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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
__________
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): September 23, 1997
HEALTH CARE PROPERTY INVESTORS, INC.
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(Exact name of registrant as specified in its charter)
Maryland 1-8895 33-0091377
- ---------------------------- ------------------------ -------------------
(State or Other Jurisdiction (Commission File Number) (I.R.S. Employer
of Incorporation Identification No.)
10990 Wilshire Boulevard, Suite 1200, Los Angeles, California 90024
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(Address of Principal Executive Offices) (Zip Code)
(310) 473-1990
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(Registrant's telephone number, including area code)
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Item 5. Other Events.
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PREFERRED STOCK OFFERING
On June 18, 1997, Health Care Property Investors, Inc. (the "Company")
filed with the Securities and Exchange Commission (the "Commission") a
registration statement on Form S-3 (File No. 333-29485) (the "Registration
Statement"), as amended by Amendment No. 1 to the Registration Statement filed
with the Commission on June 26, 1997, relating to the registration under the
Securities Act of 1933, as amended, of up to $385,000,000 aggregate offering
price of common stock, par value $1.00 per share, preferred stock, par value
$1.00 per share, and/or unsecured debt securities of the Company, which
Registration Statement was declared effective on June 27, 1997.
On September 23, 1997, the Company entered into a purchase agreement (the
"Purchase Agreement") with Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner &
Smith Incorporated and Morgan Stanley & Co. Incorporated (collectively, the
"Underwriters"), pursuant to which the Company agreed to issue and sell up to
2,760,000 shares of the Company's 7-7/8% Series A Cumulative Redeemable
Preferred Stock (the "Preferred Shares"). Each of the Purchase Agreement, the
Articles Supplementary establishing the terms of the Preferred Shares, an
opinion with respect to the legality of the Preferred Shares and an opinion with
respect to tax matters is attached hereto as an Exhibit.
RECENT HEALTH CARE LEGISLATION
On August 5, 1997, President Clinton signed into law the Balanced Budget
Act of 1997, which adopted a variety of changes to the Medicare and Medicaid
programs which may have an effect upon the revenues of the operators of
properties owned by the Company or entities to whom the Company provides
mortgage loans. These changes, which will be implemented at various times,
include (i) the adoption of the Medicare+Choice program, which expands the
Medicare beneficiaries' choices to include traditional Medicare fee-for-service,
private fee-for-service, medical savings accounts, various managed care plans,
and provider sponsored organizations, among others, (ii) the expansion and
restriction of reimbursement for various Medicare benefits, (iii) the freeze in
hospital rates in 1998 and more limited annual increases in hospital rates for
1999-2002, (iv) the adoption of a prospective pay system for skilled nursing
facilities, home health agencies, hospital outpatient departments, and
rehabilitation hospitals, (v) the repeal of the Boren amendment in Medicaid so
that states have the exclusive authority to determine provider rates and
providers have no federal right of action, (vi) the reduction in Medicare
disproportionate share payments to hospitals, and (vii) the removal of the
$150,000,000 limit on tax-exempt bonds for nonacute hospital capital projects.
In addition, the Balanced Budged Act of 1997 strengthens the anti-fraud and
abuse laws to provide for stiffer penalties for fraud and abuse violations.
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RECENT TAX LEGISLATION
On August 5, 1997, President Clinton signed into law the Taxpayer Relief
Act of 1997 (H.R. 2014), which will have the effect of modifying certain real
estate investment trust-related provisions of the Internal Revenue Code of 1986,
as amended (the "Code"), for tax years of the Company beginning on or after
January 1, 1998. Some of the potentially significant changes contained in this
legislation include: (i) the rule disqualifying a REIT for any year in which it
fails to comply with certain regulations requiring the REIT to monitor its stock
ownership is replaced with an intermediate financial penalty; (ii) the rule
disqualifying a REIT in any year that it is "closely held" does not apply if
during such year the REIT complied with certain regulations which require the
REIT to monitor its stock ownership, and the REIT did not know or have reason to
know that it was closely held; (iii) a REIT is permitted to render a de minimis
amount of impermissible services to tenants in connection with the management of
property and still treat amounts received with respect to such property (other
than certain amounts relating to such services) as qualified rent; (iv) the
rules regarding attribution to partnerships for purposes of defining qualified
rent and independent contractors are modified so that attribution occurs only
when a partner owns a 25% or greater interest in the partnership; (v) the 30%
gross income test is repealed; (vi) any corporation wholly-owned by a REIT is
permitted to be treated as a qualified REIT subsidiary regardless of whether
such subsidiary has always been owned by the REIT; (vii) certain rules regarding
the taxation of net long-term capital gains received by REITs are modified;
(viii) the rules relating to foreclosure property are altered; (ix) the class of
excess noncash items for purposes of the REIT distribution requirements is
expanded; (x) property that is involuntarily converted is excluded from the
prohibited transaction rules; (xi) the rules regarding the treatment of hedges
are modified, and (xii) certain other Code provisions relating to REITs are
amended. Some or all of the provisions could affect both the Company's
operations and its ability to maintain its REIT status for its taxable years
beginning in 1998.
Item 7. Financial Statements and Exhibits.
---------------------------------
(c) Exhibits.
1.1 Purchase Agreement, dated September 23, 1997, by and among the
Company, Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith
Incorporated and Morgan Stanley & Co. Incorporated.
3.1 Articles Supplementary establishing the terms of the 7-7/8%
Series A Cumulative Redeemable Preferred Stock (incorporated by reference
herein from the Company's Form 8-A (File No. 001-08895 ) filed with the
Commission on September 25, 1997).
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5.1 Opinion re legality of 7-7/8% Series A Cumulative Redeemable
Preferred Stock.
8.1 Opinion re tax matters.
23.1 Consent of Ballard Spahr Andrews & Ingersoll (included as part of
Exhibit 5.1).
23.2 Consent of Latham & Watkins (included as part of Exhibit 8.1).
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the registrant has duly caused this report to be signed on its behalf
by the undersigned thereto duly authorized.
Dated: September 25, 1997
HEALTH CARE PROPERTY INVESTORS, INC.
By: /s/ Edward J. Henning
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Name: Edward J. Henning
Title: Senior Vice President,
General Counsel and
Corporate Secretary
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EXHIBIT INDEX
<TABLE>
<S> <C>
1.1 Purchase Agreement, dated September 23, 1997, by and among the
Company, Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner &
Smith Incorporated and Morgan Stanley & Co. Incorporated.
3.1 Articles Supplementary establishing the terms of the 7-7/8% Series A
Cumulative Redeemable Preferred Stock (incorporated by reference
herein from the Company's Form 8-A (File No. 001-08895) filed with the
Commission on September 25, 1997).
5.1 Opinion re legality of 7-7/8% Series A Cumulative Redeemable Preferred
Stock.
8.1 Opinion re tax matters.
23.1 Consent of Ballard Spahr Andrews & Ingersoll (included as part of
Exhibit 5.1).
23.2 Consent of Latham & Watkins (included as part of Exhibit 8.1).
</TABLE>
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EXHIBIT 1.1
2,400,000 Shares
HEALTH CARE PROPERTY INVESTORS, INC.
(a Maryland corporation)
7 7/8% Series A
Cumulative Redeemable Preferred Stock
(Liquidation Preference $25 Per Share)
PURCHASE AGREEMENT
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September 23, 1997
Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
Morgan Stanley & Co. Incorporated
as Representatives of the several Underwriters
c/o Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
Merrill Lynch World Headquarters
North Tower
World Financial Center
New York, New York 10281-1209
Dear Sirs:
Health Care Property Investors, Inc., a Maryland corporation (the
"Company"), confirms its agreement with each of Merrill Lynch, Pierce, Fenner &
Smith Incorporated ("Merrill Lynch") and Morgan Stanley & Co. Incorporated
(collectively, the "Underwriters"), which term shall also include any
Underwriter substituted as hereinafter provided in Section 10), for whom Merrill
Lynch is acting as a representative (in such capacity, Merrill Lynch shall
hereinafter be referred to as the "Representative"), with respect to the sale by
the Company and the purchase by the Underwriters, acting severally and not
jointly, of the
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respective numbers of shares of 7/8% Series A Cumulative Redeemable Preferred
Stock (Liquidation Preference $25 per share) of the Company ("Series A Preferred
Stock") set forth in Schedule A hereto, and with respect to the grant by the
Company to the Underwriters, acting severally and not jointly, of the option
described in Section 2(b) hereof to purchase all or any part of 360,000
additional shares of Series A Preferred Stock to cover over-allotments. The
aforesaid 2,400,000 shares of Series A Preferred Stock (the "Initial
Securities") to be purchased by the Underwriters and all or any part of the
shares of Preferred Stock subject to the option described in Section 2(b) hereof
(the "Option Securities") are collectively hereinafter called the "Securities".
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 (No. 333-29485) and a related
preliminary prospectus for the registration under the Securities Act of 1933, as
amended (the "1933 Act") of Common Stock, par value $1.00 per share ("Common
Stock"), preferred stock, par value $1.00 per share ("Preferred Stock"),
including the Securities, and debt securities (collectively, the "Registered
Securities"), which registration statement has been declared effective by the
Commission and copies of which have heretofore been delivered to you. Such
Registration Statement, in the form in which it was declared effective, as
amended through the date hereof, including all documents incorporated or deemed
to be incorporated by reference therein through the date hereof, is hereinafter
referred to as the "Original Registration Statement". Any registration
statement filed pursuant to Rule 462(b) of the rules and regulations of the
Commission under the 1933 Act (the "1933 Act Regulations") is herein referred to
as the "Rule 462(b) Registration Statement". The Company proposes to file with
the Commission pursuant to Rule 424(b) of the 1933 Act Regulations the
Prospectus Supplement (as defined in Section 3(i) hereof) relating to the
Securities and the prospectus dated September 19, 1997 (the "Base Prospectus")
relating to the Registered Securities, and has previously advised you of all
further information (financial and other) with respect to the Company set forth
therein. The Base Prospectus together with the Prospectus Supplement, in their
respective forms on the date hereof (being the forms in which they are to be
filed with the Commission pursuant to Rule 424(b) of the 1933 Act Regulations),
including all documents incorporated or deemed to be incorporated by reference
therein through the date hereof, are hereinafter referred to as, collectively,
the "Prospectus", except that if any revised prospectus or prospectus supplement
shall be provided to the Underwriters by the Company for use in connection with
the offering and sale of the Securities which differs from the Prospectus
(whether or not such revised prospectus or prospectus supplement is required to
be filed by the Company pursuant to Rule 424(b) of the 1933 Act Regulations),
the term "Prospectus" shall refer to such revised prospectus or prospectus
supplement, as the case may be, from and after the time it is first provided to
the Underwriters for such use. Unless the context otherwise requires, all
references in this Agreement to documents, financial statements and schedules
and other information which is "contained", "included", "stated", "described in"
or "referred to" in the Registration Statement or the Prospectus (and all other
references of like import) shall be deemed to mean and include all such
documents, financial statements and schedules and other information which is or
is deemed to be incorporated by reference in the Registration Statement or the
Prospectus, as the case may be; and all references in this Agreement to
amendments or supplements to the Registration Statement or the Prospectus shall
be deemed to
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mean and include the filing of any document under the Securities Exchange Act of
1934 (the "1934 Act") after the date of this Agreement which is or is deemed to
be incorporated by reference in the Registration Statement or the Prospectus, as
the case may be.
The Company understands that the Underwriters propose to make a public
offering of the Securities as soon as the Underwriters deem advisable after this
Agreement has been executed and delivered.
Section 1. Representations and Warranties. (a) The Company represents and
------------------------------
warrants to each Underwriter as of the date hereof (such date being hereinafter
referred to as the "Representation Date") as follows:
(i) The Company meets the requirements for use of Form S-3 under the
1933 Act and the 1933 Act Regulations. Each of the Original Registration
Statement and any Rule 462(b) Registration Statement and the Base
Prospectus, at the respective times the Original Registration Statement,
any Rule 462(b) Registration Statement and any post-effective amendments
thereto became effective and as of the Representation Date, complied and
comply in all material respects with the requirements of the 1933 Act and
the 1933 Act Regulations (including Rule 415(a) of the 1933 Act
Regulations), and did not and as of the Representation Date do not contain
an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein
not misleading. The Prospectus, at the Representation Date (unless the
term "Prospectus" refers to a prospectus which has been provided to the
Underwriters by the Company for use in connection with the offering of the
Securities which differs from the Prospectus filed with the Commission
pursuant to Rule 424(b) of the 1933 Act Regulations, in which case at the
time it is first provided to the Underwriters for such use) and at the
Closing Time referred to in Section 2 hereof, does not and will not include
an untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided,
--------
however, that the representations and warranties in this subsection (i)
-------
shall not apply to statements in or omissions from the Registration
Statement or Prospectus made in reliance upon and in conformity with
information furnished to the Company in writing by any Underwriter through
Merrill Lynch expressly for use in the Registration Statement or the
Prospectus or the information contained in any Statement of Eligibility and
Qualification of a trustee under the Trust Indenture Act of 1939, as
amended (the "1939 Act") filed as an exhibit to the Registration Statement
(a "Form T-1"). For purposes of this Section 1(a), all references to the
Registration Statement, any post-effective amendments thereto and the
Prospectus shall be deemed to include, without limitation, any
electronically transmitted copies thereof filed with the Commission
pursuant to its Electronic Data Gathering, Analysis, and Retrieval system
("EDGAR").
(ii) The documents incorporated or deemed to be incorporated by
reference into the Prospectus pursuant to Item 12 of Form S-3 under the
1933 Act, at the time they were or hereafter are filed with the Commission,
complied and will comply in all
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material respects with the requirements of the 1934 Act and the rules and
regulations of the Commission thereunder (the "1934 Act Regulations"), and,
when read together and with the other information in the Prospectus, at the
respective times the Registration Statement and any amendments thereto
became effective, at the Representation Date and at Closing Time, did not,
do not and will not contain an untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary in
order to make the statements therein, in the light of the circumstances
under which they were made, not misleading.
(iii) The accountants who certified the financial statements and
supporting schedules included or incorporated by reference in the
Registration Statement and Prospectus are independent public accountants as
required by the 1933 Act and the 1933 Act Regulations.
(iv) The financial statements and any supporting schedules of the
Company and its consolidated subsidiaries included or incorporated by
reference in the Registration Statement and the Prospectus present fairly
the consolidated financial position of the Company and its consolidated
subsidiaries as at the dates indicated and the results of their operations
for the periods specified; and, except as otherwise stated in the
Registration Statement and the Prospectus, said financial statements have
been prepared in conformity with generally accepted accounting principles
applied on a consistent basis; and the supporting schedules included or
incorporated by reference in the Registration Statement present fairly the
information required to be stated therein; and the Company's ratios of
earnings to fixed charges included in the Prospectus under the caption
"Ratio of Earnings to Fixed Charges" and in Exhibit 12 to the Registration
Statement have been calculated in compliance with Item 503(d) of Regulation
S-K of the Commission.
(v) Since the respective dates as of which information is given in the
Registration Statement and the Prospectus, except as otherwise stated
therein or contemplated thereby, (A) there has been no material adverse
change in the condition, financial or otherwise, or in the earnings,
business affairs or business prospects of the Company and its subsidiaries
considered as one enterprise, whether or not arising in the ordinary course
of business, (B) there have been no transactions entered into by the
Company or any of its subsidiaries, other than those in the ordinary course
of business, which are material with respect to the Company and its
subsidiaries considered as one enterprise, and (C) except for regular
quarterly dividends on the Common Stock, there has been no dividend or
distribution of any kind declared, paid or made by the Company on any class
of its capital stock.
(vi) The Company has been duly incorporated and is validly existing as
a corporation in good standing under the laws of the State of Maryland with
corporate power and authority to own, lease and operate its properties and
to conduct its business as described in the Prospectus; the Company is duly
qualified as a foreign corporation to transact business and is in good
standing in each jurisdiction in which such
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qualification is required, whether by reason of the ownership or leasing of
property or the conduct of business, except where the failure to so qualify
and be in good standing would not have a material adverse effect on the
condition, financial or otherwise, or the earnings, business affairs or
business prospects of the Company and its subsidiaries considered as one
enterprise; and the Company is in substantial compliance with all laws,
ordinances and regulations of each state in which it owns properties that
are material to the properties and business of the Company and its
subsidiaries considered as one enterprise in such state.
(vii) Each subsidiary of the Company which is a significant
subsidiary (each, a "Significant Subsidiary") as defined in Rule 405 of
Regulation C of the 1933 Act Regulations has been duly organized and is
validly existing as a corporation or partnership, as the case may be, in
good standing under the laws of the jurisdiction of its organization, has
power and authority as a corporation or partnership, as the case may be, to
own, lease and operate its properties and conduct its business as described
in the Prospectus and is duly qualified as a foreign corporation or
partnership, as the case may be, to transact business and is in good
standing in each jurisdiction in which such qualification is required,
whether by reason of the ownership or leasing of property or the conduct of
business, except where the failure to so qualify would not have a material
adverse effect on the condition, financial or otherwise, or the earnings,
business affairs or business prospects of the Company and its subsidiaries
considered as one enterprise; all of the issued and outstanding capital
stock of each such corporate subsidiary has been duly authorized and
validly issued, is fully paid and non-assessable and, except for directors'
qualifying shares, is owned by the Company, directly or through
subsidiaries, free and clear of any security interest, mortgage, pledge,
lien, encumbrance, claim or equity; and all of the issued and outstanding
partnership interests of each such subsidiary which is a partnership have
been duly authorized (if applicable) and validly issued and are fully paid
and non-assessable and (except for other partnership interests described in
the Prospectus) are owned by the Company, directly or through corporate
subsidiaries, free and clear of any security interest, mortgage, pledge,
lien, encumbrance, claim or equity.
(viii) The Company has at all times operated in such manner as to
qualify as a "real estate investment trust" under the Internal Revenue Code
of 1986, as amended (the "Code"), and intends to continue to operate in
such manner.
(ix) The authorized capital stock of the Company is as set forth in
the Prospectus under "Capitalization" (except for subsequent issuances, if
any, pursuant to reservations, agreements or employee benefit plans
referred to in the Prospectus); the shares of issued Common Stock have been
duly authorized and validly issued and are fully paid and non-assessable;
the Company has the requisite corporate power and authority to execute and
deliver this Agreement and to perform its obligations hereunder and the
Securities have been duly authorized for issuance and sale to the
Underwriters pursuant to this Agreement and, when issued and delivered by
the Company pursuant to this Agreement against payment of the consideration
set forth
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herein, will be validly issued and fully paid and non-assessable; the
Common Stock, the Preferred Stock and the Series A Preferred Stock conform
to all statements relating thereto contained in the Prospectus and such
descriptions conform to the rights set forth in the instruments defining
the same; the issuance of the Securities is not subject to preemptive
rights; and, after giving effect to the sale of the Securities and the sale
of any other of the Registered Securities to be issued prior to the
delivery of the Securities, the aggregate amount of Securities which have
been issued and sold by the Company will not exceed the aggregate amount of
theretofore unsold Registered Securities.
(x) Neither the Company nor any of its subsidiaries is in violation of
its charter or bylaws or in material default in the performance or
observance of any obligation, agreement, covenant or condition contained in
any contract, indenture, mortgage, loan agreement, note, lease or other
instrument to which the Company or any of its subsidiaries is a party or by
which it or any of them or their properties may be bound or to which any of
the property or assets of the Company or any of its subsidiaries is subject
and in which the violation or default might result in a material adverse
change in the condition, financial or otherwise, or in the earnings,
business affairs or business prospects of the Company and its subsidiaries
considered as one enterprise; and the execution, delivery and performance
of this Agreement and the consummation of the transactions contemplated
herein and compliance by the Company with its obligations hereunder have
been duly authorized by all necessary corporate action and will not
conflict with or constitute a breach of, or default under, or result in the
creation or imposition of any lien, charge or encumbrance upon any property
or assets of the Company or any of its subsidiaries pursuant to any
contract, indenture, mortgage, loan agreement, note, lease or other
instrument to which the Company or any of its subsidiaries is a party or by
which it or any of them may be bound, or to which any of the property or
assets of the Company or any of its subsidiaries is subject, nor will such
action result in any violation of the provisions of the charter or by-laws
of the Company or any law, administrative regulation or administrative or
court order or decree.
(xi) There is no action, suit or proceeding before or by any court or
governmental agency or body, domestic or foreign, now pending, or, to the
knowledge of the Company, threatened, against or affecting the Company or
any of its subsidiaries, which is required to be disclosed in the
Registration Statement (other than as disclosed therein), or which might
result in any material adverse change in the condition, financial or
otherwise, or in the earnings, business affairs or business prospects of
the Company and its subsidiaries considered as one enterprise, or which
might materially and adversely affect the properties or assets thereof or
which might materially and adversely affect the consummation of this
Agreement or any transaction contemplated hereby; all pending legal or
governmental proceedings to which the Company or any of its subsidiaries is
a party or of which any of their respective property or assets is the
subject which are not described in or incorporated by reference in the
Registration Statement, including ordinary routine litigation incidental
to the
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business, are, considered in the aggregate, not material; and there are no
contracts or documents of the Company or any of its subsidiaries which are
required to be filed or incorporated by reference as exhibits to, or
incorporated by reference in, the Registration Statement by the 1933 Act or
by the 1933 Act Regulations which have not been so filed.
(xii) No authorization, approval, consent , order or decree of any
court or governmental authority or agency is required for the consummation
by the Company of the transactions contemplated by this Agreement or in
connection with the offering, issuance or sale of the Securities hereunder,
except such as may be required under the 1933 Act or the 1933 Act
Regulations or state securities laws.
(xiii) This Agreement has been duly authorized, executed and
delivered by the Company and, upon execution and delivery by the
Underwriters, will be a valid and legally binding agreement of the Company.
(xiv) The Company and its subsidiaries have good title to all real
property or interests in real property owned by it or any of them, in each
case free and clear of all liens, encumbrances and defects except such as
are stated or incorporated by reference in the Prospectus or such as would
not materially adversely affect the condition, financial or otherwise, or
the earnings, business affairs or business prospects of the Company and its
subsidiaries considered as one enterprise; the Company and its subsidiaries
have obtained satisfactory confirmations (consisting of policies of title
insurance or commitments or binders therefor or opinions of counsel based
upon the examination of abstracts) confirming, except as otherwise
described in the Prospectus, (A) that the Company and its subsidiaries have
the foregoing title to such real property and interests in real property,
and (B) that the instruments securing the Company's and its subsidiaries'
real estate mortgage loans create valid liens upon the real properties
described in such instruments enjoying the priorities intended, subject
only to exceptions to title which have no material adverse effect on the
value of such real properties and interests in relation to the Company and
its subsidiaries considered as one enterprise; and no material real
property and buildings are held under lease by the Company (other than
long-term ground leases).
(xv) The Company is not required to be registered under the Investment
Company Act of 1940, as amended (the "1940 Act").
(xvi) The Securities are currently rated "baa2" by Moody's Investor's
Service, Inc., "BBB" by Standard & Poor's Ratings Group and "BBB+" by Duff
& Phelps Credit Rating Co.
(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 each Underwriter as to the matters
covered thereby.
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Section 2. Sale and Delivery to Underwriters; Closing.
------------------------------------------
(a) On the basis of the representations and warranties herein contained and
subject to the terms and conditions herein set forth, the Company agrees to sell
to each Underwriter, severally and not jointly, and each Underwriter, severally
and not jointly, agrees to purchase from the Company, at $24.2125 per share, the
number of Initial Securities set forth in Schedule A hereto opposite the name of
such Underwriter, plus any additional number of Securities which such
Underwriter may become obligated to purchase pursuant to the provisions of
Section 10 hereof.
(b) In addition, on the basis of the representations and warranties herein
contained and subject to the terms and conditions herein set forth, the Company
hereby grants an option to the Underwriters, severally and not jointly, to
purchase up to an additional 360,000 shares of Series A Preferred Stock at the
price per share set forth in paragraph (a) above. The option hereby granted
will expire 30 days after the Representation Date, and may be exercised in whole
or in part from time to time only for the purpose of covering over-allotments
which may be made in connection with the offering and distribution of the
Initial Securities upon notice by the Underwriters to the Company setting forth
the number of Option Securities as to which the Underwriters are then exercising
the option and the time, date and place of payment and delivery for such Option
Securities. Any such time and date of delivery (a "Date of Delivery") shall be
determined by the Underwriters, but shall not be later than seven full business
days after the exercise of said option, nor in any event prior to Closing Time,
as hereinafter defined, unless otherwise agreed upon by the Underwriters and the
Company. If the option is exercised as to all or any portion of the Option
Securities, each of the Underwriters, acting severally and not jointly, will
purchase that proportion of the total number of Option Securities then being
purchased which the number of Initial Securities set forth in Schedule A
opposite the name of such Underwriter bears to the total number of Initial
Securities, subject in each case to such adjustments as the Underwriters in
their discretion shall make to eliminate any sales or purchases of fractional
Securities.
(c) Payment of the purchase price for, and delivery of certificates for,
the Initial Securities shall be made at the office of Latham & Watkins, 633 West
Fifth Street, Suite 4000, Los Angeles, California 90071-2007, or at such other
place as shall be agreed upon by the Underwriters and the Company, at 7:00 A.M.,
Los Angeles time, on September 26, 1997 (unless postponed in accordance with the
provisions of Section 10 hereof), or such other time not later than ten business
days after such date as shall be agreed upon by the Underwriters and the Company
(such time and date of payment and delivery being herein called "Closing Time").
In addition, in the event that any or all of the Option Securities are purchased
by the Underwriters, payment of the purchase price for and delivery of
certificates for such Option Securities shall be made at the above-mentioned
office of Latham & Watkins, or at such other place as shall be mutually agreed
upon by the Underwriters and the Company, on each Date of Delivery as specified
in the notice from the Underwriters to the Company. Payment shall be made to
the Company by wire transfer of immediately available funds to a bank account
designated by the Company against delivery to the Underwriters of certificates
for the Securities to be purchased by the Underwriters. Certificates for the
Initial Securities and the
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Option Securities shall be in such denominations and registered in such names as
the Underwriters may request in writing at least one business day before Closing
Time or the relevant Date of Delivery, as the case may be. It is understood that
each Underwriter other than Merrill Lynch has authorized Merrill Lynch, for its
account, to accept delivery of, receipt for, and make payment of the purchase
price for, the Securities which it has agreed to purchase. Merrill Lynch,
individually and not as representative of the Underwriters, may (but shall not
be obligated to) make payment to the Company on behalf of any Underwriter or
Underwriters for the Securities to be purchased by such Underwriter or
Underwriters, but such payment shall not relieve such Underwriter or
Underwriters from its obligations hereunder. The certificates for the Initial
Securities and the Option Securities, if any, will be made available for
examination and packaging by the Underwriters not later than 10:00 A.M. on the
last business day prior to Closing Time or the relevant Date of Delivery, as the
case may be in New York, New York.
Section 3. Covenants of the Company. The Company covenants with each
------------------------
Underwriter as follows:
(a) The Company will notify the Underwriters immediately, and confirm
the notice in writing, (i) of the effectiveness of any post-effective
amendment to the Registration Statement, (ii) of the mailing or the
delivery to the Commission for filing of the Prospectus or any amendment to
the Registration Statement or amendment or supplement to the Prospectus or
any document to be filed pursuant to the 1934 Act during any period when
the Prospectus is required to be delivered under the 1933 Act, (iii) of the
receipt of any comments or inquiries from the Commission relating to the
Registration Statement or Prospectus, (iv) of any request by the Commission
for any amendment to the Registration Statement or any amendment or
supplement to the Prospectus or for additional information, (v) of the
issuance by the Commission of any stop order suspending the effectiveness
of the Registration Statement or the initiation of any proceeding for that
purpose, and (vi) of the issuance by any state securities commission or
other regulatory authority of any order suspending the qualification or the
exemption from qualification of the Securities under state securities or
Blue Sky laws or the initiation of any proceedings for that purpose. The
Company will make every reasonable effort to prevent the issuance by the
Commission of any stop order and, if any such stop order is issued, to
obtain the lifting thereof at the earliest possible moment. The Company
will provide the Underwriters with copies of the form of Prospectus, in
such number as the Underwriters may reasonably request, and file or
transmit for filing with the Commission such Prospectus in accordance with
Rule 424(b) of the 1933 Act Regulations by the close of business in New
York on the second business day immediately succeeding the date hereof.
(b) The Company will give the Underwriters notice of its intention to
file or prepare any amendment to the Registration Statement (including any
filing under Rule 462(b)) or any amendment or supplement to the Prospectus
(including any revised prospectus which the Company proposes for use by the
Underwriters in connection with the offering of the Securities that differs
from the prospectus filed with the Commission
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pursuant to Rule 424(b) of the 1933 Act Regulations, whether or not such
revised prospectus is required to be filed pursuant to Rule 424(b) of the
1933 Act Regulations or any abbreviated term sheet prepared in reliance on
Rule 434 of the 1933 Act Regulations), will furnish the Underwriters with
copies of any such amendment or supplement a reasonable amount of time
prior to such proposed filing or use, as the case may be, and will not file
any such amendment or supplement or use any such prospectus to which the
Underwriters or counsel for the Underwriters shall reasonably object.
(c) The Company will deliver to the Underwriters as many signed copies
of the Registration Statement as originally filed and of each amendment
thereto (including exhibits filed therewith and documents incorporated or
deemed to be incorporated by reference therein) as the Underwriters may
reasonably request and will also deliver to the Underwriters as many
conformed copies of the Registration Statement as originally filed and of
each amendment thereto (including documents incorporated or deemed to be
incorporated by reference therein but without exhibits filed therewith) as
the Underwriters may reasonably request.
(d) The Company will furnish to the Underwriters, from time to time
during the period when the Prospectus is required to be delivered under the
1933 Act or the 1934 Act, such number of copies of the Prospectus (as
amended or supplemented) the Underwriters may reasonably request for the
purposes contemplated by the 1933 Act or the 1934 Act or the respective
applicable rules and regulations of the Commission thereunder.
(e) If any event shall occur as a result of which it is necessary, in
the opinion of counsel for the Underwriters or counsel for the Company, to
amend or supplement the Prospectus in order to make the Prospectus not
misleading in the light of the circumstances existing at the time it is
delivered to a purchaser, the Company will forthwith amend or supplement
the Prospectus (in form and substance satisfactory to counsel for the
Underwriters) so that, as so amended or supplemented, the Prospectus will
not contain an untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in the
light of the circumstances existing at the time it is delivered to a
purchaser, not misleading, and the Company will furnish to the Underwriters
a reasonable number of copies of such amendment or supplement.
(f) The Company will endeavor, in cooperation with the Underwriters,
to qualify the Securities for offering and sale under the applicable
securities laws of such states and other jurisdictions of the United States
as the Underwriters may designate; provided, however, that the Company
shall not be obligated to file any general consent to service of process or
to qualify as a foreign corporation in any jurisdiction in which it is not
so qualified. In each jurisdiction in which the Securities shall have been
so qualified, the Company will file such statements and reports as may be
required by
10
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laws of such jurisdiction to continue such qualification in effect for as
long as may be required for the distribution of the Securities.
(g) The Company will make generally available to its security holders
as soon as practicable, but not later than 60 days after the close of the
period covered thereby, an earnings statement (in form complying with the
provisions of Rule 158 of the 1933 Act Regulations) covering the twelve
month period beginning not later than the first day of the Company's fiscal
quarter next following the "effective date" (as defined in said Rule 158)
of the Registration Statement.
(h) The Company will use the net proceeds received by it from the sale
of the Securities in the manner to be specified in the Prospectus
Supplement under "Use of Proceeds".
(i) Immediately following the execution of this Agreement, the Company
will prepare a prospectus supplement, dated the date hereof (the
"Prospectus Supplement"), containing the terms of the Securities, the plan
of distribution thereof and such other information as may be required by
the 1933 Act or the 1933 Act Regulations or as the Underwriters and the
Company deem appropriate, and will file or transmit for filing with the
Commission in accordance with Rule 424(b) of the 1933 Act Regulations
copies of the Prospectus (including such Prospectus Supplement).
(j) The Company, during the period when the Prospectus is required to
be delivered under the 1933 Act or the 1934 Act, will file promptly all
documents required to be filed with the Commission pursuant to Section 13,
14 or 15 of the 1934 Act within the time periods required by the 1934 Act
and the 1934 Act Regulations.
Section 4. Payment of Expenses. The Company will pay all expenses
-------------------
incident to the performance of its obligations under this Agreement, including
(i) the printing and filing of the Registration Statement as originally filed
and of each amendment thereto, (ii) the preparation, issuance and delivery of
the certificates for the Securities to the Underwriters, (iii) the fees and
disbursements of the Company's counsel and accountants, (iv) the qualification
of the Securities under securities laws in accordance with the provisions of
Section 3(f) hereof, including filing fees and the reasonable fee and
disbursements of counsel for the Underwriters in connection therewith and in
connection with the preparation of a Supplemental Blue Sky Survey, (v) the
printing and delivery to the Underwriters in quantities as hereinabove stated of
copies of the Registration Statement as originally filed and of each amendment
thereto, of each preliminary prospectus and preliminary prospectus supplement
and of the Prospectus and Prospectus Supplement and any amendments or
supplements thereto, including any abbreviated term sheet delivered by the
Company pursuant to Rule 434 of the 1933 Act Regulations, (vi) the printing and
delivery to the Underwriters of copies of the Supplemental Blue Sky Survey and
(vii) the fees and expenses incurred in connection with the listing of the
Securities on the New York Stock Exchange.
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If this Agreement is cancelled or terminated by the Underwriters in
accordance with the provisions of Section 5 or Section 9(a)(i) hereof, the
Company shall reimburse the Underwriters for all of their out-of-pocket
expenses, including the reasonable fee and disbursements of counsel for the
Underwriters.
Section 5. Conditions of Underwriters' Obligations. The obligations of
---------------------------------------
the Underwriters hereunder are subject to the accuracy of the representations
and warranties of the Company herein contained, to the performance by the
Company of its obligations hereunder, and to the following further conditions:
(a) At Closing Time no stop order suspending the effectiveness of the
Registration Statement shall have been issued under the 1933 Act or
proceedings therefor initiated or threatened by the Commission. The
Prospectus (including the Prospectus Supplement referred to in Section 3(i)
hereof) shall have been filed or transmitted for filing with the Commission
pursuant to Rule 424(b) of the 1933 Act Regulations within the prescribed
time period, and prior to Closing Time the Company shall have provided
evidence satisfactory to the Underwriters of such timely filing or
transmittal.
(b) At Closing Time the Underwriters shall have received:
(1) The favorable opinion, dated as of Closing Time, of Latham &
Watkins, special counsel for the Company, in form and scope
satisfactory to counsel for the Underwriters, to the effect that:
(i) This Agreement has been duly executed and delivered by
the Company.
(ii) The Registration Statement (including any Rule 462(b)
Registration Statement) has been declared effective under the
1933 Act and, to the best of such counsel's knowledge and
information, no stop order suspending the effectiveness of the
Registration Statement has been issued under the 1933 Act and no
proceedings therefor have been initiated or threatened by the
Commission.
(iii) The Registration Statement (including any Rule 462(b)
Registration Statement) at the time it became effective and at
the Representation Date, appeared on its face to comply as to
form in all material respects with the requirements for
registration statements on Form S-3 under the 1933 Act and the
1933 Act Regulations; it being understood that such counsel need
express no opinion with respect to documents incorporated by
reference therein except as set forth in paragraph (iv) below,
any Form T-1 or the financial statements, schedules and other
financial and statistical data included or incorporated by
reference in the Registration Statement. In passing upon the
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compliance as to form of the Registration Statement, such counsel
may assume that the statements made and incorporated by reference
therein are true, correct and complete.
(iv) Each document filed pursuant to the 1934 Act and
incorporated by reference in the Prospectus (other than the
financial statements and other financial and statistical data and
related schedules included or incorporated by reference therein,
as to which no opinion need be rendered), at the time it was
filed with the Commission, appeared on its face to comply as to
form in all material respects with the requirements of the 1934
Act and the 1934 Act Regulations. In passing upon compliance as
to form of such documents, such counsel may assume that the
statements made therein are true, correct and complete.
(v) To the best of such counsel's knowledge, there are no
legal or governmental proceedings pending or threatened which are
required to be disclosed in the Prospectus.
(vi) No authorization, approval, consent, decree or order of
any court or governmental authority or agency is required for the
consummation by the Company of the transactions contemplated by
this Agreement or in connection with the sale of the Securities
hereunder, except such as may have been obtained or rendered, as
the case may be, or as may be required under the 1933 Act or the
1933 Act Regulations or state securities laws.
(vii) The issue and sale of the Securities and the compliance
by the Company with the provisions of this Agreement and the
consummation of the transactions herein contemplated will not
result in a breach or violation of any material term or provision
of, or constitute a default under the Material Agreements (as
defined in such opinion); nor will such action result in any
violation of the provisions of the charter or by-laws of the
Company or, to the best of such counsel's knowledge, result in
any material violation of any statute or any order, rule or
regulation applicable to the Company of any court or governmental
agency or body having jurisdiction over the Company or any of its
subsidiaries or any of their properties, except that such counsel
need express no opinion under federal securities laws except as
expressly otherwise provided in this Section 5(b)(1), and no
opinion under state securities laws (including real estate
syndication laws) or any antifraud laws.
(viii) The Company is not an "investment company" within
the meaning of the 1940 Act.
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(2) The favorable opinion, dated as of Closing Time, of Latham &
Watkins, special counsel for the Company, in form and scope
satisfactory to counsel for the Underwriters and subject to customary
assumptions, limitations and exceptions acceptable to counsel for the
Underwriters, to the effect that:
(i) the Company was organized in conformity with the
requirements for qualification as a real estate investment trust
and its proposed method of operation will enable it to meet the
requirements for qualification and taxation as a real estate
investment trust under the Code; and
(ii) the information in the Prospectus under the captions
"Certain Federal Income Tax Considerations to the Company", and
"Certain Federal Income Tax Considerations to Holders of Series A
Preferred Stock", insofar as such statements constitute matters
of law, summaries of legal matters, documents or proceedings, or
legal conclusions, has been reviewed by them and is correct in
all material respects.
(3) The favorable opinion, dated as of Closing Time, of Ballard
Spahr Andrews & Ingersoll, Maryland counsel for the Company, in form
and scope satisfactory to counsel for the Underwriters, to the effect
that:
(i) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the
State of Maryland.
(ii) The Company has corporate power and authority to own,
lease and operate its properties and to conduct its business as
described in the Prospectus.
(iii) The authorized capital stock of the Company is as set
forth in the Prospectus under "Capitalization."
(iv) The Securities have been duly authorized for issuance
and sale to the Underwriters pursuant to this Agreement and, when
issued and delivered by the Company pursuant to this Agreement
against payment of the consideration set forth herein, will be
validly issued and fully paid and non-assessable; and the
issuance of such Securities is not subject to preemptive rights
under the charter or bylaws of the Company or the Maryland
General Corporation Law or, to the best of such counsel's
knowledge, similar rights.
(v) Texas HCP, Inc. has been duly incorporated and is
validly existing as a corporation in good standing under the laws
of the
14
<PAGE>
jurisdiction of its incorporation, and has corporate power and
authority to own, lease and operate its properties and to conduct
its business as described in the Prospectus; all of the issued
and outstanding shares of capital stock of such subsidiary have
been duly and validly authorized and issued, and are fully paid
and non-assessable and, to the best of such counsel's knowledge
and information, are owned by the Company, directly or through
subsidiaries, free and clear of any security interest, mortgage,
pledge, lien, encumbrance, claim or equity.
(vi) This Agreement has been duly authorized by the Company.
(vii) The Preferred Stock and the Series A Preferred Stock
conform to the descriptions thereof contained in the Prospectus
and the form of certificate used to evidence the Securities is in
due and proper form.
(viii) No authorization, approval, consent, decree or order
of any court or governmental authority or agency is required for
the consummation by the Company of the transactions contemplated
by this Agreement or in connection with the sale of the
Securities hereunder, except such as may have been obtained or
rendered, as the case may be, or as may be required under the
1933 Act or the 1933 Act Regulations or state securities laws.
In rendering its opinion, Ballard Spahr Andrews & Ingersoll shall
state that Brown & Wood LLP, in rendering its opinion pursuant to
Section 5(b)(5), may rely upon such opinion as to matters arising
under the laws of the State of Maryland.
(4) The favorable opinion, dated as of Closing Time, of Edward J.
Henning, General Counsel of the Company, in form and scope
satisfactory to counsel for the Underwriters, to the effect that:
(i) To the best of such counsel's knowledge and information,
the Company is duly qualified as a foreign corporation to
transact business and is in good standing in each jurisdiction in
which its ownership or lease of substantial properties or the
conduct of its business requires such qualification, except where
the failure to so qualify would not have a material adverse
effect on the condition, financial or otherwise, or the earnings,
business affairs or business prospects of the Company and its
subsidiaries considered as one enterprise.
(ii) To the best of such counsel's knowledge and
information, each Significant Subsidiary of the Company is duly
15
<PAGE>
qualified as a foreign corporation to transact business and is in
good standing in each jurisdiction in which its ownership or
lease of substantial properties or the conduct of its business
requires such qualification, except where the failure to so
qualify and be in good standing would not have a material adverse
effect on the condition, financial or otherwise, or the earnings,
business affairs or business prospects of the Company and its
subsidiaries considered as one enterprise.
(iii) To the best of such counsel's knowledge and
information, no material default exists in the due performance or
observance by the Company or any of its subsidiaries of any
obligation, agreement, covenant or condition contained in any
contract, indenture, mortgage, loan agreement, note, lease or
other instrument described or referred to in the Registration
Statement or filed as an exhibit thereto or incorporated by
reference therein which would have a material adverse effect on
the condition, financial or otherwise, or in the earnings,
business affairs or business prospects of the Company and its
subsidiaries considered as one enterprise.
(iv) To the best of such counsel's knowledge and
information, there are no contracts, indentures, mortgages, loan
agreements, notes, leases or other instruments or documents
required to be described or referred to in the Registration
Statement or to be filed as exhibits thereto other than those
described or referred to therein or filed or incorporated by
reference as exhibits thereto and the descriptions thereof or
references thereto are correct.
(v) The authorized, issued and outstanding capital stock of
the Company is as set forth in the Prospectus under
"Capitalization" (except for subsequent issuances, if any,
pursuant to reservations, agreements, dividend reinvestment plans
or employee or director stock plans referred to in the
Prospectus), the shares of Preferred Stock (including the Series
A Preferred Stock) have been duly authorized, and the shares of
issued and outstanding Common Stock have been duly authorized and
validly issued and are fully paid and non-assessable.
(5) The favorable opinion, dated as of Closing Time, of Brown &
Wood LLP, counsel for the Underwriters, with respect to the matters
set forth in (i) and (iii) of subsection (b)(1) and in (i), (iv), (vi)
and (vii) of subsection (b)(3) of this Section. In rendering such
opinion, Brown & Wood LLP may rely upon the opinion of Ballard Spahr
Andrews & Ingersoll, rendered pursuant to Section 5(b)(4), as to
matters arising under the laws of the State of Maryland.
16
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(6) In giving their opinions required by subsections (b)(1) and
(b)(5), respectively, of this Section, Latham & Watkins and Brown &
Wood LLP shall each additionally state that nothing has come to their
attention that would cause them to believe that the Registration
Statement, at the time it became effective, contained an untrue
statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading or that the Prospectus, at the Representation
Date (unless the term "Prospectus" refers to a prospectus which has
been provided to the Underwriters by the Company for use in connection
with the offering of the Securities which differs from the Prospectus
on file at the Commission at the Representation Date, in which case at
the time it is first provided to the Underwriters for such use) or at
Closing Time, included an untrue statement of a material fact or
omitted or omits to state a material fact necessary in order to make
the statements therein, in the light of the circumstances under which
they were made, not misleading. In giving their opinions, Latham &
Watkins and Brown & Wood LLP may rely, to the extent recited therein,
(A) as to all matters of fact, upon certificates and written
statements of officers of the Company and (B) as to the qualification
and good standing of the Company and each Significant Subsidiary to do
business in any state or jurisdiction, upon certificates of
appropriate government officials.
(c) At Closing Time there shall not have been, since the date hereof
or since the respective dates as of which information is given in the
Registration Statement and the Prospectus, any material adverse change in
the condition, financial or otherwise, or in the earnings, business affairs
or business prospects of the Company and its subsidiaries considered as one
enterprise, whether or not arising in the ordinary course of business, and
the Underwriters shall have received a certificate of the President or a
Vice President of the Company and the chief financial or chief accounting
officer of the Company, dated as of Closing Time, to the effect that (i)
there has been no such material adverse change, (ii) the representations
and warranties in Section 1 hereof are true and correct with the same force
and effect as though expressly made at and as of Closing Time, (iii) the
Company has performed or complied with all agreements and satisfied all
conditions on its part to be performed or satisfied at or prior to Closing
Time, and (iv) no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for that purpose
have been initiated or, to the best knowledge and information of such
officer, threatened by the Commission. As used in this Section 5(c), the
term "Prospectus" means the Prospectus in the form first used to confirm
sales of the Securities.
(d) At the time of execution of this Agreement, the Underwriters shall
have received from Arthur Andersen llp a letter, dated such date, in form
and substance satisfactory to the Underwriters, containing statements and
information of the type ordinarily included in accountants "comfort
letters" to underwriters with respect to financial statements and financial
information included and incorporated by reference in the Registration
Statement and the Prospectus (including, without limitation, the pro
17
<PAGE>
forma financial statements, if any) and substantially in the same form as
the draft letter previously delivered to and approved by the Underwriters.
(e) At Closing Time the Underwriters shall have received from Arthur
Andersen LLP a letter, dated as of Closing Time, to the effect that they
reaffirm the statements made in the letter furnished pursuant to subsection
(d) of this Section, except that the specified date referred to therein
shall be a date not more than three business days prior to Closing Time.
(f) At Closing Time the Securities shall have been duly listed,
subject to notice of issuance, on the New York Stock Exchange.
(g) At Closing Time and each Date of Delivery, if any, counsel for the
Underwriters shall have been furnished with such documents and opinions as
they may reasonably require for the purpose of enabling them to pass upon
the issuance and sale of the Securities as herein contemplated and related
proceedings, or in order to evidence the accuracy and completeness of any
of the representations and warranties, or the fulfillment of any of the
conditions, herein contained; and all proceedings taken by the Company in
connection with the issuance and sale of the Securities as herein
contemplated shall be satisfactory in form and substance to the
Underwriters and counsel for the Underwriters.
(h) In the event the Underwriters exercise their option provided in
Section 2 hereof to purchase all or any portion of the Option Securities,
the representations and warranties of the Company contained herein and the
statements in any certificates furnished by the Company hereunder shall be
true and correct as of each Date of Delivery, and the Underwriters shall
have received:
(1) The favorable opinion of Latham & Watkins, special counsel
for the Company, in form and substance satisfactory to counsel for the
Underwriters, dated such Date of Delivery, relating to the Option
Securities and otherwise to the same effect as the opinion required by
Sections 5(b)(1) and 5(b)(6) hereof.
(2) The favorable opinion of Latham & Watkins, special counsel
for the Company, in form and substance satisfactory to counsel for the
Underwriters, dated such Date of Delivery, reaffirming their opinion
delivered at Closing Time pursuant to Section 5(b)(2) hereof.
(3) The favorable opinion of Ballard Spahr Andrews & Ingersoll,
Maryland counsel for the Company, in form and substance satisfactory
to counsel for the Underwriters, dated such Date of Delivery, relating
to the Option Securities and otherwise to the same effect as the
opinion required by Sections 5(b)(3) hereof.
18
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(4) The favorable opinion of Edward J. Henning, General Counsel
of the Company, in form and substance satisfactory to counsel for the
Underwriters, dated such Date of Delivery, reaffirming his opinion
delivered at Closing Time pursuant to Section 5(b)(4) hereof.
(5) The favorable opinion of Brown & Wood LLP, counsel for the
Underwriters, dated such Date of Delivery, relating to the Option
Securities and otherwise to the same effect as the opinion required by
Sections 5(b)(5) and 5(b)(6) hereof.
(6) A certificate of the President or a Vice President of the
Company and the chief financial or chief accounting officer of the
Company, dated such Date of Delivery, confirming that the certificate
delivered at Closing Time pursuant to Section 5(c) hereof remains true
and correct as of such Date of Delivery.
(7) A letter from Arthur Andersen LLP, in form and substance
satisfactory to the Underwriters, dated such Date of Delivery,
substantially the same in scope and substance as the letter furnished
to the Underwriters pursuant to Section 5(e) hereof except that the
"specified date" in the letter furnished pursuant to this subsection
shall be a date not more than three business days prior to such Date
of Delivery.
If any condition specified in this Section shall not have been fulfilled
when and as required to be fulfilled, this Agreement may be terminated by the
Underwriters by notifying the Company at any time at or prior to Closing Time,
and such termination shall be without liability of any party to any other party
except as provided in Section 4 hereof. Notwithstanding any such termination,
the provisions of Sections 4, 6, 7 and 8 shall remain in effect.
Section 6. Indemnification. (a) The Company agrees to indemnify and hold
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harmless each Underwriter and each person, if any, who controls any Underwriter
within the meaning of Section 15 of the 1933 Act, 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), or any omission or alleged omission therefrom
of a material fact required to be stated therein or necessary to make the
statements therein not misleading or arising out of any untrue statement or
alleged untrue statement of a material fact contained in any preliminary
prospectus, any preliminary prospectus supplement or the Prospectus (or any
amendment or supplement thereto) or the omission or alleged omission
therefrom of a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading;
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(ii) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim
whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission, if such settlement is effected with
the written consent of the Company; and
(iii) against any and all expense whatsoever, as incurred (including,
subject to Section 6(c) hereof, the fees and disbursements of counsel
chosen by Merrill Lynch), reasonably incurred in investigating, preparing
or defending against any litigation, or any investigation or proceeding by
any governmental agency or body, commenced or threatened, or any claim
whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission, to the extent that any such expense
is not paid under (i) or (ii) above;
provided, however, that (A) this indemnity agreement shall not apply to any
- -------- -------
loss, liability, claim, damage or expense to the extent arising out of any
untrue statement or omission or alleged untrue statement or omission made in
reliance upon and in conformity with written information furnished to the
Company by any Underwriter through Merrill Lynch expressly for use in the
Registration Statement (or any amendment thereto) or any preliminary prospectus,
preliminary prospectus supplement or the Prospectus (or any amendment or
supplement thereto), and (B) with respect to any untrue statement or omission or
alleged untrue statement or omission made in any preliminary prospectus or
preliminary prospectus supplement, this indemnity agreement shall not inure to
the benefit of any Underwriter (or to the benefit of any person controlling such
Underwriter within the meaning of Section 15 of the 1933 Act) to the extent that
any such loss, liability, claim, damage or expense of such Underwriter or any
person controlling such Underwriter results from the fact that such Underwriter
sold Securities to a person to whom there was not sent or given by such
Underwriter or on such Underwriter's behalf at or prior to the written
confirmation of the sale of such Securities to such person, a copy of the
Prospectus (as then amended or supplemented), if required by law to have been so
delivered, and if the Prospectus (as so amended or supplemented) would have
cured the defect giving rise to such loss, liability, claim, damage or expense.
(b) Each Underwriter severally agrees to indemnify and hold harmless the
Company, its directors, each of its officers who signed the Registration
Statement, and each person, if any, who controls the Company within the meaning
of Section 15 of the 1933 Act against any and all loss, liability, claim, damage
and expense described in the indemnity contained in subsection (a) of this
Section, as incurred, but only with respect to untrue statements or omissions,
or alleged untrue statements or omissions, made in the Registration Statement
(or any amendment thereto) or any preliminary prospectus, preliminary prospectus
supplement or the Prospectus (or any amendment or supplement thereto) in
reliance upon and in conformity with information furnished to the Company by
such Underwriter through Merrill Lynch expressly for use in the Registration
Statement (or any amendment thereto) or such preliminary prospectus, preliminary
prospectus supplement or the Prospectus (or any amendment or supplement
thereto).
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(c) Each indemnified party shall give written notice as promptly as
reasonably practicable to each indemnifying party of any action commenced
against it in respect of which indemnity may be sought hereunder, but failure to
so notify an indemnifying party shall not relieve such indemnifying party from
any liability which it may have otherwise than on account of this indemnity
agreement. An indemnifying party may participate at its own expense in the
defense of any such action. In no event shall the indemnifying parties be
liable for the 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.
(d) For purposes of this Section 6, all references to the Registration
Statement, any preliminary prospectus, preliminary prospectus supplement or the
Prospectus, or any amendment or supplement to any of the foregoing, shall be
deemed to include, without limitation, any electronically transmitted copies
thereof filed with the Commission pursuant to EDGAR.
Section 7. Contribution. In order to provide for just and equitable
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contribution in circumstances in which the indemnity agreement provided for in
Section 6 hereof is for any reason held to be unenforceable by the indemnified
parties although applicable in accordance with its terms, the Company and the
Underwriters shall contribute to the aggregate losses, liabilities, claims,
damages and expenses of the nature contemplated by said indemnity agreement
incurred by the Company and one or more of the Underwriters, as incurred, in
such proportions that the Underwriters are responsible for that portion
represented by the percentage that the underwriting discount appearing on the
cover page of the Prospectus Supplement bears to the initial public offering
price appearing thereon and the Company is responsible for the balance;
provided, however, that 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
the purposes of this Section, each person, if any, who controls an Underwriter
within the meaning of Section 15 of the 1933 Act shall have the same rights to
contribution as such Underwriter and each director of the Company, each officer
of the Company who signed the Registration Statement, and each person, if any,
who controls the Company within the meaning of Section 15 of the 1933 Act shall
have the same rights to contribution as the Company.
Section 8. Representations, Warranties and Agreements to Survive Delivery.
--------------------------------------------------------------
All representations, warranties and agreements contained in this Agreement, or
contained in certificates of officers of the Company submitted pursuant hereto
or thereto, shall remain operative and in full force and effect, regardless of
any investigation made by or on behalf of the Underwriters or any controlling
person, or by or on behalf of the Company, and shall survive delivery of the
Securities to the Underwriters.
Section 9. Termination of Agreement. (a) The Underwriters may terminate
------------------------
this Agreement, by notice to the Company, at any time at or prior to Closing
Time (i) if there has been, since the date of this Agreement or since the
respective dates as of which information is
21
<PAGE>
given in the Prospectus, any material adverse change in the condition, financial
or otherwise, or in the earnings, business affairs or business prospects of the
Company and its subsidiaries considered as one enterprise, whether or not
arising in the ordinary course of business, (ii) if there has occurred any
outbreak of hostilities or other calamity or crisis the effect of which on the
financial markets of the United States is such as to make it, in the judgement
of the Underwriters, impracticable to market the Securities or enforce contracts
for the sale of the Securities, (iii) if trading in the securities of the
Company has been suspended by the Commission, or if trading generally on either
the American Stock Exchange or the New York Stock Exchange has been suspended,
or minimum or maximum prices for trading have been fixed, or maximum ranges for
prices for securities have been required, by either of said Exchanges or by
order of the Commission or any other governmental authority, or if a banking
moratorium has been declared by either federal, New York or California
authorities or (iv) if any of the nationally recognized securities rating
agencies specified in Section 1(a)(xvi) hereof shall have publicly announced
that it has (A) placed the Securities on what is commonly termed a "watch list"
for possible downgrading or (B) downgraded the Securities. As used in this
Section 9(a), the term "Prospectus" means the Prospectus in the form first used
to confirm sales of the Securities.
(b) If this Agreement is terminated pursuant to this Section, such
termination shall be without liability of any party to any other party except as
provided in Section 4 hereof. Notwithstanding any such termination, the
provisions of Sections 4, 6, 7 and 8 shall remain in effect.
Section 10. Default by One or More of the Underwriters. If any Underwriter
------------------------------------------
shall fail at Closing Time to purchase the Securities which it is obligated to
purchase hereunder (the "Defaulted Securities"), the Representative shall have
the right, but not the obligation, within 24 hours thereafter, to make
arrangements for one or more of the non-defaulting Underwriters, or any other
underwriters, to purchase all, but not less than all, of the Defaulted
Securities in such amounts as may be agreed upon and upon the terms herein set
forth; if, however, the Representative shall have not completed such
arrangements within such 24-hour period, then:
(a) if the number of Defaulted Securities does not exceed 10% of the
number of Securities to be purchased on such date, each of the non-
defaulting Underwriters shall be obligated, severally and not jointly, to
purchase the full amount thereof in the proportions that their respective
underwriting obligations hereunder bear to the underwriting obligations of
all non-defaulting Underwriters, or
(b) if the number of Defaulted Securities exceeds 10% of the number of
Securities to be purchased on such date, this Agreement or, with respect to
any Date of Delivery which occurs after the Closing Time, the obligation of
the Underwriters to purchase and of the Company to sell the Option
Securities to be purchased and sold on such Date of Delivery, shall
terminate without liability on the part of any non-defaulting Underwriter.
22
<PAGE>
No action pursuant to this Section shall relieve any defaulting
Underwriter from liability in respect of its default.
In the event of any such default which does not result in a termination of
this Agreement, either the Non-Defaulting Underwriters or the Company shall have
the right to postpone Closing Time for a period not exceeding seven days in
order to effect any required changes in the Registration Statement or Prospectus
or in any other documents or arrangements.
Section 11. Notices. All notices and other communications hereunder shall
-------
be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of written telecommunication. Notices to the
Underwriters shall be directed to them at Merrill Lynch & Co., Murdock Plaza,
10900 Wilshire Boulevard, 9th Floor, Los Angeles, CA 90024, Attention: James F.
Flaherty III, Managing Director, and notices to the Company shall be directed to
it at 10990 Wilshire Boulevard, Suite 1200, Los Angeles, California 90024,
Attention: Kenneth B. Roath, President and Chief Executive Officer, with a copy
to Pamela B. Kelly, Esq. at Latham & Watkins, 633 West Fifth Street, Los
Angeles, California 90071.
Section 12. Parties. This Agreement shall inure to the benefit of and be
-------
binding upon the Underwriters and the Company and their respective successors.
Nothing expressed or mentioned in this Agreement is intended or shall be
construed to give any person, firm or corporation other than the Underwriters
and the Company and their respective successors and the controlling persons and
the officers and directors referred to in Sections 6 and 7 hereof and their
heirs and legal representatives any legal or equitable right, remedy or claim
under or in respect of this Agreement or any provision herein contained. This
Agreement and all conditions and provisions hereof are intended to be for the
sole and exclusive benefit of the Underwriters and the Company and their
respective successors, and said controlling persons and said officers and
directors and their heirs and legal representatives, and for the benefit of no
other person, firm or corporation. No purchaser of Securities from any
Underwriter shall be deemed to be a successor merely by reason of such purchase.
Section 13. Governing Law and Time. This Agreement shall be governed by
----------------------
and construed in accordance with the laws of the State of California applicable
to agreements made and to be performed in such State. Unless stated otherwise,
all specified times of day refer to New York City time.
23
<PAGE>
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to the Company a counterpart hereof, whereupon this
instrument, along with all counterparts, will become a binding agreement between
the Underwriters and the Company in accordance with its terms.
Very truly yours,
HEALTH CARE PROPERTY INVESTORS, INC.
By: /s/ James G. Reynolds
-----------------------------------
Name: James G. Reynolds
Title: Executive Vice President and
Chief Financial Officer
CONFIRMED AND ACCEPTED,
as of the date first above written:
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
MORGAN STANLEY & CO. INCORPORATED
As Representatives of the Underwriters
By: MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By: /s/ Paul M. Meurer
--------------------------------------------
Authorized Signatory
24
<PAGE>
SCHEDULE A
<TABLE>
<CAPTION>
Number of
Underwriters Securities
- ---------------------------------------------- ----------
<S> <C>
Merrill Lynch, Pierce, Fenner & Smith
Incorporated............................... 1,200,000
Morgan Stanley & Co. Incorporated............. 1,200,000
----------
Total......................................... 2,400,000
==========
</TABLE>
25
<PAGE>
EXHIBIT 5.1
[LETTERHEAD OF BALLARD SPAHR ANDREWS & INGERSOLL]
September 25, 1997
Health Care Properties Investors, Inc.
10990 Wilshire Boulevard
Suite 1200
Los Angeles, California 90024
Re: Health Care Properties Investors, Inc., a Maryland corporation (the
"Company") - up to Two Million Seven Hundred Sixty Thousand
(2,760,000) shares (the "Shares") of the Series A Cumulative
Redeemable Preferred Stock of the Company, par value $1.00 per share
(the "Series A Preferred Stock") to be issued and sold pursuant to
Registration Statement on Form S-3, as amended (Registration No. 333-
29485)
---------------------------------------------------------------------
Ladies and Gentlemen:
In connection with the registration of the Shares under the Securities Act
of 1933, as amended (the "Act"), by the Company on Form S-3 filed with the
Securities and Exchange Commission on or about June 18, 1997, as amended, (the
"Registration Statement"), you have requested our opinion with respect to the
matters set forth below. Capitalized terms not otherwise defined herein shall
have the meanings ascribed to them in the Registration Statement.
We have acted as special Maryland corporate counsel for the Company in
connection with the matters described herein. In our capacity as special
Maryland corporate counsel to the Company, we have reviewed and are familiar
with proceedings proposed to be taken by the Company in connection with the
authorization, issuance and sale of the Shares, and for purposes of this opinion
have assumed such proceedings will be timely completed in the manner presently
proposed. In addition, we have relied upon certificates and advice from the
officers of the Company upon which we believe we are justified in relying and on
various certificates from, and documents recorded with, the State Department of
Assessments and Taxation of Maryland (the "SDAT"), including the charter of the
Company (the "Charter"), consisting of Articles of Restatement filed with the
SDAT on April 27, 1992 and Articles Supplementary filed or to be filed with the
SDAT on or about September 26, 1997. We have also examined the Bylaws of the
Company, as amended through
<PAGE>
BALLARD SPAHR ANDREWS & INGERSOLL
Health Care Properties Investors, Inc.
September 25, 1997
Page 2
the date hereof (the "Bylaws") and Resolutions of the Board of Directors of the
Company and committees thereof adopted on or before the date hereof and in full
force and effect on the date hereof; and such laws, records, documents,
certificates, opinions and instruments as we deem necessary to render this
opinion.
We have assumed the genuineness of all signatures, the authenticity of all
documents submitted to us as originals and the conformity to the originals of
all documents submitted to us as certified, photostatic or conformed copies.
In addition, we have assumed that each person executing any instrument, document
or certificate referred to herein on behalf of any party is duly authorized to
do so. We have also assumed that none of the Shares will be issued or
transferred in violation of the restrictions on ownership and transfer of stock
contained in the Charter of the Company and described in the Prospectus
Supplement (which is part of the Registration Statement) under "Restrictions on
Ownership and Transfer".
Based on the foregoing, and subject to the assumptions and qualifications
set forth herein, it is our opinion that, as of the date of this letter, the
Shares have been duly authorized by all necessary corporate action on the part
of the Company, and the Shares will, upon issuance and delivery in accordance
with the terms and conditions described in the Registration Statement against
payment of the purchase price thereof as determined by the Board of Directors of
the Company or a committee thereof, be validly issued, fully paid and
nonassessable.
We consent to your filing this opinion as an exhibit to the Registration
Statement, and further consent to the filing of this opinion as an exhibit to
the applications to securities commissioners for the various states of the
United States for registration of the Shares. We also consent to the
identification of our firm as Maryland counsel to the Company in the section of
the Prospectus (which is part of the Registration Statement) entitled "Legal
Matters."
The opinions expressed herein are limited to the laws of the State of
Maryland and we express no opinion concerning any laws other than the laws of
the State of Maryland. Furthermore, the opinions presented in this letter are
limited to the matters specifically set forth herein and no other opinion shall
be inferred beyond the matters expressly stated.
Very truly yours,
BALLARD SPAHR ANDREWS & INGERSOLL
<PAGE>
EXHIBIT 8.1
[LETTERHEAD OF LATHAM & WATKINS]
September 26, 1997
Health Care Property Investors, Inc.
10990 Wilshire Boulevard, Suite 1200
Los Angeles, California 90024
Re: Health Care Property Investors, Inc.
7-7/8% Series A Cumulative Redeemable Preferred Stock
-----------------------------------------------------
Ladies and Gentlemen:
We have acted as special counsel to Health Care Property
Investors, Inc., a Maryland corporation (the "Company"), in connection with the
sale by the Company on the date hereof to Merrill Lynch & Co., Merrill Lynch,
Pierce, Fenner & Smith Incorporated and Morgan Stanley & Co. Incorporated
(collectively, the "Underwriters") of 2,400,000 shares of the Company's 7-7/8%
Series A Cumulative Redeemable Preferred Stock (the "Series A Preferred Stock"),
pursuant to (i) a registration statement (the "Registration Statement") on Form
S-3 under the Securities Act of 1933 (the "1933 Act"), filed with the Securities
and Exchange Commission (the "Commission") on June 18, 1997 (File No. 333-
29485), as amended by pre-effective Amendment No. 1 thereto filed with the
Commission on June 26, 1997, and declared effective by the Commission on June
27, 1997, (ii) a Prospectus dated September 19, 1997 (the "Base Prospectus"), as
supplemented by the Prospectus Supplement dated September 23, 1997 filed with
the Commission on September 24, 1997 pursuant to Rule 424(b) under the 1933 Act
(the "Prospectus Supplement," and together with the Base Prospectus, the
"Prospectus") and (iii) a purchase agreement dated September 23, 1997 between
the Underwriters and the Company (the "Purchase Agreement").
This opinion is based on various assumptions and is conditioned
upon certain representations made by the Company as to factual matters through a
certificate of an
<PAGE>
Health Care Property Investors, Inc.
September 26, 1997
Page 2
officer of the Company (the "Officer's Certificate"). In addition, this
opinion is based upon the factual representations of the Company concerning its
business and properties as set forth in the Prospectus.
In our capacity as such counsel, we have made such legal and factual
examinations and inquiries, including an examination of originals or copies
certified or otherwise identified to our satisfaction of such documents,
corporate records and other instruments, as we have deemed necessary or
appropriate for purposes of this opinion.
In our examination, we have assumed the authenticity of all documents
submitted to us as originals, the genuineness of all signatures thereon, the
legal capacity of natural persons executing such documents and the conformity to
authentic original documents of all documents submitted to us as copies.
We are opining herein as to the effect on the subject transaction only of
the federal income tax laws of the United States and we express no opinion with
respect to the applicability thereto, or the effect thereon, of other federal
laws, the laws of any state or other jurisdiction or as to any matters of
municipal law or the laws of any other local agencies with any state.
Based upon the facts set forth in the Prospectus and Officer's Certificate,
it is our opinion that the information in the Prospectus Supplement set forth
under the caption "Certain Federal Income Tax Considerations to Holders of
Series A Preferred Stock," to the extent that it constitutes matters of law,
summaries of legal matters, documents or proceedings or legal conclusions, has
been reviewed by us and is correct in all material respects.
No opinion is expressed as to any matter not discussed herein.
This opinion is based on various statutory provisions, regulations
promulgated thereunder and interpretations thereof by the Internal Revenue
Service and the courts having jurisdiction over such matters, all of which are
subject to change either prospectively or retroactively. Also, any variation
or difference in the facts from those set forth in the Prospectus or Officer's
Certificate may affect the conclusions stated herein.
This opinion is rendered only to you and is solely for your benefit in
connection with the Registration Statement. We hereby consent to the filing of
this opinion as an exhibit to the Registration Statement. This opinion may not
be relied upon by you for any other purpose, or furnished to, quoted to or
relied upon by any other person, firm or corporation for any purpose, without
our prior written consent.
Very truly yours,
/s/ LATHAM & WATKINS
