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EXHIBIT 1.1
3,500,000 Shares
HEALTH CARE PROPERTY INVESTORS, INC.
(a Maryland corporation)
Common Stock
(Par Value $1.00 Per Share)
PURCHASE AGREEMENT
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Table of Contents
Page
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Section 1. Representations and Warranties................................................................... 3
(i) Compliance with Registration Requirements........................................ 3
(ii) Incorporated Documents........................................................... 3
(iii) Independent Accountants.......................................................... 4
(iv) Financial Statements............................................................. 4
(v) No Material Adverse Change in Business........................................... 4
(vi) Good Standing of the Company..................................................... 5
(vii) Good Standing of Subsidiaries.................................................... 5
(viii) REIT Status...................................................................... 5
(ix) Capitalization................................................................... 5
(x) Absence of Defaults and Conflicts................................................ 6
(xi) Absence of Proceedings........................................................... 6
(xii) Absence of Further Requirements.................................................. 7
(xiii) Authorization of Purchase Agreement.............................................. 7
(xiv) Title to Property................................................................ 7
(xv) Investment Company Act........................................................... 7
Section 2. Sale and Delivery to the Underwriters; Closing................................................... 7
Section 3. Covenants of the Company......................................................................... 9
(a) Compliance with Securities Regulations and Commission Requests............................ 9
(b) Filing of Amendments...................................................................... 9
(c) Delivery of Registration Statements....................................................... 10
(d) Delivery of Prospectuses.................................................................. 10
(e) Continued Compliance with Securities Laws................................................. 10
(f) Blue Sky Qualifications................................................................... 10
(g) Earnings Statement........................................................................ 10
(h) Use of Proceeds........................................................................... 11
(i) Preparation of Prospectus Supplement...................................................... 11
(j) Reporting Requirements.................................................................... 11
(k) Lock-up Period............................................................................ 11
Section 4. Payment of Expenses.............................................................................. 11
Section 5. Conditions of the Underwriters' Obligations...................................................... 12
(a) Effectiveness of Registration Statement................................................... 12
(b) Opinions.................................................................................. 12
(c) Officers' Certificate..................................................................... 16
(d) Accountant's Comfort Letter............................................................... 17
(e) Bring-down Comfort Letter................................................................. 17
(f) Listing................................................................................... 17
(g) Lock-up Agreements........................................................................ 17
(h) Additional Documents...................................................................... 17
(i) Over-allotment Option..................................................................... 17
i
Section 6. Indemnification.................................................................................. 18
(a) Indemnification of the Underwriters....................................................... 18
(b) Indemnification of Company, Directors and Officers........................................ 20
(c) Actions Against Parties; Notification..................................................... 20
(d) Settlement without Consent if Failure to Reimburse........................................ 20
(e) EDGAR..................................................................................... 21
Section 7. Contribution..................................................................................... 21
Section 8. Representations, Warranties and Agreements to Survive Delivery................................... 22
Section 9. Termination of Agreement......................................................................... 22
Section 10. Default by One or More Underwriters............................................................. 23
Section 11. Notices......................................................................................... 23
Section 12. Parties......................................................................................... 24
Section 13. Governing Law and Time.......................................................................... 24
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3,500,000 Shares
HEALTH CARE PROPERTY INVESTORS, INC.
(a Maryland corporation)
Common Stock
(Par Value $1.00 Per Share)
PURCHASE AGREEMENT
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May 8, 2001
Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
As Representative of the several Underwriters
Merrill Lynch World Headquarters
North Tower
World Financial Center
New York, New York 10281-1209
Dear Sirs:
Health Care Property Investors, Inc., a Maryland corporation (the
"Company"), confirms its agreement with Merrill Lynch & Co., Merrill Lynch,
Pierce, Fenner & Smith Incorporated ("Merrill Lynch") and each of the other
Underwriters named in Schedule A hereto (collectively, the "Underwriters", which
term shall also include any underwriter substituted as hereinafter provided in
Section 10 hereof), for whom Merrill Lynch is acting as representative (in such
capacity, Merrill Lynch shall hereinafter be referred to as the
"Representative"), with respect to the sale by the Company and the purchase by
the Underwriters, acting severally and not jointly, of the respective numbers of
shares of Common Stock, par value $1.00 per share, of the Company ("Common
Stock") set forth in said schedule A, and with respect to the grant by the
Company to the Underwriters, acting severally and not jointly, of the option
described in Section 2(b) hereof to purchase all or any part of 525,000
additional shares of Common Stock to cover over-allotments. The aforesaid
3,500,000 shares of Common Stock (the "Initial Securities") to be purchased by
the Underwriters and all or any part of the shares of Common Stock subject to
the option described in Section 2(b) hereof (the "Option Securities") are
collectively hereinafter called the "Securities."
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The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 (No. 333-57163) and a related
preliminary prospectus for the registration under the Securities Act of 1933, as
amended (the "1933 Act") of Common Stock, including the Securities, preferred
stock, par value $1.00 per share ("Preferred Stock"), and debt securities
(collectively, the "Registered Securities"), which registration statement has
been declared effective by the Commission and copies of which have heretofore
been delivered to you. Such registration statement, in the form in which it was
declared effective, as amended through the date hereof, including all documents
incorporated or deemed to be incorporated by reference therein through the date
hereof, is hereinafter referred to as the "Original Registration Statement."
Any registration statement filed pursuant to Rule 462(b) of the rules and
regulations of the Commission under the 1933 Act (the "1933 Act Regulations") is
herein referred to as the "Rule 462(b) Registration Statement." The Original
Registration Statement, together with any Rule 462(b) Registration Statement, is
hereinafter referred to as the "Registration Statement." The Company proposes
to file with the Commission pursuant to Rule 424(b) of the 1933 Act Regulations
the Prospectus Supplement (as defined in Section 3(i) hereof) relating to the
Securities and the prospectus dated August 27, 1998 (the "Base Prospectus")
relating to the Registered Securities, and has previously advised you of all
further information (financial and other) with respect to the Company set forth
therein. The Base Prospectus together with the Prospectus Supplement, in their
respective forms on the date hereof (being the forms in which they are to be
filed with the Commission pursuant to Rule 424(b) of the 1933 Act Regulations),
including all documents incorporated or deemed to be incorporated by reference
therein through the date hereof, are hereinafter referred to as, collectively,
the "Prospectus," except that if any revised prospectus or prospectus supplement
shall be provided to the Underwriters by the Company for use in connection with
the offering and sale of the Securities which differs from the Prospectus
(whether or not such revised prospectus or prospectus supplement is required to
be filed by the Company pursuant to Rule 424(b) of the 1933 Act Regulations),
the term "Prospectus" shall refer to such revised prospectus or prospectus
supplement, as the case may be, from and after the time it is first provided to
the Underwriters for such use. Unless the context otherwise requires, all
references in this Agreement to documents, financial statements and schedules
and other information which is "contained", "included", "stated", "described in"
or "referred to" in the Registration Statement or the Prospectus (and all other
references of like import) shall be deemed to mean and include all such
documents, financial statements and schedules and other information which is or
is deemed to be incorporated by reference in the Registration Statement or the
Prospectus, as the case may be; and all references in this Agreement to
amendments or supplements to the Registration Statement or the Prospectus shall
be deemed to mean and include the filing of any document under the Securities
Exchange Act of 1934 (the "1934 Act") after the date of this Agreement which is
or is deemed to be incorporated by reference in the Registration Statement or
the Prospectus, as the case may be.
The Company understands that the Underwriters propose to make a public
offering of the Securities as soon as the Representative deems advisable after
this Agreement has been executed and delivered.
2
Section 1. Representations and Warranties.
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(a) The Company represents and warrants to each Underwriter as of the date
hereof (such date being hereinafter referred to as the "Representation Date")
and as of the Closing Time referred to in Section 2 as follows:
(i) Compliance with Registration Requirements. The Company meets the
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requirements for use of Form S-3 under the 1933 Act and the 1933 Act
Regulations. Each of the Original Registration Statement and any Rule
462(b) Registration Statement and the Base Prospectus, at the respective
times the Original Registration Statement, any Rule 462(b) Registration
Statement and any post-effective amendments thereto became effective and as
of the Representation Date, complied and comply in all material respects
with the requirements of the 1933 Act and the 1933 Act Regulations
(including Rule 415(a) of the 1933 Act Regulations), and did not and as of
the Representation Date do 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. No stop order
suspending the effectiveness of the Original Registration Statement or any
Rule 462(b) Registration Statement has been issued under the 1933 Act and
no proceedings for that purpose have been instituted or are pending or, to
the knowledge of the Company, are contemplated by the Commission, and any
request on the part of the Commission for additional information has been
complied with. The Prospectus, at the Representation Date (unless the term
"Prospectus" refers to a prospectus which has been provided to the
Underwriters by the Company for use in connection with the offering of the
Securities which differs from the Prospectus filed with the Commission
pursuant to Rule 424(b) of the 1933 Act Regulations, in which case at the
time it is first provided to the Underwriters 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,
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however, that the representations and warranties in this subsection (i)
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shall not apply to statements in or omissions from the Registration
Statement or Prospectus made in reliance upon and in conformity with
information furnished to the Company in writing by any Underwriter through
Merrill Lynch expressly for use in the Registration Statement or the
Prospectus or the information contained in any Statement of Eligibility and
Qualification of a trustee under the Trust Indenture Act of 1939, as
amended (the "1939 Act") filed as an exhibit to the Registration Statement
(a "Form T-1"). For purposes of this Section 1(a), all references to the
Registration Statement, any post-effective amendments thereto and the
Prospectus shall be deemed to include, without limitation, any
electronically transmitted copies thereof filed with the Commission
pursuant to its Electronic Data Gathering, Analysis, and Retrieval system
("EDGAR").
(ii) Incorporated Documents. The documents incorporated or deemed to
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be incorporated by reference into the Prospectus pursuant to Item 12 of
Form S-3 under the 1933 Act, at the time they were or hereafter are filed
with the Commission, complied and will comply in all material respects with
the requirements of the 1934 Act and the rules and regulations of the
Commission thereunder (the "1934 Act Regulations"), and, when read together
and with the other information in the Prospectus, at the respective times
the
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Registration Statement and any amendments thereto became effective, at the
Representation Date and at Closing Time, did not, do not and will not
contain an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.
(iii) Independent Accountants. The accountants who certified the
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financial statements and supporting schedules included or incorporated by
reference in the Registration Statement and Prospectus are independent
public accountants as required by the 1933 Act and the 1933 Act
Regulations.
(iv) Financial Statements. The financial statements and any
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supporting schedules of the Company and its consolidated subsidiaries
included or incorporated by reference in the Registration Statement and the
Prospectus present fairly the consolidated financial position of the
Company and its consolidated subsidiaries as at the dates indicated and the
results of their operations for the periods specified; and, except as
otherwise stated in the Registration Statement and the Prospectus, said
financial statements have been prepared in conformity with generally
accepted accounting principles applied on a consistent basis; and the
supporting schedules included or incorporated by reference in the
Registration Statement present fairly the information required to be stated
therein; the selected financial data and the summary financial information
included in the Prospectus present fairly the information shown therein and
have been compiled on a basis consistent with that of the audited financial
statements included in the Registration Statement and the Prospectus; the
pro forma financial statements and the related notes thereto included in
documents incorporated or deemed to be incorporated by reference in the
Registration Statement and the Prospectus present fairly the information
shown therein, have been prepared in accordance with the Commission's rules
and guidelines with respect to pro forma financial statements and have been
properly compiled on the bases described therein, and the assumptions used
in the preparation thereof are reasonable and the adjustments used therein
are appropriate to give effect to the transactions and circumstances
referred to therein; and the Company's ratios of earnings to fixed charges
included in the Prospectus under the caption "Ratio of Earnings to Fixed
Charges" and in Exhibit 12 to the Registration Statement have been
calculated in compliance with Item 503(d) of Regulation S-K of the
Commission.
(v) No Material Adverse Change in Business. Since the respective
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dates as of which information is given in the Registration Statement and
the Prospectus, except as otherwise stated therein or contemplated thereby,
(A) there has been no material adverse change in the condition, financial
or otherwise, or in the earnings, business affairs or business prospects of
the Company and its subsidiaries considered as one enterprise, whether or
not arising in the ordinary course of business, (B) there have been no
transactions entered into by the Company or any of its subsidiaries, other
than those in the ordinary course of business, which are material with
respect to the Company and its subsidiaries considered as one enterprise,
and (C) except for regular quarterly dividends on the Common Stock, the
Company's 7 7/8% Series A Cumulative Redeemable Preferred Stock (the
"Series A Preferred Stock"), the Company's 8.70% Series B Cumulative
Redeemable Preferred Stock (the "Series B Preferred Stock") and the
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Company's 8.60% Series C Cumulative Redeemable Preferred Stock (the "Series
C Preferred Stock"), there has been no dividend or distribution of any kind
declared, paid or made by the Company on any class of its capital stock.
(vi) Good Standing of the Company. The Company has been duly
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incorporated and is validly existing as a corporation in good standing
under the laws of the State of Maryland with corporate power and authority
to own, lease and operate its properties and to conduct its business as
described in the Prospectus; the Company is duly qualified as a foreign
corporation to transact business and is in good standing in each
jurisdiction in which such qualification is required, whether by reason of
the ownership or leasing of property or the conduct of business, except
where the failure to so qualify and be in good standing would not have a
material adverse effect on the condition, financial or otherwise, or the
earnings, business affairs or business prospects of the Company and its
subsidiaries considered as one enterprise; and the Company is in
substantial compliance with all laws, ordinances and regulations of each
state in which it owns properties that are material to the properties and
business of the Company and its subsidiaries considered as one enterprise
in such state.
(vii) Good Standing of Subsidiaries. Each subsidiary of the Company
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which is a significant subsidiary (each, a "Significant Subsidiary") as
defined in Rule 405 of Regulation C of the 1933 Act Regulations has been
duly organized and is validly existing as a corporation or partnership, as
the case may be, in good standing under the laws of the jurisdiction of its
organization, has power and authority as a corporation or partnership, as
the case may be, to own, lease and operate its properties and conduct its
business as described in the Prospectus and is duly qualified as a foreign
corporation or partnership, as the case may be, to transact business and is
in good standing in each jurisdiction in which such qualification is
required, whether by reason of the ownership or leasing of property or the
conduct of business, except where the failure to so qualify would not have
a material adverse effect on the condition, financial or otherwise, or the
earnings, business affairs or business prospects of the Company and its
subsidiaries considered as one enterprise; all of the issued and
outstanding capital stock of each such corporate subsidiary has been duly
authorized and validly issued, is fully paid and non-assessable and, except
for directors' qualifying shares, is owned by the Company, directly or
through subsidiaries, free and clear of any security interest, mortgage,
pledge, lien, encumbrance, claim or equity; and all of the issued and
outstanding partnership interests of each such subsidiary which is a
partnership have been duly authorized (if applicable) and validly issued
and are fully paid and non-assessable and (except for other partnership
interests described in the Prospectus) are owned by the Company, directly
or through corporate subsidiaries, free and clear of any security interest,
mortgage, pledge, lien, encumbrance, claim or equity.
(viii) REIT Status. The Company has at all times operated in such
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manner as to qualify as a "real estate investment trust" under the Internal
Revenue Code of 1986, as amended (the "Code"), and intends to continue to
operate in such manner.
(ix) Capitalization. The authorized capital stock of the Company is
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as set forth in the Prospectus under "Capitalization" (except for
subsequent issuances, if any,
5
pursuant to reservations, agreements or employee benefit plans referred to
in the Prospectus); the shares of issued Common Stock have been duly
authorized and validly issued and are fully paid and non-assessable; the
Company has the requisite corporate power and authority to execute and
deliver this Agreement and to perform its obligations hereunder and the
Securities have been duly authorized for issuance and sale to the
Underwriters pursuant to this Agreement and, when issued and delivered by
the Company pursuant to this Agreement against payment of the consideration
set forth herein, will be validly issued and fully paid and non-assessable;
the Common Stock and the Preferred Stock conform to all statements relating
thereto contained in the Prospectus and such descriptions conform to the
rights set forth in the instruments defining the same; the issuance of the
Securities is not subject to preemptive rights or similar rights; and,
after giving effect to the sale of the Securities and the sale of any other
of the Registered Securities to be issued prior to the delivery of the
Securities, the aggregate amount of Securities which have been issued and
sold by the Company will not exceed the aggregate amount of theretofore
unsold Registered Securities.
(x) Absence of Defaults and Conflicts. Neither the Company nor any
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of its subsidiaries is in violation of its charter or bylaws or in material
default in the performance or observance of any obligation, agreement,
covenant or condition contained in any contract, indenture, mortgage, loan
agreement, note, lease or other instrument to which the Company or any of
its subsidiaries is a party or by which it or any of them or their
properties may be bound or to which any of the property or assets of the
Company or any of its subsidiaries is subject and in which the violation or
default might result in a material adverse change in the condition,
financial or otherwise, or in the earnings, business affairs or business
prospects of the Company and its subsidiaries considered as one enterprise;
and the execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated herein and compliance by the
Company with its obligations hereunder have been duly authorized by all
necessary corporate action and will not conflict with or constitute a
breach of, or default under, or result in the creation or imposition of any
lien, charge or encumbrance upon any property or assets of the Company or
any of its subsidiaries pursuant to any contract, indenture, mortgage, loan
agreement, note, lease or other instrument to which the Company or any of
its subsidiaries is a party or by which it or any of them may be bound, or
to which any of the property or assets of the Company or any of its
subsidiaries is subject, nor will such action result in any violation of
the provisions of the charter or bylaws of the Company or any law,
administrative regulation or administrative or court order or decree.
(xi) Absence of Proceedings. There is no action, suit or proceeding
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before or by any court or governmental agency or body, domestic or foreign,
now pending, or, to the knowledge of the Company, threatened, against or
affecting the Company or any of its subsidiaries, which is required to be
disclosed in the Registration Statement (other than as disclosed therein),
or which 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 and its subsidiaries considered as one enterprise,
or which might materially and adversely affect the properties or assets
thereof or which might materially and adversely affect the consummation of
this Agreement or any transaction contemplated hereby; all pending legal or
governmental proceedings to which the
6
Company or any of its subsidiaries is a party or of which any of their
respective property or assets is the subject which are not described in or
incorporated by reference in the Registration Statement, including ordinary
routine litigation incidental to the business, are, considered in the
aggregate, not material; and there are no contracts or documents of the
Company or any of its subsidiaries which are required to be filed or
incorporated by reference as exhibits to, or incorporated by reference in,
the Registration Statement by the 1933 Act or by the 1933 Act Regulations
which have not been so filed.
(xii) Absence of Further Requirements. No authorization, approval,
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consent, order or decree of any court or governmental authority or agency
is required for the consummation by the Company of the transactions
contemplated by this Agreement or in connection with the offering, issuance
or sale of the Securities hereunder, except such as may be required under
the 1933 Act or the 1933 Act Regulations or state securities laws.
(xiii) Authorization of Purchase Agreement. This Agreement has been
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duly authorized, executed and delivered by the Company and, upon execution
and delivery by the Underwriters, will be a valid and legally binding
agreement of the Company.
(xiv) Title to Property. The Company and its subsidiaries have good
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title to all real property or interests in real property owned by it or any
of them, in each case free and clear of all liens, encumbrances and defects
except such as are stated in or included in documents incorporated or
deemed to be incorporated by reference in the Prospectus or such as would
not materially adversely affect the condition, financial or otherwise, or
the earnings, business affairs or business prospects of the Company and its
subsidiaries considered as one enterprise; the Company and its subsidiaries
have obtained satisfactory confirmations (consisting of policies of title
insurance or commitments or binders therefor or opinions of counsel based
upon the examination of abstracts) confirming, except as otherwise
described in the Prospectus, (A) that the Company and its subsidiaries have
the foregoing title to such real property and interests in real property,
and (B) that the instruments securing the Company's and its subsidiaries'
real estate mortgage loans create valid liens upon the real properties
described in such instruments enjoying the priorities intended, subject
only to exceptions to title which have no material adverse effect on the
value of such real properties and interests in relation to the Company and
its subsidiaries considered as one enterprise; and no material real
property and buildings are held under lease by the Company (other than
long-term ground leases).
(xv) Investment Company Act. The Company is not required to be
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registered under the Investment Company Act of 1940, as amended (the "1940
Act").
(b) Any certificate signed by any officer of the Company and delivered to
the Representative or to counsel for the Underwriters shall be deemed a
representation and warranty by the Company to each Underwriter as to the matters
covered thereby.
Section 2. Sale and Delivery to Underwriters; Closing.
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(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 each Underwriter,
7
severally and not jointly, and each Underwriter, severally and not jointly,
agrees to purchase from the Company, at $______ per share, the number of Initial
Securities set forth in Schedule A opposite the name of such Underwriter plus
any additional number of Initial Securities which such Underwriter may become
obligated to purchase pursuant to the provisions of Section 10 hereof.
In addition, on the basis of the representations and warranties herein
contained and subject to the terms and conditions herein set forth, the Company
hereby grants an option to the Underwriters, severally and not jointly, to
purchase up to an additional 525,000 shares of Common Stock at the price per
share set forth in paragraph (a) above. The option hereby granted will expire
30 days after the Representation Date, and may be exercised in whole or in part
from time to time only for the purpose of covering over-allotments which may be
made in connection with the offering and distribution of the Initial Securities
upon notice by the Representative to the Company setting forth the number of
Option Securities as to which the several Underwriters are then exercising the
option and the time and date of payment and delivery for such Option Securities.
Any such time and date of delivery (a "Date of Delivery") shall be determined by
the Representative, but shall not be later than seven full business days after
the exercise of said option, nor in any event prior to Closing Time, as
hereinafter defined, unless otherwise agreed upon by the Representative and the
Company. . If the option is exercised as to all or any portion of the Option
Securities, each of the Underwriters, acting severally and not jointly, will
purchase that proportion of the total number of Option Securities then being
purchased which the number of Initial Securities set forth in Schedule A
opposite the name of such Underwriter bears to the total number of Initial
Securities (except as otherwise provided in the Pricing Agreement), subject in
each case to such adjustments as the Representative in its discretion shall make
to eliminate any sales or purchases of fractional shares.
(b) Payment of the purchase price for, and delivery of certificates for,
the Initial Securities shall be made at the office of Latham & Watkins, 633 West
Fifth Street, Suite 4000, Los Angeles, California 90071-2007, or at such other
place as shall be agreed upon by the Representative and the Company, at 7:00
A.M., Los Angeles time, on May 14, 2001, or such other time not later than ten
business days after such date as shall be agreed upon by the Representative and
the Company (such time and date of payment and delivery being herein called
"Closing Time"). In addition, in the event that any or all of the Option
Securities are purchased by the Underwriters, payment of the purchase price for
and delivery of certificates for such Option Securities shall be made at the
above-mentioned office of Latham & Watkins, or at such other place as shall be
mutually agreed upon by the Representative and the Company, on each Date of
Delivery as specified in the notice from the Representative to the Company.
Payment shall be made to the Company by wire transfer of immediately available
funds to a bank account designated by the Company against delivery to the
Representative for the respective accounts of the Underwriters of certificates
for the Securities to be purchased by them. Certificates for the Initial
Securities and the Option Securities, if any, shall be in such denominations and
registered in such names as the Representative may request in writing at least
one business day before Closing Time or the relevant Date of Delivery, as the
case may be. It is understood that each Underwriter has authorized the
Representative, for its account, to accept delivery of, receipt for, and make
payment of the purchase price for, the Initial Securities and the Option
Securities, if any, which it has agreed to purchase. Merrill Lynch,
individually and not as representative of the Underwriters, may (but shall not
be obligated to) make payment of the
8
purchase price for the Initial Securities or the Option Securities, if any, to
be purchased by any Underwriter whose check has not been received by Closing
Time, but such payment shall not relieve such Underwriter from its obligations
hereunder. The certificates for the Initial Securities and the Option
Securities, if any, will be made available for examination and packaging by the
Representative not later than 10:00 A.M. on the last business day prior to
Closing Time or the relevant Date of Delivery, as the case may be in New York,
New York.
Section 3. Covenants of the Company. The Company covenants with each
------------------------
Underwriters as follows:
(a) Compliance with Securities Regulations and Commission Requests.
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The Company will notify the Representative immediately, and confirm the
notice in writing, (i) of the effectiveness of any post-effective amendment
to the Registration Statement, (ii) of the mailing or the delivery to the
Commission for filing of the Prospectus or any amendment to the
Registration Statement or amendment or supplement to the Prospectus or any
document to be filed pursuant to the 1934 Act during any period when the
Prospectus is required to be delivered under the 1933 Act, (iii) of the
receipt of any comments or inquiries from the Commission relating to the
Registration Statement or Prospectus, (iv) of any request by the Commission
for any amendment to the Registration Statement or any amendment or
supplement to the Prospectus or for additional information, (v) of the
issuance by the Commission of any stop order suspending the effectiveness
of the Registration Statement or the initiation of any proceeding for that
purpose, and (vi) of the issuance by any state securities commission or
other regulatory authority of any order suspending the qualification or the
exemption from qualification of the Securities under state securities or
Blue Sky laws or the initiation of any proceedings for that purpose. The
Company will make every reasonable effort to prevent the issuance by the
Commission of any stop order and, if any such stop order is issued, to
obtain the lifting thereof at the earliest possible moment. The Company
will provide the Underwriters with copies of the form of Prospectus, in
such number as the Underwriters may reasonably request, and file or
transmit for filing with the Commission such Prospectus in accordance with
Rule 424(b) of the 1933 Act Regulations by the close of business in New
York on the second business day immediately succeeding the date hereof.
(b) Filing of Amendments. The Company will give the Representative
--------------------
notice of its intention to file or prepare any amendment to the
Registration Statement (including any filing under Rule 462(b)) or any
amendment or supplement to the Prospectus (including any revised prospectus
which the Company proposes for use by the Underwriters in connection with
the offering of the Securities that differs from the prospectus filed with
the Commission pursuant to Rule 424(b) of the 1933 Act Regulations, whether
or not such revised prospectus is required to be filed pursuant to Rule
424(b) of the 1933 Act Regulations or any abbreviated term sheet prepared
in reliance on Rule 434 of the 1933 Act Regulations), will furnish the
Representative 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
9
supplement or use any such prospectus to which the Representative or
counsel for the Underwriters shall reasonably object.
(c) Delivery of Registration Statements. The Company will deliver to
-----------------------------------
the Representative as many signed copies of the Registration Statement as
originally filed and of each amendment thereto (including exhibits filed
therewith and documents incorporated or deemed to be incorporated by
reference therein) as the Representative may reasonably request and will
also deliver to the Representative as many conformed copies of the
Registration Statement as originally filed and of each amendment thereto
(including documents incorporated or deemed to be incorporated by reference
therein but without exhibits filed therewith) as the Representative may
reasonably request.
(d) Delivery of Prospectuses. The Company will furnish to each
------------------------
Underwriter, from time to time during the period when the Prospectus is
required to be delivered under the 1933 Act or the 1934 Act, such number of
copies of the Prospectus (as amended or supplemented) as such Underwriter
may reasonably request for the purposes contemplated by the 1933 Act or the
1934 Act or the respective applicable rules and regulations of the
Commission thereunder.
(e) Continued Compliance with Securities Laws. If any event shall
-----------------------------------------
occur as a result of which it is necessary, in the opinion of counsel for
the Underwriters or counsel for the Company, 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 to a purchaser, the
Company will forthwith amend or supplement the Prospectus (in form and
substance satisfactory to counsel for the Underwriters) so that, as so
amended or supplemented, the Prospectus will not contain 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 to a purchaser, not misleading, and
the Company will furnish to the Underwriters a reasonable number of copies
of such amendment or supplement.
(f) Blue Sky Qualifications. The Company will endeavor, in
-----------------------
cooperation with the Underwriters, to qualify the Securities for offering
and sale under the applicable securities laws of such states and other
jurisdictions of the United States as the Representative may designate;
provided, however, that the Company shall not be obligated to file any
general consent to service of process or to qualify as a foreign
corporation in any jurisdiction in which it is not so qualified. In each
jurisdiction in which the Securities shall have been so qualified, the
Company will file such statements and reports as may be required by laws of
such jurisdiction to continue such qualification in effect for as long as
may be required for the distribution of the Securities.
(g) Earnings Statement. The Company will make generally available to
------------------
its security holders as soon as practicable, but not later than 60 days
after the close of the period covered thereby, an earnings statement (in
form complying with the provisions of Rule 158 of the 1933 Act Regulations)
covering the twelve month period beginning not later than the first day of
the Company's fiscal quarter next following the "effective date" (as
defined in said Rule 158) of the Registration Statement.
10
(h) Use of Proceeds. The Company will use the net proceeds received
---------------
by it from the sale of the Securities in the manner to be specified in the
Prospectus Supplement under "Use of Proceeds."
(i) Preparation of Prospectus Supplement. Immediately following the
------------------------------------
execution of this Agreement, the Company will prepare a prospectus
supplement, dated the date hereof (the "Prospectus Supplement"), containing
the terms of the Securities, the plan of distribution thereof and such
other information as may be required by the 1933 Act or the 1933 Act
Regulations or as the Representative and the Company deem appropriate, and
will file or transmit for filing with the Commission in accordance with
Rule 424(b) of the 1933 Act Regulations copies of the Prospectus (including
such Prospectus Supplement).
(j) Reporting Requirements. The Company, during the period when the
----------------------
Prospectus is required to be delivered under the 1933 Act or the 1934 Act,
will file promptly all documents required to be filed with the Commission
pursuant to Section 13, 14 or 15 of the 1934 Act within the time periods
required by the 1934 Act and the 1934 Act Regulations.
(k) Lock-up Period. During a period of 90 days from the date of this
--------------
Agreement, the Company will not, without the prior written consent of the
Representative, directly or indirectly (i) offer, pledge, sell, contract to
sell, sell any option or contract to purchase, purchase any option or
contract to sell, grant any option, right or warrant to purchase or
otherwise transfer or dispose of any shares of Common Stock or any
securities convertible into or exercisable or exchangeable for Common Stock
or file any registration statement under the 1933 Act with respect to the
foregoing or (ii) enter into any swap or other agreement or transaction
that transfers, in whole or in part, directly or indirectly, the economic
consequences of ownership of Common Stock, whether any such swap,
agreement, or other transaction described in (i) or (ii) above is to be
settled by delivery of Common Stock, other securities, cash or otherwise,
except for (A) Common Stock issued pursuant to this Agreement, (B) Common
Stock issued or options to purchase Common Stock granted pursuant to
existing employee benefit plans of the Company or (C) Common Stock issued
or securities exchangeable for shares of Common Stock in connection with
the acquisition of properties or interests therein (provided that the
recipients of such Common Stock or securities referred to in this clause
(C), pursuant to agreements in effect on the date hereof, agree in writing
to lock-up provisions substantially identical to those contained in the
Lock-Up Agreement attached hereto as Exhibit B).
Section 4. Payment of Expenses. The Company will pay all expenses
-------------------
incident to the performance of its obligations under this Agreement, including
(i) the printing and filing of the Registration Statement as originally filed
and of each amendment thereto, (ii) the preparation, issuance and delivery of
the certificates for the Securities to the Underwriters, (iii) the fees and
disbursements of the Company's counsel and accountants, (iv) the qualification
of the Securities under securities laws in accordance with the provisions of
Section 3(f) hereof, including filing fees and the reasonable fee and
disbursements of counsel for the Underwriters in connection
11
therewith and in connection with the preparation of a Supplemental Blue Sky
Survey, (v) the printing and delivery to the Underwriters in quantities as
hereinabove stated of copies of the Registration Statement as originally filed
and of each amendment thereto, of each preliminary prospectus and preliminary
prospectus supplement and of the Prospectus and Prospectus Supplement and any
amendments or supplements thereto, including any abbreviated term sheet
delivered by the Company pursuant to Rule 434 of the 1933 Act Regulations, (vi)
the printing and delivery to the Underwriters of copies of the Supplemental Blue
Sky Survey and (vii) the fees and expenses incurred in connection with the
listing of the Securities on the New York Stock Exchange.
If this Agreement is cancelled or terminated by the Representative in
accordance with the provisions of Section 5 or Section 9(a)(i) hereof, the
Company shall reimburse the Underwriters for all of their out-of-pocket
expenses, including the reasonable fees and disbursements of counsel for the
Underwriters.
Section 5. Conditions of Underwriters' Obligations. The obligations of
---------------------------------------
the Underwriters 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) Effectiveness of Registration Statement. 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 Prospectus (including the Prospectus
Supplement referred to in Section 3(i) hereof) shall have been filed or
transmitted for filing with the Commission 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 the
Representative of such timely filing or transmittal.
(b) Opinions. At Closing Time the Representative shall have received:
--------
(1) The favorable opinion, dated as of Closing Time, of Latham &
Watkins, special counsel for the Company, as set forth in Exhibit A
hereto.
(2) The favorable opinion, dated as of Closing Time, of Latham &
Watkins, special counsel for the Company, in form and scope
satisfactory to counsel for the Underwriters and subject to customary
assumptions, limitations and exceptions acceptable to counsel for the
Underwriters, to the effect that:
(i) the Company was organized in conformity with the
requirements for qualification as a real estate investment trust
under the Code commencing with its taxable year ending December
31, 1985, and its proposed method of operation will enable it to
meet the requirements for qualification and taxation as a real
estate investment trust under the Code; and
12
(ii) the information in the Prospectus under the captions
"Certain Federal Income Tax Considerations to the Company," and
"Material Federal Income Tax Considerations to Holders of Common
Stock," insofar as such statements constitute matters of law,
summaries of legal matters, documents or proceedings, or legal
conclusions, has been reviewed by them and is accurate in all
material respects.
(3) The favorable opinion, dated as of Closing Time, of Ballard
Spahr Andrews & Ingersoll, LLP, Maryland counsel for the Company, in
form and scope satisfactory to counsel for the Underwriters, to the
effect that:
(i) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the
State of Maryland.
(ii) The Company has the corporate power and authority to
own, lease and operate its properties and to conduct its business
as described in the Prospectus.
(iii) The authorized capital stock of the Company is as set
forth in the Prospectus under "Capitalization."
(iv) The Securities have been duly authorized for issuance
and sale to the Underwriters pursuant to this Agreement and, when
issued and delivered by the Company pursuant to this Agreement
against payment of the consideration set forth herein, will be
validly issued and fully paid and non-assessable. The issuance of
such Securities is not subject to preemptive rights under the
charter or bylaws of the Company or the Maryland General
Corporation Law.
(v) Texas HCP, Inc. has been duly incorporated and is
validly existing as a corporation in good standing under the laws
of the State of Maryland and has the corporate power and
authority to own, lease and operate its properties and to conduct
its business as described in the Prospectus. All of the issued
and outstanding shares of capital stock of such subsidiary has
been duly authorized and validly issued, is fully paid and non-
assessable and is owned by the Company, directly or through
subsidiaries, free and clear of any security interest, mortgage,
pledge, lien, or claim.
(vi) The execution and delivery of this Agreement has been
duly and validly authorized by all necessary corporate action on
the part of the Company under its charter and bylaws and the
Maryland General Corporation Law. This Agreement has been duly
executed and delivered by the Company.
13
(vii) The Common Stock conforms to the description thereof
contained in the Prospectus and the form of certificate used to
evidence the Securities is in due and proper form.
(viii) The issuance and sale of the Securities by the
Company and the compliance by the Company with the provisions of
this Agreement and the consummation of the transactions
contemplated hereby, will not result in any violation of the
provisions of the charter or bylaws of the Company.
(ix) No authorization, approval, consent, decree or order
of any court or governmental authority or agency is required
under the Maryland General Corporation Law for the consummation
by the Company of the transactions contemplated by this Agreement
or in connection with the sale of the Securities hereunder,
except such as may have been obtained or rendered, as the case
may be.
(x) The statements set forth in the Prospectus Supplement
under the caption "Recent and Proposed Charter Amendments,"
insofar as such statements purport to summarize certain
provisions of the documents referred to therein, fairly summarize
such provisions in all material respects, and insofar as such
statements constitute matters of law, summaries of legal matters
or legal conclusions, are correct in all material respects.
In rendering its opinion, Ballard Spahr Andrews & Ingersoll, LLP
shall state that each of Sidley Austin Brown & Wood LLP, in rendering
its opinion pursuant to Section 5(b)(5), and Latham & Watkins, in
rendering its opinion pursuant to Section 5(b)(1), may rely upon such
opinion as to matters arising under the laws of the State of Maryland.
(4) The favorable opinion, dated as of Closing Time, of
Edward J. Henning, General Counsel of the Company, in form and scope
satisfactory to counsel for the Underwriters, to the effect that:
(i) To the best of such counsel's knowledge and
information, the Company is duly qualified as a foreign
corporation to transact business and is in good standing in each
jurisdiction in which its ownership or lease of substantial
properties or the conduct of its business requires such
qualification, except where the failure to so qualify would not
have a material adverse effect on the condition, financial or
otherwise, or the earnings, business affairs or business
prospects of the Company and its subsidiaries considered as one
enterprise.
(ii) To the best of such counsel's knowledge and
information, each Significant Subsidiary of the Company is duly
qualified as a foreign corporation to transact business and is in
good standing in each jurisdiction in which its ownership or
lease of substantial properties or the
14
conduct of its business requires such qualification, except where
the failure to so qualify and be in good standing would not have
a material adverse effect on the condition, financial or
otherwise, or the earnings, business affairs or business
prospects of the Company and its subsidiaries considered as one
enterprise.
(iii) To the best of such counsel's knowledge and
information, no material default exists in the due performance or
observance by the Company or any of its subsidiaries of any
obligation, agreement, covenant or condition contained in any
contract, indenture, mortgage, loan agreement, note, lease or
other instrument described or referred to in the Registration
Statement or filed as an exhibit thereto or incorporated by
reference therein which would have a material adverse effect on
the condition, financial or otherwise, or in the earnings,
business affairs or business prospects of the Company and its
subsidiaries considered as one enterprise.
(iv) To the best of such counsel's knowledge and
information, there are no contracts, indentures, mortgages, loan
agreements, notes, leases or other instruments or documents
required to be described or referred to in the Registration
Statement or to be filed as exhibits thereto other than those
described or referred to therein or filed or incorporated by
reference as exhibits thereto and the descriptions thereof or
references thereto are correct.
(v) The authorized, issued and outstanding capital stock
of the Company is as set forth in the Prospectus under
"Capitalization" (except for subsequent issuances, if any,
pursuant to reservations, agreements, dividend reinvestment plans
or employee or director stock plans referred to in the
Prospectus), and the shares of issued and outstanding Common
Stock and Preferred Stock have been duly authorized and validly
issued and are fully paid and non-assessable.
(vi) To the best of such counsel's knowledge, there are no
legal or governmental proceedings pending or threatened which are
required to be disclosed in the Prospectus.
(vii) The issue and sale of the Securities and the
compliance by the Company with the provisions of this Agreement
and the consummation of the transactions contemplated herein will
not, to the best of such counsel's knowledge, result in any
material violation of any order applicable to the Company of any
court or governmental agency or body having jurisdiction over the
Company or any of its subsidiaries or any of their properties.
(5) The favorable opinion, dated as of Closing Time, of
Sidley Austin Brown & Wood LLP, counsel for the Underwriters, with
respect to the matters set forth in paragraph (ii) of Exhibit A hereto
and in subparagraphs (i), (iv), (vi) and
15
(vii) of subsection (b)(3) of this Section. In rendering such opinion,
Sidley Austin Brown & Wood LLP may rely upon the opinion of Ballard
Spahr Andrews & Ingersoll, LLP, rendered pursuant to Section 5(b)(3),
as to matters arising under the laws of the State of Maryland.
(6) In giving their opinions required by subsections (b)(1) and
(b)(5), respectively, of this Section, Latham & Watkins and Sidley
Austin Brown & Wood LLP shall each additionally state that nothing has
come to their attention that would cause them to believe that the
Registration Statement, at the time it became effective, contained an
untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the statements
therein not misleading or that the Prospectus, at the Representation
Date (unless the term "Prospectus" refers to a prospectus which has
been provided to the Underwriters 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 Representation Date, in which case at
the time it is first provided to the Underwriters for such use) or at
Closing Time, included or includes an untrue statement of a material
fact or omitted or omits to state a material fact necessary in order
to make the statements therein, in the light of the circumstances
under which they were made, not misleading; it being understood that
such counsel shall express no opinion with respect to the financial
statements, schedules and other financial data in the Registration
Statement or the Prospectus. In giving their opinions, Latham &
Watkins and Sidley Austin Brown & Wood LLP may rely, to the extent
recited therein, (A) as to all matters of fact, upon certificates and
written statements of officers of the Company and (B) as to the
qualification and good standing of the Company and each Significant
Subsidiary to do business in any state or jurisdiction, upon
certificates of appropriate government officials.
(c) Officers' Certificate. At Closing Time there shall not have been,
---------------------
since the date hereof or since the respective dates as of which information
is given in the Registration Statement and the Prospectus, any material
adverse change in the condition, financial or otherwise, or in the
earnings, business affairs or business prospects of the Company and its
subsidiaries considered as one enterprise, whether or not arising in the
ordinary course of business, and the Representative shall have received a
certificate of the President or a Vice President of the Company and of the
chief financial or chief accounting officer of the Company, dated as of
Closing Time, to the effect that (i) there has been no such material
adverse change, (ii) the representations and warranties in Section 1 hereof
are true and correct with the same force and effect as though expressly
made at and as of Closing Time, (iii) the Company has performed or complied
with all agreements and satisfied all conditions on its part to be
performed or satisfied at or prior to Closing Time, and (iv) no stop order
suspending the effectiveness of the Registration Statement has been issued
and no proceedings for that purpose have been initiated or, to the best
knowledge and information of such officer, threatened by the Commission. As
used in this Section 5(c), the term "Prospectus" means the Prospectus in
the form first used to confirm sales of the Securities.
16
(d) Accountant's Comfort Letter. At the time of the execution of this
---------------------------
Agreement, the Representative shall have received from Arthur Andersen LLP
a letter, dated such date, in form and substance satisfactory to the
Representative, containing statements and information of the type
ordinarily included in accountants "comfort letters" to underwriters with
respect to financial statements and financial information included and
incorporated by reference in the Registration Statement and the Prospectus
(including, without limitation, the pro forma financial statements, if any)
and substantially in the same form as the draft letter previously delivered
to and approved by the Representative.
(e) Bring-down Comfort Letter. At Closing Time the Representative
-------------------------
shall have received from Arthur Andersen LLP a letter, dated as of Closing
Time, to the effect that they reaffirm the statements made in the letter
furnished pursuant to subsection (d) of this Section, except that the
specified date referred to therein shall be a date not more than three
business days prior to Closing Time.
(f) Listing. At Closing Time the Securities shall have been duly
-------
listed, subject to notice of issuance, on the New York Stock Exchange.
(g) Lock-up Agreements. The Representative shall have received an
------------------
agreement substantially in the form of Exhibit B hereto signed by the
persons listed on Schedule B hereto, dated as of the date of this
Agreement.
(h) Additional Documents. At Closing Time and at each Date of
--------------------
Delivery, if any, counsel for the Underwriters 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 and completeness of any of the representations and
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 satisfactory in
form and substance to the Representative and counsel for the Underwriters.
(i) Over-allotment Option. In the event the Underwriters exercise the
---------------------
option granted to them in Section 2 hereof to purchase all or any portion
of the Option Securities, the representations and warranties of the Company
contained herein and the statements in any certificates furnished by the
Company hereunder shall be true and correct as of each Date of Delivery,
and subject to the following further conditions:
(1) The Representative shall have received:
(i) The favorable opinion of Latham & Watkins, special
counsel for the Company, in form and substance satisfactory to
counsel for the Underwriters, dated such Date of Delivery,
relating to the Option Securities and otherwise to the same
effect as the opinion required by Sections 5(b)(1) and 5(b)(6)
hereof.
17
(ii) The favorable opinion of Latham & Watkins, special
counsel for the Company, in form and substance satisfactory to counsel
for the Underwriters, dated such Date of Delivery, reaffirming their
opinion delivered at Closing Time pursuant to Section 5(b)(2) hereof.
(iii) The favorable opinion of Ballard Spahr Andrews &
Ingersoll, LLP, Maryland counsel for the Company, in form and
substance satisfactory to counsel for the Underwriters, dated such
Date of Delivery, relating to the Option Securities and otherwise to
the same effect as the opinion required by Sections 5(b)(3) hereof.
(iv) The favorable opinion of Edward J. Henning, General
Counsel of the Company, in form and substance satisfactory to counsel
for the Underwriters, dated such Date of Delivery, reaffirming his
opinion delivered at Closing Time pursuant to Section 5(b)(4) hereof.
(v) The favorable opinion of Sidley Austin Brown & Wood
LLP, counsel for the Underwriters, dated such Date of Delivery,
relating to the Option Securities and otherwise to the same effect as
the opinion required by Sections 5(b)(5) and 5(b)(6) hereof.
(vi) A certificate of the President or a Vice President of
the Company and the chief financial or chief accounting officer of the
Company, dated such Date of Delivery, confirming that the certificate
delivered at Closing Time pursuant to Section 5(c) hereof remains true
and correct as of such Date of Delivery.
(vii) A letter from Arthur Andersen LLP, in form and
substance satisfactory to the Representative, dated such Date of
Delivery, substantially the same in scope and substance as the letter
furnished to the Representative pursuant to Section 5(e) hereof except
that the "specified date" in the letter furnished pursuant to this
subsection shall be a date not more than three business days prior to
such Date of Delivery.
If any condition specified in this Section shall not have been fulfilled
when and as required to be fulfilled, this Agreement may be terminated by the
Representative by notifying 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. Notwithstanding any such termination,
the provisions of Sections 1, 4, 6, 7 and 8 shall remain in effect.
Section 6. Indemnification.
---------------
(a) Indemnification of the Underwriters. The Company agrees to indemnify
-----------------------------------
and hold harmless each Underwriter and each person, if any, who controls any
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act, as follows:
18
(i) 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 any omission or alleged omission therefrom
of a material fact required to be stated therein or necessary to make the
statements therein not misleading or arising out of any untrue statement or
alleged untrue statement of a material fact contained in any preliminary
prospectus, any preliminary prospectus supplement 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;
(ii) 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
(iii) against any and all expense whatsoever, as incurred (including,
subject to Section 6(c) hereof, the fees and disbursements of counsel
chosen by Merrill Lynch), reasonably incurred 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 statement or omission, or any such
alleged untrue statement or omission, to the extent that any such expense
is not paid under (i) or (ii) above;
provided, however, that (A) 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 any Underwriter through Merrill Lynch expressly for use in the
Registration Statement (or any amendment thereto) or any preliminary prospectus,
preliminary prospectus supplement or the Prospectus (or any amendment or
supplement thereto), and (B) with respect to any untrue statement or omission or
alleged untrue statement or omission made in any preliminary prospectus or
preliminary prospectus supplement, this indemnity agreement shall not inure to
the benefit of the Underwriters (or to the benefit of any person controlling an
Underwriter within the meaning of Section 15 of the 1933 Act) to the extent that
any such loss, liability, claim, damage or expense of the Underwriters or any
person controlling the Underwriters' results from the fact that the Underwriters
sold Securities to a person to whom it shall be established there was not sent
or given by the Underwriters or on the Underwriters' behalf at or prior to the
written confirmation of the sale of such Securities to such person, a copy of
the Prospectus (as then amended or supplemented), if required by law to have
been so delivered, and if the Prospectus (as so amended or supplemented) would
have cured the defect giving rise to such loss, liability, claim, damage or
expense and provided that the Company shall have met its obligation pursuant to
this Agreement to provide the Underwriters with such Prospectus (as so amended
or supplemented).
19
(b) Indemnification of Company, Directors and Officers. Each Underwriter
--------------------------------------------------
severally agrees to indemnify and hold harmless the Company, its directors, each
of its 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, 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 any
preliminary prospectus, preliminary prospectus supplement or the Prospectus (or
any amendment or supplement thereto) in reliance upon and in conformity with
written information furnished to the Company by any Underwriter through Merrill
Lynch expressly for use in the Registration Statement (or any amendment thereto)
or such preliminary prospectus, preliminary prospectus supplement or the
Prospectus (or any amendment or supplement thereto).
(c) Actions Against Parties; Notification. Each indemnified party shall
-------------------------------------
give written 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 hereunder to the extent it is
not materially prejudiced as a result thereof and in any event shall not relieve
it from any liability which it may have otherwise than on account of this
indemnity agreement. In the case of parties indemnified pursuant to Section
6(a) above, counsel to the indemnified parties shall be selected by the
Representative, and, in the case of parties indemnified pursuant to Section 6(b)
above, counsel to the indemnified parties shall be selected by the Company. An
indemnifying party may participate at its own expense in the defense of any such
action; provided, however, that counsel to the indemnifying party shall not
-------- -------
(except with the consent of the indemnified party) also be counsel to the
indemnified party. 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. No
indemnifying party shall, without the prior written consent of the indemnified
parties, settle or compromise or consent to the entry of any judgment with
respect to any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or any claim whatsoever in
respect of which indemnification or contribution could be sought under this
Section 6 or Section 7 hereof (whether or not the indemnified parties are actual
or potential parties thereto), unless such settlement, compromise or consent (i)
includes an unconditional release of each indemnified party from all liability
arising out of such litigation, investigation, proceeding or claim and (ii) does
not include a statement as to or an admission of fault, culpability or a failure
to act by or on behalf of any indemnified party.
(d) Settlement without Consent if Failure to Reimburse. If at any time an
--------------------------------------------------
indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel, such indemnifying party
agrees that it shall be liable for any settlement of the nature contemplated by
Section 6(a)(ii) effected without its written consent if (i) such settlement is
entered into more than 45 days after receipt by such indemnifying party of the
aforesaid request, (ii) such indemnifying party shall have received notice of
the terms of such settlement at least 30 days prior to such settlement being
entered into and (iii) such indemnifying
20
party shall not have reimbursed such indemnified party in accordance with such
request prior to the date of such settlement.
(e) EDGAR. For purposes of this Section 6, all references to the
-----
Registration Statement, any preliminary prospectus, preliminary prospectus
supplement or the Prospectus, or any amendment or supplement to any of the
foregoing, shall be deemed to include, without limitation, any electronically
transmitted copies thereof filed with the Commission pursuant to EDGAR.
Section 7. Contribution. If the indemnification provided for in Section 6
------------
hereof is for any reason unavailable to or insufficient to hold harmless an
indemnified party in respect of any losses, liabilities, claims, damages or
expenses referred to therein, then each indemnifying party shall contribute to
the aggregate amount of such losses, liabilities, claims, damages and expenses
incurred by such indemnified party, as incurred, (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company, on the one
hand, and the Underwriters, on the other 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 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 the
Underwriters, 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 the
Underwriters, 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 underwriting discount received by the Underwriters, in
each case as set forth on the cover of the Prospectus (or, if Rule 434 is used,
the corresponding location on the Term Sheet) bear to the aggregate public
offering price of the Securities as set forth on such cover (or corresponding
location on the Term Sheet, as the case may be).
The relative fault of the Company, on the one hand, and the Underwriters,
on the other hand, shall be determined by reference to, among other things,
whether any such untrue or alleged untrue statement of a material fact or
omission or alleged omission to state a material fact relates to information
supplied by the Company or by the Underwriters and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.
The Company and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this Section 7 were determined by pro rata
allocation or by any other method of allocation which does not take account of
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
21
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.
Notwithstanding the provisions of this Section 7, no Underwriter shall not
be required to contribute any amount in excess of the amount by which the total
price at which the Securities underwritten by it were offered exceeds the amount
of any damages which such Underwriter has otherwise been required to pay by
reason of 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.
For purposes of this Section 7, each person, if any, who controls an
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act shall have the same rights to contribution as such Underwriter, and
each director of the Company, each officer of the Company who signed the
Registration Statement, and each person, if any, who controls the Company within
the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 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
contained in certificates of officers of the Company submitted pursuant hereto
or thereto, shall remain operative and in full force and effect, regardless of
any investigation made by or on behalf of any Underwriter or any controlling
person, or by or on behalf of the Company, and shall survive delivery of the
Securities to the Underwriters.
Section 9. Termination of Agreement.
------------------------
(a) The Representative 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 date of this Agreement or since the respective dates as of which information
is given in the Prospectus, any material adverse change in the condition,
financial or otherwise, or in the earnings, business affairs or business
prospects of the Company and its subsidiaries considered as one enterprise,
whether or not arising in the ordinary course of business, (ii) if there has
occurred any material adverse change in the financial markets in the United
States, any outbreak of hostilities or other calamity or crisis or change or
development involving a prospective change in national or international
political, financial or economic conditions, in each case the effect of which on
the financial markets of the United States is such as to make it, in the
judgment of the Representative, impracticable to market the Securities or
enforce contracts for the sale of the Securities, or (iii) if trading in the
securities of the Company has been suspended by the Commission, or if trading
generally on either the American Stock Exchange or the New York Stock Exchange
or in the NASDAQ National Market 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,
the NASD or any other governmental authority, or if a banking moratorium has
been declared by either federal, New York, Maryland or
22
California authorities. As used in this Section 9(a), the term "Prospectus"
means the Prospectus in the form first used to confirm sales of the Securities.
(b) If this Agreement is terminated pursuant to this Section, such
termination shall be without liability of any party to any other party except as
provided in Section 4 hereof. Notwithstanding any such termination, the
provisions of Sections 4, 6, 7 and 8 shall remain in effect.
Section 10. Default by One or More of the Underwriters. If one or more of
------------------------------------------
the Underwriters shall fail at Closing Time or a Date of Delivery to purchase
the Securities which it or they are obligated to purchase under this Agreement
(the "Defaulted Securities"), the Representative shall have the right, within 24
hours thereafter, to make arrangements for one or more of the non-defaulting
Underwriters, or any other underwriters, to purchase all, but not less than all,
of the Defaulted Securities in such amounts as may be agreed upon and upon the
terms herein set forth; if, however, the Representative shall not have completed
such arrangements within such 24-hour period, then:
(a) if the number of Defaulted Securities does not exceed 10% of the
number of Securities to be purchased on such date, each of the non-defaulting
Underwriters shall be obligated, severally and not jointly, to purchase the full
amount thereof in the proportions that their respective underwriting obligations
hereunder bear to the underwriting obligations of all non-defaulting
Underwriters, or
(b) if the number of Defaulted Securities exceeds 10% of the number of
Securities to be purchased on such date, this Agreement or, with respect to any
Date of Delivery which occurs after the Closing Time, the obligation of the
Underwriters to purchase and of the Company to sell the Option Securities to be
purchased and sold on such Date of Delivery shall terminate without liability on
the part of any non-defaulting Underwriter.
No action taken pursuant to this Section shall relieve any defaulting
Underwriter from liability in respect of its default.
In the event of any such default which does not result in a termination of
this Agreement or in the case of a Date of Delivery which is after the Closing
Time, which does not result in a termination of the obligation of the
Underwriters to purchase and the Company to sell the relevant Option Securities,
as the case may be, either the Representative or the Company shall have the
right to postpone Closing Time or the relevant Date of Delivery, as the case may
be, for a period not exceeding seven days in order to effect any required
changes in the Registration Statement or Prospectus or in any other documents or
arrangements. As used herein, the term "Underwriter" includes any person
substituted for an Underwriter under this Section 10.
Section 11. 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 written telecommunication. Notices to the
Underwriters shall be directed to the Representative at Merrill Lynch & Co.,
10877 Wilshire Boulevard, Suite 1900, Los Angeles, CA 90024, Attention: James F.
Flaherty III, Managing Director, and notices to the Company shall be
23
directed to it at 4675 MacArthur Court, 9th Floor, Newport Beach, California
92660, Attention: Kenneth B. Roath, President and Chief Executive Officer, with
a copy to Pamela B. Kelly, Esq. at Latham & Watkins, 633 West Fifth Street,
Suite 4000, Los Angeles, California 90071.
Section 12. Parties. This Agreement shall inure to the benefit of and be
-------
binding upon the Underwriters and the Company and their respective successors.
Nothing expressed or mentioned in this Agreement is intended or shall be
construed to give any person, firm or corporation, other than the Underwriters
and the Company and their respective successors and the controlling persons and
the officers and directors referred to in Sections 6 and 7 hereof 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 Underwriters and the Company and their
respective successors, and said controlling persons and said officers and
directors and their heirs and legal representatives, and for the benefit of no
other person, firm or corporation. No purchaser of Securities from any
Underwriter shall be deemed to be a successor merely by reason of such purchase.
Section 13. Governing Law and Time. This Agreement shall be governed by
----------------------
and construed in accordance with the laws of the State of California applicable
to agreements made and to be performed in such State. Unless stated otherwise,
all specified times of day refer to New York City time.
24
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to the Company a counterpart hereof, whereupon this
instrument, along with all counterparts, will become a binding agreement between
the Underwriters and the Company in accordance with its terms.
Very truly yours,
HEALTH CARE PROPERTY INVESTORS, INC.
By: ___________________________________
Name:
Title:
CONFIRMED AND ACCEPTED,
as of the date first above written:
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By: _____________________________________________
Authorized Signatory
For itself and as Representative of the
other Underwriters named in Schedule A hereto.
25
SCHEDULE A
Number
Name of Underwriter of Securities
------------------- -------------
Merrill Lynch, Pierce Fenner & Smith
Incorporated....................................... 1,225,700
Salomon Smith Barney Inc. 758,100
Banc of America Securities LLC 758,100
Legg Mason Wood Walker, Incorporated 758,100
---------
Total.............................................. 3,500,000
=========
Sch B-1
SCHEDULE B
1. Kenneth B. Roath
2. James G. Reynolds
3. Devasis Ghose
4. Edward J. Henning
5. Paul V. Colony
6. Robert R. Fanning, Jr.
7. Michael D. McKee
8. Orville E. Melby
9. Harold M. Messmer, Jr.
10. Peter L. Rhein
11. Stephen R. Maulbetsch
Sch B-1