EXHIBIT 1
HEALTHCARE REALTY TRUST INCORPORATED
$300,000,000 5.125% SENIOR NOTES DUE 2014
UNDERWRITING AGREEMENT
March 25, 2004
Wachovia Capital Markets, LLC
One Wachovia Center
301 South College Street
Charlotte, North Carolina 28288
Healthcare Realty Trust Incorporated, a Maryland corporation that has
elected to be taxed as a real estate investment trust (the "Company"), proposes
to issue and sell to the underwriters named in Schedule I hereto (the
"Underwriters") $300,000,000 aggregate principal amount of its 5.125% Senior
Notes due 2014 (the "Notes"). The Notes are to be issued pursuant to an
indenture dated as of May 15, 2001, between the Company and Wachovia Bank,
National Association (formerly, First Union National Bank), as trustee (the
"Trustee"), as supplemented by a second supplemental indenture thereto to be
dated as of March 30, 2004 (together, the "Indenture"). Copies of the Indenture,
in substantially final form, have been delivered to each of the Underwriters.
1. PURCHASE AND SALE. On the basis of the representations, warranties
and agreements contained herein, but subject to the terms and conditions herein
set forth, the Company hereby agrees to sell to each Underwriter, and each
Underwriter agrees, severally and not jointly, to purchase from the Company, at
the purchase price of 98.848% of the principal amount thereof (plus accrued
interest from March 30, 2004, if any), the aggregate principal amount of the
Notes set forth opposite the name of such Underwriter on Schedule I hereto.
The Company is advised by you that the Underwriters intend to (i) make
a public offering of such the Notes as soon after the date hereof as in your
judgment is advisable and (ii) initially offer the Notes upon the terms set
forth in the Prospectus.
Subject to Sections 5 and 8, if any Underwriter shall default in its
obligation to take up and pay for the Notes to be purchased by it hereunder
(otherwise than for reasons sufficient to justify the termination of this
Agreement under the provisions of Section 8) and if the principal amount of the
Notes that all Underwriters so defaulting shall have agreed but failed to take
up and pay for does not exceed 10% of the total aggregate principal amount of
the Notes, the non-defaulting Underwriters shall take up and pay for (in
addition to the principal amount of the Notes they are obligated to purchase
pursuant to this Section 1) the principal amount of the Notes agreed to be
purchased by all such defaulting Underwriters, as hereinafter provided. Such
Notes shall be taken up and paid for by such non-defaulting Underwriters in such
principal amount or amounts as you may designate with the consent of each
Underwriter so designated or, in the
event no such designation is made, such Notes shall be taken up and paid for by
all non-defaulting Underwriters pro rata in proportion to the aggregate
principal amount of Notes set forth opposite the names of such non-defaulting
Underwriters on Schedule I.
If a new Underwriter or Underwriters are substituted by the
Underwriters or by the Company for a defaulting Underwriter or Underwriters in
accordance with the foregoing provision, the Company or you shall have the right
to postpone the time of purchase for a period not exceeding five business days
so that any necessary changes in the Prospectus or other documents may be
effected. The term Underwriter as used in this Agreement shall refer to and
include any Underwriter substituted under this Section 1 with like effect as if
such substituted Underwriter had originally been named in Schedule I.
If the aggregate principal amount of the Notes that the defaulting
Underwriter or Underwriters agreed to purchase exceeds 10% of the total
aggregate principal amount of the Notes that all Underwriters agreed to purchase
hereunder, and if neither the non-defaulting Underwriters nor the Company shall
make arrangements within the five business day period stated above for the
purchase of all the Notes that the defaulting Underwriter or Underwriters agreed
to purchase hereunder, this Agreement shall be terminated without further act or
deed and without any liability on the part of the Company to any non-defaulting
Underwriter and without any liability on the part of any non-defaulting
Underwriter to the Company. Nothing in this paragraph, and no action taken
hereunder, shall relieve any defaulting Underwriter from liability in respect of
any default of such Underwriter under this Agreement.
2. PAYMENT AND DELIVERY. Payment of the purchase price for the Notes
shall be made to the Company by Federal Funds wire transfer, against delivery of
the Notes to you through the facilities of The Depository Trust Company ("DTC")
for the respective accounts of the Underwriters. Such payment and delivery shall
be made at 10:00 A.M., New York City time, on March 30, 2004 or at such other
place, time and date as the Underwriters and the Company may agree upon in
writing, such date being herein called the "Closing Date."
3. REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF THE COMPANY. (a) The
Company represents and warrants to and agrees with each of the Underwriters
that:
(i) The Company has carefully prepared, pursuant to and in
conformity with the requirements of the Securities Act of 1933, as
amended (the "1933 Act"), and the rules and regulations promulgated
thereunder (the "1933 Act Rules and Regulations") by the Securities and
Exchange Commission (the "SEC"), and has filed with the SEC a
registration statement on Form S-3 (File No. 333-109306, which also
constitutes a post-effective amendment to a previous registration
statement File No. 333-56608 pursuant to Rule 429 of the 1933 Act Rules
and Regulations), which has been declared effective and includes a
prospectus relating to common stock, common stock warrants, preferred
stock and debt securities of the Company, for registration of the Notes
under the 1933 Act and the offering thereof from time to time in
accordance with Rule 415 of the 1933 Act Rules and Regulations. The
Company and the offering of the Notes in the registration statement
meet the requirements for use of Form S-3 under the 1933 Act. The
documents
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incorporated by reference in the Prospectus pursuant to Item 12 of Form
S-3 under the 1933 Act, at the time they were filed with the SEC,
complied in all material respects with the requirements of the
Securities Exchange Act of 1934, as amended (the "1934 Act"), and the
rules and regulations promulgated thereunder (the "1934 Act Rules and
Regulations") and none of such documents, when they were filed with the
SEC, contained an untrue statement of a material fact or omitted to
state a material fact necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading;
and any further documents so filed and incorporated by reference in the
Prospectus, when such documents are filed with the SEC, will conform in
all material respects to the requirements of the 1934 Act and the 1934
Act Rules and Regulations and will not contain an untrue statement of a
material fact or omit to state a material fact necessary to make the
statements therein, in light of the circumstances under which they were
made, not misleading. Such registration statements (and any further
registration statements that may be filed by the Company for the
purpose of registering additional Notes and in connection with which
this Agreement is included or incorporated therein by reference as an
exhibit) including all documents incorporated therein by reference, as
from time to time amended or supplemented by the filing of documents
pursuant to the 1934 Act, the 1933 Act or otherwise, are referred to
herein as the "Registration Statement." The term "Registration
Statement" also means the registration statement as amended by a
post-effective amendment and includes any abbreviated registration
statement prepared and filed with the SEC in accordance with Rule
462(b) under the 1933 Act (an "Abbreviated Registration Statement").
The time at which the Registration Statement became effective is
referred to herein as the "Effective Date." The Company proposes to
prepare and file with the SEC, pursuant to Rule 424 under the 1933 Act,
a supplement to the prospectus (the "Prospectus Supplement") included
in the Registration Statement that will describe the issuance of the
Notes pursuant to this Agreement, the sale and plan of distribution of
the Notes and additional information concerning the Company and its
business. The Company may, from time to time, prepare and file with the
SEC, pursuant to Rule 430 or 430A under the 1933 Act Rules and
Regulations a preliminary Prospectus Supplement (each a "Preliminary
Prospectus") containing the prospectus included as part of the
Registration Statement, as supplemented by a preliminary Prospectus
Supplement, and including the documents incorporated in such prospectus
by reference, relating to the Notes. The prospectus, including all
documents incorporated therein by reference, included in the
Registration Statement, as supplemented by any Preliminary Prospectus
or Prospectus Supplement, in the form filed by the Company with the SEC
is herein called the "Prospectus." For purposes of this Agreement, the
words "amend," "amendment," "amended," "supplement" or "supplemented"
with respect to the Registration Statement or the Prospectus shall mean
amendments or supplements to the Registration Statement or the
Prospectus, as the case may be as well as documents filed after the
date of this Agreement and incorporated by reference therein as
described above.
(ii) The Indenture has been duly and validly authorized and is
the valid and binding agreement of the Company, enforceable against the
Company in accordance with its terms except as enforcement thereof may
be limited by bankruptcy, insolvency or other similar laws affecting
creditors' rights generally or general equitable principles (the
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"Exceptions"); and the Indenture has been duly qualified under the
Trust Indenture Act of 1939 (the "1939 Act") and conforms in all
material respects to the description thereof in the Registration
Statement and the Prospectus.
(iii) The Notes have been duly authorized by the Company and,
when executed by the Company and authenticated by the Trustee in
accordance with the Indenture and delivered to the Underwriters against
payment therefor in accordance with the terms hereof, will have been
validly issued and delivered, and will constitute valid and legally
binding obligations of the Company entitled to the benefits of the
Indenture and enforceable in accordance with their terms, except as
enforcement thereof may be limited by the Exceptions, and the Notes
will conform in all material respects to the description thereof in the
Prospectus as amended or supplemented with respect to such Notes.
(iv) Neither the SEC nor any state or other jurisdiction or
other regulatory body has issued, and neither is, to the knowledge of
the Company, threatening to issue, any stop order under the 1933 Act or
other order suspending the effectiveness of the Registration Statement
(as amended or supplemented) or preventing or suspending the use of any
Prospectus Supplement, Preliminary Prospectus or the Prospectus or
suspending the qualification or registration of the Notes for offering
or sale in any jurisdiction, nor instituted or, to the knowledge of the
Company, threatened to institute proceedings for any such purpose. The
Prospectus and each Prospectus Supplement or Preliminary Prospectus, as
of the applicable date of issue, and the Registration Statement and any
amendments thereto as of the applicable effective date, contain or will
contain, as the case may be, all statements which are required to be
stated therein by, and in all material respects conform or will
conform, as the case may be, to the requirements of the 1933 Act, the
1933 Act Rules and Regulations and the 1939 Act. Neither the
Registration Statement nor any amendment thereto, as of the applicable
effective date, contains or will contain, as the case may be, any
untrue statement of a material fact or omits or will omit to state any
material fact required to be stated therein or necessary to make the
statements therein, not misleading, and neither the Prospectus, any
Prospectus Supplement, nor Preliminary Prospectus, at the applicable
date of issue, contains or will contain, as the case may be, any untrue
statement of a material fact or omits or will omit to state any
material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they
were made, not misleading; provided, however, that the Company makes no
representation or warranty as to information contained in or omitted
from the Registration Statement, any Preliminary Prospectus or the
Prospectus, or any such amendment or supplement, in reliance upon, and
in conformity with, written information furnished to the Company
relating to the Underwriters by or on behalf of the Underwriters
expressly for use in the preparation thereof or the Trustee's Statement
of Eligibility and Qualification on Form T-1. There is no contract or
document required to be described in the Registration Statement or
Prospectus or to be filed as an exhibit to the Registration Statement
that is not described or filed as required. Any future documents
incorporated by reference so filed, when they are filed, will comply in
all material respects with the requirements of the 1934 Act and the
1934 Act Rules and Regulations; no such incorporated document contained
or will
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contain any untrue statement of a material fact or omit or will
omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading; and, when read
together and with the other information in the Prospectus, at the time
the Registration Statement became effective and at the Closing Date,
each such incorporated document did not or will not, as the case may
be, 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.
(v) This Agreement has been duly authorized, executed and
delivered by the Company and this Agreement constitutes a valid and
legally binding obligation of the Company enforceable against the
Company in accordance with its terms, except as enforceability may be
limited by the Exceptions.
(vi) All outstanding shares of capital stock of the Company
have been duly authorized and validly issued and are fully paid,
non-assessable and not subject to any preemptive or similar rights. The
authorized capital stock of the Company conforms as to legal matters to
the description thereof contained in, or incorporated by reference
into, the Prospectus.
(vii) The Company and its "subsidiaries" (as defined in
Section 3(a)(x) hereof) have been duly incorporated or organized and
are validly existing as corporations or organizations in good standing
under the laws of the states or other jurisdictions in which they are
incorporated or organized, with full power and authority (corporate and
other) to own, lease and operate their properties and conduct their
businesses as described in the Prospectus and, with respect to the
Company, to execute and deliver, and perform the Company's obligations
under, this Agreement; the Company and its subsidiaries are duly
qualified to do business as foreign corporations or organizations in
good standing in each state or other jurisdiction in which their
ownership or leasing of property or conduct of business legally
requires such qualification, except where the failure to be so
qualified, individually or in the aggregate, would not have a Material
Adverse Effect. The term "Material Adverse Effect" as used herein means
any material adverse effect on the condition (financial or other), net
worth, business, affairs, management, prospects, results of operations
or cash flow of the Company and its subsidiaries, taken as a whole.
(viii) Neither the Company nor any of its subsidiaries has
sustained since the date of the latest audited financial statements
included or incorporated by reference in the Prospectus any material
loss or interference with its business from fire, explosion, flood or
other calamity, whether or not covered by insurance, or from any labor
dispute or court or governmental action, order or decree otherwise than
as set forth in the Prospectus or as disclosed in writing to the
Underwriters prior to execution and delivery of this Agreement and,
since the respective dates as of which information is given in the
Prospectus, there has not been any change in the capital stock or
long-term debt of the Company or any of its subsidiaries which would
give rise to a Material Adverse Effect, or any development involving a
prospective Material Adverse Effect, in or affecting the general
affairs, management, financial position, stockholders' equity or
results of operations of the
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Company and its subsidiaries taken as a whole, otherwise than as set
forth in the Prospectus.
(ix) The issuance and sale of the Notes pursuant to this
Agreement and the execution, delivery and performance by the Company of
this Agreement, and the consummation of the transactions herein or
therein contemplated, will not conflict with or result in a breach or
violation of any of the terms or provisions of, or constitute a default
under, or result in the creation or imposition of any lien, charge or
encumbrance upon any properties or assets of the Company or any of its
subsidiaries under, any indenture, mortgage, deed of trust, loan
agreement 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 is bound, or to which any of the properties or assets of
the Company or any of its subsidiaries is subject, or violate any
statute, rule, regulation or other law, or any order or judgment, of
any court or governmental agency or body having jurisdiction over the
Company or any of its subsidiaries or any of their properties, except
to such extent as, individually or in the aggregate, does not have a
Material Adverse Effect, nor will such action result in any violation
of the provisions of the Company's articles of incorporation or bylaws;
and no consent, approval, authorization, order, registration or
qualification of or with any such court or governmental agency or body
is required for the execution, delivery and performance of this
Agreement, the issuance and sale of the Notes pursuant to this
Agreement or the consummation of the transactions contemplated hereby,
except such as have been, or will be prior to the date of this
Agreement, obtained under the 1933 Act and such consents, approvals,
authorizations, registrations or qualifications as may be required
under state securities or blue sky laws in connection with the purchase
and distribution of the Notes by the Underwriters.
(x) All corporate action required to be taken by the Company
for the authorization, issuance and sale of the Notes pursuant to this
Agreement has been duly and validly taken prior to the date hereof. The
Company has no subsidiaries or affiliates (collectively,
"subsidiaries") other than those identified in Exhibit 21 to the
Company's last filed Annual Report on Form 10-K or as otherwise
disclosed in writing to the Underwriters ("Exhibit 21"). The Company
owns all of the outstanding capital stock of or other equity interests
in each such subsidiary except as set forth in Exhibit 21 or as
otherwise disclosed in writing to the Underwriters. Other than the
subsidiaries referred to above, the Company does not own, directly or
indirectly, any shares of stock or any other equity or long-term debt
of any other corporation or have any direct or indirect equity interest
or ownership of long-term debt in any firm, partnership, joint venture,
limited liability company, association or other entity, except as
described in the Prospectus. The outstanding shares of capital stock of
or other equity interests in the Company's subsidiaries have been duly
authorized and validly issued, are fully paid and non-assessable and
are owned by the Company free and clear of any mortgage, pledge, lien,
encumbrance, charge or adverse claim and are not the subject of any
agreement or understanding with any person and were not issued in
violation of any preemptive or similar rights; and there are no
outstanding subscriptions, rights, warrants, options, calls,
convertible securities, commitments of sale or instruments related to
or entitling any
6
person to purchase or otherwise acquire any shares of, or any security
convertible into or exchangeable or exercisable for, the capital stock
of, or other ownership interest in any of the subsidiaries.
(xi) The statements set forth in the Prospectus, as of its
date of issue, describing the Notes and this Agreement, insofar as they
purport to describe the provisions of the laws and documents referred
to therein, are accurate, complete and fair in all material respects.
(xii) Each of the Company and its subsidiaries is in
possession of and is operating in compliance with all franchises,
grants, authorizations, licenses, certificates, permits, easements,
consents, orders and approvals ("Permits") from all state, federal,
foreign and other regulatory authorities, and has satisfied the
requirements imposed by regulatory bodies, administrative agencies or
other governmental bodies, agencies or officials, that are required for
the Company and its subsidiaries lawfully to own, lease and operate
their properties and conduct their businesses as described in the
Prospectus, in each case with such exceptions, individually or in the
aggregate, as would not have a Material Adverse Effect; and, each of
the Company and its subsidiaries is conducting its business in
compliance with all of the laws, rules and regulations of each
jurisdiction in which it conducts its business, in each case with such
exceptions, individually or in the aggregate, as would not have a
Material Adverse Effect; each of the Company and its subsidiaries has
filed all notices, reports, documents or other information ("Notices")
required to be filed under applicable laws, rules and regulations, in
each case, with such exceptions, individually or in the aggregate, as
would not have a Material Adverse Effect; and, except as otherwise
specifically described in the Prospectus, neither the Company nor any
of its subsidiaries has received any notification from any court or
governmental body, authority or agency, relating to the revocation or
modification of any such Permit or, to the effect that any additional
authorization, approval, order, consent, license, certificate, permit,
registration or qualification ("Approvals") from such regulatory
authority is needed to be obtained by any of them, in any case where it
could be reasonably expected that obtaining such Approvals or the
failure to obtain such Approvals, individually or in the aggregate,
would have a Material Adverse Effect.
(xiii) The Company and its subsidiaries have filed all
necessary federal, state and foreign income and franchise tax returns
and paid all taxes shown as due thereon; all such tax returns are
complete and correct in all material respects; all tax liabilities are
adequately provided for on the books of the Company and its
subsidiaries except to such extent as would not have a Material Adverse
Effect; the Company and its subsidiaries have made all necessary
payroll tax payments and are current and up-to-date; and the Company
and its subsidiaries have no knowledge of any tax proceeding or action
pending or threatened against the Company or its subsidiaries which,
individually or in the aggregate, might have a Material Adverse Effect.
(xiv) Except as described in the Prospectus, the Company and
its subsidiaries own or possess, or can acquire on reasonable terms,
adequate patents, patent licenses,
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trademarks, service marks and trade names necessary to conduct the
business now operated by them, and neither the Company nor any of its
subsidiaries has received any notice of infringement of or conflict
with asserted rights of others with respect to any patents, patent
licenses, trademarks, service marks or trade names which, individually
or in the aggregate, if the subject of an unfavorable decision, ruling
or finding, would have a Material Adverse Effect.
(xv) Except in each case such as would not have a Material
Adverse Effect, the Company and its subsidiaries have good and
marketable title in fee simple to all items of real property and good
and marketable title to all personal property owned by them, in each
case free and clear of all liens, encumbrances, restrictions and
defects except such as are described in the Prospectus or do not
materially affect the value of such property and do not interfere with
the use made and proposed to be made of such property; and any property
held under lease or sublease by the Company or any of its subsidiaries
is held under valid, duly authorized, and enforceable leases or
subleases with such exceptions as are not material and do not interfere
with the use made and proposed to be made of such property by the
Company and its subsidiaries; the Company and its subsidiaries have
title insurance on all real properties described in the Prospectus as
having been financed by them pursuant to a mortgage loan in an amount
at least equal to the aggregate principal amount of each such mortgage
loan or in an amount at least equal to the aggregate acquisition price
paid by the Company or its subsidiaries for such properties and the
cost of construction of the improvements located on such properties;
and neither the Company nor any of its subsidiaries has any notice or
knowledge of any material claim of any sort which has been, or may be,
asserted by anyone adverse to the Company's or any of its subsidiaries
rights as lessee or sublessee under any lease or sublease described
above, or affecting or questioning the Company's or any of its
subsidiaries' rights to the continued possession of the leased or
subleased premises under any such lease or sublease in conflict with
the terms thereof. To the knowledge of the Company, no lessee of any
portion of any of the properties described in the Prospectus is in
default under its respective lease and there is no event which, but for
the passage of time or the giving of notice or both, would constitute a
default under any such lease, except such defaults that would,
individually or in the aggregate, not have a Material Adverse Effect.
(xvi) No labor disturbance exists with the employees of the
Company or any of its subsidiaries or, to the Company's knowledge, is
imminent which, individually or in the aggregate, would have a Material
Adverse Effect. None of the employees of the Company or any of its
subsidiaries is represented by a union and, to the knowledge of the
Company and its subsidiaries, no union organizing activities are taking
place. Neither the Company nor any of its subsidiaries has violated any
federal, state or local law or foreign law relating to discrimination
in hiring, promotion or pay of employees, nor any applicable wage or
hour laws, or the rules and regulations thereunder, or analogous
foreign laws and regulations, which might, individually or in the
aggregate, result in a Material Adverse Effect.
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(xvii) The Company and its subsidiaries are in compliance in
all material respects with all presently applicable provisions of the
Employee Retirement Income Security Act of 1974, as amended, including
the regulations and published interpretations thereunder ("ERISA"); no
"reportable event" (as defined in ERISA) has occurred with respect to
any "pension plan" (as defined in ERISA) for which the Company and its
subsidiaries would have any liability; the Company and its subsidiaries
have not incurred and do not expect to incur liability under (i) Title
IV of ERISA with respect to termination of, or withdrawal from, any
"pension plan" or (ii) Sections 412 or 4971 of the Internal Revenue
Code of 1986, as amended, including the regulations and published
interpretations thereunder (the "Code"); and each "pension plan" for
which the Company or any of its subsidiaries would have any liability
that is intended to be qualified under Section 401(a) of the Code is so
qualified in all material respects, and, to the Company's knowledge,
nothing has occurred, whether by action or by failure to act, which
would cause the loss of such qualification.
(xviii) The Company and its subsidiaries maintain insurance of
the types and in the amounts generally deemed adequate for its
business, including, but not limited to, directors' and officers'
insurance, insurance covering real and personal property owned or
leased by the Company and its subsidiaries against theft, damage,
destruction, acts of vandalism and all other risks customarily insured
against, all of which insurance is in full force and effect. Neither
the Company nor any of its subsidiaries has been refused any insurance
coverage sought or applied for, and the Company has no reason to
believe that it and its subsidiaries will not be able to renew their
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 have a Material Adverse
Effect.
(xix) Neither the Company nor any of its subsidiaries is, or
with the giving of notice or lapse of time or both would be, in default
or violation with respect to its articles of incorporation or by-laws.
Neither the Company nor any of its subsidiaries is, or with the giving
of notice or lapse of time or both would be, in default in the
performance or observance of any material obligation, agreement,
covenant or condition contained in any indenture, mortgage, deed of
trust, loan agreement, 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 is bound or to which any of the
properties or assets of the Company or any of its subsidiaries is
subject, or in violation of any statutes, laws, ordinances or
governmental rules or regulations or any orders or decrees to which it
is subject, including, without limitation, Section 13 of the 1934 Act,
which default or violation, individually or in the aggregate, would
have a Material Adverse Effect. Neither the Company nor any of its
subsidiaries has, at any time during the past five years, (A) made any
unlawful contributions to any candidate for any political office, or
failed fully to disclose any contribution in violation of law, or (B)
made any payment to any state, federal or foreign government official,
or other person charged with similar public or quasi-public duty (other
than any such payment required or permitted by applicable law).
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(xx) Other than as set forth in the Prospectus, there are no
legal or governmental proceedings pending to which the Company or any
of its subsidiaries is a party or of which any property of the Company
or any of its subsidiaries is the subject, or to the Company's
knowledge, any person from whom the Company or any of its subsidiaries
acquired any of such property, or any lessee, sublessee or operator of
any such property or portion thereof is a party, that, if determined
adversely to the Company or any of its subsidiaries, would individually
or in the aggregate have a Material Adverse Effect or which would
materially and adversely affect the consummation of the transactions
contemplated hereby or which is required to be disclosed in the
Prospectus; to the Company's knowledge, no such proceedings are
threatened or contemplated. Neither the Company nor any of its
subsidiaries has, nor, to the Company's knowledge, any seller, lessee,
sublessee or operator of any such properties, or portion thereof or any
previous owner thereof has, received from any governmental authority
notice of any material violation of any municipal, state or federal
law, rule or regulation (including without limitation any such law,
rule or regulation applicable to the health care industry) and
including foreign, federal, state or local law or regulation relating
to human health or safety or the environment or hazardous substances or
materials concerning such properties, or any part thereof which has
heretofore been cured, and neither the Company nor any of its
subsidiaries knows of any such violation, or any factual basis,
occurrence or circumstance that would give rise to a claim under or
pursuant to any such laws, rules or regulations which would,
individually or in the aggregate, have a Material Adverse Effect.
Except as described in the Prospectus, none of the property owned or
leased by the Company or any of its subsidiaries is, to the knowledge
of the Company, contaminated with any waste or hazardous substances,
and neither the Company nor any of its subsidiaries may be deemed an
"owner or operator" of a "facility" or "vessel" which owns, possesses,
transports, generates or disposes of a "hazardous substance" as those
terms are defined in ss.9601 of the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, 42 U.S.C. ss.9601 et
seq. Neither the Company nor any of its subsidiaries, nor, to the
Company's knowledge, any seller, lessee, sublessee or operator of any
such property, or portion thereof has, received from any governmental
authority any written notice of any condemnation of or zoning change
affecting such properties, or any part thereof and the Company does not
know of any such condemnation or zoning change which is threatened and
which if consummated would have a Material Adverse Effect, or a
material adverse effect on any Material Subsidiary. No contract or
document of a character required to be described in the Registration
Statement, the Prospectus of any document incorporated by reference
therein or to be filed as an exhibit to the Registration Statement or
any document incorporated therein is not so described, filed or
incorporated by reference as required.
(xxi) The Company is not and, after giving effect to the
offering and sale of the Notes, will not be an "investment company" or
an entity "controlled" by an "investment company," as such terms are
defined in the Investment Company Act of 1940, as amended (the "1940
Act").
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(xxii) The Company has not distributed and, prior to the later
to occur of (i) the Closing Date and (ii) completion of the
distribution of the Notes, will not distribute any offering material in
connection with the offering and sale of the Notes other than the
Registration Statement, the Prospectus, the Preliminary Prospectus or
the Prospectus Supplement.
(xxiii) The accounting firm which has certified the financial
statements filed with or incorporated by reference in and as a part of
the Registration Statement, is an independent public accounting firm
within the meaning of the 1933 Act and the 1933 Act Rules and
Regulations. The consolidated financial statements and schedules of the
Company, including the notes thereto, filed with or incorporated by
reference and as a part of the Registration Statement or Prospectus,
are accurate in all material respects and present fairly in all
material respects the financial condition of the Company and its
subsidiaries as of the respective dates thereof and the consolidated
results of operations and changes in financial position and
consolidated statements of cash flow for the respective periods covered
thereby, all in conformity with generally accepted accounting
principles applied on a consistent basis throughout the periods
involved except as otherwise disclosed therein. All adjustments
necessary for a fair presentation of results for such periods have been
made. The selected financial data included or incorporated by reference
in the Registration Statement and Prospectus present fairly in all
material respects the information shown therein and have been compiled
on a basis consistent with that of the audited financial statements.
Any operating or other statistical data included or incorporated by
reference in the Registration Statement and Prospectus comply in all
material respects with the 1933 Act and the 1933 Act Rules and
Regulations and present fairly in all material respects the information
shown therein.
(xxiv) No holder of any security of the Company or any other
person has the right, contractual or otherwise, which has not been
waived by the holder thereof, (i) to cause the Company to sell or
otherwise issue to them, or to permit them to underwrite the sale of,
the Notes, or (ii) as a result of the consummation of the transactions
contemplated herein, to require registration under the 1933 Act of any
securities of the Company. Except for this Agreement, there are no
contracts, agreements or understandings between the Company or any of
its subsidiaries and any person that would give rise to a valid claim
against the Company, its subsidiaries or the Underwriters for a
brokerage commission, finder's fee or like payment in connection with
the issuance, purchase and sale of the Notes.
(xxv) (i) The Company is organized and operates in conformity
with the requirements for qualification as a real estate investment
trust ("REIT") under Sections 856 and 857 of the Code, (ii) the Company
qualified as a REIT for all taxable years prior to 2004, and (iii) the
Company's method of operation will enable it to meet the requirements
for taxation as a REIT under the Code for 2004 and all subsequent
taxable years, and the Company intends to qualify as a REIT for all
such years.
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(xxvi) Except as described in the Prospectus, neither the
Company nor any of its subsidiaries has either given or received any
communication regarding the termination of, or intent not to renew, any
of the leasehold interests of lessees in the Company's and its
subsidiaries' properties held under lease, any property operating
agreement or any other agreement between the Company or its
subsidiaries and the operators of its properties or facilities, and no
such termination or non-renewal has been threatened by the Company, any
of its subsidiaries or, to the Company's knowledge, any other party to
any such lease, other than as would not have, individually or in the
aggregate, a Material Adverse Effect.
(xxvii) Except for the subsidiaries ("Material Subsidiaries")
identified on Annex C to this Agreement, none of the subsidiaries of
the Company individually consist of more than 1.5%, or in the aggregate
consist of more than 10%, of the Company's (i) net assets, or (ii)
revenues for the most recently ended quarterly period.
(xxviii) There is and has been no failure on the part of the
Company and, to the Company's knowledge, any of the Company's directors
or officers, in their capacities as such, to comply with any provisions
of the Sarbanes-Oxley Act of 2002 and the rules and regulations
promulgated in connection therewith (collectively, the "Sarbanes Oxley
Act"), including Section 402 relating to loans and Sections 302 and 906
related to certifications.
(xxix) Neither the Company nor any subsidiary nor, to the
knowledge of the Company, any director, trustee, officer, agent,
employee or affiliate of the Company or any of its subsidiaries is
currently subject to any U.S. sanctions administered by the Office of
Foreign Assets Control of the U.S. Treasury Department ("OFAC"); and
the Company will not directly or indirectly use the proceeds of the
offering, or lend, contribute or otherwise make available such proceeds
to any subsidiary, joint venture partner or other person or entity, for
the purpose of financing any activities of any person currently subject
to any U.S. sanctions administered by OFAC.
(b) Any certificate signed by any officer of the Company and delivered
to the Underwriters or to counsel for the Underwriters shall be deemed a
representation and warranty by the Company to the Underwriters as to the matters
covered thereby.
4. ADDITIONAL COVENANTS. The Company covenants and agrees with the
Underwriter that:
(a) The Company will timely transmit copies of the Prospectus, and any
amendments or supplements thereto, or a term sheet or abbreviated term sheet, as
applicable, to the SEC for filing pursuant to Rule 424(b) of the 1933 Act Rules
and Regulations.
(b) The Company will deliver to the Underwriters as soon as practicable
after the date of this Agreement as many copies of the Prospectus (including all
documents incorporated by reference therein) as the Underwriters may reasonably
request for the purposes contemplated by the 1933 Act; the Company will promptly
advise the Underwriters of any request of the SEC for
12
amendment of the Registration Statement or for supplement to the Prospectus or
for any additional information, and of the issuance by the SEC or any state or
other jurisdiction or other regulatory body of any stop order under the 1933 Act
or other order suspending the effectiveness of the Registration Statement (as
amended or supplemented) or preventing or suspending the use of any Preliminary
Prospectus or the Prospectus or suspending the qualification or registration of
the Notes for offering or sale in any jurisdiction, and of the institution or
threat of any proceedings therefor, of which the Company shall have received
notice or otherwise have knowledge prior to the completion of the distribution
of the Notes; and the Company will use its best efforts to prevent the issuance
of any such stop order or other order and, if issued, to secure the prompt
removal thereof.
(c) After the date of this Agreement and prior to the Closing Date, the
Company will not file any amendment or supplement to the Registration Statement,
the Prospectus (or any other prospectus relating to the Notes filed pursuant to
Rule 424(b) of the 1933 Act Rules and Regulations that differs from the
Prospectus as filed pursuant to such Rule 424(b)) and will not file any document
under the 1934 Act before the termination of the offering of the Notes by the
Underwriters if the document would be deemed to be incorporated by reference
into the Registration Statement or the Prospectus, of which the Underwriters
shall not previously have been advised and furnished with a copy or to which the
Underwriters shall have reasonably objected or which is not in compliance with
the 1933 Act Rules and Regulations; and the Company will promptly notify you
after it shall have received notice thereof of the time when any amendment to
the Registration Statement becomes effective or when any supplement to the
Prospectus has been filed.
(d) During the period when the Prospectus relating to any of the Notes
is required to be delivered under the 1933 Act by any Underwriter or dealer, the
Company will comply, at its own expense, with all requirements imposed by the
1933 Act and the 1933 Act Rules and Regulations, as now and hereafter amended,
and by the rules and regulations of the SEC thereunder, as from time to time in
force, so far as necessary to permit the continuance of sales of or dealing in
the Notes during such period in accordance with the provisions hereof and as
contemplated by the Prospectus.
(e) If, during the period when the Prospectus relating to any of the
Notes is required to be delivered under the 1933 Act by any Underwriter or
dealer, (i) any event relating to or affecting the Company or of which the
Company shall be advised in writing by the Underwriters shall occur as a result
of which, in the opinion of the Company or the Underwriters, the Prospectus as
then amended or supplemented would include any untrue statement of a material
fact or omit to state a material fact necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading or (ii) it shall be necessary to amend or supplement the Registration
Statement or the Prospectus to comply with the 1933 Act, the 1933 Act Rules and
Regulations, the 1934 Act or the 1934 Act Rules and Regulations, the Company
will forthwith at its expense prepare and file with the SEC, and furnish to the
Underwriters a reasonable number of copies of, such amendment or supplement or
other filing that will correct such statement or omission or effect such
compliance.
13
(f) From time to time as requested by the Underwriters and during the
period when the Prospectus relating to the Notes is required to be delivered
under the 1933 Act by any Underwriter or dealer, the Company will furnish such
proper information as may be lawfully required and otherwise cooperate in
qualifying the Notes for offer and sale under the securities or blue sky laws of
such jurisdictions as the Underwriters may reasonably designate and will file
and make in each year such statements or reports as are or may be reasonably
required by the laws of such jurisdictions; provided, however, that the Company
shall not be required to qualify as a foreign corporation or shall be required
to qualify as a dealer in securities or to file a general consent to service of
process under the laws of any jurisdiction.
(g) In accordance with Section 11(a) of the 1933 Act and Rule 158 of
the 1933 Act Rules and Regulations, the Company will make generally available to
the holders of the Notes, as soon as practicable, an earnings statement (which
need not be audited) in reasonable detail covering the 12 months beginning not
later than the first day of the month next succeeding the month in which
occurred the effective date (within the meaning of Rule 158) of this Agreement.
(h) The Company shall file promptly all documents required to be filed
with the SEC pursuant to Sections 13(a), 13(c), 14 or 15(d) of the 1934 Act. The
Company shall furnish to its security holders annual reports containing
financial statements audited by independent public accountants and quarterly
reports containing financial statements and financial information which may be
unaudited. The Company will deliver to the Underwriters at its principal
executive office a reasonable number of copies of annual reports, quarterly
reports, current reports and copies of all other documents, reports and
information furnished by the Company to its shareholders or filed with any
securities exchange or market pursuant to the requirements of such exchange or
market or with the SEC pursuant to the 1933 Act or the 1934 Act. The Company
shall deliver to the Underwriters similar reports with respect to any
significant subsidiaries, as that term is defined in the 1933 Act Rules and
Regulations, which are not consolidated in the Company's financial statements.
Any report, document or other information required to be furnished under this
paragraph (h) shall be furnished as soon as practicable after such report,
document or information becomes available.
(i) During the period beginning from the date of this Agreement and
continuing through the Closing Date, the Company will not, without the prior
written consent of the Underwriters, offer for sale, sell or enter into any
agreement to sell, or otherwise dispose of, or publicly announce an intention to
effect any such transactions, any securities of the Company, except for the
Notes.
(j) The Company will apply the proceeds from the sale of the Notes as
set forth in the description under "Use of Proceeds" in the Prospectus, as
amended or supplemented, which description complies and will comply in all
respects with the requirements of Item 504 of Regulation S-K.
(k) The Company will promptly provide you with copies of all
correspondence to and from, and all documents issued to and by, the SEC in
connection with the registration of the Notes under the 1933 Act.
14
(l) After the date of this Agreement and prior to the Closing Date, the
Company will furnish to you, as soon as they have been prepared, and prior to
any filing with the SEC or public disclosure, copies of any unaudited interim
consolidated financial statements of the Company and its subsidiaries for any
periods subsequent to the periods covered by the financial statements appearing
in the Registration Statement and the Prospectus.
(m) After the date of this Agreement and prior to the Closing Date, the
Company will not issue any press releases or other communications directly or
indirectly and will hold no press conferences with respect to the Company or any
of its subsidiaries, the financial condition, results of operations, business,
properties, assets or liabilities of the Company or any of its subsidiaries, or
the offering of the Notes, without your prior written consent.
(o) The Company and its subsidiaries will maintain and keep accurate
books and records reflecting their assets and maintain internal accounting
controls which provide reasonable assurance that (1) transactions are executed
in accordance with management's authorization, (2) transactions are recorded as
necessary to permit the preparation of the Company's consolidated financial
statements and to maintain accountability for the assets of the Company and its
subsidiaries, (3) access to the assets of the Company and its subsidiaries is
permitted only in accordance with management's authorization, and (4) the
recorded accounts of the assets of the Company and its subsidiaries are compared
with existing assets at reasonable intervals.
(p) If the Company elects to rely on Rule 462(b) under the 1933 Act for
the sale of the Notes, the Company shall both file an Abbreviated Registration
Statement with the SEC in compliance with Rule 462(b) and pay the applicable
fees in accordance with Rule 111 of the 1933 Act by the earlier of (i) 8:00
P.M., New York City time, on the date of this Agreement, and (ii) the time that
confirmations are given or sent, as specified by Rule 462(b)(2).
(q) If at any time during the 90-day period after the date of this
Agreement, any rumor, publication or event relating to or affecting the Company
shall occur as a result of which in your opinion the market price of the Notes
has been or is likely to be materially affected (regardless of whether such
rumor, publication or event necessitates a supplement to or amendment of the
Prospectus), the Company will, after written notice from you advising the
Company to the effect set forth above, forthwith consult with you concerning the
issuance of a press release or other public statement, responding to or
commenting on such rumor, publication or event.
(r) (1) Each time the Registration Statement or Prospectus is amended
or supplemented from the date of this Agreement through the Closing Date (other
than by an amendment or supplement by filing of a Current Report on Form 8-K
which the Company deems to be immaterial or with respect to offerings of
securities not pursuant to this Agreement ), the Company will deliver or cause
to be delivered forthwith to the Underwriters a certificate signed by an
executive officer of the Company, dated the date of such amendment or
supplement, as the case may be, in form reasonably satisfactory to the
Underwriters, of the same tenor as the
15
certificate referred to in Section 5(i) of this Agreement relating to the
Registration Statement or the Prospectus as amended or supplemented to the time
of delivery of such certificate.
(2) Each time the Company furnishes a certificate pursuant to
Section 4(r)(1) of this Agreement, the Company will furnish or cause to be
furnished forthwith to the Underwriters a written opinion of counsel for the
Company. Any such opinion shall be dated the date of such amendment or
supplement, as the case may be, shall be in a form satisfactory to the
Underwriters and shall be of the same tenor as the opinion referred to in
Section 5(c) of this Agreement, but modified to relate to the Registration
Statement and the Prospectus as amended and supplemented to the time of delivery
of such opinion. In lieu of such opinion, counsel last furnishing such an
opinion to the Underwriters may furnish to the Underwriters a letter to the
effect that the Underwriters may rely on such last opinion to the same extent as
though it were dated the date of such letter (except that statements in such
last opinion will be deemed to relate to the Registration Statement and the
Prospectus as amended or supplemented to the time of delivery of such letter.)
(3) Each time the Registration Statement or the Prospectus is
amended or supplemented to set forth amended or supplemental financial
information or such amended or supplemental information is incorporated by
reference in the Prospectus (except with respect to offerings of securities not
pursuant to this Underwriting Agreement ), the Company shall cause its
independent public accountants forthwith to furnish the Underwriters with a
letter, dated the date of such amendment or supplement, as the case may be, in
form satisfactory to the Underwriters, of the same tenor as the letter referred
to in Section 5(e), with regard to the amended or supplemental financial
information included or incorporated by reference in the Registration Statement
or the Prospectus as amended or supplemented to the date of such letter;
provided, however, that each time amended or supplemented financial information
is incorporated by reference in the Prospectus to the Company's Quarterly Report
on Form 10-Q or a Current Report on Form 8-K, the letter required to be
delivered pursuant to this Section 4(r)(3) shall be delivered to the
Underwriters only upon reasonable request.
(s) The Company will continue to qualify as a REIT under the Code.
(t) The Company agrees to give, and will cause each of its subsidiaries
to give, and shall direct its financial advisors, accountants and legal counsel
to give, upon reasonable notice, the Underwriters and counsel to the
Underwriters and their respective authorized representatives reasonable access
to all offices and other facilities and to all contracts, agreements,
commitments, books and records of or pertaining to the Company or its
subsidiaries, will permit the foregoing to make such reasonable inspections as
they may require or would be appropriate in fulfilling any due diligence or
other obligations as provided by law and will cause its officers to furnish to
the Underwriters with such financial and operating data and other information
with respect to the business and properties of the Company and its subsidiaries
as the Underwriters may from time to time reasonably request. The Underwriters,
counsel to the Underwriters, and their respective authorized representatives
will use such information only in full compliance with Regulation FD.
16
(u) During the period beginning from the date of this Agreement and
continuing through the Closing Date, the Company agrees not to, and to use its
reasonable best efforts to cause its officers, directors and affiliates not to,
(i) take, directly or indirectly, any action designed to stabilize or manipulate
the price of any security of the Company, or which may cause or result in, or
which might in the future reasonably be expected to cause or result in, the
stabilization or manipulation of the price of any security of the Company, to
facilitate the sale or resale of any security of the Company, (ii) sell, bid
for, purchase or pay anyone any compensation for soliciting purchases of the
Notes other than pursuant to this Agreement or (iii) pay or agree to pay to any
person any compensation for soliciting any order to purchase any other
securities of the Company.
(v) The Company will comply with all applicable securities and other
applicable laws, rules and regulations, including, without limitation, the
Sarbanes Oxley Act, and will use its best efforts to cause the Company's
directors and officers, in their capacities as such, to comply with such laws,
rules and regulations, including, without limitation, the provisions of the
Sarbanes Oxley Act.
5. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The obligations of the
Underwriters to purchase and pay for the Notes under this Agreement shall be
subject to the accuracy, as of the date hereof, and as of the Closing Date, of
the representations and warranties of the Company contained herein, to the
performance by the Company of its covenants and obligations hereunder, and to
the following additional conditions:
(a) If the Registration Statement has not previously become effective,
the Registration Statement and all post-effective amendments thereto shall have
become effective not later than 11:00 P.M., New York City time, on the date of
this Agreement, or at such later date and time as may be approved by the
Underwriters; if the Company has elected to rely on Rule 462(b) under the 1933
Act, the Abbreviated Registration Statement shall have become effective not
later than the earlier of (x) 8:00 P.M. New York City time, on the date of this
Agreement, or (y) at such later date and time as may be approved by the
Underwriters. All filings required by Rule 424 and Rule 430A of the 1933 Act
Rules and Regulations shall have been made. No stop order suspending the
effectiveness of the Registration Statement, as amended from time to time, shall
have been issued and no proceeding for that purpose shall have been initiated
or, to the knowledge of the Company or any Underwriter, threatened or
contemplated by the SEC, and any request of the SEC for additional information
(to be included in the Registration Statement or the Prospectus or otherwise)
shall have been complied with to the reasonable satisfaction of the
Underwriters.
(b) The Underwriters shall not have advised the Company on or prior to
the Closing Date, that the Registration Statement or Prospectus or any amendment
or supplement thereto contains an untrue statement of fact which, in the opinion
of counsel to the Underwriters, is material, or omits to state a fact which, in
the opinion of such counsel, is material and is required to be stated therein or
is necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading.
17
(c) On the Closing Date, you shall have received one or more opinions
of counsel for the Company, addressed to you and dated the Closing Date, in
substantially the forms of Annex A and Annex B.
In rendering the opinion, such counsel may rely, (1) as to matters
involving laws of any jurisdiction other than New York or the United States,
upon opinions addressed to the Underwriters of other counsel satisfactory to it
and Bryan Cave LLP, and (2) as to all matters of fact, upon certificates and
written statements of the executive officers of, and accountants for, the
Company, provided, in either case, that such counsel shall state in their
opinion that they and the Underwriters are justified in relying thereon.
Such counsel shall also confirm that during the preparation of the
Registration Statement and Prospectus, such counsel participated in conferences
with officers and representatives of the Company and its independent
accountants, at which conferences the contents of the Registration Statement and
the Prospectus including all documents filed under the 1934 Act and deemed
incorporated by reference therein were discussed, reviewed and revised. On the
basis of the information which was developed in the course thereof, considered
in light of such counsel's understanding of applicable law and the experience
gained by such counsel through their practice thereunder, without such counsel
assuming responsibility for the accuracy and completeness of such statements
except to the extent expressly provided above, such counsel shall confirm that
nothing came to their attention that would lead them to believe that either the
Registration Statement (including any document filed under the 1934 Act and
deemed incorporated by reference therein), as of the Effective Date, contained
an untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading, or
the Prospectus or any amendment or supplement thereto (including any document
filed under the 1934 Act and deemed incorporated by reference therein) as of its
respective issue date and as of the Closing Date, contained or contains any
untrue statement of a material fact or omitted or omits 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 (other
than the financial statements or other financial data as to which such counsel
need express no opinion).
(d) You shall have received on the Closing Date, from Bryan Cave LLP,
counsel to the Underwriters, such opinion or opinions, dated the Closing Date
with respect to such matters as you may reasonably require; and the Company
shall have furnished to such counsel such documents as they reasonably request
for the purposes of enabling them to review or pass on the matters referred to
in this Section 5 and in order to evidence the accuracy, completeness and
satisfaction of the representations, warranties and conditions herein contained.
(e) On the business day immediately preceding the date of this
Agreement and on the Closing Date, you shall have received from Ernst & Young
LLP, a letter or letters, dated the date of this Agreement and the Closing Date,
respectively, in form and substance satisfactory to you, confirming that they
are independent public accountants with respect to the Company within the
meaning of the 1933 Act and the 1933 Act Rules and Regulations, and containing
statements and
18
information of the type ordinarily included in accountants' "comfort letters" to
underwriters with respect to the financial statements and certain financial
information relating to the Company contained in the Registration Statement and
Prospectus.
(f) Except as contemplated in the Prospectus, (i) neither the Company
nor any of its subsidiaries shall have sustained since the date of the latest
audited financial statements included or incorporated by reference in the
Prospectus any material loss or interference with its business from fire,
explosion, flood or other calamity, whether or not covered by insurance, or from
any labor dispute or court or governmental action, order or decree; and (ii)
subsequent to the respective dates as of which information is given in the
Registration Statement and the Prospectus, neither the Company nor any of its
subsidiaries shall have incurred any liability or obligation, direct or
contingent, or entered into any transactions, and there shall not have been any
change in the capital stock or short-term or long-term debt of the Company and
its subsidiaries or any change, or any development involving or which might
reasonably be expected to involve a prospective change in the condition
(financial or other), net worth, business, affairs, management, prospects,
results of operations or cash flow of the Company or its subsidiaries, the
effect of which, in any such case described in clause (i) or (ii), is in your
judgment so material or adverse as to make it impracticable or inadvisable to
proceed with the public offering or the delivery of the Notes being delivered on
the Closing Date on the terms and in the manner contemplated in the Prospectus.
(g) There shall not have occurred any of the following: (i) a general
moratorium on commercial banking activities declared by either federal or any
state authorities; (ii) the outbreak or escalation of hostilities involving the
United States or the declaration by the United States of a national emergency or
war, which in your judgment makes it impracticable or inadvisable to proceed
with the public offering or the delivery of the Notes in the manner contemplated
in the Prospectus; (iii) a suspension or material limitation in trading n the
Company's securities, or in securities generally, on the NYSE; or (iv) any
calamity or crisis, change in national, international or world affairs, act of
God, change in the international or domestic markets, or change in the existing
financial, political or economic conditions in the United States or elsewhere,
which in your judgment makes it impracticable or inadvisable to proceed with the
public offering or the delivery of the Notes in the manner contemplated in the
Prospectus.
(h) There shall not have occurred any downgrading, nor shall any notice
or announcement have been given or made (other than as may occur if the Notes
are not sold pursuant to this Agreement) of (i) any intended or potential
downgrading or (ii) any review or possible change that does not indicate an
improvement, in the rating accorded any securities of or guaranteed by the
Company or any of its subsidiaries by any "nationally recognized statistical
rating organization," as that terms is defined in Rule 436(g)(2) under the Act.
(i) You shall have received certificates, dated the Closing Date and
signed by the Chief Executive Officer and the Chief Financial Officer of the
Company, in their capacities as such, stating that:
(i) the condition set forth in Section 5(a) has been fully
satisfied;
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(ii) they have carefully examined the Registration Statement
and the Prospectus as amended or supplemented and all documents
incorporated by reference therein and nothing has come to their
attention that would lead them to believe that either the Registration
Statement or the Prospectus, or any amendment or supplement thereto or
any documents incorporated by reference therein as of their respective
effective, issue or filing dates, contained, and the Prospectus as
amended or supplemented and all documents incorporated by reference
therein and when read together with the documents incorporated by
reference therein, at such Closing Date, contains any untrue statement
of a material fact, or omits to state a material fact required to be
stated therein or necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading;
(iii) The Chief Executive Officer and Chief Financial Officer
are responsible for establishing and maintaining disclosure controls
and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the 1934
Act Rules and Regulations) and have (a) designed such disclosure
controls and procedures, or caused such disclosure controls to be
designed under their supervision, to ensure that material information
relating to the Company, including its consolidated subsidiaries, is
made known to them by others within those entities, particularly during
the periods in which the Prospectus was being prepared, (b) evaluated
the effectiveness of the Company's disclosure controls and procedures,
and (c) disclosed in the Prospectus any change in the Company's
internal control over financial reporting that occurred during the
fourth quarter of 2003 that has materially affected, or is reasonably
likely to materially affect, the Company's internal control over
financial reporting.
(iv) since the date of this Agreement, there has occurred no
event required to be set forth in an amendment or supplement to the
Registration Statement or the Prospectus which has not been so set
forth and there has been no document required to be filed under the
1934 Act and the 1934 Act Rules and Regulations that upon such filing
would be deemed to be incorporated by reference into the Prospectus
that has not been so filed;
(v) all representations and warranties made herein by the
Company are true and correct at such Closing Date, with the same effect
as if made on and as of such Closing Date, and all agreements herein to
be performed or complied with by the Company on or prior to such
Closing Date have been duly performed and complied with by the Company;
(vi) neither the Company nor any of its subsidiaries has
sustained since the date of the latest audited financial statements
included or incorporated by reference in the Prospectus any material
loss or interference with its business from fire, explosion, flood or
other calamity, whether or not covered by insurance, or from any labor
dispute or court or governmental action, order or decree;
20
(vii) except as disclosed in the Prospectus, subsequent to the
respective dates as of which information is given in the Registration
Statement and the Prospectus, neither the Company nor any of its
subsidiaries has incurred any liabilities or obligations, direct or
contingent, other than in the ordinary course of business, or entered
into any transactions not in the ordinary course of business, which in
either case are material to the Company or such subsidiary; and there
has not been any change in the capital stock or material increase in
the short-term debt or long-term debt of the Company or any of its
subsidiaries or any material adverse change or any development
involving or which may reasonably be expected to result in a Material
Adverse Effect; and there has been no dividend or distribution of any
kind, paid or made by the Company on any class of its capital stock;
(viii) the Company is in compliance, both prior to and after
giving effect to the transactions contemplated hereby, with the
financial covenants set forth in the Company's credit agreement and
other agreement and instruments respecting outstanding indebtedness of
the Company and its subsidiaries; and
(ix) covering such other matters as you may reasonably
request.
(j) The Company and the Trustee shall have executed and delivered the
second supplemental indenture.
(k) The Company shall have furnished to you at the Closing Date such
further information, opinions, certificates, letters and documents as you may
have reasonably requested.
All such opinions, certificates, letters and documents will be in
compliance with the provisions hereof only if they are satisfactory in form and
substance to you and to Bryan Cave LLP, counsel for the Underwriters. The
Company will furnish you with such signed and conformed copies of such opinions,
certificates, letters and documents as you may request.
If any of the conditions specified above in this Section 5 shall not
have been satisfied at or prior to the Closing Date or waived by you in writing,
this Agreement may be terminated by you on notice to the Company.
6. INDEMNIFICATION AND CONTRIBUTION. (a) The Company shall indemnify
and hold harmless the Underwriters from and against any losses, damages or
liabilities, joint or several, to which the Underwriters may become subject,
under the 1933 Act or otherwise, insofar as such losses, damages or liabilities
(or actions or claims in respect thereof) arise out of or are based upon (i) an
untrue statement or alleged untrue statement of a material fact contained in the
Registration Statement or any amendment thereto, or in any blue sky application
or other document executed by the Company or based on any information furnished
in writing by the Company, filed in any state or other jurisdiction in order to
qualify any or all of the Notes under the securities laws thereof (the "Blue Sky
Application"), or the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein
not misleading or an untrue statement or alleged untrue statement of a material
fact
21
contained in any Prospectus Supplement, Preliminary Prospectus, the Prospectus
or any other prospectus relating to the Notes or the omission or alleged
omission therefrom of a material fact required to be stated therein or necessary
to make the statements therein, in light of the circumstances under which they
were made, not misleading, or (ii) any untrue statement or alleged untrue
statement made by the Company in Section 3 of this Agreement or in any
representation or warranty by the Company to the Underwriters of the failure by
the Company to perform when and as required by any agreement or covenant
contained herein and will reimburse each Underwriter for any legal or other
expenses incurred by such Underwriter in connection with investigating,
preparing, pursuing or defending against any such loss, damage, liability or
action or claim, including, without limitation, any investigation or proceeding
by any governmental agency or body, commenced or threatened, including the
reasonable fees and expenses of counsel to the indemnified party, as such
expenses are incurred (including such losses, damages, liabilities or expenses
to the extent of the aggregate amount paid in settlement of any such action or
claim, provided that (subject to Section 6(d) hereof) any such settlement is
effected with the written consent of the Company); provided, however, that the
Company shall not be liable in any such case to the extent, but only to the
extent, that any such loss, damage or liability arises out of or is based upon
an untrue statement or alleged untrue statement or omission or alleged omission
made in any Prospectus Supplement, Preliminary Prospectus, the Registration
Statement, the Prospectus or any other prospectus relating to the Notes, or any
such amendment or supplement, in reliance upon and in conformity with written
information relating to the Underwriters furnished to the Company by you,
expressly for use in the preparation thereof.
(b) The Underwriters will indemnify and hold harmless the Company from
and against any losses, damages or liabilities to which the Company may become
subject, under the 1933 Act or otherwise, insofar as such losses, damages or
liabilities (or actions or claims in respect thereof) arise out of or are based
upon an untrue statement or alleged untrue statement of a material fact
contained in any Prospectus Supplement, Preliminary Prospectus, the Registration
Statement, the Prospectus or any other prospectus relating to the Notes, or any
amendment or supplement thereto, or any Blue Sky Application, or arise out of
are based upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, in each case to the extent, but only to the extent, that such untrue
statement or alleged untrue statement or omission or alleged omission was made
in any Prospectus Supplement, Preliminary Prospectus, the Registration
Statement, the Prospectus or any other prospectus relating to the Notes, or any
such amendment or supplement, or any Blue Sky Application, in reliance upon and
in conformity with written information relating to the Underwriters furnished to
the Company by you, expressly for use in the preparation thereof, and will
reimburse the Company for any legal or other expenses incurred by the Company in
connection with investigating or defending any such action or claim as such
expenses are incurred (including such losses, damages, liabilities or expenses
to the extent of the aggregate amount paid in settlement of any such action or
claim, provided that (subject to Section 6(d) hereof) any such settlement is
effected with the written consent of the Underwriters.
(c) Promptly after receipt by an indemnified party under Section 6(a)
or 6(b) hereof of notice of the commencement of any action, such indemnified
party shall, if a claim in respect
22
thereof is to be made against an indemnifying party under Section 6(a) or 6(b)
hereof, notify each such indemnifying party in writing of the commencement
thereof, but the failure so to notify such indemnifying party shall not relieve
such indemnifying party from any liability except to the extent that it has been
prejudiced in any material respect by such failure or from any liability that it
may have to any such indemnified party otherwise than under Section 6(a) or 6(b)
hereof. In case any such action shall be brought against any such indemnified
party and it shall notify each indemnifying party of the commencement thereof,
each such indemnifying party shall be entitled to participate therein and, to
the extent that it shall wish, jointly with any other indemnifying party under
Section 6(a) or 6(b) hereof similarly notified, to assume the defense thereof,
with counsel satisfactory to such indemnified party, and, after notice from such
indemnifying party to such indemnified party of its election so to assume the
defense thereof, such indemnifying party shall not be liable to such indemnified
party under Section 6(a) or 6(b) hereof for any legal expenses of other counsel
or any other expenses, in each case subsequently incurred by such indemnified
party, in connection with the defense thereof other than reasonable costs of
investigation. The indemnified party shall have the right to employ its own
counsel in any such action, but the fees and expenses of such counsel shall be
at the expense of such indemnified party unless (i) the employment of counsel by
such indemnified party at the expense of the indemnifying party has been
authorized by the indemnifying party, (ii) the indemnified party shall have been
advised by such counsel that there may be a conflict of interest between the
indemnifying party and the indemnified party in the conduct of the defense, or
certain aspects of the defense, of such action (in which case the indemnifying
party shall not have the right to direct the defense of such action with respect
to those matters or aspects of the defense on which a conflict exists or may
exist on behalf of the indemnified party) or (iii) the indemnifying party shall
not in fact have employed counsel reasonably satisfactory to such indemnified
party to assume the defense of such action, in any of which events such fees and
expenses to the extent applicable shall be borne, and shall be paid as incurred,
by the indemnifying party. If at any time such indemnified party shall have
requested such indemnifying party under Section 6(a) or 6(b) hereof to reimburse
such 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) or 6(b) hereof effected without its written consent if (i) such
settlement is entered into more than 45 days after receipt by such indemnifying
party of such request for reimbursement, (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 party shall not have
reimbursed such indemnified party in accordance with such request for
reimbursement prior to the date of such settlement. No such indemnifying party
shall, without the written consent of such indemnified party, effect the
settlement or compromise of, or consent to the entry of any judgment with
respect to, any pending or threatened action or claim in respect of which
indemnification or contribution may be sought hereunder (whether or not such
indemnified party is an actual or potential party to such action or claim)
unless such settlement, compromise or judgment (A) includes an unconditional
release of such indemnified party from all liability arising out of such action
or claim and (B) does not include a statement as to or an admission of fault,
culpability or a failure to act, by or on behalf of any such indemnified party.
In no event shall such indemnifying parties be liable for the fees and expenses
of more than one counsel, including any local counsel, for all such indemnified
parties in connection with any one action or
23
separate but similar or related actions in the same jurisdiction arising out of
the same general allegations or circumstances.
(d) If the indemnification provided for in this Section 6 is
unavailable to or insufficient to indemnify or hold harmless an indemnified
party under Section 6(a) or 6(b) hereof in respect of any losses, damages or
liabilities (or actions or claims in respect thereof) referred to therein, then
each indemnifying party under Section 6(a) or 6(b) hereof shall contribute to
the amount paid or payable by such indemnified party as a result of such losses,
damages or liabilities (or actions or claims in respect thereof) 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 Notes. If, however, the allocation provided by the immediately
preceding sentence is not permitted by applicable law or if the indemnified
party failed to give the notice required under Section 6(c) hereof and such
indemnifying party was prejudiced in a material respect by such failure, then
each such indemnifying party shall contribute to such amount paid or payable by
such indemnified party in such proportion as is appropriate to reflect not only
such relative benefits but also the relative fault, as applicable, of the
Company, on the one hand, and the Underwriters, on the other hand, in connection
with the statements or omissions that resulted in such losses, damages or
liabilities (or actions or claims in respect thereof), as well as any other
relevant equitable considerations. The relative benefits received by, as
applicable, the Company, on the one hand, and the Underwriters, on the other
hand, shall be deemed to be in the same proportion as the total net proceeds
from such offering (before deducting expenses) received by the Company bear to
the total underwriting discounts and commissions received by the Underwriters.
The relative fault, as applicable, of the Company, on the one hand, and the
Underwriters, on the other hand, shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or the omission or alleged omission to state a material fact relates to
information supplied by the Company, on the one hand, or the Underwriters, on
the other hand, and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Company and the Underwriters agree that it would not be just and equitable
if contribution pursuant to this Section 6(d) were determined by pro rata
allocation or by any other method of allocation that does not take account of
the equitable considerations referred to above in this Section 6(d). The amount
paid or payable by such an indemnified party as a result of the losses, damages
or liabilities (or actions or claims in respect thereof) referred to above in
this Section 6(d) shall be deemed to include any legal or other expenses
incurred by such indemnified party in connection with investigating or defending
any such action or claim. Notwithstanding the provisions of this Section 6(d),
the Underwriters shall not be required to contribute any amount in excess of the
amount by which the total price at which the Notes underwritten by it and
distributed to the public were offered to the public exceeds the amount of any
damages that the Underwriters have otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the 1933 Act) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation.
(e) The obligations of the Company under this Section 6 shall be in
addition to any liability that the Company may otherwise have and shall extend,
upon the same terms and
24
conditions, to each officer, director, employee, agent or other representative
and to each person, if any, who controls any Underwriter within the meaning of
the 1933 Act; and the obligations of the Underwriters under this Section 6 shall
be in addition to any liability that the respective Underwriter may otherwise
have and shall extend, upon the same terms and conditions, to each officer and
director of the Company who signed the Registration Statement and to each
person, if any, who controls the Company within the meaning of the 1933 Act.
(f) The parties to this Agreement hereby acknowledge that they are
sophisticated business persons who were represented by counsel during the
negotiations regarding the provisions hereof, including, without limitation, the
provisions of this Section 6, and are fully informed regarding such provisions.
They further acknowledge that the provisions of this Section 6 fairly allocate
the risks in light of the ability of the parties to investigate the Company and
its business in order to assure that adequate disclosure is made in the
Registration Statement, any Prospectus Supplement, Preliminary Prospectus, the
Prospectus, and any supplement or amendment thereof, as required by the 1933
Act.
7. REPRESENTATIONS AND AGREEMENTS TO SURVIVE DELIVERY. The respective
representations, warranties, agreements and statements of the Company and the
Underwriters, as set forth in this Agreement or made by or on behalf of them,
respectively, pursuant to this Agreement, shall remain operative and in full
force and effect regardless of any investigation (or any statement as to the
results thereof) made by or on behalf of the Underwriters or any controlling
person of any Underwriter, the Company or any of its officers, directors or any
controlling persons, and shall survive delivery of and payment for the Notes
hereunder.
8. TERMINATION. (a) This Agreement may be terminated by you at any time
at or prior to the Closing Date by notice to the Company if any condition
specified in Section 5 hereof shall not have been satisfied on or prior to the
Closing Date. Any such termination shall be without liability of any party to
any other party except as provided in Sections 6 and 9 hereof.
(b) This Agreement may be terminated at any time by the Company or the
Underwriters upon the giving of written notice of such termination, but without
prejudice to any rights, obligations or liabilities of any party hereto accrued
or incurred prior to such termination.
If you terminate this Agreement as provided in Section 8(b), you shall
notify the Company by telephone or telegram, confirmed in writing as provided in
Section 10.
9. COSTS AND EXPENSES. The Company, whether or not the transactions
contemplated hereby are consummated or this Agreement is terminated, will bear
and pay the costs and expenses incident to the registration of the Notes and
public offering thereof, including, without limitation, (a) all expenses
(including transfer taxes) incurred in connection with the delivery to the
Underwriters of the Notes, the filing fees of the SEC, the fees and expenses of
the Company's counsel and accountants, (b) the preparation, printing, filing,
delivery and shipping of the Registration Statement, each Prospectus Supplement,
Preliminary Prospectus, the Prospectus and any amendments or supplements thereto
and the printing, delivery and shipping of this Agreement and other underwriting
documents and any instruments or documents related
25
to any of the foregoing, (c) the furnishing of copies of such documents to the
Underwriters, (d) the registration or qualification of the Notes for offering
and sale under the securities laws of the various states and other
jurisdictions, including the reasonable fees and disbursements of counsel to the
Underwriters relating to such registration or qualification and in connection
with preparing any Blue Sky Memoranda or related analysis, (e) all printing and
engraving costs related to preparation of the certificates for the Notes,
including transfer agent and registrar fees, (f) all travel expenses, including
air fare and accommodation expenses, of representatives of the Company in
connection with the offering of the Notes, (g) the fees and expenses of the
Trustee and its counsel, (h) the approval of the Notes by DTC for "book-entry"
transfer, (i) the rating of the Notes by rating agencies, and (i) all of the
other costs and expenses incident to the performance by the Company of the
registration and offering of the Notes; provided, that the Underwriters will
bear and pay the fees and expenses of the Underwriters' counsel (except as
specifically provided in this Section 9), the Underwriters' out-of-pocket
expenses, and any advertising costs and expenses incurred by the Underwriters
incident to the public offering of the Notes.
10. NOTICES. All notices or communications hereunder, except as herein
otherwise specifically provided, shall be in writing and if sent to the
Underwriters shall be mailed, delivered, sent by facsimile transmission, or
telegraphed and confirmed c/o Wachovia Capital Markets, LLC at One Wachovia
Center, 301 South College Street, Charlotte, North Carolina 28288, Attention:
Investment Grade Syndicate, facsimile number (704) 383-9165, with a copy to
Bryan Cave LLP, attention: J. Mark Klamer, facsimile number (801) 751-0631, or
if sent to the Company shall be mailed, delivered, sent by facsimile
transmission, or telegraphed and confirmed to the Company at 3310 West End
Avenue, Suite 700, Nashville, TN 37203, attention: General Counsel, facsimile
number (615) 269-8461, with a copy to Waller Lansden Dortch & Davis, PLLC,
Attention: Theodore W. Lenz, facsimile number (615) 244-6804.
11. PARTIES. This Agreement shall inure to the benefit of and be
binding upon the Underwriters, the Company and, to the extent provided in
Sections 6 and 7, the officers and directors of the Company and each person who
controls the Company or the Underwriters and their respective heirs, executors,
administrators, successors and assigns. Nothing expressed or mentioned in this
Agreement is intended or shall be construed to give any person, corporation or
other entity 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 being intended to be and being for the sole and
exclusive benefit of the parties hereto and their respective successors and
assigns and said controlling persons and said officers and directors, and for
the benefit of no other person, corporation or other entity. No purchaser of any
of the Notes from any Underwriter shall be construed a successor or assign by
reason merely of such purchase.
12. COUNTERPARTS. This Agreement may be executed by any one or more of
the parties hereto in any number of counterparts, each of which shall be deemed
to be an original, but all such counterparts shall together constitute one and
the same instrument.
26
13. PRONOUNS. Whenever a pronoun of any gender or number is used
herein, it shall, where appropriate, be deemed to include any other gender and
number.
14. TIME OF ESSENCE. Time shall be of the essence in this Agreement.
15. APPLICABLE LAW. This Agreement shall be governed by, and construed
in accordance with, the laws of the State of New York, without giving effect to
the choice of law or conflict of laws principles thereof.
27
If the foregoing is in accordance with your understanding, please so
indicate in the space provided below for that purpose, whereupon this letter
shall constitute a binding agreement among the Company and the Underwriters.
HEALTHCARE REALTY TRUST INCORPORATED
By: /s/ David R. Emery
---------------------------------
Name: David R. Emery
Title: Chairman of the Board and
Chief Executive Officer
Accepted in Charlotte,
North Carolina as of the date
first above written, on
WACHOVIA CAPITAL MARKETS, LLC
By /s/ Teresa Hee
--------------------------------
Name: Teresa Hee
Title: Director
28
SCHEDULE I
Principal Amount of
Underwriter Notes
- ------------------------------------ -------------------
Wachovia Capital Markets, LLC $204,000,000
Banc of America Securities LLC 15,000,000
Credit Lyonnais Securities (USA) Inc. 15,000,000
SunTrust Capital Markets, Inc. 15,000,000
ABN AMRO Incorporated 9,000,000
Fleet Securities, Inc. 9,000,000
McDonald Investments Inc. 9,000,000
Vining-Sparks IBG Limited Partnership 9,000,000
AmSouth Bancorporation 6,000,000
FTN Financial Securities Corporation 6,000,000
Fifth Third Securities, Inc. 3,000,000
-----------
Total $300,000,000
------------
29
ANNEX A
(i) The Registration Statement and all post-effective
amendments thereto and the Abbreviated Registration Statement, if any,
have become effective under the 1933 Act; any required filing of the
Prospectus or any supplement thereto pursuant to Rule 424(b) or
otherwise has been made in the manner and within the time period
required thereby; and, to the knowledge of such counsel, no stop or
other order suspending the effectiveness of the Registration Statement
has been issued and no proceedings for that purpose have been
instituted or are pending or contemplated under the 1933 Act or under
the securities laws of any jurisdiction.
(ii) The Registration Statement and the Prospectus, and each
amendment or supplement thereto (including any document incorporated by
reference into the Prospectus), as of their respective effective or
issue date, comply as to form and appear on their face to be
appropriately responsive in all material respects to the requirements
of Form S-3 under the 1933 Act, the applicable 1933 Act Rules and
Regulations and the Trust Indenture Act of 1939, as amended (the "Trust
Indenture Act") (except that such counsel need express no opinion as to
the financial statements, notes thereto, supporting schedules or other
financial or statistical information included in or incorporated by
reference into or omitted from the Registration Statement or the
Prospectus and the Statement of Eligibility and Qualification of the
Trustee on Form T-1); the conditions for use of Form S-3 have been
satisfied; and, as of the date they were filed with the SEC, the
documents incorporated by reference in the Prospectus appear on their
face to comply as to form and be appropriately responsive in all
material respects with the requirements of the 1934 Act and the
applicable 1934 Act Rules and Regulations (except that such counsel
need express no opinion as to the financial statements, notes thereto,
supporting schedules or other financial or statistical information
included in or incorporated by reference into or omitted from the
Registration Statement or the Prospectus).
(iii) The Agreement, the Notes and the Indenture have been
duly authorized, executed and delivered by the Company and each
constitutes a valid and legally binding obligation of the Company
enforceable against the Company in accordance with its terms, except as
enforceability may be limited by the Exceptions and except to the
extent the enforceability of the indemnification and contribution
provisions of Section 6 of the Agreement may be limited by public
policy considerations as expressed in the 1933 Act as construed by
courts of competent jurisdiction.
(iv) The Company and its Material Subsidiaries are validly
existing as corporations or other organizations in good standing under
the laws of the states or other jurisdictions in which they are
incorporated or organized, with full power and authority (corporate and
other) to own, lease and operate their properties and conduct their
businesses as described in the Prospectus and, with respect to the
Company, to execute and deliver, and perform the Company's obligations
under, the Agreement; the Company and its Material Subsidiaries are
duly qualified to do business as foreign corporations or other
organizations in good standing in each state or other jurisdiction in
which their
30
ownership or leasing of property or conduct of business legally
requires such qualification, except where the failure to be so
qualified, individually or in the aggregate, would not have a Material
Adverse Effect.
(v) The outstanding shares of capital stock or other
securities evidencing equity ownership of each of the Material
Subsidiaries have been duly authorized and validly issued, are fully
paid and non-assessable and, to the knowledge of such counsel, are
owned by the Company free and clear of any mortgage, pledge, lien,
encumbrance, charge or adverse claim and are not the subject of any
agreement or understanding with any person, and were not issued in
violation of any preemptive or similar rights; and, to the knowledge of
such counsel, except as disclosed in the Prospectus, there are no
outstanding subscriptions, rights, warrants, options, calls,
convertible securities, commitments of sale, or instruments related to
or entitling any person to purchase or otherwise acquire any shares of,
or any security convertible into or exercisable or exchangeable for,
any such shares of capital stock or other ownership interest of any of
such subsidiaries.
(vi) The issuance and sale of the Notes and the execution,
delivery and performance by the Company of the Agreement and the
consummation of the transactions herein contemplated, will not conflict
with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, or result in the creation
or imposition of any lien, charge or encumbrance upon any properties or
assets of the Company or any of its subsidiaries under, any indenture,
mortgage, deed of trust, loan agreement or other agreement or
instrument known to such counsel to which the Company or any of its
subsidiaries is a party or by which the Company or any of its
subsidiaries is bound or to which any of the properties or assets of
the Company or any of its subsidiaries is subject, except to such
extent as, individually or in the aggregate, does not have a Material
Adverse Effect, nor will such action result in any violation of the
provisions of the Company's articles of incorporation or bylaws or any
statute, rule, regulation or other law, or any order or judgment known
to such counsel, of any court or governmental agency or body having
jurisdiction over the Company or any of its subsidiaries or any of
their properties.
(vii) No consent, approval, authorization, order, registration
or qualification of or with any court or governmental agency or body is
required in connection with the execution, delivery and performance of
the Agreement, and the issuance and sale of the Notes, and the
consummation of the transactions contemplated hereby, except such as
may be required under the 1933 Act or the 1933 Act Rules and
Regulations and have been obtained, or under state securities or blue
sky laws in connection with the purchase and distribution of the Notes
by the Underwriter. Each of the Company and its subsidiaries has filed
all Notices pursuant to, and has obtained all Approvals required to be
obtained under, and has otherwise complied with all requirements of,
all applicable laws and regulations in connection with the issuance and
sale of the Notes, in each case with such exceptions, individually or
in the aggregate, as would not affect the validity of the Notes, their
issuance or the transactions contemplated hereby or have a Material
31
Adverse Effect; and no such Notices or Approvals are required to be
filed or obtained by the Company or any of its subsidiaries in
connection with the execution, delivery and performance of this
Agreement, the issuance and sale of the Notes or the transactions
contemplated hereby, in each case with such exceptions, individually or
in the aggregate, as would not affect the validity of the Notes, their
issuance or the transactions contemplated hereby or have a Material
Adverse Effect.
(viii) The Company has duly and validly authorized capital
stock as set forth in the Prospectus. The Notes conform, or when issued
will conform, as to legal matters to the description thereof in the
Prospectus and the Notes to be sold by the Company have been duly
authorized and, when delivered and paid for in accordance with the
Agreement, will be validly issued, fully paid and non-assessable. All
corporate action required to be taken by the Company for the
authorization, issue and sale of the Notes has been duly and validly
taken. The issuance and sale of the Notes by the Company to the
Underwriters and the fulfillment of and compliance with all of the
provisions of the Notes, the Indenture and the Underwriting Agreement
by the Company do not result in a breach of any of the terms or
provisions of, or constitute a default under, any existing obligation
of the Company pursuant to applicable law or the articles of
incorporation, bylaws or governing documents of the Company or, to the
knowledge of such counsel, any agreement to which the Company or any of
its subsidiaries is a party or by which any of them may be bound.
(ix) To the knowledge of such counsel, the Company and each of
its subsidiaries hold all Permits from all state, federal and other
regulatory authorities, and have satisfied in all material respects the
requirements imposed by regulatory bodies, administrative agencies or
other governmental bodies, agencies or officials, that are required for
the Company and its subsidiaries lawfully to own, lease and operate its
properties and conduct its business as described in the Prospectus,
and, to the knowledge of such counsel, each of the Company and its
subsidiaries is conducting its business in compliance in all material
respects with all of the laws, rules and regulations of each
jurisdiction in which it conducts its business.
(x) The statements made in the Prospectus under the captions
"The Company," "Forward Looking Statements and Risk Factors,"
"Business," "Description of Notes" and "Certain United States Federal
Income Tax Considerations" and under Item 15 of Part II of the
Registration Statement, and in the Company's Annual Report on Form 10-K
of the year ended December 31, 2003 under "Item 1, Business," "Item 3,
Legal Proceedings," "Item 11, Executive Compensation" and "Item 13,
"Certain Relationships and Related Transactions," to the extent that
they constitute summaries of statutes, laws, ordinances, rules,
regulations, legal or governmental proceedings, contracts and other
documents referred to therein, have been reviewed by such counsel and
are accurate summaries and fairly present in all material respects the
information disclosed therein and as required under the 1933 Act and
the 1933 Act Rules and Regulations.
32
(xi) Neither the Company nor any of its subsidiaries is, or
with the giving of notice or lapse of time or both would be, in default
or violation with respect to its articles of incorporation or by-laws.
To the knowledge of such counsel, neither the Company nor any of its
subsidiaries is, or with the giving of notice or lapse of time or both
would be, in default in the performance or observance of any material
obligation, agreement, covenant or condition contained in any
indenture, mortgage, deed of trust, loan agreement, 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 is bound
or to which any of the properties or assets of the Company or any of
its subsidiaries is subject, or in violation of any statutes, laws,
ordinances or governmental rules or regulations or any orders or
decrees to which it is subject, including, without limitation, Section
13 of the 1934 Act, which default or violation, individually or in the
aggregate, would have a Material Adverse Effect.
(xii) To the knowledge of such counsel, (A) there are no
material (individually, or in the aggregate) legal, governmental or
regulatory proceedings pending or threatened to which the Company or
any of its subsidiaries is a party or of which the business or
properties of the Company or any of its subsidiaries is the subject
which are not disclosed in the Registration Statement and Prospectus;
(B) there are no contracts or documents of a character required to be
described in the Registration Statement or the Prospectus or to be
filed as an exhibit to the Registration Statement which are not
described or filed as required; and (C) there are no statutes,
ordinances, laws, rules or regulations required to be described in the
Registration Statement or Prospectus which are not described as
required.
(xiii) The Company is not and, after giving effect to the
offering and sale of the Notes, will not be an "investment company" or
an entity "controlled" by an "investment company," as such terms are
defined in the 1940 Act.
(ix)The Indenture has been duly qualified under the Trust
Indenture Act.
33
ANNEX B
Ladies and Gentlemen:
We have acted as special tax counsel to Healthcare Realty Trust
Incorporated, a Maryland corporation (the "Company"), in connection with the
Registration Statement on Form S-3 for the proposed issuance [$400,000,000]
aggregate principal amount of the Company's ___% Senior Notes due 20___ (the
"Securities"). In connection with the offering of the Securities, you have
requested our opinions (A) that the Company was and is organized in conformity
with the requirements for qualification as a real estate investment trust
("REIT") under Sections 856 through 860 of the Internal Revenue Code of 1986, as
amended (the "Code") and that its method of operation as described in the
Prospectus Supplement permits it to meet the requirements for qualification and
taxation as a REIT, and (B) that, for taxable years of the Company ended
December 31, 1993, through December 31, 2003, the Company met the requirements
for qualification and taxation as a REIT set forth in Subchapter M of the Code.
In rendering our opinion, we have examined and relied upon the
following documents and other materials:
1. Schedules prepared and delivered by officials of the Company setting
forth:
(a) REIT taxable and gross income for the fiscal year ended
December 31, 2003, together with a schedule of actual dividends distributed and
projected dividends to be distributed in accordance with Code Section 858 and
compliance with the distribution requirements of Code Section 857(a); and
(b) Compliance with the applicable REIT ratios or tests for
the fiscal year ended December 31, 2003, including:
Income tests:
(1) 95% gross income test for the year; and
(2) 75% gross income test for the year.
Asset tests:
(1) 75% asset test at the end of each quarter;
(2) 25% asset test at the end of each quarter;
(3) 10% asset test at the end of each quarter; and
(4) 5% asset test at the end of each quarter.
2. Schedules prepared and delivered by officials of the Company setting
forth for all taxable years of the Company since and including the first year
with respect to which the Company elected REIT status, the information described
in paragraph 1 above and including, for taxable years prior to that ended
December 31, 1998, the 30% gross income test.
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3. The Company's certificate, dated _________, 2003.
In addition, we have examined such additional records, documents,
certificates and other instruments and made such investigations of fact and law
as in our judgment are necessary or appropriate to enable us to render the
opinion expressed below.
In rendering our opinion, we have made the following assumptions:
1. Shares of the Company have been, since the completion of the
Company's initial public offering, and will continue to be, beneficially owned
by over 100 shareholders, as defined under Code Section 856(a)(5); five or fewer
shareholders have not owned, directly or indirectly under the rules of Code
Section 544, as modified by Code Section 856(h), at any time since the
completion of the initial public offering, over 50% in value of the outstanding
stock of the Company; and "Excess Shares" (defined in the Company's Second
Articles of Amendment and Restatement to be shares of a value exceeding 9.9% in
value of the outstanding shares of the Company) held or deemed held by any
person (pursuant to applicable rules of attribution) are deemed to have no value
or voting rights.
2. The Company has complied and will comply with any and all procedural
requirements for REIT status set forth in Code Sections 856 through 860 and the
regulations thereunder, including the timely making of such elections and the
obtaining and disclosing of such information as is required on the federal tax
returns to be filed by the Company.
3. Additional properties acquired will constitute "real estate assets"
and any other investments made by the REIT will be made in a manner which will
satisfy the asset tests of Code Section 856(c).
4. The income from existing and additional leases entered into or
acquired and the income from other investments will not cause the Company to
fail to satisfy the income tests of Code Section 856(c).
5. The Company will operate in accordance with its past and proposed
method of operation as described in its filings with the Securities and Exchange
Commission under the Securities Act of 1933 and the Securities Exchange Act of
1934, as amended.
6. The Company had no accumulated "C" corporation earnings and profits
at December 31, 2003.
7. All partnerships in which the Company may have an ownership interest
will own only "real estate assets" and cash reserves. All activities of those
partnerships will consist of activities permitted to be undertaken by a REIT,
and income of such partnerships, other than interest income on cash reserves,
shall be "rents from real property".
8. Each corporation in which the Company has acquired or acquires an
equity interest shall either be a "Qualified REIT Subsidiary" under Code Section
856(i), a "Taxable
35
REIT Subsidiary" under Code Section 856(l) or a corporation in which the Company
will not own over ten percent of the outstanding voting securities, and the
securities owned of any such corporation that is not a Qualified REIT Subsidiary
or a Taxable REIT Subsidiary will not be greater in value than five percent (5%)
of the value of the total assets of the Company, and the aggregate value of the
securities of all such Taxable REIT Subsidiaries will not exceed twenty percent
(20%) of the value of the total assets of the Company.
On the basis of and in reliance on the foregoing, we wish to advise you
that:
(A) under current law, including relevant statutes, regulations and
judicial and administrative precedent (which law is subject to change on a
retroactive basis), in our opinion the Company was and is organized in
conformity with the requirements for qualification as a REIT under the Code and
that its method of operation permits it to meet the requirements for
qualification and taxation as a REIT.
(B) with respect to the taxable years of the Company ended December 31,
1993, through December 31, 2003, the Company met the requirements for
qualification and taxation as a REIT set forth in Subchapter M of the Code.
(C) we also hereby confirm the statements made under the captions
"Certain Federal Income Tax Considerations" in the Prospectus Supplement,
"Federal Income Tax and ERISA Considerations" in the Basic Prospectus, and under
Item 1 of the Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 2003, incorporated by reference therein, under the captions
"Federal Income Tax Information," "ERISA Considerations" and "Status of the
Company under ERISA".
Since actual qualification as a REIT is dependent upon future facts and
circumstances, it is possible that future events, operations, distributions or
other actions will cause the Company not to qualify or continue to qualify as a
REIT.
The foregoing opinions are limited to the federal income tax matters
addressed herein, and no other opinions are rendered with respect to other
federal tax matters or to any issues arising under the tax laws of any state,
locality or foreign country. We undertake no obligation to update the opinions
expressed herein after the date of this letter.
Sincerely,
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ANNEX C
MATERIAL SUBSIDIARIES
1. ASMI/Birmingham Medical Building SPE, LLC
2. HR Acquisition of Alabama, Inc.
3. HR of California, Inc.
4. HR Acquisition I Corporation
5. HR Acquisition of Pennsylvania, Inc.
6. HR Acquisition of San Antonio, Ltd.
7. HR Acquisition of Virginia, L.P.
8. HR of Las Vegas, Ltd.
9. HR of Los Angeles, Ltd.
10. HR of Sarasota, Ltd.
11. HRT of Alabama, Inc.
12. HRT of Delaware, Inc.
13. HRT of Roanoke, Inc.
14. HRT of Tennessee, Inc.
15. Healthcare Realty Services Incorporated
16. Healthcare Realty Trust Incorporated
17. Pennsylvania HRT, Inc.
18. San Antonio SSP, Ltd.
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