Exhibit 10.2
HEALTH CARE REIT, INC.
(a Delaware corporation)
PLACEMENT AGENCY AGREEMENT
Dated: February 25, 2002
HEALTH CARE REIT, INC.
(a Delaware corporation)
PLACEMENT AGENCY AGREEMENT
February 25, 2002
Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
4 World Financial Center, Floor 26
New York, NY 10800
Ladies and Gentlemen:
Health Care REIT, Inc., a Delaware corporation (the "Company"),
confirms its agreement with Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner &
Smith Incorporated (collectively, "Merrill Lynch" or the "Placement Agent"), to
act as exclusive placement agent for the Company, with respect to the issue and
sale by the Company and the purchase by Cohen & Steers Quality Income Realty
Fund, Inc., a Maryland corporation (the "Fund"), of common shares of the Company
(the "Common Shares" or the "Securities") pursuant to the terms and conditions
of a purchase agreement between the Company and the Fund to be executed as of
the date hereof (the "Purchase Agreement").
It is contemplated that the Securities will be issued by the Company to
the Fund in an aggregate principal amount anticipated to be at least
$24,999,989. In acting as the Placement Agent, Merrill Lynch will seek to place
the securities with the Fund on a reasonable best efforts basis, acting as the
Company's agent and not as a principal in the placement of the Securities.
Merrill Lynch may separately engage, at its own expense and with the prior
approval of the Company, sub-agents as it may deem necessary or appropriate.
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 (No. 333-73936) covering the
registration of the Securities under the Securities Act of 1933, as amended (the
"1933 Act"), including the related preliminary prospectus or prospectuses.
Promptly after execution and delivery of this Agreement, the Company will either
(i) prepare and file a prospectus in accordance with the provisions of Rule 430A
("Rule 430A") of the rules and regulations of the Commission under the 1933 Act
(the "1933 Act Regulations"), if applicable, and paragraph (b) of Rule 424
("Rule 424(b)") of the 1933 Act Regulations or (ii) if the Company has elected
to rely upon Rule 434 ("Rule 434") of the 1933 Act Regulations, prepare and file
a term sheet (a "Term Sheet") in accordance with the provisions of Rule 434 and
Rule 424(b). The information included in any such prospectus or in any such Term
Sheet, as the case may be, that was omitted from such registration statement at
the time it became effective but that is deemed to be part of such registration
statement at the time it became effective, if applicable, (a) pursuant to
paragraph (b) of Rule 430A is referred to as "Rule 430A Information" or (b)
pursuant to paragraph (d) of Rule 434 is referred to as "Rule 434 Information."
Each prospectus used before such registration statement became effective, and
any prospectus that omitted, as applicable, the Rule 430A Information or the
Rule 434 Information, that was used after such effectiveness and prior to the
execution and delivery of this Agreement, is herein called a "preliminary
prospectus." Such registration statement, including the exhibits thereto,
schedules thereto, if any, and the documents incorporated by reference therein
pursuant to Item 12 of Form S-3 under the 1933 Act, at the time it became
effective and including the Rule 430A Information and the Rule 434 Information,
as applicable, and documents subsequently incorporated by reference therein
pursuant to Item 12 of Form S-3 is herein called the "Registration Statement."
Any registration statement filed pursuant to Rule 462(b) of the 1933 Act
Regulations is herein referred to as the "Rule 462(b) Registration Statement,"
and after such filing the term "Registration Statement" shall include the Rule
462(b)
Registration Statement. The final prospectus, including the documents
incorporated by reference therein pursuant to Item 12 of Form S-3 under the 1933
Act, in the form first furnished to the Fund in this offering is herein called
the "Prospectus." If Rule 434 is relied on, the term "Prospectus" shall refer to
the preliminary prospectus together with the Term Sheet and all references in
this Agreement to the date of the Prospectus shall mean the date of the Term
Sheet. For purposes of this Agreement, all references to the Registration
Statement, any preliminary prospectus, the Prospectus or any Term Sheet or any
amendment or supplement to any of the foregoing shall be deemed to include the
copy filed with the Commission pursuant to its Electronic Data Gathering,
Analysis and Retrieval system ("EDGAR").
All references in this Agreement to financial statements and schedules
and other information which is "contained," "included" or "stated" in the
Registration Statement, any preliminary prospectus or the Prospectus (or other
references of like import) shall be deemed to mean and include all such
financial statements and schedules and other information which is incorporated
by reference in the Registration Statement, any preliminary prospectus or the
Prospectus, as the case may be; and all references in this Agreement to
amendments or supplements to the Registration Statement, any preliminary
prospectus or the Prospectus shall be deemed to mean and include the filing of
any document under the Securities Exchange Act of 1934, as amended (the "1934
Act"), which is incorporated by reference in the Registration Statement, such
preliminary prospectus or the Prospectus, as the case may be.
As used herein, the term "Subsidiary" means a corporation or a
partnership a majority of the outstanding voting stock, partnership or
membership interests, as the case may be, of which is owned or controlled,
directly or indirectly, by the Company or by one or more other Subsidiaries of
the Company.
SECTION 1. REPRESENTATIONS AND WARRANTIES.
(a) Representations and Warranties by the Company. The Company
represents and warrants to the Placement Agent as of the date hereof, and as of
the Closing Time referred to in Section 2(b) hereof, and agrees with the
Placement Agent, as follows:
(i) The Company has been duly organized and is validly existing as
a corporation in good standing under the laws of the State of Delaware,
with corporate power and authority to own its properties and conduct
its business as described in the Registration Statement; the Company is
duly qualified to transact business in all jurisdictions in which the
conduct of its business requires such qualification, and in which the
failure to qualify would (a) have a materially adverse effect upon the
business of the Company and its Subsidiaries, taken as a whole (b)
adversely affect the issuance, validity or enforceability of the
Securities or (c) adversely affect the consummation of the transactions
contemplated by this Agreement (each of (a), (b) and (c) above, a
"Material Adverse Effect"); except for HCRI Pennsylvania Properties,
Inc., HCRI Texas Properties, Inc., HCRI Overlook Green, Inc., HCRI
Nevada Properties, Inc., Health Care REIT International, Inc., HCRI
Southern Investments I, Inc., HCN BCC Holdings, Inc., HCRI Tennessee
Properties, Inc., HCRI Limited Holdings, Inc., HCRI Texas Properties,
Ltd., Pennsylvania BCC Properties, Inc., HCN Atlantic GP, Inc., HCN
Atlantic LP, Inc., HCRI Louisiana Properties, L.P., HCRI North Carolina
Properties, LLC, HCRI Massachusetts Properties, Inc., HCRI
Massachusetts Properties Trust, HCRI Indiana Properties, Inc., HCRI
Indiana Properties, LLC, HCRI Holdings Trust, HCRI Maryland Properties
LLC, HCRI Satyr Hill, LLC, HCRI Friendship, LLC, HCRI St. Charles, LLC,
HCRI Massachusetts Properties Trust II, HCRI Beachwood, Inc., HCRI
Broadview, Inc., HCRI Westlake, Inc., HCRI Westmoreland, Inc., HCRI
Wisconsin Properties, LLC, HCRI North Carolina Properties I, Inc.,
North Carolina Properties II, Inc., North Carolina Properties III,
Limited Partnership, HCRI Kentucky Properties, LLC and HCRI Laurel,
LLC, the Company has no Subsidiaries.
(ii) The outstanding shares of common stock of the Company have
been duly authorized and validly issued and are fully paid and
non-assessable and are duly listed on the New York Stock Exchange; the
Common Shares to be issued and sold by the Company in the
Purchase Agreement have been duly authorized and when issued and paid
for as contemplated herein will be validly issued, fully-paid and
non-assessable; and no preemptive or similar rights of stockholders
exist with respect to any of the Common Shares or the issue and sale
thereof.
(iii) The shares of authorized capital stock of the Company,
including the Common Shares, conform with the statements concerning
them in the Registration Statement.
(iv) The Commission has not issued an order preventing or
suspending the use of any preliminary prospectus relating to the
proposed offering of the Common Shares nor instituted proceedings for
that purpose. The Registration Statement contains, and the Prospectus,
and any amendments or supplements thereto, contain or will contain, all
statements which are required to be stated therein by, and in all
material respects conform to or will conform to, as the case may be,
the requirements of the 1933 Act and the 1933 Act Regulations. The
documents incorporated by reference in the Prospectus, at the time they
were or will be filed with the Commission, conformed or will conform at
the time of filing, in all material respects to the requirements of the
1934 Act or the 1933 Act, as applicable, and the rules and regulations
of the Commission under the 1934 Act (the "1934 Act Regulations") and
the 1933 Act Regulations. Neither the Registration Statement nor any
amendment thereto, and neither the Prospectus nor any supplement
thereto, including any documents incorporated by reference therein,
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
representations or warranties as to information contained in or omitted
from the Registration Statement or the Prospectus, or any such
amendment or supplement, or any documents incorporated by reference
therein, in reliance upon, and in conformity with, written information
furnished to the Company by or on behalf of the Placement Agent,
specifically for use in the preparation thereof.
(v) The financial statements of the Company, together with related
notes and schedules as set forth or incorporated by reference in the
Registration Statement, present fairly the financial position and the
results of operations of the Company at the indicated dates and for the
indicated periods. Such financial statements and the related notes and
schedules have been prepared in accordance with generally accepted
accounting principles, consistently applied throughout the periods
involved, and all adjustments necessary for a fair presentation of
results for such periods have been made. The summary financial and
statistical data included or incorporated by reference in the
Registration Statement present fairly the information shown therein
and, to the extent based upon or derived from the financial statements,
have been compiled on a basis consistent with the financial statements
presented therein.
(vi) There is no action or proceeding pending or, to the knowledge
of the Company, threatened against the Company or involving any
property of the Company before any court or administrative agency which
might reasonably be expected to result in any Material Adverse Effect,
except as set forth in the Registration Statement.
(vii) The Company has good and marketable title to all of the
properties and assets reflected in the financial statements hereinabove
described (or as described in the Registration Statement as owned by
it), subject to no lien, mortgage, pledge, charge or encumbrance of any
kind except those reflected in such financial statements (or as
described in the Registration Statement) or which are not material in
amount or which do not interfere with the use made or proposed to be
made of the property. The leases, agreements to purchase and mortgages
to which the Company is a party, and the guaranties of third parties to
the Company or its Subsidiaries (a) are the legal, valid and binding
obligations of the Company and, to the knowledge of the Company, of all
other parties thereto, and the Company knows of no default or defenses
currently existing with respect thereto which might reasonably be
expected to result in any material adverse
change in the business or condition (financial or otherwise) of the
Company, and (b) conform to the descriptions thereof set forth in the
Registration Statement. Each mortgage which the Company holds on the
properties described in the Registration Statement constitutes a valid
mortgage lien for the benefit of the Company on such property.
(viii) The Company has filed all federal, state and foreign income
tax returns which have been required to be filed and has paid all taxes
indicated by said returns and all assessments received by it to the
extent that such taxes have become due and are not being contested in
good faith. All tax liabilities have been adequately provided for in
the financial statements of the Company.
(ix) Since the respective dates as of which information is given in
the Registration Statement, as it may be amended or supplemented, there
has not been any material adverse change in or affecting the condition,
financial or otherwise, of the Company or the earnings, business
affairs, management, or business prospects of the Company, whether or
not occurring in the ordinary course of business, and the Company has
not incurred any material liabilities or obligations and there has not
been any material transaction entered into by the Company, other than
transactions in the ordinary course of business and changes and
transactions contemplated by the Registration Statement, as it may be
amended or supplemented. The Company has no material contingent
obligations which are not disclosed in the Registration Statement, as
it may be amended or supplemented.
(x) The Company is not (a) in default under any agreement, lease,
contract, indenture or other instrument or obligation to which it is a
party or by which it or any of its properties is bound or the Company's
certificate of incorporation or by-laws, (b) in violation of any
statute, or (c) in violation of any order, rule or regulation
applicable to the Company or its properties, of any court or of any
regulatory body, administrative agency or other governmental body, any
of which defaults or violations described in clauses (a) through (c)
is, or after any required notice and passage of any applicable grace
period would constitute, a Material Adverse Effect. The consummation of
the transactions herein contemplated and the fulfillment of the terms
hereof will not conflict with or constitute a violation of any statute
or conflict with or result in a breach of any of the terms or
provisions of, or constitute a default under, any indenture, mortgage,
deed of trust or other agreement or instrument to which the Company is
a party or by which the Company or the Company's properties may be
bound, or of the certificate of incorporation or by-laws of the Company
or any order, rule or regulation applicable to the Company or the
Company's properties or of any court or of any regulatory body,
administrative agency or other governmental body.
(xi) Each approval, consent, order, authorization, designation,
declaration or filing by or with any regulatory, administrative or
other governmental body necessary in connection with the execution and
delivery by the Company of this Agreement and the consummation of the
transactions herein contemplated (except such additional steps as may
be required by the National Association of Securities Dealers, Inc.
(the "NASD") or may be necessary to qualify the Common Shares under
state securities or Blue Sky laws) has been obtained or made by the
Company, and is in full force and effect.
(xii) The Company holds all material licenses, certificates and
permits from governmental authorities which are necessary to the
conduct of its businesses and the Company has not received any notice
of infringement or of conflict with asserted rights of others with
respect to any patents, patent rights, trade names, trademarks or
copyrights, which infringement is material to the business of the
Company.
(xiii) The Company qualifies as a real estate investment trust
pursuant to Sections 856 through 860 of the Internal Revenue Code of
1986, as amended, has so qualified for the taxable years ended December
31, 1984 through December 31, 2001 and no transaction or other event
has occurred or is contemplated which would prevent the Company from so
qualifying for its current taxable year.
(xiv) To the best of the Company's knowledge, Ernst & Young LLP,
who have certified certain of the financial statements and related
schedules filed with the Commission as part of, or incorporated by
reference in, the Registration Statement, are independent public
accountants as required by the 1933 Act and the 1933 Act Regulations.
(xv) To the knowledge of the Company, after inquiry of its officers
and directors, there are no affiliations with the NASD among the
Company's officers, directors, or principal stockholders, except as set
forth in the Registration Statement or as otherwise disclosed in
writing to the Placement Agent.
(xvi) This Agreement has been duly authorized, executed and
delivered by the Company.
(xvii) Neither the Company nor any of its officers or directors has
taken nor will any of them take, directly or indirectly, any action
resulting in a violation of Regulation M promulgated under the 1934
Act, or designed to cause or result in, or which has constituted or
which reasonably might be expected to constitute, the stabilization or
manipulation of the price of the Securities.
(xviii) The Common Shares have been approved for listing upon
official notice of issuance on the New York Stock Exchange.
(xix) The Company is not, and immediately after the sale of the
Common Shares pursuant to the terms and conditions of this Agreement
will not be, an "investment company" or a company "controlled" by an
"investment company" within the meaning of the Investment Company Act
of 1940.
(b) Officer's Certificates. Any certificate signed by any officer of
the Company or any of its Subsidiaries delivered to the Placement Agent or to
counsel for the Placement Agent shall be deemed a representation and warranty by
such person or entity, as the case may be, to the Placement Agent as to the
matters covered thereby.
SECTION 2. PLACEMENT AGENT FEES.
(a) On the basis of the representations and warranties herein contained
and subject to the terms and conditions herein set forth, the Company agrees to
pay Merrill Lynch a fee (the "Fee"), based upon the aggregate amount of
Securities sold, as calculated in accordance with the provisions of this Section
for its services pursuant to this Agreement. The Fee will equal to 5.125% of the
purchase price of all Securities sold to the Fund pursuant to this Agreement.
(b) On the date in which the Fund purchases the Securities from the
Company in accordance with this Agreement (the "Closing Time"), the Company
shall pay the Fee to the Placement Agent in cash by wire transfer of immediately
available funds to a bank account designated by the Placement Agent.
SECTION 3. COVENANTS OF THE COMPANY. The Company covenants with the
Placement Agent as follows:
(a) Compliance with Securities Regulations and Commission Requests. The
Company will comply with the requirements of Rule 430A or Rule 434, as
applicable, and will notify the Placement Agent immediately, and confirm the
notice in writing, (i) when any post-effective amendment to the Registration
Statement shall become effective, or any supplement to the Prospectus or any
amended
Prospectus shall have been filed, (ii) of the receipt of any comments from the
Commission, (iii) of any request by the Commission for any amendment to the
Registration Statement or any amendment or supplement to the Prospectus or for
additional information, and (iv) of the issuance by the Commission of any stop
order suspending the effectiveness of the Registration Statement or of any order
preventing or suspending the use of any preliminary prospectus, or of the
suspension of the qualification of the Securities for offering or sale in any
jurisdiction, or of the initiation or threatening of any proceedings for any of
such purposes. The Company will promptly effect the filings necessary pursuant
to Rule 424(b) and will take such steps as it deems necessary to ascertain
promptly whether the form of prospectus transmitted for filing under Rule 424(b)
was received for filing by the Commission and, in the event that it was not, it
will promptly file such prospectus. The Company will make every reasonable
effort to prevent the issuance of any stop order and, if any stop order is
issued, to obtain the lifting thereof at the earliest possible moment.
(b) Continued Compliance with Securities Laws. The Company will comply
with the 1933 Act and the 1933 Act Regulations and the 1934 Act and the 1934 Act
Regulations so as to permit the completion of the distribution of the Securities
as contemplated in this Agreement and in the Prospectus. If at any time when a
prospectus is required by the 1933 Act to be delivered in connection with sales
of the Securities, any event shall occur or condition shall exist as a result of
which it is necessary, in the opinion of counsel for the Placement Agent or for
the Company, to amend the Registration Statement or amend or supplement the
Prospectus in order that the Prospectus will not include any untrue statements
of a material fact or omit to state a material fact necessary in order to make
the statements therein not misleading in the light of the circumstances existing
at the time it is delivered to a purchaser, or if it shall be necessary, in the
opinion of such counsel, at any such time to amend the Registration Statement or
amend or supplement the Prospectus in order to comply with the requirements of
the 1933 Act or the 1933 Act Regulations, the Company will promptly prepare and
file with the Commission such amendment or supplement as may be necessary to
correct such statement or omission or to make the Registration Statement or the
Prospectus comply with such requirements, and the Company will furnish to the
Placement Agent such number of copies of such amendment or supplement as the
Placement Agent may reasonably request.
(c) Rule 158. The Company will timely file such reports pursuant to the
1934 Act as are necessary in order to make generally available to its
securityholders as soon as practicable an earnings statement for the purposes
of, and to provide the benefits contemplated by, the last paragraph of Section
11(a) of the 1933 Act.
(d) Reporting Requirements. The Company, during the period when the
Prospectus is required to be delivered under the 1933 Act or the 1934 Act, will
file all documents required to be filed with the Commission pursuant to the 1934
Act within the time periods required by the 1934 Act and the 1934 Act
Regulations.
(e) Use of Proceeds. The Company will use the net proceeds received by
it from the sale of the Securities in the manner specified in the Prospectus
under "Use of Proceeds."
(f) REIT Qualification. The Company will use its best efforts to
continue to meet the requirement to qualify as a "real estate investment trust"
under the Code for each of its taxable years for so long as the board of
directors deems it in the best interests of the Company's stockholders to remain
so qualified.
(g) No Manipulation of Market for Securities. Except for the
authorization of actions permitted to be taken by the Placement Agent as
contemplated herein or in the Prospectus, the Company will not (a) take,
directly or indirectly, any action designed to cause or to result in, or that
might reasonably be expected to constitute, the stabilization or manipulation of
the price of any security of the Company to facilitate the sale or resale of the
Securities, and (b) until the Closing Time, (i) sell, bid for or purchase the
Securities or pay any person any compensation for soliciting purchases of the
Securities or
(ii) pay or agree to pay to any person any compensation for soliciting another
to purchase any other securities of the Company.
(h) Rule 462(b) Registration Statement. If the Company elects to rely
upon Rule 462(b), the Company shall file a Rule 462(b) Registration Statement
with the Commission in compliance with Rule 462(b) by 10:00 P.M., Washington,
D.C. time, on the date of this Agreement, and the Company shall at the time of
filing either pay to the Commission the filing fee for the Rule 462(b)
Registration Statement or give irrevocable instructions for the payment of such
fee pursuant to Rule 111(b) under the 1933 Act.
SECTION 4. PAYMENT OF EXPENSES.
(a) Expenses. The Company will pay or cause to be paid all expenses
incident to the performance of its obligations under this Agreement, including
(i) the preparation, printing and filing of the Registration Statement
(including financial statements and exhibits) and each amendment thereto, (ii)
the preparation and delivery to the Placement Agent of this Agreement and such
other documents as may be required in connection with the offering, purchase,
sale, issuance or delivery of the Securities, (iii) the fees and disbursements
of the Company's counsel, accountants and other advisors, (iv) the reasonable
fees and disbursements of counsel for the Placement Agent in connection with the
preparation of any Blue Sky Survey that the Placement Agent deems to be
necessary or appropriate, and any supplement thereto, (v) the printing and
delivery to the Placement Agent of copies of each of the preliminary prospectus,
Prospectus and any amendments or supplements thereto, (vi) the fees and expenses
of any transfer agent or registrar for the Securities and (vii) the fees and
expenses incurred in connection with the listing of the Securities on the New
York Stock Exchange.
(b) Termination of Agreement. If this Agreement is terminated by the
Placement Agent in accordance with the provisions of Section 5 or Section 9(a),
the Company shall reimburse the Placement Agent for all of its out-of-pocket
expenses, including the reasonable fees and disbursements of counsel for the
Placement Agent.
SECTION 5. CONDITIONS OF PLACEMENT AGENT'S OBLIGATIONS. The obligations
of the Placement Agent hereunder are subject to the accuracy of the
representations and warranties of the Company contained in Section 1 hereof or
in certificates of any officer or authorized representative of the Company
delivered pursuant to the provisions hereof, to the performance by the Company
of its covenants and other obligations hereunder, and to the following further
conditions:
(a) Effectiveness of Registration Statement. The Registration
Statement, including any Rule 462(b) Registration Statement, has become
effective and at Closing Time no stop order suspending the effectiveness of the
Registration Statement shall have been issued under the 1933 Act or proceedings
therefor initiated or threatened by the Commission, and any request on the part
of the Commission for additional information shall have been complied with to
the reasonable satisfaction of counsel to the Placement Agent. A prospectus
containing the Rule 430A Information shall have been filed with the Commission
in accordance with Rule 424(b) (or a post-effective amendment providing such
information shall have been filed and declared effective in accordance with the
requirements of Rule 430A) or, if the Company has elected to rely upon Rule 434,
a Term Sheet shall have been filed with the Commission in accordance with Rule
424(b).
(b) Opinion of Counsel for Company. At Closing Time, the Placement
Agent shall have received the favorable opinion, dated as of Closing Time, of
Shumaker, Loop & Kendrick, LLP, counsel for the Company to the effect that:
(i) The Company has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the State of
Delaware, with corporate power and authority to own its properties
and conduct its business as described in the Prospectus.
(ii) The Company is duly qualified to transact business in all
jurisdictions in which the conduct of its business requires such
qualification, and in which the failure to qualify would have a
materially adverse effect upon the business of the Company.
(iii) The Company has authorized and outstanding capital stock as
set forth under the caption "Capitalization" in the Prospectus; the
authorized shares of its common stock have been duly authorized;
the outstanding shares of its common stock have been duly
authorized and validly issued and are fully paid and nonassessable;
all of the Common Shares conform in all material respects to the
description thereof contained in the Prospectus; the certificates
for the Common Shares are in due and proper form; the Common Shares
have been duly authorized and will be validly issued, fully paid
and non-assessable when issued and paid for as contemplated by this
Agreement; and no preemptive or similar rights of stockholders
exist with respect to any of the Common Shares or the issue and
sale thereof.
(iv) The Registration Statement has become effective under the 1933
Act and, to such counsel's knowledge no stop order proceedings with
respect thereto have been instituted or are pending or threatened
under the 1933 Act.
(v) The Registration Statement, the Prospectus and each amendment
or supplement thereto and documents incorporated by reference
therein comply as to form in all material respects with the
requirements of the 1933 Act or the 1934 Act, as applicable, and
the applicable rules and regulations thereunder (except that such
counsel need express no opinion as to the financial statements,
schedules and other financial or statistical information included
or incorporated by reference therein).
(vi) The statements under the caption "Description of Our Common
Stock" in the Prospectus, insofar as such statements constitute a
summary of documents referred to therein or matters of law, are
accurate summaries and fairly and correctly present in all material
respects the information called for with respect to such documents
and matters.
(vii) The statements under the caption "Certain Government
Regulations" in the Company's Annual Report on Form 10-K, and any
amendments thereto, for the fiscal year ended December 31, 2000, as
updated by statements under the same caption in the Prospectus, as
to matters of law stated therein, have been reviewed by such
counsel and constitute fair summaries of the matters described
therein which are material to the business or condition (financial
or otherwise) of the Company.
(viii) Such counsel does not know of any contracts or documents
required to be filed as exhibits to or incorporated by reference in
the Registration Statement or described in the Registration
Statement or the Prospectus which are not so filed, incorporated by
reference or described as required, and such contracts and
documents as are summarized in the Registration Statement or the
Prospectus are fairly summarized in all material respects.
(ix) Such counsel knows of no material legal proceedings pending or
threatened against the Company except as set forth in the
Prospectus.
(x) The execution and delivery of this Agreement and the
consummation of the transactions herein contemplated do not and
will not conflict with or constitute a violation of any statute or
conflict with or result in a breach of any of the terms or
provisions of, or constitute a default under, the certificate of
incorporation or by-laws of the Company, any material agreement or
instrument known to such counsel to which the Company is a party or
by which the Company or the Company's properties may be
bound or any order known to such counsel or rule or regulation
applicable to the Company or the Company's properties of any court
or governmental agency or body.
(xi) This Agreement has been duly authorized, executed and
delivered by the Company.
(xii) No approval, consent, order, authorization, designation,
declaration or filing by or with any regulatory, administrative or
other governmental body is necessary in connection with the
execution and delivery of this Agreement and the consummation of
the transactions herein contemplated (other than as may be required
by the NASD or as required by state securities and Blue Sky laws as
to which such counsel need express no opinion) except such as have
been obtained or made by the Company, specifying the same.
(xiii) The Company is not an "investment company" or a company
"controlled" by an "investment company" within the meaning of the
Investment Company Act of 1940.
In addition, such counsel will provide an opinion, based on such
counsel's own review of the Company's certificate of incorporation, stating that
the Company was organized and continues to be organized in conformity with the
requirements for qualification as a real estate investment trust under
subchapter M of the Internal Revenue Code of 1986, as amended, (the "Code") and,
based on such counsel's review of the Company's federal income tax returns and
discussions with management and independent public accountants for the Company,
that the Company, taking into account operations for its taxable and fiscal
years ended December 31, 1998 through December 31, 2001, satisfied the
requirements for qualification and taxation as a real estate investment trust
under the Code for such years and that its proposed method of operation will
enable it to meet the requirements for qualification and taxation as a real
estate investment trust under the Code for its taxable and fiscal year ending
December 31, 2001. Furthermore, such counsel shall opine that the statements
contained under the heading "Taxation" in the Registration Statement and in the
Company's Annual Report on Form 10-K, and any amendments, for the fiscal year
ended December 31, 2002 are correct and accurate in all material respects and
present fairly and accurately the material aspects of the federal income tax
treatment of the Company and of its stockholders.
In rendering such opinion, Shumaker, Loop & Kendrick, LLP may rely as
to matters governed by the laws of states other than the laws of State of Ohio,
the corporate laws of the State of Delaware or Federal laws on local counsel in
such jurisdictions, provided that in such case Shumaker, Loop & Kendrick, LLP
shall state that they believe that they and the Placement Agent are justified in
relying on such other counsel and such other counsel shall indicate that the
Placement Agent may rely on such opinion. As to matters of fact, to the extent
they deem proper, such counsel may rely on certificates of officers of the
Company and public officials so long as such counsel states that they have no
reason to believe that either the Placement Agent or they are not justified in
relying on such certificates. In addition to the matters set forth above, such
opinion shall also include a statement to the effect that nothing has come to
the attention of such counsel which leads them to believe that the Registration
Statement, as of the time it became effective under the Act, the Prospectus or
any amendment or supplement thereto, on the date it was filed pursuant to Rule
424(b), or any of the documents incorporated by reference therein, as of the
date of effectiveness of the Registration Statement or, in the case of documents
incorporated by reference into the Prospectus after the date of effectiveness of
the Registration Statement, as of the respective date when such documents were
filed with the Commission, contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary to
make the statements therein not misleading, and the Registration Statement and
the Prospectus, or any amendment or supplement thereto, or any of the documents
incorporated by reference therein, as of the date of effectiveness of the
Registration Statement or, in the case of documents incorporated by reference
into the Prospectus after the date of effectiveness of the Registration
Statement, as of the respective date when such documents were filed with the
Commission, as of the Closing Time, 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 (except that such
counsel need express no view as to financial statements, schedules and other
financial or statistical information included therein). With respect to such
statement, Shumaker, Loop & Kendrick, LLP, may state that this statement is
based upon the procedures set forth or incorporated by reference therein, but is
without independent check and verification.
(c) Opinion of Designated Underwriter's Counsel. The Placement Agent
shall have received from Calfee, Halter & Griswold LLP, Designated Underwriter's
Counsel, an opinion dated the Closing Time with respect to the organization of
the Company, the validity of the Common Shares, the Registration Statement, the
Prospectus and other related matters as the Placement Agent reasonably may
request, and such counsel shall have received such papers and information as
they reasonably request to enable them to pass upon such matters.
(d) Officers' Certificate. At Closing Time, there shall not have been,
since the date hereof or since the respective dates as of which information is
given in the Prospectus, any material adverse change in the condition, financial
or otherwise, or in the earnings, business affairs or business prospects of the
Company and the Subsidiaries considered as one enterprise, whether or not
arising in the ordinary course of business, and the Placement Agent shall have
received a certificate of the President or a Vice President of the Company, on
behalf of the Company, and of the chief financial or chief accounting officer of
the Company, on behalf of the Company, dated as of Closing Time, to the effect
that (i) there has been no such material adverse change, (ii) the
representations and warranties in Section 1(a) hereof are true and correct with
the same force and effect as though expressly made at and as of Closing Time and
(iii) the Company has complied with all agreements and satisfied all conditions
on its part to be performed or satisfied at or prior to Closing Time, and (iv)
no stop order suspending the effectiveness of the Registration Statement has
been issued and no proceedings for that purpose have been instituted or are
pending or are contemplated by the Commission.
(e) Accountant's Comfort Letter. At the time of the execution of this
Agreement, the Placement Agent shall have received from Ernst & Young LLP a
letter dated such date, in form and substance satisfactory to the Placement
Agent, containing statements and information of the type ordinarily included in
accountants' "comfort letters" to underwriters with respect to the financial
statements and certain financial information contained in the Registration
Statement and the Prospectus.
(f) Bring-down Comfort Letter. At Closing Time, the Placement Agent
shall have received from Ernst & Young LLP a letter, dated as of Closing Time,
to the effect that they reaffirm the statements made in the letter furnished
pursuant to subsection (e) of this Section, except that the specified date
referred to shall be a date not more than three business days prior to Closing
Time.
(g) Approval of Listing. At Closing Time, the Securities shall have
been approved for listing on the New York Stock Exchange, subject only to
official notice of issuance.
(h) Additional Documents. At Closing Time counsel for the Placement
Agent shall have been furnished with such documents and opinions as they may
require for the purpose of enabling them to pass upon the issuance and sale of
the Securities as herein contemplated, or in order to evidence the accuracy of
any of the representations or warranties, or the fulfillment of any of the
conditions, herein contained; and all proceedings taken by the Company in
connection with the issuance and sale of the Securities as herein contemplated
shall be reasonably satisfactory in form and substance to the Placement Agent
and counsel for the Placement Agent.
(i) Termination of Agreement. If any condition specified in this
Section 5 shall not have been fulfilled when and as required to be fulfilled,
this Agreement may be terminated by the Placement Agent by notice to the Company
at any time at or prior to Closing Time and such termination shall be without
liability of any party to any other party except as provided in Section 4 and
except that Sections 1, 6, 7, 8 and 12 shall survive any such termination and
remain in full force and effect.
SECTION 6. INDEMNIFICATION.
(a) Indemnification of Placement Agent. The Company agrees to indemnify
and hold harmless the Placement Agent and each person, if any, who controls the
Placement Agent within the meaning of Section 15 of the 1933 Act or Section 20
of the 1934 Act, and any director, officer, employee or affiliate thereof as
follows:
(i) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of any untrue statement or alleged
untrue statement of a material fact contained in the Registration
Statement (or any amendment thereto), including the Rule 430A
Information and the Rule 434 Information, if applicable, or the
omission or alleged omission therefrom of a material fact required to
be stated therein or necessary to make the statements therein not
misleading or arising out of any untrue statement or alleged untrue
statement of a material fact included in any preliminary prospectus or
the Prospectus (or any amendment or supplement thereto), or the
omission or alleged omission therefrom of a material fact necessary in
order to make the statements therein, in the light of the circumstances
under which they were made, not misleading; PROVIDED, HOWEVER, that the
Company shall not be required under this subsection (a)(i) to indemnify
the Placement Agent with respect to any preliminary prospectus to the
extent that any loss, claim, damage or expense of the Placement Agent
results solely from an untrue statement of a material fact contained
in, or the omission of a material fact from, such preliminary
prospectus which untrue statement or omission was corrected in the
Prospectus and which corrected Prospectus was furnished by the Company
to the Placement Agent but was not sent or given by the Placement Agent
to the purchaser of the Securities at or prior to the written
confirmation of such sale.
(ii) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim
whatsoever based upon any such untrue statement or omission, or any
such alleged untrue statement or omission; provided any such settlement
is effected with the written consent of the Company; and
(iii) against any and all expense whatsoever, as incurred
(including the fees and disbursements of counsel chosen by the
Placement Agent), reasonably incurred in investigating, preparing or
defending against any litigation, or any investigation or proceeding by
any governmental agency or body, commenced or threatened, or any claim
whatsoever based upon any such untrue statement or omission, or any
such alleged untrue statement or omission, to the extent that any such
expense is not paid under (i) or (ii) above;
PROVIDED, HOWEVER, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Company by the
Placement Agent expressly for use in the Registration Statement (or any
amendment thereto), including the Rule 430A Information and the Rule 434
Information, if applicable, or any preliminary prospectus or the Prospectus (or
any amendment or supplement thereto).
(b) Indemnification of Company, Directors and Officers. The Placement
Agent severally agrees to indemnify and hold harmless the Company, each person,
if any, who controls the Company within the meaning of Section 15 of the 1933
Act or Section 20 of the 1934 Act, and any officer, director, trustee, employee
or affiliate thereof, against any and all loss, liability, claim, damage and
expense described in the indemnity contained in subsection (a) of this Section,
as incurred, but only with respect to untrue statements or omissions, or alleged
untrue statements or omissions, made in the Registration Statement (or any
amendment thereto), including the Rule 430A Information and the Rule 434
Information, if applicable, or any preliminary prospectus or the Prospectus (or
any amendment or
supplement thereto) in reliance upon and in conformity with written information
furnished to the Company by the Placement Agent expressly for use in the
Registration Statement (or any amendment thereto) or such preliminary prospectus
or the Prospectus (or any amendment or supplement thereto).
(c) Actions against Parties; Notification. Each indemnified party shall
give notice as promptly as reasonably practicable to each indemnifying party of
any action commenced against it in respect of which indemnity may be sought
hereunder, but failure to so notify an indemnifying party shall not relieve such
indemnifying party from any liability hereunder to the extent it is not
materially prejudiced as a result thereof and in any event shall not relieve it
from any liability which it may have otherwise than on account of this indemnity
agreement. In the case of parties indemnified pursuant to Section 6(a) above,
counsel to the indemnified parties shall be selected by the Placement Agent,
and, in the case of parties indemnified pursuant to Section 6(b) above, counsel
to the indemnified parties shall be selected by the Company. An indemnifying
party may participate at its own expense in the defense of any such action;
provided, however, that counsel to the indemnifying party shall not (except with
the consent of the indemnified party) also be counsel to the indemnified party.
In no event shall the indemnifying parties be liable for fees and expenses of
more than one counsel (in addition to any local counsel) separate from their own
counsel for all indemnified parties in connection with any one action or
separate but similar or related actions in the same jurisdiction arising out of
the same general allegations or circumstances. No indemnifying party shall,
without the prior written consent of the indemnified parties, settle or
compromise or consent to the entry of any judgment with respect to any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever in respect of which
indemnification or contribution could be sought under this Section 6 or Section
7 hereof (whether or not the indemnified parties are actual or potential parties
thereto), unless such settlement, compromise or consent (i) includes an
unconditional release of each indemnified party from all liability arising out
of such litigation, investigation, proceeding or claim and (ii) does not include
a statement as to or an admission of fault, culpability or a failure to act by
or on behalf of any indemnified party.
SECTION 7. CONTRIBUTION. If the indemnification provided for in Section
6 hereof is for any reason unavailable to or insufficient to hold harmless an
indemnified party in respect of any losses, liabilities, claims, damages or
expenses referred to therein, then each indemnifying party shall contribute to
the aggregate amount of such losses, liabilities, claims, damages and expenses
incurred by such indemnified party, as incurred, (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company on the one
hand and the Placement Agent on the other hand from the offering of the
Securities pursuant to this Agreement or (ii) if the allocation provided by
clause (i) is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of the Company on the one hand and of the
Placement Agent on the other hand in connection with the statements or omissions
which resulted in such losses, liabilities, claims, damages or expenses, as well
as any other relevant equitable considerations.
The relative benefits received by the Company on the one hand and the
Placement Agent on the other hand in connection with the offering of the
Securities pursuant to this Agreement shall be deemed to be in the same
respective proportions as the total net proceeds from the offering of the
Securities pursuant to this Agreement (before deducting expenses) received by
the Company and the Fee received by the Placement Agent.
The relative fault of the Company on the one hand and the Placement
Agent on the other hand shall be determined by reference to, among other things,
whether any such untrue or alleged untrue statement of a material fact or
omission or alleged omission to state a material fact relates to information
supplied by the Company or by the Placement Agent and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission.
The Company and the Placement Agent agree that it would not be just and
equitable if contribution pursuant to this Section 7 were determined by pro rata
allocation or by any other method of
allocation which does not take account of the equitable considerations referred
to above in this Section 7. The aggregate amount of losses, liabilities, claims,
damages and expenses incurred by an indemnified party and referred to above in
this Section 7 shall be deemed to include any legal or other expenses reasonably
incurred by such indemnified party in investigating, preparing or defending
against any litigation, or any investigation or proceeding by any governmental
agency or body, commenced or threatened, or any claim whatsoever based upon any
such untrue or alleged untrue statement or omission or alleged omission.
Notwithstanding the provisions of this Section 7, the Placement Agent
shall not be required to contribute any amount in excess of the amount by which
the total price at which the Securities placed by it exceeds the amount of any
damages which the Placement Agent has otherwise been required to pay by reason
of any such untrue or alleged untrue statement or omission or alleged omission.
No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the 1933 Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 7, each person, if any, who controls the
Placement Agent within the meaning of Section 15 of the 1933 Act or Section 20
of the 1934 Act shall have the same rights to contribution as the Placement
Agent, and each trustee of the Company, each officer of the Company who signed
the Registration Statement, and each person, if any, who controls the Company
within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act
shall have the same rights to contribution as the Company.
SECTION 8. REPRESENTATIONS, WARRANTIES AND AGREEMENTS TO SURVIVE
DELIVERY. All representations, warranties and agreements contained in this
Agreement or in certificates of officers of the Company submitted pursuant
hereto, shall remain operative and in full force and effect, regardless of any
investigation made by or on behalf of the Placement Agent or controlling person,
or by or on behalf of the Company, and shall survive delivery of the Securities
to the Fund.
SECTION 9. TERMINATION OF AGREEMENT.
(a) Termination; General. The Placement Agent may terminate this
Agreement, by notice to the Company, at any time at or prior to Closing Time (i)
if there has been, since the time of execution of this Agreement or since the
respective dates as of which information is given in the Prospectus, any
material adverse change in the condition, financial or otherwise, or in the
earnings, business affairs or business prospects of the Company and any of the
Subsidiaries considered as one enterprise, whether or not arising in the
ordinary course of business, or (ii) if there has occurred any material adverse
change in the financial markets in the United States, any outbreak of
hostilities or escalation thereof or other calamity or crisis or any change or
development involving a prospective change in national or international
political, financial or economic conditions, in each case the effect of which is
such as to make it, in the judgment of the Placement Agent, impracticable or
inadvisable to market the Securities or to enforce contracts for the sale of the
Securities, or (iii) if trading in any securities of the Company has been
suspended or materially limited by the Commission or the American Stock
Exchange, or if trading generally on the American Stock Exchange or the New York
Stock Exchange or in the Nasdaq National Market has been suspended or materially
limited, or minimum or maximum prices for trading have been fixed, or maximum
ranges for prices have been required, by any of said exchanges or by such system
or by order of the Commission, the National Association of Securities Dealers,
Inc. or any other governmental authority, or a material disruption has occurred
in commercial banking or securities settlement or clearance services in the
United States, or (iv) if a banking moratorium has been declared by either
Federal or New York authorities.
(b) Liabilities. If this Agreement is terminated pursuant to this
Section, such termination shall be without liability of any party to any other
party except as provided in Section 4 hereof, and
provided further that Sections 1, 6, 7, 8 and 12 shall survive such termination
and remain in full force and effect.
SECTION 10. NOTICES. All notices and other communications hereunder
shall be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the Placement
Agent shall be directed to the Placement Agent at 4 World Financial Center,
Floor 26, New York, New York, 10800, attention of John Brady; and notices to the
Company shall be directed to Health Care REIT, Inc., One SeaGate, Suite 1500,
Toledo, Ohio 43603-1475, attention of George L. Chapman, Chairman of the Board,
Chief Executive Officer and President.
SECTION 11. PARTIES. This Agreement shall each inure to the benefit of
and be binding upon the Placement Agent, the Company and their respective
successors. Nothing expressed or mentioned in this Agreement is intended or
shall be construed to give any person, firm or corporation, other than the
Placement Agent, the Company and their respective successors and the controlling
persons and officers and directors referred to in Sections 6 and 7 and their
heirs and legal representatives, any legal or equitable right, remedy or claim
under or in respect of this Agreement or any provision herein contained. This
Agreement and all conditions and provisions hereof are intended to be for the
sole and exclusive benefit of the Placement Agent and the Company and their
respective successors, and said controlling persons and officers and directors
and their heirs and legal representatives, and for the benefit of no other
person, firm or corporation. No purchaser of Securities from any Placement Agent
shall be deemed to be a successor by reason merely of such purchase.
SECTION 12. GOVERNING LAW AND TIME. THIS AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO
AGREEMENTS MADE AND TO BE PERFORMED IN SAID STATE. UNLESS OTHERWISE EXPLICITLY
PROVIDED, SPECIFIED TIMES OF DAY REFER TO NEW YORK CITY TIME.
SECTION 13. EFFECT OF HEADINGS. The Article and Section headings herein
and the Table of Contents are for convenience only and shall not affect the
construction hereof.
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company a counterpart hereof, whereupon
this instrument, along with all counterparts, will become a binding agreement
between the Placement Agent and the Company in accordance with its terms.
Very truly yours,
HEALTH CARE REIT, INC.
By: /s/ George L. Chapman
---------------------------------------
George L. Chapman
Chairman of the Board, Chief Executive
Officer and President
CONFIRMED AND ACCEPTED,
as of the date first above written:
MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By: /s/ Scott Eisen
---------------------------------------
Scott Eisen
Vice President, Investment Banking