 15 of the 1933 Act shall have the same rights to contribution as the
Company.
Section 8. Representations, Warranties and Agreements to Survive
Delivery. All representations, warranties and agreements contained in this
Agreement or in certificates of officers of the Company submitted pursuant
hereto, shall remain operative and in full force and effect, regardless of any
investigation made by or on behalf of you or any controlling person, or by or on
behalf of the Company, and shall survive delivery of the Securities to you.
Section 9. Termination of Agreement. (a) You may terminate this
Agreement, by notice to the Company, at any time at or prior to Closing Time (i)
if there has been, since the respective dates as of which information is given
in the Registration Statement, any material adverse change in the condition,
financial or otherwise, or in the earnings, business affairs or business
prospects of the Company, whether or not arising in the ordinary course of
business, which would make it, in your reasonable judgment, impracticable or
inadvisable to (x) commence or continue the offering of the units of the Trust
to the public, or (y) enforce contracts for the sale of units of the Trust, (ii)
if there has occurred any material adverse change in the financial markets in
the United States or any outbreak of hostilities or escalation of existing
hostilities or other calamity or crisis the effect of which on the financial
markets of the United States is such as to make it, in your reasonable judgment,
impracticable or inadvisable to (x) commence or continue the offering of the
33
<PAGE>
units of the Trust to the public, or (y) enforce contracts for the sale of units
of the Trust or (iii) if trading in the Company's Common Shares has been
suspended by the Commission, or if trading generally on either the New York
Stock Exchange or the American Stock Exchange has been suspended, or minimum or
maximum prices for trading have been fixed, or maximum ranges for prices for
securities have been required, by either of said exchanges or by order of the
Commission or any other governmental authority, or if a banking moratorium has
been declared by Federal or New York authorities.
(b) If this Agreement is terminated pursuant to this Section 9, such
termination shall be without liability of any party to any other party except as
provided in Section 4, and provided further that Sections 6 and 7 hereof shall
survive such termination.
Section 10. Notices. All notices and other communications hereunder
shall be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to you shall be
directed to you at Prudential Securities Incorporated, One New York Plaza, 18th
Floor, New York, New York 10292-2018, Attention: Equity Transactions Group, Vice
President; and notices to the Company shall be directed to it at 400 Centre
Street, Newton, Massachusetts 02158, Attention: David J. Hegarty, President.
Section 11. Parties. This Agreement shall inure to the benefit of and
be binding upon you and the Company and your respective successors. Nothing
expressed or mentioned in this Agreement is intended or shall be construed to
give any person, firm or corporation, other than those referred to in Sections 6
and 7 and their heirs and legal representatives, any legal or equitable right,
remedy or claim under or in respect of this Agreement or any provision herein
contained. This Agreement and all conditions and provisions hereof are intended
to be for the sole and exclusive benefit of the parties hereto and thereto and
their respective successors and said controlling persons and officers, trustees
and directors and their heirs and legal representatives, and for the benefit of
no other person, firm or corporation. No purchaser of Securities from you shall
be deemed to be a successor by reason merely of such purchase.
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<PAGE>
Section 12. Governing Law and Time; Miscellaneous. This Agreement shall
be governed by and construed in accordance with the laws of the State of New
York applicable to agreements made and to be performed in said State. Specified
times of day refer to New York City time.
THE DECLARATION OF TRUST ESTABLISHING THE COMPANY, DATED OCTOBER 9,
1986, A COPY OF WHICH, TOGETHER WITH ALL AMENDMENTS THERETO (THE "DECLARATION"),
IS DULY ON FILE IN THE OFFICE OF THE STATE DEPARTMENT OF ASSESSMENTS AND
TAXATION OF MARYLAND, PROVIDES THAT THE NAME "HEALTH AND RETIREMENT PROPERTIES
TRUST" REFERS TO THE TRUSTEES UNDER THE DECLARATION COLLECTIVELY AS TRUSTEES,
BUT NOT INDIVIDUALLY OR PERSONALLY, AND THAT NO TRUSTEE, OFFICER, SHAREHOLDER,
EMPLOYEE OR AGENT OF THE COMPANY SHALL BE HELD TO ANY PERSONAL LIABILITY,
JOINTLY OR SEVERALLY, FOR ANY OBLIGATION OF, OR CLAIM AGAINST, THE COMPANY. ALL
PERSONS DEALING WITH THE COMPANY, IN ANY WAY, SHALL LOOK ONLY TO THE ASSETS OF
THE COMPANY FOR THE PAYMENT OF ANY SUM OR THE PERFORMANCE OF ANY OBLIGATION.
35
<PAGE>
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us a counterpart hereof, whereupon this
instrument along with all counterparts will become a binding agreement between
you and the Company in accordance with its terms.
Very truly yours,
HEALTH AND RETIREMENT PROPERTIES TRUST
By: /s/ Ajay Saini
Name: Ajay Saini
Title: Chief Financial Officer
CONFIRMED AND ACCEPTED, as of the date first above written:
PRUDENTIAL SECURITIES INCORPORATED
By: /s/ Jean-Claude Canfin
Name: Jean-Claude Canfin
Title: Managing Director
36
EXHIBIT 1.2
HEALTH AND RETIREMENT PROPERTIES TRUST
(a Maryland real estate investment trust)
PURCHASE AGREEMENT
February 12, 1998
Smith Barney Inc.
388 Greenwich Street, 32nd Floor
New York, New York 10013
Ladies and Gentlemen:
Health and Retirement Properties Trust, a Maryland real estate
investment trust (the "Company"), confirms its agreement with you with respect
to the sale by the Company and the purchase by you of 1,490,780 shares of its
common shares of beneficial interest, with par value of $.01 per share, at a
price per share of $19.11875 (the "Securities"). You intend to deposit the
Securities directly with The Equity Focus Trusts - REIT Portfolio Series, 1998 -
A (the "Trust"), a registered unit investment trust under the Investment Company
Act of 1940, as amended, to which you act as sponsor and depositor.
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 (No. 333-26887) for the
registration of debt securities, preferred shares of beneficial interest,
depositary shares, common shares of beneficial interest and warrants under the
Securities Act of 1933, as amended (the "1933 Act"), and has filed such
amendments thereto, if any, as may have been required to the date hereof. Such
registration statement has been declared effective under the 1933 Act. Such
registration statement (as amended, if applicable) and the prospectus
constituting a part thereof, as supplemented by the prospectus supplement
relating to the Securities (including, in each case, all documents incorporated
or deemed to be incorporated by reference therein), as from time to time amended
or supplemented pursuant to the 1933 Act, the Securities Exchange Act of 1934,
<PAGE>
as amended (the "1934 Act"), or otherwise, are hereinafter referred to as the
"Registration Statement" and the "Prospectus", respectively. All references in
this Agreement to financial statements and schedules and other information which
is "contained", "included" or "stated" in the Registration Statement or the
Prospectus (and all other references of like import) shall be deemed to mean and
include all such financial statements and schedules and other information which
is or is deemed to be incorporated by reference in the Registration Statement or
in the Prospectus, as the case may be.
Section 1. Representations and Warranties.
(a) The Company represents and warrants to you as of the date hereof as
follows:
(i) At the time the Registration Statement became effective,
the Registration Statement complied in all material respects with the
requirements of the 1933 Act and the rules and regulations under the
1933 Act (the "1933 Act Regulations") and did not contain an untrue
statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein not
misleading. The Prospectus, at the date hereof (unless the term
"Prospectus" refers to a prospectus which has been provided to you by
the Company for use in connection with the offering of the Securities
which differs from the Prospectus on file at the Commission at the date
of effectiveness of the Registration Statement, in which case at the
time it is first provided to you for such use) and at the Closing Time
referred to in Section 2 hereof, does not and will not include an
untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided,
however, that the representations and warranties in this subsection (i)
shall not apply to those parts of the Registration Statement or the
Prospectus made in reliance upon and in conformity with information
furnished to the Company in writing by you expressly for use in the
Registration Statement or the Prospectus.
2
<PAGE>
(ii) The documents incorporated or deemed to be incorporated
by reference in the Prospectus, at the time they were or hereafter are
filed with the Commission, complied and will comply in all material
respects with the requirements of the 1934 Act and the rules and
regulations of the Commission under the 1934 Act (the "1934 Act
Regulations"), and, when read together with the other information in
the Prospectus, at the time the Registration Statement became effective
and at Closing Time, did not and will not include an untrue statement
of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading.
(iii) The Company is a Maryland real estate investment trust
duly organized, validly existing and in good standing under the laws of
the State of Maryland. Each of its subsidiaries has been duly organized
and is validly existing as a corporation or trust in good standing
under the laws of its jurisdiction of incorporation or organization.
Each of the Company and its subsidiaries has full power and authority
(corporate and other) to carry on its business as described in the
Registration Statement and in the Prospectus and to own, lease and
operate its properties. Each of the Company and its subsidiaries is
duly qualified and is in good standing as a foreign corporation or
trust, as the case may be, and is authorized to do business in each
jurisdiction in which the nature of its business or its ownership or
leasing of property requires such qualification, except where the
failure to be so qualified would not have a material adverse effect on
the Company and its subsidiaries, taken as a whole.
3
<PAGE>
(iv) The financial statements of the Company and its
subsidiaries and, to the Actual Knowledge of the Company (as defined in
paragraph (xi) of this Section 1(a)), of Marriott International, Inc.
(the "Operator") and Government Properties Investors, Inc. ("GPI") and
its consolidated subsidiaries, together with the related schedules and
notes thereto, included or incorporated by reference in the
Registration Statement and in the Prospectus, comply as to form in all
material respects with the requirements of the 1933 Act. Such financial
statements of the Company and, to the Actual Knowledge of the Company,
of the Operator and GPI, together with the related schedules and notes
thereto, present fairly the consolidated financial position, results of
operations, shareholders' equity and changes in financial position of
the foregoing entities at the respective dates or for the respective
periods therein specified and have been prepared in accordance with
generally accepted accounting principles ("GAAP") consistently applied
throughout the periods involved. The pro forma financial statements and
other pro forma financial information (including the notes thereto)
included or incorporated by reference in the Registration Statement and
in the Prospectus (i) present fairly the information shown therein,
(ii) have been prepared in accordance with the Commission's rules and
guidelines with respect to pro forma financial statements and (iii)
have been properly compiled on the basis described therein and the
assumptions used in the preparation of such pro forma financial
statements and other pro forma financial information (including the
notes thereto) are reasonable and the adjustments used therein are
appropriate to give effect to the transactions or circumstances
referred to therein. The adjusted pro forma financial statements and
other adjusted pro forma financial information (including the notes
thereto) included or incorporated by reference in the Registration
Statement and in the Prospectus (i) present fairly the information
shown therein and (ii) have been properly compiled on the basis
described therein and the assumptions used in the preparation of such
adjusted pro forma financial statements and other adjusted pro forma
financial information (including the notes thereto) are reasonable and
the adjustments used therein are appropriate to give effect to the
transactions or circumstances referred to therein.
4
<PAGE>
(v) The accountants who have certified the financial
statements of the Company and its subsidiaries and, to the Actual
Knowledge of the Company, of the Operator and its subsidiaries and of
GPI and its subsidiaries, included or incorporated by reference in the
Registration Statement and in the Prospectus are independent certified
accountants as required by the 1933 Act. The statements included in or
incorporated by reference in the Registration Statement and in the
Prospectus with respect to such accountants pursuant to Rule 509 of
Regulation S-K under the 1933 Act are true and correct in all material
respects.
(vi) All of the outstanding shares of beneficial interest of
the Company have been duly authorized and are validly issued, fully
paid, non-assessable (except as otherwise described in the Registration
Statement) and free of preemptive or similar rights or other rights to
subscribe for or to purchase securities provided for by law or by its
Declaration of Trust or bylaws; all of the outstanding shares of
beneficial interest of the Company and options to purchase shares of
beneficial interest of the Company have been issued in accordance with
applicable federal and state securities laws; all of the issued and
outstanding indebtedness of the Company is duly and validly authorized
and issued; the Securities to be issued and sold pursuant to this
Agreement have been duly authorized and, when issued and delivered to
you against payment therefor as provided hereunder, will have been
validly issued and will be fully paid, non-assessable (except as
otherwise described in the Registration Statement) and free of
preemptive or similar rights; all outstanding common shares of
beneficial interest (the "Common Shares"), except for shares issued
pursuant to the Company's Incentive Share Award Plan, are listed on the
New York Stock Exchange (the "NYSE") and the Company knows of no reason
or set of facts which is likely to result in the delisting of such
Common Shares or the inability to list the Securities; and there are no
rights of holders of securities of the Company to the registration of
Common Shares or other securities that would require inclusion of such
Common Shares or other securities in the offering of the Securities.
5
<PAGE>
(vii) The shares of beneficial interest of the Company and the
Securities conform to the descriptions thereof in the Registration
Statement and in the Prospectus.
(viii) Since the respective dates as of which information is
given in the Prospectus, and except as otherwise disclosed therein, (i)
there has been no material adverse change in the business, operations,
earnings, prospects, properties or condition (financial or otherwise)
of the Company and its subsidiaries, taken as a whole, or, to the
Actual Knowledge of the Company, of the Advisor (as defined in
paragraph (xi) of this Section 1(a)), in any case whether or not
arising in the ordinary course of business, (ii) there have been no
material transactions entered into by the Company and its subsidiaries,
on a consolidated basis, other than transactions in the ordinary course
of business, (iii) neither the Company nor its subsidiaries has
incurred any material liabilities or obligations, direct or contingent,
(iv) the Company and its subsidiaries, on a consolidated basis, have
not, (A) other than regular quarterly dividends, declared, paid or made
a dividend or distribution of any kind on any class of its shares of
beneficial interest (other than dividends or distributions from wholly
owned subsidiaries to the Company), (B) issued any shares of beneficial
interest of the Company or any of its subsidiaries or any options,
warrants, convertible securities or other rights to purchase the shares
of beneficial interest of the Company or any of its subsidiaries (other
than the issuance of Common Shares upon conversion of certain
convertible debentures of the Company) or (C) repurchased or redeemed
shares of beneficial interest, and (v) there has not been (A) any
material decrease in the Company's net worth or (B) any material
increase in the short-term or long-term debt (including capitalized
lease obligations but excluding borrowings under existing bank lines of
credit) of the Company and its subsidiaries, on a consolidated basis.
6
<PAGE>
(ix) The Company and each of its subsidiaries maintains a
system of internal accounting controls sufficient to provide reasonable
assurance that (i) transactions are executed in accordance with
management's general or specific authorizations; (ii) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with GAAP and to maintain asset accountability; (iii) access
to assets is permitted only in accordance with management's general or
specific authorization; and (iv) the recorded accountability for assets
is compared with the existing assets at reasonable intervals and
appropriate action is taken with respect to any differences.
(x) Except as otherwise disclosed in the Prospectus, neither
the Company nor any of its subsidiaries nor, to the Actual Knowledge of
the Company, the Advisor, is in violation of its respective charter or
by-laws or other organizational documents or in default in the
performance of any obligation, agreement or condition contained in any
bond, debenture, note or any other evidence of indebtedness or in any
other agreement, indenture or instrument to which the Company or any of
its subsidiaries or, to the Actual Knowledge of the Company, the
Advisor, is a party or by which any of their respective properties or
assets may be bound or affected, except for any such violation that
would not have a material adverse effect on the condition, financial or
otherwise or in the respective earnings, business affairs or business
prospects of the Company and its subsidiaries, taken as a whole.
Neither the Company nor, to the Actual Knowledge of the Company, the
Advisor, is in violation of any law, ordinance, governmental rule or
regulation or court decree to which it is subject, except for any such
violations that would not, individually or in the aggregate, have a
material adverse effect on the business, operations, earnings,
prospects, properties or condition (financial or otherwise) of any of
the Company and its subsidiaries, taken as a whole.
(xi) Except as disclosed in the Registration Statement or in
the Prospectus, there is not now pending or, to the knowledge of the
Company, threatened, any litigation, action, suit or proceeding to
which the Company or, to the actual knowledge of the Company (including
7
<PAGE>
without limitation, for purposes of this Agreement, its managing
trustees) without independent inquiry (the "Actual Knowledge of the
Company"), REIT Management & Research, Inc. (the "Advisor"), is or will
be a party before or by any court or governmental agency or body, which
(A) might result in any material adverse change in the condition,
financial or otherwise, or in the earnings, business affairs or
business prospects of the Company or (B) might materially and adversely
affect the property or assets of the Company or (C) concerns the
Company or, to the Actual Knowledge of the Company, the Advisor, and is
required to be disclosed in the Prospectus, or (D) could adversely
affect the consummation of this Agreement and the issuance, purchase
and sale of the Securities. No contract or other document is required
to be described in the Registration Statement or in the Prospectus or
to be filed as an exhibit to the Registration Statement that is not
described therein or filed as required.
(xii) The execution, delivery and performance by the Company
of this Agreement, the issuance, offering and sale by the Company of
the Securities as contemplated by the Registration Statement and by the
Prospectus and the consummation of the transactions contemplated hereby
and compliance with the terms and provisions hereof, will not violate
or conflict with or constitute a breach of any of the terms or
provisions of, or a default under, (i) the Amended and Restated
Declaration of Trust (the "Declaration of Trust") or the By-laws of the
Company or the charter or by-laws or other organizational documents of
any subsidiaries of the Company or, to the Actual Knowledge of the
Company, the respective charter or by-laws or other organizational
documents of the Advisor, or (ii) except as disclosed in the
Prospectus, any agreement, indenture or other instrument to which the
Company or any of its subsidiaries or, to the Actual Knowledge of the
Company, the Advisor, is a party or by which the Company or any of its
subsidiaries or, to the Actual Knowledge of the Company, the Advisor or
their respective properties or assets is bound, or (iii) any laws,
administrative regulations or rulings or decrees to which the Company
or any of its subsidiaries or, to the Actual Knowledge of the Company,
the Advisor or their respective properties or assets may be subject.
8
<PAGE>
(xiii) No consent, approval, authorization, order,
registration, filing, qualification, license or permit of or with any
court or any public, governmental or regulatory agency or body having
jurisdiction over the Company or any of its subsidiaries or any of
their respective properties or assets is required for the execution,
delivery and performance of this Agreement and the consummation of the
transactions contemplated hereby, including, without limitation, the
issuance, sale and delivery of the Securities pursuant to this
Agreement, except such as have been obtained and such as may be
required under foreign and state securities or "Blue Sky" laws.
(xiv) Except as otherwise disclosed in the Registration
Statement and in the Prospectus, the Company and each of its
subsidiaries has good and marketable title or ground leases, free and
clear of all liens, claims, encumbrances and restrictions, except liens
for taxes not yet due and payable and other liens and encumbrances
which do not, either individually or in the aggregate, materially and
adversely affect the current use or value thereof, to all property and
assets described in the Registration Statement and in the Prospectus as
being owned by them. Except as otherwise set forth in the Registration
Statement or in the Prospectus, all leases to which the Company and
each of its subsidiaries is a party relating to real property, and all
other leases which are material to the business of the Company and its
subsidiaries, taken as a whole, are valid and binding, and no default
(to the Company's knowledge, in the case of leases to which the Company
is a party as lessor, that would, individually or in the aggregate,
have a material adverse effect on the business, operations, earnings,
prospects, properties or condition (financial or otherwise) of the
Company and its subsidiaries, taken as a whole) has occurred and is
continuing thereunder, and the Company and each of its subsidiaries
enjoys peaceful and undisturbed possession under all such leases to
which it is a party as lessee. With respect to all properties owned or
9
<PAGE>
leased by the Company and each of its subsidiaries, the Company or such
subsidiary has such documents, instruments, certificates, opinions and
assurances, including without limitation, fee, leasehold owners or
mortgage title insurance policies (disclosing no encumbrances or title
exceptions which are material to the Company and its subsidiaries
considered as a whole, except as otherwise set forth in the
Registration Statement and in the Prospectus), legal opinions and
property insurance policies in each case in form and substance as are
usual and customary in transactions involving the purchase of similar
real estate and are appropriate for the Company or such subsidiary to
have obtained.
(xv) The Company and each of its subsidiaries owns, or
possesses adequate rights to use, all patents, trademarks, trade names,
service marks, copyrights, licenses and other rights necessary for the
conduct of their respective businesses as described in the Registration
Statement and in the Prospectus, and neither the Company nor any of its
subsidiaries has received any notice of conflict with, or infringement
of, the asserted rights of others with respect to any such patents,
trademarks, trade names, service marks, copyrights, licenses and other
such rights (other than conflicts or infringements that, if proven,
would not have a material adverse effect on the business, operations,
earnings, prospects, properties or condition (financial or otherwise)
of the Company and its subsidiaries, taken as a whole), and neither the
Company nor any of its subsidiaries knows of any basis therefor.
(xvi) All material tax returns required to be filed by the
Company and each of its subsidiaries in any jurisdiction have been
timely filed, other than those filings being contested in good faith,
and all material taxes, including withholding taxes, penalties and
interest, assessments, fees and other charges due pursuant to such
returns or pursuant to any assessment received by the Company or any of
its subsidiaries have been paid, other than those being contested in
good faith and for which adequate reserves have been provided.
10
<PAGE>
(xvii) Except for those matters which in the aggregate do not
have a material adverse effect on the business, operations, earnings,
prospects, properties or condition (financial or otherwise) of the
Company and its subsidiaries taken as a whole, and except for Hazardous
Materials (as defined below) or substances which are handled and/or
disposed of in compliance with all applicable federal, state and local
requirements, to the Company's knowledge, after due investigation, the
real property owned, leased or otherwise operated by the Company and
each of its subsidiaries in connection with the operation of their
respective businesses, including, without limitation, any subsurface
soils and ground water (the "Realty"), is free of contamination from
any Hazardous Materials. To the Company's knowledge, after due
investigation, the Realty does not contain any underground storage or
treatment tanks, active or abandoned water, gas or oil wells, or any
other underground improvements or structures, other than the
foundations, footings, or other supports for the improvements located
thereon which, based on present knowledge, could, in their present
condition, reasonably be expected to presently cause a material
detriment to or materially impair the beneficial use thereof by the
Company or constitute or cause a significant health, safety or other
environmental hazard to occupants or users thereof without regard to
any special conditions of such occupants or users. The Company
represents that, after due investigation, it has no knowledge of any
material violation, with respect to the Realty, of any Environmental
Law, or of any material liability on the part of the Company with
respect to the Realty, resulting from the presence, use, release,
threatened release, emission, disposal, pumping, discharge, generation
or processing of any Hazardous Materials. As used herein,
"Environmental Law" means any federal, state or local statute,
regulation, judgment, order or authorization relating to emissions,
discharges, releases or threatened releases of Hazardous Materials into
ambient air, surface water, ground water, publicly-owned treatment
works, septic systems or land, or otherwise relating to the pollution
or protection of public health or the environment, and "Hazardous
Materials" means any substance, material or waste which is regulated by
any federal, state or local government or quasi-government authority,
which is defined, used or listed as a "hazardous waste", "hazardous
substance", "toxic substance", "medical waste", "infectious waste" or
other similar terms as defined or used in any Environmental Law, or any
petroleum products, asbestos, lead-based paint, polychlorinated
biphenyls, flammable explosives or radioactive materials.
11
<PAGE>
(xviii) Each of the Company, its subsidiaries and, to the
Actual Knowledge of the Company, the Advisor, has such permits,
licenses, franchises and authorizations of governmental or regulatory
authorities (together, "permits"), including, without limitation, under
any applicable Environmental Law, as are necessary to own, lease and
operate its properties and to engage in the business currently
conducted by it, except such licenses and permits as to which the
failure to own or possess will not in the aggregate have a material
adverse effect on the business, operations, earnings, prospects,
properties or condition (financial or otherwise) of the Company, and
neither the Company nor, to the Actual Knowledge of the Company, the
Advisor, has any reason to believe that any governmental body or agency
is considering limiting, suspending or revoking any such license,
certificate, permit, authorization, approval, franchise or right; each
of the Company, its subsidiaries and, to the Actual Knowledge of the
Company, the Advisor, has fulfilled and performed all of its
obligations with respect to such permits and no event has occurred
which allows, or after notice or lapse of time would allow, revocation
or termination thereof or results in any other material impairment of
the rights of the holder of any such permit; and, except as described
in the Registration Statement and in the Prospectus, such permits
contain no restrictions that are materially burdensome to the Company
or any of its subsidiaries.
(xix) To the knowledge of the Company, no labor problem exists
or is imminent with employees of the Company or any of its subsidiaries
that could have a material adverse effect on the business, operations,
earnings, prospects, properties or condition (financial or otherwise)
of the Company and its subsidiaries, taken as a whole.
12
<PAGE>
(xx) Neither the Company nor any of its subsidiaries nor, to
the knowledge of the Company, any officer, trustee or director
purporting to act on behalf of the Company or any of its subsidiaries,
has at any time: (i) made any contributions to any candidate for
political office, or failed to disclose fully any such contributions,
in violation of law; (ii) made any payment of funds to, or received or
retained any funds from, any state, federal or foreign governmental
officer or official, or other person charged with similar public or
quasi-public duties, other than payments required or allowed by
applicable law; or (iii) engaged in any transactions, maintained any
bank accounts or used any corporate funds except for transactions, bank
accounts and funds, which have been and are reflected in the normally
maintained books and records of the Company and its subsidiaries.
(xxi) All of the outstanding shares of beneficial interest of,
or other ownership interests in, each of the Company's subsidiaries
have been duly authorized and validly issued and are fully paid and
nonassessable, and, except as disclosed in the Registration Statement
and in the Prospectus, are or will be owned by the Company free and
clear of any security interest, claim, lien, encumbrance or adverse
interest of any nature.
(xxii) Except, as referred to or described in the Registration
Statement and in the Prospectus, none of the subsidiaries of the
Company owns any shares of stock or any other securities of any
corporation or has any equity interest in any firm, partnership,
association or other entity other than the issued capital shares of its
subsidiaries, and the Company does not own, directly or indirectly, any
shares of stock or any other securities of any corporation or have any
equity interest in any firm, partnership, association or other entity
other than the issued capital shares of its subsidiaries, except in
each case for non-controlling positions acquired in the ordinary course
of business.
(xxiii) Except as disclosed in the Registration Statement and
in the Prospectus, there are no material outstanding loans or advances
or material guarantees of indebtedness by the Company or any of its
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subsidiaries to or for the benefit of any of the officers, trustees or
directors of the Company or any of its subsidiaries or any of the
members of the families of any of them.
(xxiv) The Company and each of its subsidiaries maintains
insurance, duly in force, with insurers of recognized financial
responsibility; such insurance insures against such losses and risks as
are adequate in accordance with customary industry practice to protect
the Company and its subsidiaries and their respective businesses; and
neither the Company nor any such subsidiary has any reason to believe
that it will not be able to renew its existing insurance coverage as
and when such coverage expires or to obtain similar coverage from
similar insurers as may be necessary to continue its business at a cost
that would not materially and adversely affect the business,
operations, earnings, prospects, properties or condition (financial or
otherwise) of the Company and its subsidiaries, taken as a whole,
except as disclosed in or contemplated by the Registration Statement
and by the Prospectus.
(xxv) Neither the Company nor any of its officers and
directors (as defined in the 1933 Act Regulations) has taken or will
take, directly or indirectly, prior to the termination of the offering
contemplated by this Agreement, any action designed to stabilize or
manipulate the price of any security of the Company, or which has
caused or resulted in, or which might in the future reasonably be
expected to cause or result in, stabilization or manipulation of the
price of any security of the Company to facilitate the sale or resale
of the Securities.
(xxvi) Neither the Company nor any of its subsidiaries is an
"investment company" or an "affiliated person" of, or "promoter" or
"principal underwriter" for, an "investment company" as such terms are
defined in the Investment Company Act of 1940, as amended (the "1940
Act"), or an "investment adviser" as such term is defined in the
Investment Advisers Act of 1940, as amended.
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(xxvii) The Company is organized in conformity with the
requirements for qualification, and, as of the date hereof the Company
operates, and as of Closing Time the Company will operate, in a manner
that qualifies the Company as a "real estate investment trust" under
the Internal Revenue Code of 1986, as amended (the "Code"), and the
rules and regulations thereunder, for 1997 and subsequent years. The
Company qualified as a real estate investment trust under the Code for
each of its taxable years from 1987 through 1997.
(xxviii) No default exists, and no event has occurred which,
with notice or lapse of time or both, would constitute a default in the
due performance and observance of any term, covenant or condition of
any indenture, mortgage, deed of trust, lease or other agreement or
instrument to which the Company or any of its subsidiaries is a party
or by which the Company or any of its subsidiaries or any of their
respective properties is bound or may be affected, except such defaults
which, singly or in the aggregate, would not have a material adverse
effect on the business, operations, earnings, prospects, properties or
condition (financial or otherwise) of the Company and its subsidiaries,
considered as a whole, except as disclosed in the Registration
Statement and in the Prospectus.
(xxix) The Advisory Agreement, dated as of January 1, 1998,
between the Company and the Advisor (the "Advisory Agreement"), has
been duly authorized, executed and delivered by the parties thereto and
constitutes the valid agreement of the parties thereto, enforceable in
accordance with its terms, except as limited by (a) the effect of
bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer
or other similar laws relating to or affecting the rights or remedies
of creditors or (b) the effect of general principles of equity
(regardless of whether enforcement is sought in a proceeding in equity
or at law).
(b) Any certificate signed by any officer of the Company or any of its
subsidiaries and delivered to you or your counsel shall be deemed a
15
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representation and warranty by the Company to you as to the matters covered
thereby.
Section 2. Sale and Delivery to You; Closing.
(a) On the basis of the representations and warranties herein contained
and subject to the terms and conditions herein set forth, the Company agrees to
sell to you, and you agree to purchase from the Company, the Securities as set
forth on the first page of this Agreement.
(b) Payment of the purchase price for and delivery of the Securities
shall be made, subject to Section 9, on February 17, 1998 at 9:00 a.m. at the
offices of Sullivan & Worcester LLP in Boston, Massachusetts (such time and date
of payment and delivery being herein called "Closing Time"). Payment shall be
made by wire transfer of immediately available funds to the Company against
delivery to you of the Securities to be purchased by you. The Securities shall
be in such authorized denominations and registered in such names as you may
request in writing at least two business days before Closing Time. The
Securities will be made available for examination by you not later than 10:00
a.m. on the last business day prior to Closing Time.
Section 3. Covenants of the Company. The Company covenants with you as
follows:
(a) Immediately following the execution of this Agreement, the Company
will prepare a Prospectus Supplement setting forth the number of Securities
covered thereby and their terms not otherwise specified in the Prospectus, your
name, the price at which the Securities are to be purchased by you from the
Company, and such other information as you and the Company deem appropriate in
connection with the offering of the 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 and will furnish to you as
many copies of the Prospectus (including such Prospectus Supplement) as you
shall reasonably request.
(b) Until the termination of the initial offering of the Securities,
the Company will notify you immediately, and confirm the notice in writing, (i)
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of the effectiveness of any amendment to the Registration Statement, (ii) of the
transmittal to the Commission for filing of any supplement or amendment to the
Prospectus or any document to be filed pursuant to the 1934 Act, (iii) of the
receipt of any comments from the Commission with respect to the Securities, (iv)
of any request by the Commission for any amendment to the Registration Statement
or any amendment or supplement to the Prospectus with respect to the Securities
or for additional information relating thereto, and (v) of the issuance by the
Commission of any stop order suspending the effectiveness of the Registration
Statement or the initiation of any proceedings for that purpose. The Company
will make every reasonable effort to prevent the issuance of any such stop order
and, if any stop order is issued, to obtain the lifting thereof at the earliest
possible moment.
(c) The Company will give you notice of its intention to file or
prepare any post-effective amendment to the Registration Statement or any
amendment or supplement (including any document to be filed pursuant to the 1934
Act prior to the termination of the initial offering of the Securities) to the
Prospectus (including any revised prospectus which the Company proposes for use
by you in connection with the offering of the Securities which differs from the
prospectus on file at the Commission at the time that the Registration Statement
becomes effective, whether or not such revised prospectus is required to be
filed pursuant to Rule 424(b) of the 1933 Act Regulations), will furnish you
with copies of any such amendment or supplement a reasonable amount of time
prior to such proposed filing or use, as the case may be, and will not file any
such amendment or supplement or use any such prospectus to which your counsel
shall reasonably object.
(d) The Company will deliver to you a conformed copy of the
Registration Statement as originally filed and of each amendment thereto filed
prior to the termination of the initial offering of the Securities (including
exhibits filed therewith or incorporated by reference therein and the documents
incorporated by reference into the Prospectus pursuant to Item 12 of Form S-3).
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<PAGE>
(e) The Company will furnish to you, from time to time during the
period when the Prospectus is required to be delivered under the 1933 Act or the
1934 Act, such number of copies of the Prospectus (as amended or supplemented)
as you may reasonably request for the purposes contemplated by the 1933 Act, the
1933 Act Regulations, the 1934 Act or 1934 Act Regulations.
(f) If any event shall occur as a result of which it is necessary, in
the opinion of your counsel, to amend or supplement the Prospectus in order to
make the Prospectus not misleading in the light of the circumstances existing at
the time it is delivered, the Company will either (i) forthwith prepare and
furnish to you an amendment of or supplement to the Prospectus or (ii) make an
appropriate filing pursuant to Section 13, 14 or 15 of the 1934 Act, in form and
substance reasonably satisfactory to your counsel, which will amend or
supplement the Prospectus so that it will not include an untrue statement of a
material fact or omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances existing at the time it is
delivered, not misleading.
(g) The Company will endeavor in good faith, in cooperation with you,
to qualify the Securities for offering and sale under the applicable securities
laws and real estate syndication laws of such states and other jurisdictions of
the United States as you may designate provided that, in connection therewith,
the Company shall not be required to qualify as a foreign corporation or trust
or to file any general consent to service of process. In each jurisdiction in
which the Securities have been so qualified the Company will file such
statements and reports as may be required by the laws of such jurisdiction to
continue such qualification in effect for so long as required for the
distribution of the Securities.
(h) The Company will make generally available to its security holders
as soon as reasonably practicable, but not later than 90 days after the close of
the period covered thereby, an earning statement of the Company (in form
complying with the provisions of Rule 158 of the 1933 Act Regulations) covering
a period of at least twelve months beginning not later than the first day of the
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Company's fiscal quarter next following the effective date of the Registration
Statement. "Earning statement", "make generally available" and "effective date"
will have the meanings contained in Rule 158 of the 1933 Act Regulations.
(i) The Company will use the net proceeds received by it from the sale
of the Securities in the manner specified in the Prospectus under the caption
"Use of Proceeds" in all material respects.
(j) The Company will use its best efforts to effect the listing of the
Securities on the NYSE.
(k) The Company currently intends to continue to elect to qualify as a
"real estate investment trust" under the Code, and use its best efforts to
continue to meet the requirements to qualify as a "real estate investment
trust".
(l) The Company will timely file any document which it is required to
file pursuant to the 1934 Act prior to the termination of the offering of the
Securities.
Section 4. Payment of Expenses. The Company will pay all expenses
incident to the performance of its obligations under this Agreement, including
(i) the preparation and filing of the Registration Statement as originally filed
and of each amendment thereto, (ii) the preparation and filing of this
Agreement, (iii) the preparation, issuance and delivery of the Securities to
you, (iv) the fees and disbursements of counsel for the Company, referred to in
Section 5(b) hereof, and the Company's accountants, (v) the qualification of the
Securities under securities laws and real estate syndication laws in accordance
with the provisions of Section 3(g) hereof, including filing fees and the fee
and disbursements of counsel for the Company in connection therewith and in
connection with the preparation of any Blue Sky Survey, (vi) the printing and
delivery to you of copies of the Registration Statement as originally filed and
of each amendment thereto, and of the Prospectus and any amendments or
supplements thereto, (vii) the fees and expenses incurred in connection with the
listing of the Securities on the NYSE, (viii) the cost of printing or
reproducing and delivering to you copies of any Blue Sky Survey, (ix) the cost
of providing any CUSIP or other identification numbers for the Securities, and
(x) any transfer taxes imposed on the sale of the Securities to you.
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<PAGE>
If this Agreement is terminated by you in accordance with the
provisions of Section 5 or Section 9(a)(i), the Company shall reimburse you for
all of your out-of-pocket expenses, including the reasonable fees and
disbursements of your counsel.
Section 5. Conditions of Your Obligations. Your obligations hereunder
are subject to the accuracy of the representations and warranties of the Company
herein contained, to the performance by the Company of its obligations
hereunder, and to the following further conditions:
(a) At Closing Time no stop order suspending the effectiveness of the
Registration Statement shall have been issued under the 1933 Act or proceedings
therefor initiated or threatened by the Commission. The price of the Securities
and any other information previously omitted from the effective Registration
Statement pursuant to Rule 415 of the 1933 Act Regulations shall have been
transmitted to the Commission for filing pursuant to Rule 424(b) of the 1933 Act
Regulations within the prescribed time period, and prior to Closing Time the
Company shall have provided evidence satisfactory to you of such timely filing,
or a post-effective amendment providing such information shall have been filed
and declared effective in accordance with the requirements of the 1933 Act
Regulations.
(b) At Closing Time you shall have received the favorable opinion,
dated as of Closing Time, of Sullivan & Worcester LLP, counsel for the Company,
in form and substance satisfactory to your counsel, to the effect that:
(i) The Company is a Maryland real estate investment trust
duly organized, validly existing and in good standing under the laws of
the State of Maryland; each of its Significant Subsidiaries (as defined
in Rule 1-02 of Regulation S-X under the 1933 Act) has been duly
organized, is validly existing as a corporation or trust in good
standing under the laws of its jurisdiction of incorporation or
organization; each of the Company and its subsidiaries has the trust or
corporate (as applicable) power and authority to carry on its business
as described in the Registration Statement and in the Prospectus and to
own, lease and operate its properties; each of the Company and its
20
<PAGE>
subsidiaries is duly qualified and is in good standing as a foreign
corporation or trust, as the case may be, authorized to do business in
each jurisdiction in which its ownership or leasing of property
requires such qualification, except where the failure to be so
qualified would not have a material adverse effect on the Company and
its subsidiaries, taken as a whole.
(ii) All of the issued and outstanding shares of beneficial
interest of, or other ownership interests in, each of the Company's
subsidiaries have been duly authorized and validly issued and are fully
paid and non-assessable, and are owned by the Company free and clear of
any security interest or other adverse interest (within the meaning of
Article 8 of the Massachusetts Uniform Commercial Code).
(iii) The Registration Statement has become effective under
the 1933 Act, and, to the knowledge of such counsel, no stop order
suspending the effectiveness of the Registration Statement is in
effect, and no proceedings for such purpose are pending before or
threatened by the Commission; and any required filing of the Prospectus
pursuant to Rule 424 under the 1933 Act has been made in accordance
with said Rule 424.
(iv) The Company has the requisite trust power and authority
to enter into and perform this Agreement and to issue and deliver the
Securities.
(v) To such counsel's knowledge, except as disclosed in the
Registration Statement or in the Prospectus, there is not now pending
or threatened, any litigation, action, suit or proceeding to which the
Company or any of its subsidiaries or the Advisor is or will be a party
before or by any court or governmental agency or body, which (A) might
result in any material adverse change in the condition, financial or
otherwise, or in the business, operations, earnings, prospects or
properties of the Company and its subsidiaries, taken as a whole, or
(B) might materially and adversely affect the property or assets of the
Company and its subsidiaries, taken as a whole, or (C) concerns the
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Company or any of its subsidiaries or the Advisor and is required to be
disclosed in the Prospectus, or (D) could adversely affect the
consummation of this Agreement and the issuance of the Securities; to
such counsel's knowledge, no contract or other document is required to
be described in the Registration Statement or in the Prospectus or to
be filed as an exhibit to the Registration Statement that is not
described therein or filed as required.
(vi) Except as otherwise disclosed in the Prospectus, to such
counsel's knowledge, neither the Company, any of its subsidiaries nor
the Advisor is in violation of its respective charter or by-laws or
other organizational documents or in default in the performance of any
obligation, agreement or condition contained in any bond, debenture,
note or any other evidence of indebtedness or in any other material
agreement, indenture or instrument to which the Company, any of its
subsidiaries or the Advisor is a party or by which any of their
respective properties or assets may be bound or affected, except for
any such violation that would not have a material adverse effect on the
business, operations, earnings, business prospects, properties or
condition (financial or otherwise) of the Company and its subsidiaries
taken as a whole.
(vii) To such counsel's knowledge, each of the Company, its
subsidiaries and the Advisor has such permits, licenses, franchises and
authorizations of governmental or regulatory authorities (together,
"permits"), including, without limitation, under any applicable
Environmental Law, as are necessary to own, lease and operate its
properties and to engage in the business currently conducted by it,
except such licenses and permits as to which the failure to own or
possess will not in the aggregate have a material adverse effect on the
business, operations, earnings, business prospects, properties or
condition (financial or otherwise) of the Company and its subsidiaries,
taken as a whole.
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<PAGE>
(viii) The execution, delivery and performance of this
Agreement, and the consummation of the transactions herein contemplated
will not conflict with or constitute a breach or violation of any of
the terms or provisions of, or constitute a default under, (A) the
Declaration of Trust or the By-laws of the Company or the charter or
by-laws or other organizational documents of the Advisor or any
Significant Subsidiary of the Company, or (B) except as disclosed in
the Prospectus, any material agreement, indenture or other instrument
to which the Company, any of its Significant Subsidiaries or the
Advisor or their respective material properties or assets is bound, or
(C) any laws, administrative regulations or rulings or decrees known to
such counsel to which the Company, any of its Significant Subsidiaries
or the Advisor or their respective material properties or assets may be
subject.
(ix) No consent, approval, authorization, order, registration,
filing, qualification, license or permit of or with any federal,
Massachusetts or Maryland court or public, governmental or regulatory
agency or body having jurisdiction over the Company or any of its
Significant Subsidiaries or the Advisor or any of their respective
material properties or assets is required for the Company's execution,
delivery and performance of this Agreement and the consummation of the
transactions contemplated hereby, including, without limitation, the
issuance, sale and delivery of the Securities pursuant to this
Agreement, except such as have been obtained and such as may be
required under foreign and state securities or "Blue Sky" laws.
(x) The Advisory Agreement has been duly authorized, executed
and delivered by the parties thereto and constitutes the valid
agreement of the parties thereto, enforceable in accordance with its
terms, except (a) as limited by the effect of bankruptcy, insolvency,
reorganization, fraudulent transfer, moratorium or other similar laws
relating to or affecting the rights or remedies of creditors, (b) as
limited by the effect of general principles of equity (regardless of
whether enforcement is sought in a proceeding in equity or at law) and
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<PAGE>
(c) insofar as the enforceability of the indemnity and contribution
provisions contained in such agreement may be limited by federal or
state securities laws and the public policy underlying such laws.
(xi) The Advisor (A) is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware,
and (B) has the requisite corporate power and authority to conduct its
business as described in the Prospectus and to own and operate its
material properties.
(xii) The Company has qualified to be taxed as a real estate
investment trust pursuant to Sections 856-860 of the Code for each of
the fiscal years ended December 31, 1987 through December 31, 1997, and
the Company's current anticipated investments and its current plan of
operation will enable it to continue to meet the requirements for
qualification and taxation as a real estate investment trust under the
Code; actual qualification of the Company as a real estate investment
trust, however, will depend upon the Company's continued ability to
meet, and its meeting, through actual annual operating results and
distributions, the various qualification tests imposed under the Code.
(xiii) The Registration Statement and the Prospectus and any
supplements or amendments thereto (except for the financial statements
and the notes thereto and the schedules and other financial and
statistical data included therein and the Excluded Proceedings (as
defined in the last paragraph of this Section 5(b)), as to which such
counsel need not express any opinion) comply as to form in all material
respects with the requirements of the 1933 Act.
(xiv) Each document incorporated by reference in the
Registration Statement and in the Prospectus (except for the financial
statements and the notes thereto and the schedules and other financial
and statistical data included therein and the Excluded Proceedings (as
defined in the last paragraph of this Section 5(b)), as to which such
counsel need not express any opinion) complied as to form when filed
with the Commission in all material respects with the requirements of
the 1934 Act.
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<PAGE>
(xv) The statements (a) in the Prospectus under the captions
"Description of Shares", "Redemption; Business Combinations and Control
Share Acquisitions" and "Limitation of Liability; Shareholder
Liability", (b) in Item 1 of the Company's Annual Report on Form 10-K
under the caption "Regulation and Reimbursement", (c) in Part B
("Authorization of Additional Common Shares of Beneficial Interest") of
Item 5 of the Company's Current Report on Form 8-K dated February 17,
1997 and (d) Item 5 of the Company's Current Report on Form 8-K dated
February 13, 1997 (excluding the statements under the caption "Legal
Proceedings"), in each case insofar as they purport to summarize
matters arising under Massachusetts or Maryland law or the federal law
of the United States, or provisions of documents to which the Company
is a party specifically referred to therein, are accurate summaries of
such legal matters or provisions.
(xvi) This Agreement has been duly authorized, executed and
delivered by the Company.
(xvii) (A) All of the outstanding shares of beneficial
interest of the Company have been duly authorized and are validly
issued, fully paid and non-assessable (except as otherwise described in
the Registration Statement) and (B) the Securities have been duly
authorized and, when issued and delivered to you against payment
therefor in accordance with the terms of this Agreement, will be
validly issued, fully paid and nonassessable, and will be free of any
preemptive or, to their knowledge, similar rights that entitle any
person (other than you, your successors and assigns) to acquire any
Securities upon the issuance thereof by the Company.
(xviii) The Company is not required to register as an
"investment company" within the meaning of the 1940 Act.
(xix) To the extent required to be described therein, the
Securities conform in all material respects to the descriptions in the
Registration Statement and the Prospectus.
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<PAGE>
(xx) Although counsel has not undertaken, except as otherwise
indicated in their opinion, to determine independently, and does not
assume any responsibility for, the accuracy or completeness of the
statements in the Registration Statement, such counsel has participated
in the preparation of the Registration Statement and the Prospectus,
including review and discussion of the contents thereof (including
review and discussion of the contents of all documents incorporated by
reference in the Registration Statement and the Prospectus), and
nothing has come to the attention of such counsel that has caused them
to believe that the Registration Statement (including the documents
incorporated by reference therein) at the time the Registration
Statement became effective, or the Prospectus, as of its date and as of
Closing Time, as the case may be, contained an untrue statement of a
material fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein not misleading or
that any amendment or supplement to the Prospectus, as of its
respective date, and as of Closing Time, as the case may be, contained
any untrue statement of a material fact or omitted to state a material
fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading (it being
understood that such counsel need express no view with respect to (a)
the financial statements and the notes thereto and the schedules and
other financial and statistical data included or incorporated by
reference in the Registration Statement or in the Prospectus or (b) the
matters to be addressed in the opinion of Sherin & Lodgen LLP, special
counsel to the Company, described below.)
In rendering their opinion as aforesaid, Sullivan & Worcester
LLP may rely upon an opinion, dated as of Closing Time, of Piper &
Marbury L.L.P. as to matters governed by Maryland law, provided that
such reliance is expressly authorized by such opinion and a copy of
such opinion is delivered to you and is, in form and substance,
satisfactory to you and your counsel. In addition, in rendering such
opinion, such counsel may state that their opinion as to laws of the
State of Delaware is limited to the Delaware General Corporation Law
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and that their opinion with respect to the qualification of the Company
and its subsidiaries to do business in jurisdictions other than their
respective jurisdictions of organization is based solely upon
certificates to such effect issued by an appropriate official of the
applicable jurisdictions.
The opinion of Piper & Marbury L.L.P. described in the
paragraph above shall be rendered to you at the request of the Company
and shall so state therein.
In addition, you shall have received at Closing Time an
opinion (satisfactory to you and your counsel) of Sherin & Lodgen LLP,
special counsel for the Company, dated as of Closing Time, to the
effect that the statements describing the proceedings (the "Excluded
Proceedings") described in Item 5 of the Company's Current Report on
Form 8-K dated February 13, 1997 under the caption "Legal Proceedings",
insofar as they purport to summarize legal proceedings constitute a
fair summary of such legal proceedings.
(c) You shall have received at Closing Time an opinion, dated
as of Closing Time, of Brown & Wood LLP, your counsel, as to the
matters referred to in clauses (iii), (xiii), (xvi), (xvii)(B), (xix)
and (xx) of the foregoing paragraph (b). In giving such opinion with
respect to the matters covered by clause (xx), such counsel may state
that their opinion and belief are based upon their participation in the
preparation of the Registration Statement and the Prospectus and any
amendments or supplements thereto and review and discussion of the
contents thereof, but are without independent check or verification
except as specified.
In rendering their opinion as aforesaid, Brown & Wood LLP may
rely upon an opinion, dated as of Closing Time, of Piper & Marbury L.L
P. as to matters governed by Maryland law, and the opinion of Sullivan
& Worcester LLP referred to above as to matters governed by
Massachusetts law. In addition, in rendering such opinion, such counsel
may state that their opinion as to laws of the State of Delaware is
limited to the Delaware General Corporation Law.
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(d) At Closing Time (i) the Registration Statement and the Prospectus
shall contain all statements which are required to be stated therein in
accordance with the 1933 Act and the 1933 Act Regulations and in all material
respects shall conform to the requirements of the 1933 Act and the 1933 Act
Regulations, and neither the Registration Statement nor the Prospectus shall
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein
not misleading and no action, suit or proceeding at law or in equity shall be
pending or to the knowledge of the Company threatened against the Company which
would be required to be set forth in the Prospectus other than as set forth
therein, (ii) there shall not have been, since the respective dates as of which
information is given in the Registration Statement and the Prospectus, any
material adverse change in the condition, financial or otherwise, of the Company
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 (iii) no proceedings shall be pending or, to the
knowledge of the Company, threatened against the Company before or by any
Federal, state or other commission, board or administrative agency wherein an
unfavorable decision, ruling or finding would materially and adversely affect
the business, property, financial condition or income of the Company other than
as set forth in the Prospectus; and you shall have received, at Closing Time, a
certificate of the President and Chief Operating Officer and the chief financial
officer of the Company, dated as of Closing Time, evidencing compliance with the
provisions of this subsection (c) and stating that the representations and
warranties set forth in Section 1(a) hereof are accurate as though expressly
made at and as of Closing Time.
(e) Concurrently with the execution and delivery of this Agreement, and
at Closing Time prior to payment and delivery of the Securities, Ernst & Young
LLP shall have furnished to you a letter, dated the date of its delivery,
addressed to you and in form and substance satisfactory to you, confirming that
they are independent accountants with respect to the Company as required by the
1933 Act and the 1933 Act Regulations and with respect to the financial and
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other statistical and numerical information contained in the Registration
Statement and the Prospectus or incorporated by reference therein. Each such
letter shall contain information of the type customarily included in
accountants' comfort letters to underwriters.
(f) At Closing Time your counsel shall have been furnished with such
documents and opinions as they may reasonably require for the purpose of
enabling them to pass upon the issuance and sale of the Securities as herein
contemplated and related proceedings, or in order to evidence the accuracy of
any of the representations or warranties, or the fulfillment of any of the
conditions, herein contained; and all proceedings taken by the Company in
connection with the issuance and sale of the Securities as herein contemplated
shall be reasonably satisfactory in form and substance to you and your counsel.
If any condition specified in this Section 5 shall not have been
fulfilled when and as required to be fulfilled, this Agreement may be terminated
by you by notice to the Company at any time at or prior to Closing Time, and
such termination shall be without liability of any party to any other party
except as provided in Section 4 hereof.
Section 6. Indemnification. (a) The Company hereby agrees to indemnify
and hold harmless you and each person, if any, who controls you within the
meaning of Section 15 of the 1933 Act as follows:
(1) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, arising out of any untrue statement or
alleged untrue statement of a material fact contained in the
Registration Statement (or any amendment thereto), or the omission or
alleged omission therefrom of a material fact required to be stated
therein or necessary to make the statements therein not misleading or
arising out of any untrue statement or alleged untrue statement of a
material fact included in any preliminary prospectus or the Prospectus
(or any amendment or supplement thereto), or the omission, or alleged
omission therefrom of a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made, not misleading:
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(2) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, to the extent of the aggregate amount
paid in settlement of any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or threatened,
or of any claim whatsoever based upon any such untrue statement or
omission, or any such alleged untrue statement or omission, if such
settlement is effected with the written consent of the Company; and
(3) against any and all expense whatsoever, as incurred
(including, subject to Section 6(c) hereof, the fees and disbursements
of your counsel), reasonably incurred in investigating, preparing or
defending against any litigation, or any investigation or proceedings
by any governmental agency or body, commenced or threatened, or any
claim whatsoever based upon any such untrue statement or omission, or
any such alleged untrue statement or omission, to the extent that any
such expense is not paid under paragraph (1) or (2) above;
provided, however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Company by you
expressly for use in the Registration Statement (or any amendment thereto) or
the Prospectus (or any amendment or supplement thereto); and provided, further,
that the foregoing indemnity agreement with respect to any preliminary
prospectus shall not inure to your benefit, or the benefit of any person
controlling you, if a copy of the Prospectus (as then amended or supplemented if
the Company shall have furnished any amendments or supplements thereto and
excluding documents incorporated or deemed to be incorporated by reference
therein) was not sent or given by or on behalf of you to such person asserting
any such losses, claims, damages or liabilities at or prior to the written
confirmation of the sale of such Securities to such person, if required by law
so to have been delivered, and if the Prospectus (as so amended or supplemented)
would have cured the defect giving rise to such loss, claim, damage or expense.
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(b) You agree to indemnify and hold harmless the Company, each of the
Company's trustees, each of the Company's officers who signed the Registration
Statement and each person, if any, who controls the Company within the meaning
of Section 15 of the 1933 Act against any and all loss, liability, claim, damage
and expense described in the indemnity contained in subsection (a) of this
Section 6, as incurred, but only with respect to untrue statements or omissions,
or alleged untrue statements or omissions, made in the Registration Statement
(or any amendment thereto) or the Prospectus (or any amendment or supplement
thereto) in reliance upon and in conformity with written information furnished
to the Company by you expressly for use in the Registration Statement (or any
amendment thereto) or the Prospectus (or any amendment or supplement thereto).
(c) Each indemnified party shall give notice as promptly as reasonably
practicable to each indemnifying party of any action commenced against it in
respect of which indemnity may be sought hereunder, but failure to so notify an
indemnifying party shall not relieve such indemnifying party from any liability
which it may have otherwise than on account of this indemnity agreement. An
indemnifying party may participate at its own expense in the defense of such
action. In no event shall the indemnifying parties be liable for fees and
expenses of more than one counsel (in addition to any local counsel) separate
from their own counsel for all indemnified parties in connection with any one
action or separate but similar or related actions in the same jurisdiction
arising out of the same general allegations or circumstances.
Section 7. Contribution. In order to provide for just and equitable
contribution in circumstances in which the indemnity agreement provided for in
Section 6 hereof is for any reason held to be unenforceable by the indemnified
parties although applicable in accordance with its terms, the Company and you
shall contribute to the aggregate losses, liabilities, claims, damages and
expenses of the nature contemplated by said indemnity agreement incurred by the
Company and you, as incurred, (i) in such proportion as is appropriate to
reflect the relative benefits received by the Company on the one hand and you on
the other hand from the offering of the Securities pursuant to this Agreement or
(ii) if the allocation provided by clause (i) is not permitted by applicable
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law, in such proportion as is appropriate to reflect not only the relative
benefits referred to in clause (i) above but also the relative fault of the
Company on the one hand and of you on the other hand in connection with the
statements or omissions which resulted in such losses, liabilities, claims,
damages or expenses, as well as any other relevant equitable considerations.
The relative benefits received by the Company on the one hand and you
on the other hand in connection with the offering of the Securities pursuant to
this Agreement shall be deemed to be in the same respective proportions as the
total net proceeds from the offering of the Securities pursuant to this
Agreement (before deducting expenses) received by the Company and the total
discount received by you, bear to the aggregate initial offering price of the
Securities.
The relative fault of the Company on the one hand and you on the other
hand shall be determined by reference to, among other things, whether any such
untrue or alleged untrue statement of a material fact or omission or alleged
omission to state a material fact relates to information supplied by the Company
or by you and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission.
The Company and you agree that it would not be just and equitable if
contribution pursuant to this Section 7 were determined by pro rata allocation
or by any other method of allocation which does not take into account the
equitable considerations referred to above in this Section 7. The aggregate
amount of losses, liabilities, claims, damages and expenses incurred by an
indemnified party and referred to above in this Section 7 shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue or alleged untrue
statement or omission or alleged omission.
No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the 1933 Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. Notwithstanding the
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provisions of this Section 7, you shall not be required to contribute any amount
in excess of the amount by which the total price at which the Securities
purchased from the Company by you were contributed to the Trust exceeds the
amount of any damages which you have otherwise been required to pay in respect
of such losses, liabilities, claims, damages and expenses. For purposes of this
Section 7, each person, if any, who controls you within the meaning of Section
15 of the 1933 Act shall have the same rights to contribution as you, and each
trustee of the Company, each officer of the Company who signed the Registration
Statement, and each person, if any, who controls the Company within the meaning
of Section 15 of the 1933 Act shall have the same rights to contribution as the
Company.
Section 8. Representations, Warranties and Agreements to Survive
Delivery. All representations, warranties and agreements contained in this
Agreement or in certificates of officers of the Company submitted pursuant
hereto, shall remain operative and in full force and effect, regardless of any
investigation made by or on behalf of you or any controlling person, or by or on
behalf of the Company, and shall survive delivery of the Securities to you.
Section 9. Termination of Agreement. (a) You may terminate this
Agreement, by notice to the Company, at any time at or prior to Closing Time (i)
if there has been, since the respective dates as of which information is given
in the Registration Statement, any material adverse change in the condition,
financial or otherwise, or in the earnings, business affairs or business
prospects of the Company, whether or not arising in the ordinary course of
business, which would make it, in your reasonable judgment, impracticable or
inadvisable to (x) commence or continue the offering of the units of the Trust
to the public, or (y) enforce contracts for the sale of units of the Trust, (ii)
if there has occurred any material adverse change in the financial markets in
the United States or any outbreak of hostilities or escalation of existing
hostilities or other calamity or crisis the effect of which on the financial
markets of the United States is such as to make it, in your reasonable judgment,
impracticable or inadvisable to (x) commence or continue the offering of the
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units of the Trust to the public, or (y) enforce contracts for the sale of units
of the Trust or (iii) if trading in the Company's Common Shares has been
suspended by the Commission, or if trading generally on either the New York
Stock Exchange or the American Stock Exchange has been suspended, or minimum or
maximum prices for trading have been fixed, or maximum ranges for prices for
securities have been required, by either of said exchanges or by order of the
Commission or any other governmental authority, or if a banking moratorium has
been declared by Federal or New York authorities.
(b) If this Agreement is terminated pursuant to this Section 9, such
termination shall be without liability of any party to any other party except as
provided in Section 4, and provided further that Sections 6 and 7 hereof shall
survive such termination.
Section 10. Notices. All notices and other communications hereunder
shall be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to you shall be
directed to you at Smith Barney Inc., 388 Greenwich Street, 32nd Floor, New
York, New York 10013, Attention: Marc Teillon; and notices to the Company shall
be directed to it at 400 Centre Street, Newton, Massachusetts 02158, Attention:
David J. Hegarty, President.
Section 11. Parties. This Agreement shall inure to the benefit of and
be binding upon you and the Company and your respective successors. Nothing
expressed or mentioned in this Agreement is intended or shall be construed to
give any person, firm or corporation, other than those referred to in Sections 6
and 7 and their heirs and legal representatives, any legal or equitable right,
remedy or claim under or in respect of this Agreement or any provision herein
contained. This Agreement and all conditions and provisions hereof are intended
to be for the sole and exclusive benefit of the parties hereto and thereto and
their respective successors and said controlling persons and officers, trustees
and directors and their heirs and legal representatives, and for the benefit of
no other person, firm or corporation. No purchaser of Securities from you shall
be deemed to be a successor by reason merely of such purchase.
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Section 12. Governing Law and Time; Miscellaneous. This Agreement shall
be governed by and construed in accordance with the laws of the State of New
York applicable to agreements made and to be performed in said State. Specified
times of day refer to New York City time.
THE DECLARATION OF TRUST ESTABLISHING THE COMPANY, DATED OCTOBER 9,
1986, A COPY OF WHICH, TOGETHER WITH ALL AMENDMENTS THERETO (THE "DECLARATION"),
IS DULY ON FILE IN THE OFFICE OF THE STATE DEPARTMENT OF ASSESSMENTS AND
TAXATION OF MARYLAND, PROVIDES THAT THE NAME "HEALTH AND RETIREMENT PROPERTIES
TRUST" REFERS TO THE TRUSTEES UNDER THE DECLARATION COLLECTIVELY AS TRUSTEES,
BUT NOT INDIVIDUALLY OR PERSONALLY, AND THAT NO TRUSTEE, OFFICER, SHAREHOLDER,
EMPLOYEE OR AGENT OF THE COMPANY SHALL BE HELD TO ANY PERSONAL LIABILITY,
JOINTLY OR SEVERALLY, FOR ANY OBLIGATION OF, OR CLAIM AGAINST, THE COMPANY. ALL
PERSONS DEALING WITH THE COMPANY, IN ANY WAY, SHALL LOOK ONLY TO THE ASSETS OF
THE COMPANY FOR THE PAYMENT OF ANY SUM OR THE PERFORMANCE OF ANY OBLIGATION.
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If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us a counterpart hereof, whereupon this
instrument along with all counterparts will become a binding agreement between
you and the Company in accordance with its terms.
Very truly yours,
HEALTH AND RETIREMENT PROPERTIES TRUST
By: /s/ Ajay Saini
Name: Ajay Saini
Title: Chief Financial Officer
CONFIRMED AND ACCEPTED, as of the date first above written:
SMITH BARNEY INC.
By: /s/ William C. McGahan
Name: William C. McGahan
Title: Managing Director
36
Exhibit 8.1
SULLIVAN & WORCESTER LLP
One Post Office Square
Boston, Massachusetts 02109
February 12, 1998
Health and Retirement Properties Trust
400 Centre Street
Newton, Massachusetts 02158
Ladies and Gentlemen:
In connection with the registration by Health and Retirement Properties
Trust, a Maryland real estate investment trust (the "Company"), of its common
shares of beneficial interest (the "Securities"), the following opinion is
furnished to you to be filed with the Securities and Exchange Commission (the
"SEC") as Exhibit 8.1 to the Company's Current Report on Form 8-K, to be filed
within one week of the date hereof, under the Securities Exchange Act of 1934,
as amended (the "Exchange Act").
We have acted as counsel for the Company in connection with its
Registration Statement on Form S-3, File No. 333-26887 (the "Registration
Statement") filed under the Securities Act of 1933, as amended (the "Act"), and
we have examined originals or copies, certified or otherwise identified to our
satisfaction, of the Registration Statement, corporate records, certificates and
statements of officers and accountants of the Company and of public officials,
and such other documents as we have considered relevant and necessary in order
to furnish the opinion hereinafter set forth. Specifically, and without limiting
the generality of the foregoing, we have reviewed: (i) the declaration of trust,
as amended and restated, and the by-laws of the Company; (ii) the Registration
Statement; (iii) the final Prospectus dated May 30, 1997 (the "Base Prospectus")
relating to the Registration Statement; and (iv) the Prospectus Supplements to
the Base Prospectus dated February 12, 1998 (the "Prospectus Supplement" and the
Base Prospectus, as so supplemented, the "Prospectus"). We have reviewed the
sections in the Company's Annual Report on Form 10-K for the year ended December
31, 1996, filed under the Exchange Act (the "Form 10-K") captioned "Federal
Income Tax Considerations" and "ERISA Plans, Keogh Plans and Individual
Retirement Accounts," as supplemented by the statements in the Prospectus
Supplement under the caption "Federal Income Tax Consequences." With respect to
all questions of fact on which such opinions are based, we have assumed the
accuracy and completeness of and have relied on the information set forth in the
Prospectus and in the documents incorporated therein by
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Health and Retirement Properties Trust
February 12, 1998
Page 2
reference, and on representations made to us by the officers of the Company. We
have not independently verified such information; nothing has come to our
attention, however, which would lead us to believe that we are not entitled to
rely on such information.
The opinion set forth below is based upon the Internal Revenue Code of
1986, as amended, the Treasury Regulations issued thereunder, published
administrative interpretations thereof, and judicial decisions with respect
thereto, all as of the date hereof (collectively the "Tax Laws"), and upon the
Employee Retirement Income Security Act of 1974, as amended, the Department of
Labor regulations issued thereunder, published administrative interpretations
thereof, and judicial decisions with respect thereto, all as of the date hereof
(collectively, the "ERISA Laws"). No assurance can be given that the Tax Laws or
the ERISA Laws will not change. In preparing the discussions with respect to the
matters in the sections of the Form 10-K captioned "Federal Income Tax
Considerations" and "ERISA Plans, Keogh Plans and Individual Retirement
Accounts," as supplemented by the statements in the Prospectus Supplement under
the caption "Federal Income Tax Consequences," we have made certain assumptions
and expressed certain conditions and qualifications therein, all of which
assumptions, conditions and qualifications are incorporated herein by reference.
Based upon and subject to the foregoing, we are of the opinion that the
discussions in the sections of the Form 10-K captioned "Federal Income Tax
Considerations" and "ERISA Plans, Keogh Plans and Individual Retirement
Accounts," as supplemented by the statements in the Prospectus Supplement under
the caption "Federal Income Tax Consequences," in all material respects are
accurate and fairly summarize the Tax Laws issues and ERISA Laws issues
addressed therein, and hereby confirm that the opinions of counsel referred to
in said sections represent our opinions on the subject matter thereof.
We hereby consent to the incorporation of this opinion by reference as
an exhibit to the Registration Statement and to the reference to our firm in the
Prospectus. In giving such consent, we do not thereby admit that we come within
the category of persons whose consent is required under Section 7 of the Act or
under the rules and regulations of the SEC promulgated thereunder.
Very truly yours,
/s/ Sullivan & Worcester LLP
SULLIVAN & WORCESTER LLP
