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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):
May 7, 1998
HEALTH CARE REIT, INC.
(Exact name of registrant as specified in its charter)
Delaware 1-8923 34-1096634
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
One SeaGate, Suite 1500, P.O. Box 1475, Toledo, Ohio 43603-1475
(Address of principal executive offices) (Zip Code)
(Registrant's telephone number, including area code): 419-247-2800
ITEM 5. OTHER EVENTS.
In connection with the Company's Registration Statement on Form S-3 (File
No. 333-43177), declared effective January 7, 1998, the Company has entered
into an Underwriting Agreement for an offering of 3,000,000 shares of 8 7/8%
Series B Cumulative Redeemable Preferred Stock, $1.00 par value per share, of
the Company.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial Statements of Business Acquired.
None.
(b) Pro Forma Financial Information.
None.
(c) Exhibits.
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1.1 Form of Underwriting Agreement
23.1 Consent of Independent Auditors
SIGNATURE
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 thereunto duly authorized.
HEALTH CARE REIT, INC.
By: /s/ GEORGE L. CHAPMAN
---------------------------
George L. Chapman
Its: Chairman of the Board, Chief
Executive Officer and President
Dated: May 8, 1998
EXHIBIT INDEX
Designation
Number Under
<TABLE>
<CAPTION>
Item 601 of
Exhibit No. Regulation S-K Description
- ----------- -------------- -----------
<S> <C> <C> <C>
1.1 1 Form of Underwriting
Agreement
23.1 23 Consent of Independent
Auditors
</TABLE>
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3,000,000 SHARES
HEALTH CARE REIT, INC.
8 7/8% Series B Cumulative Preferred Stock
($1.00 Par Value)
UNDERWRITING AGREEMENT
----------------------
May 7, 1998
BT Alex. Brown Incorporated
Smith Barney Inc.
EVEREN Securities, Inc.
Raymond James & Associates, Inc.
As Representative of the Several Underwriters
c/o BT Alex. Brown Incorporated
One South Street
Baltimore, Maryland 21202
Gentlemen:
Health Care REIT, Inc., a Delaware corporation (the "Company"),
proposes to sell to the several Underwriters (the "Underwriters") named in
Schedule I hereto for whom you are acting as representatives (the
"Representatives") an aggregate of 3,000,000 shares (the "Firm Shares") of the
Company's 8 7/8% Series B Cumulative Preferred Stock, $1.00 par value per share
(the "Preferred Stock"). The respective amounts of the Firm Shares to be so
purchased by the several Underwriters are set forth opposite their names in
Schedule I hereto. The Company also proposes to sell at the Underwriters' option
an aggregate of up to 450,000 additional Shares (the "Option Shares") as set
forth below.
As the Representatives, you have advised the Company (a) that you are
authorized to enter into this Agreement on behalf of the several Underwriters
and (b) that the several Underwriters are willing, acting severally and not
jointly, to purchase the number of Firm Shares set forth opposite their
respective names in Schedule I, plus their pro rata portion of the Option Shares
if you elect to exercise the over-allotment option in whole or in part for the
accounts of the several Underwriters. The Firm Shares and the Option Shares (to
the extent the aforementioned option is exercised) are herein collectively
called the "Shares."
In consideration of the mutual agreements contained herein and of the
interests of the parties in the transactions contemplated hereby, the parties
hereto agree as follows:
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1. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
represents and warrants as follows:
(i) A registration statement on Form S-3 (File No. 333-43177)
with respect to the Shares has been carefully prepared by the Company
in conformity with the requirements of the Securities Act of 1933, as
amended (the "Act"), and the Rules and Regulations (the "Rules and
Regulations") of the Securities and Exchange Commission (the
"Commission") thereunder and has been filed with the Commission under
the Act. The Company has complied with the conditions for the use of
Form S-3. Copies of such registration statement, including any
amendments thereto, the preliminary prospectuses (meeting the
requirements of Rule 430A of the Rules and Regulations) contained
therein, the exhibits, financial statements and schedules, as finally
amended and revised, and all documents incorporated by reference have
heretofore been delivered by the Company to you. Such registration
statement, herein referred to as the "Registration Statement," which
shall be deemed to include all information omitted therefrom in
reliance upon Rule 430A and contained in the Prospectus referred to
below and all information incorporated by reference therein, has been
declared effective by the Commission under the Act and no
post-effective amendment to the Registration Statement has been filed
as of the date of this Agreement. The form of prospectus first filed by
the Company with the Commission pursuant to its Rule 424(b) and Rule
430A, or if no such filing is required, the form of final prospectus
included in the Registration Statement at the time the Registration
Statement is declared effective, is herein referred to as the
"Prospectus." Each preliminary prospectus included in the Registration
Statement prior to the time it becomes effective is herein referred to
as a "Preliminary Prospectus." Any reference herein to any Preliminary
Prospectus or the Prospectus shall be deemed to refer to and include
the documents incorporated by reference therein and any supplements or
amendments thereto filed with the Commission as of the date of such
Preliminary Prospectus or Prospectus, as the case may be, and in the
case of any reference herein to any Preliminary Prospectus or
Prospectus, also shall be deemed to include any documents incorporated
by reference therein pursuant to Item 12 of Form S-3 under the Act, as
of the date of such Preliminary Prospectus or Prospectus, and any
supplements or amendments thereto, filed with the Commission after the
date of the filing of the Prospectus under Rule 424(b) or 430A, and
prior to the termination of the offering of the Shares by the
Underwriters. Any reference to any amendment or supplement to any
Preliminary Prospectus or Prospectus, as the case may be, shall be
deemed to refer to and include any documents filed after the date of
such Preliminary Prospectus or Prospectus, as the case may be, under
the Securities and Exchange Act of 1934, as amended (the "Exchange
Act"), and incorporated by reference into such Preliminary Prospectus
or Prospectus, as the case may be; and any reference to any amendment
to the Registration Statement shall be deemed to refer to and include
any annual report of the Company filed pursuant to Section 13(a) or
15(d) of the Exchange Act after the effective date of the Registration
Statement that is incorporated by reference into the Registration
Statement.
(ii) 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 have a materially adverse effect
upon the business of the Company; except for HCRI Nevada Properties,
Inc.,
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HCRI Overlook Green, Inc., HCRI Pennsylvania Properties, Inc., HCRI
Texas Properties, Inc., HCRI Texas Properties, Ltd. and Health Care
REIT International, Inc., the Company has no subsidiaries.
(iii) 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
Shares to be issued and sold by the Company have been duly authorized
and when issued and paid for as contemplated herein will be validly
issued, fully-paid and non-assessable and have been approved for
listing on the New York Stock Exchange subject to official notice of
issuance; and no preemptive or similar rights of stockholders exist
with respect to any of the Shares or the issue and sale thereof.
(iv) The shares of authorized capital stock of the Company,
including the Shares, conform with the statements concerning them in
the Registration Statement.
(v) The Commission has not issued an order preventing or
suspending the use of any Preliminary Prospectus relating to the
proposed offering of the 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 Act and the Rules and 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
Exchange Act or the Act, as applicable, and the Rules and Regulations
of the Commission thereunder. 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 any Underwriter through the
Representatives, specifically for use in the preparation thereof.
(vi) 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.
(vii) 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
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administrative agency which might reasonably be expected to result in
any material adverse change in the business or condition (financial or
otherwise) of the Company, except as set forth in the Registration
Statement.
(viii) 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
(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.
(ix) 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.
(x) 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 or any
development involving a prospective 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.
(xi) 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 be, of material significance in respect of the business or
condition (financial or otherwise) of the Company. 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
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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.
(xii) 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 Shares for public offering by the Underwriters under state
securities or Blue Sky laws) has been obtained or made by the Company,
and is in full force and effect.
(xiii) 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.
(xiv) 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, 1996 and no transaction or other event
has occurred or is contemplated which would prevent the Company from so
qualifying for its current taxable year.
(xv) 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 Act and the Rules and Regulations.
(xvi) 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 Representatives of the Underwriters.
(xvii) This Agreement has been duly authorized, executed and
delivered by the Company.
(xviii) 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 Exchange
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 Preferred Shares. The Company
acknowledges that the Underwriters may engage in transactions that
stabilize, maintain or otherwise affect the price of the Preferred
Shares, including stabilizing bids, syndicate covering transactions and
the imposition of penalty bids.
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(xix) Except as disclosed in the Registration Statement, the
Company is not a party to any written contract or agreement relating to
any purchase of real property or the lending of funds secured by real
property which is probable of being consummated.
(xx) The Shares are registered pursuant to Section 12(b) of
the Exchange Act and have been approved for listing upon official
notice of issuance on the New York Stock Exchange.
(xxi) The Company is not, and immediately after the sale of the
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.
2. PURCHASE, SALE AND DELIVERY OF THE FIRM SHARES. On the basis of the
representations, warranties and covenants herein contained, and subject to the
conditions herein set forth, the Company agrees to sell to the Underwriters and
each Underwriter agrees, severally and not jointly, to purchase, at a price of
$______ share, the number of Firm Shares set forth opposite the name of each
Underwriter in Schedule I hereto, subject to adjustments in accordance with
Section 9 hereof.
Payment for the Firm Shares to be sold hereunder is to be made
in New York Clearing House funds by certified or bank cashier's checks drawn to
the order of the Company for the Shares to be sold by it against delivery of
certificates therefor to the Representatives for the several accounts of the
Underwriters. Such payment and delivery are to be made at the offices of BT
Alex. Brown Incorporated, One South Street, Baltimore, Maryland, at 10:00 A.M.
Baltimore time, on the third business day after the date of this Agreement or at
such other time and date not later than three business days thereafter as you
and the Company shall agree upon, such time and date being herein referred to as
the "Closing Date." (As used herein, "business day" means a day on which the New
York Stock Exchange is open for trading and on which banks in New York are open
for business and not permitted by law or executive order to be closed). The
certificates for the Firm Shares will be delivered by ChaseMellon Shareholder
Services, L.L.C. (the "Transfer Agent") in such denominations and in such
registrations as the Representatives request in writing not later than the
second full business day prior to the Closing Date, and will be made available
for inspection by the Representatives at least one business day prior to the
Closing Date at such place as the Representatives and the Company shall agree.
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 to purchase the
Option Shares at the price per share as set forth in the first paragraph of this
Section 2. The option granted hereby may be exercised in whole or in part by
giving notice (i) at any time before the Closing Date and (ii) only once
thereafter within 30 days after the date of this Agreement, by you, as
Representatives of the several Underwriters, to the Company setting forth the
number of Option Shares as to which the several Underwriters are exercising the
option, the names and denominations in which the Option Shares are to be
registered and the time and date at which such certificates are to be delivered.
The time and date at which certificates for Option Shares are to be delivered
shall be determined by the Representatives but shall not be earlier than three
nor later than 10 full business days after the exercise of such option, nor in
any event prior to the Closing Date (such time and date being herein referred to
as the "Option Closing Date"). If the date of exercise of the option is three or
more days before the Closing Date, the notice of exercise shall set the Closing
Date as the Option Closing Date. The number of Option Shares to be purchased by
each Underwriter shall be in the
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same proportion to the total number of Option Shares being purchased as the
number of Firm Shares being purchased by such Underwriter bears to the total
number of Firm Shares, adjusted by you in such manner as to avoid fractional
shares. The option with respect to the Option Shares granted hereunder may be
exercised only to cover over-allotments in the sale of the Firm Shares by the
Underwriters. You, as Representatives of the several Underwriters, may cancel
such option at any time prior to its expiration by giving written notice of such
cancellation to the Company. To the extent, if any, that the option is
exercised, payment for the Option Shares shall be made on the Option Closing
Date in New York Clearing House funds by certified or bank cashier's check drawn
to the order of the Company against delivery of certificates therefor (in such
denominations and in such registrations as the Representatives request in
writing not later than the second full business day prior the Option Closing
Date) at the offices of BT Alex. Brown Incorporated, One South Street,
Baltimore, Maryland. The Transfer Agent shall make the certificates for the
Option Shares available for inspection by the Representatives at least one
business day prior to the Option Closing Date.
3. OFFERING BY THE UNDERWRITERS. It is understood that the several
Underwriters are to make a public offering of the Firm Shares as soon as the
Representatives deem it advisable to do so. The Firm Shares are to be initially
offered to the public at the public offering price set forth in the Prospectus.
The Representatives may from time to time thereafter change the public offering
price and other selling terms. To the extent, if at all, that any Option Shares
are purchased pursuant to Section 2 hereof, the Underwriters will offer them to
the public on the foregoing terms.
It is further understood that you will act as the
Representatives for the Underwriters in the offering and sale of the Shares in
accordance with a Master Agreement Among Underwriters entered into by you and
the several other Underwriters.
4. COVENANTS OF THE COMPANY. The Company covenants and agrees with the
Underwriters that:
(i) The Company will (a) prepare and timely file with the
Commission under Rule 424(b) of the Rules and Regulations, if the final
form of the prospectus is not included in the Registration Statement at
the time the Registration Statement is declared effective, a Prospectus
containing information previously omitted at the time of effectiveness
of the Registration Statement in reliance on Rule 430A, if applicable,
of the Rules and Regulations, (b) use its best efforts to cause the
Registration Statement to remain in effect as to the Shares for so long
as the Representatives may deem necessary in order to complete the
distribution of the Shares, (c) not file any amendment to the
Registration Statement or supplement to the Prospectus or document
incorporated by reference therein, of which the Representatives shall
not previously have been advised and furnished with a copy or to which
the Representatives shall have reasonably objected in writing or which
is not in compliance with the Rules and Regulations and (d) file on a
timely basis all reports and any definitive proxy or information
statements required to be filed by the Company with the Commission
subsequent to the date of the Prospectus and prior to the termination
of the offering of the Shares by the Underwriters; provided, however,
that for each such report or definitive proxy or information statement,
the Company will not file any such report or definitive proxy or
information statement, or amendment thereto, of which the
Representatives shall not previously have been advised and furnished
with a copy or to which the Representatives shall have reasonably
objected in writing or which is not in compliance with the Rules and
Regulations.
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(ii) The Company will advise the Representatives promptly of
any request of the Commission for amendment of the Registration
Statement or for supplement to the Prospectus or for any additional
information, of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or the use
of the Prospectus or of the institution of any proceedings for that
purpose, or of the suspension of the qualification of the Shares for
offering or sale in any jurisdiction, and the Company will use its best
efforts to prevent (a) the issuance of any such stop order preventing
or suspending the use of the Prospectus or (b) any such suspension of
the qualification of the Shares for offering or sale in any
jurisdiction, and to obtain as soon as possible the lifting of any such
stop order, if issued, or such suspension of qualification.
(iii) The Company will cooperate with the Representatives in
endeavoring to qualify the Shares for sale under the securities laws of
such jurisdictions as the Representatives may reasonably have
designated and will make such applications, file such documents, and
furnish such information as may be reasonably required for that
purpose, provided the Company shall not be required to qualify as a
foreign corporation or to file a general consent to service of process
in any jurisdiction or to subject itself to taxation as doing business
in any jurisdiction where it is not now so qualified or required to
file such a consent or so subject to taxation. The Company will, from
time to time, prepare and file such statements, reports, and other
documents, as are or may be required to continue such qualifications in
effect for so long a period as the Representatives may reasonably
request for distribution of the Shares.
(iv) The Company will deliver to, or upon the order of, the
Representatives, from time to time, as many copies of any Preliminary
Prospectus as the Representatives may reasonably request. The Company
will deliver to, or upon the order of, the Representatives during the
period when delivery of a Prospectus is required under the Act, as many
copies of the Prospectus in final form, or as thereafter amended or
supplemented, as the Representatives may reasonably request. The
Company will deliver to the Representatives at or before the Closing
Date, six signed copies of the Registration Statement and all
amendments thereto including all exhibits filed therewith, and will
deliver to the Representatives such number of copies of the
Registration Statement, including documents incorporated by reference
therein, but without exhibits, and of all amendments thereto, as the
Representatives may reasonably request.
(v) Subject to the provisions of Section 4(i) above, if
during the period in which a prospectus is required by law to be
delivered by the Underwriters or a dealer any event shall occur as a
result of which, in the judgment of the Company or in the opinion of
counsel for the Underwriters, it becomes necessary to amend or
supplement the Prospectus in order to make the statements therein, in
the light of the circumstances existing at the time the Prospectus is
delivered to a purchaser, not misleading, or, if it is necessary at any
time to amend or supplement the Prospectus to comply with any law, the
Company promptly will either (a) prepare and file with the Commission
an appropriate amendment to the Registration Statement or supplement to
the Prospectus or (b) prepare and file with the Commission an
appropriate filing under the Exchange Act which shall be incorporated
by reference in the Prospectus so that the Prospectus as so amended or
supplemented will not, in the light of the circumstances when it is so
delivered, be misleading, or so that the Prospectus will comply with
law.
(vi) The Company will make generally available to its security
holders, as soon as it is practicable to do so, but in any event not
later than 15 months after the effective date of the
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Registration Statement, an earnings statement (which need not be
audited) in reasonable detail, covering a period of at least 12
consecutive months beginning after the effective date of the
Registration Statement, which earnings statement shall satisfy the
requirements of Section 11(a) of the Act and Rule 158 of the Rules and
Regulations and will advise you in writing when such statement has
been so made available.
(vii) The Company will, for a period of five years from the
Closing Date, deliver to the Representatives copies of annual reports
and copies of all other documents, reports and information furnished by
the Company to its stockholders or filed with any securities exchange
pursuant to the requirements of such exchange or with the Commission
pursuant to the Act or the Exchange Act. The Company will deliver to
the Representatives similar reports with respect to significant
subsidiaries, as that term is defined in the Rules and Regulations,
which are not consolidated in the Company's financial statements.
(viii) Prior to the Closing Date, the Company will use its best
efforts to duly and validly authorize, by all necessary corporate
action, the resolutions creating the Shares and designating the rights,
preferences, restrictions, qualifications and limitations of the Shares
(the "Designating Resolutions").
(ix) The Company will use its best efforts to list the Shares
on the New York Stock Exchange.
5. COSTS AND EXPENSES. The Company will pay all costs, expenses and
fees incident to the performance of its obligations under this Agreement,
including, without limiting the generality of the foregoing, the following:
accounting fees of the Company; the fees and disbursements of counsel for the
Company; the cost of printing and delivering to, or as requested by, the
Underwriters, copies of the Registration Statement, Preliminary Prospectuses,
the Prospectus, this Agreement, the applicable listing agreement for the New
York Stock Exchange, the Blue Sky Survey and any supplements or amendments
thereto; the filing fees of the Commission; the filing fees and expenses
(including legal fees and disbursements) incident to securing any required
review by the NASD of the terms of the sale of the Shares; the fees incident to
the listing agreement for the New York Stock Exchange; and the expenses,
including the fees and disbursements of counsel for the Underwriters, incurred
in connection with the qualification of the Shares under state securities or
Blue Sky laws. Any transfer taxes imposed on the sale of the Shares to the
several Underwriters will be paid by the Company. The Company shall not,
however, be required to pay for any of the Underwriters' expenses (other than
those related to qualification under state securities or Blue Sky laws) except
that, if this Agreement shall not be consummated because the conditions in
Section 7 hereof are not satisfied, or because this Agreement is terminated by
the Representatives pursuant to Section 6 hereof (other than a termination as a
result of a failure to satisfy the condition set forth in subparagraph (iv) of
Section 6 hereof), or by reason of any failure, refusal or inability on the part
of the Company to perform any undertaking or satisfy any condition of this
Agreement or to comply with any of the terms hereof on its part to be performed,
unless such failure to satisfy said condition or to comply with said terms be
due to the default or omission of any Underwriter, then the Company shall
reimburse the several Underwriters for reasonable out-of-pocket expenses,
including fees and disbursements of counsel, reasonably incurred in connection
with investigating, marketing and proposing to market the Shares or in
contemplation of performing their obligations hereunder, but the Company shall
not in any event be liable to any of the several Underwriters for damages on
account of loss of anticipated profits from the sale by them of the Shares.
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6. CONDITIONS OF OBLIGATIONS OF THE UNDERWRITERS. The several
obligations of the Underwriters to purchase the Firm Shares on the Closing Date
and the Option Shares, if any, on the Option Closing Date are subject to the
accuracy, as of the Closing Date or the Option Closing Date, as the case may be,
of the representations and warranties of the Company contained herein, and to
the performance by the Company of its covenants and obligations hereunder and to
the following additional conditions:
(i) No stop order suspending the effectiveness of the
Registration Statement, as amended from time to time, shall have been
issued and no proceedings for that purpose shall have been taken or, to
the knowledge of the Company, shall be contemplated by the Commission.
(ii) The certificate, setting forth a copy of the Designating
Resolutions, shall have been duly executed on behalf of the Company,
shall have been filed with the Secretary of State of the State of
Delaware and shall have become effective.
(iii) The Underwriters shall have received on the Closing Date
or the Option Closing Date, as the case may be, the opinion of
Shumaker, Loop & Kendrick, LLP, counsel for the Company, dated the
Closing Date or the option closing date, as the case may be, and
addressed to the Underwriters to the effect that:
(a) 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.
(b) 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.
(c) 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 Shares conform in
all material respects to the description thereof contained in
the Prospectus; the certificates for the Shares are in due and
proper form and have been duly authorized for issuance by the
Company; the Shares to be sold by the Company pursuant to this
Agreement 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 Shares or the issue and sale thereof.
(d) The Registration Statement has become effective
under the Act and, to such counsel's knowledge no stop order
proceedings with respect thereto have been instituted or are
pending or threatened under the Act.
(e) The Designating Resolutions have been approved
and adopted by all necessary corporate action on behalf of the
Company; a certificate setting forth a copy of
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the Designating Resolutions has been duly executed on behalf
of the Company, has been duly filed with the Secretary of
State of the State of Delaware and has become effective. No
other filing, consent, approval, authorization, order,
license, certificate, permit, registration, designation or
filing with any court or other governmental agency or body is
required for the valid authorization, issue, delivery and sale
of the shares under this Agreement (except the registration
under the Act of the Shares and such consents, approvals,
authorizations, registration or qualification as may be
required under state securities or Blue Sky laws in connection
with the purchase and distribution of the Shares by the
Underwriters.)
(f) 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 Act or the
Exchange 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).
(g) The statements under the caption "Description of
Series B Preferred Stock" in the Registration Statement on
Form 8-A, as amended, which is incorporated by reference into
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.
(h) 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, 1997 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.
(i) 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.
(j) Such counsel knows of no material legal
proceedings pending or threatened against the Company except
as set forth in the Prospectus.
(k) 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.
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<PAGE> 12
(l) This Agreement has been duly authorized, executed
and delivered by the Company.
(m) 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.
(n) 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, 1994 through December 31, 1997, 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, 1998. 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, 1997 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 the 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 Underwriters are justified in relying on such other
counsel and such other counsel shall indicate that the Underwriters 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 Representatives 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
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<PAGE> 13
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 Date or the Option Closing Date,
as the case may be, contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading (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 their belief is based upon the procedures set forth or
incorporated by reference therein, but is without independent check and
verification.
(iii) The Representatives shall have received from Calfee,
Halter & Griswold LLP, counsel for the Underwriters, an opinion dated
the Closing Date or the Option Closing Date, as the case may be, with
respect to the organization of the Company, the validity of the Shares,
the Registration Statement, the Prospectus and other related matters as
the Representatives 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.
(iv) The Representatives shall have received at or prior to
the Closing Date from Calfee, Halter & Griswold LLP, a memorandum or
summary, in form and substance satisfactory to the Representatives,
with respect to the qualification for offering and sale by the
Underwriters of the Shares under the state securities or Blue Sky laws
of such jurisdictions as the Representatives may reasonably have
designated to the Company.
(v) The Representatives shall have received on the Closing
Date or the Option Closing Date, as the case may be, a signed letter
from Ernst & Young LLP, dated the Closing Date or the Option Closing
Date, as the case may be, which shall confirm, on the basis of a review
in accordance with the procedures set forth in the letter, dated May
7, 1998, signed by such firm and delivered to the Representatives
by Ernst & Young LLP, that nothing has come to their respective
attention during the period from the date five days prior to the date
hereof, to a date not more than five days prior to the Closing Date or
the Option Closing Date, as the case may be, which would require any
change in its letter dated May 13, 1998 if it were required to be
dated and delivered on the Closing Date or the Option Closing Date, as
the case may be. All such letters shall be in form and substance
satisfactory to the Representatives.
(vi) The Representatives shall have received on the Closing
Date or the Option Closing Date, as the case may be, a certificate or
certificates of the Chairman of the Board, Chief Executive Officer and
President and the Chief Financial Officer of the Company to the effect
that as of the Closing Date or the Option Closing Date, as the case may
be, each of them severally represents as follows:
(a) The Registration Statement has become effective
under the Act and no stop order suspending the effectiveness
of the Registration Statement has been issued,
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<PAGE> 14
and no proceedings for such purpose have been taken or are, to
his knowledge, contemplated by the Commission.
(b) He does not know of any litigation instituted or
threatened against the Company of a character required to be
disclosed in the Registration Statement which is not so
disclosed; he does not know of any material contract required
to be filed as an exhibit to the Registration Statement which
is not so filed; and the representations and warranties of the
Company contained in Section 1 hereof are true and correct as
of the Closing Date or the Option Closing Date, as the case
may be.
(c) He has carefully examined the Registration
Statement and the Prospectus and in his opinion, as of the
effective date of the Registration Statement, the statements
contained in the Registration Statement, including any
document incorporated by reference therein, were true and
correct, and such Registration Statement and Prospectus, or
any document incorporated by reference therein, did not omit
to state a material fact required to be stated therein or
necessary in order to make the statements therein not
misleading and, in his opinion, since the effective date of
the Registration Statement, no event has occurred which should
have been set forth in a supplement to or an amendment of the
Prospectus which has not been so set forth in such supplement
or amendment.
(vii) The Shares to be sold by the Company as of the Closing
Date or the Option Closing Date, as the case may be, shall have been
duly listed on the New York Stock Exchange subject to official notice
of issuance.
The opinions and certificates mentioned in this Agreement
shall be deemed to be in compliance with the provisions hereof only if they are
in all material respects reasonably satisfactory to the Representatives and to
Calfee, Halter & Griswold LLP, counsel for the Underwriters.
If any of the conditions hereinabove provided for in this
Section 6 shall not have been fulfilled when and as required by this Agreement
to be fulfilled, the obligations of the Underwriters hereunder may be terminated
by the Representatives by notifying the Company of such termination in writing
or by telegram at or prior to the Closing Date or the Option Closing Date, as
the case may be.
In such event, the Company and the Underwriters shall not be
under any obligation to each other (except to the extent provided in Sections 5
and 8 hereof).
7. CONDITIONS OF THE OBLIGATIONS OF THE COMPANY. The obligations of the
Company to sell and deliver the portion of the Shares required to be delivered
as and when specified in this Agreement are subject to the conditions that at
the Closing Date or the Option Closing Date, as the case may be, no stop order
suspending the effectiveness of the Registration Statement shall have been
issued and in effect or proceedings therefor initiated or threatened.
8. INDEMNIFICATION.
(i) The Company agrees to indemnify and hold harmless each
Underwriter, and each person, if any, who controls any Underwriter
within the meaning of the Act, against any losses, claims, damages or
liabilities to which such Underwriter or such controlling person may
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<PAGE> 15
become subject under the Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions or proceedings in respect
thereof) arise out of or are based upon (a) any untrue statement or
alleged untrue statement of any material fact contained or incorporated
by reference in the Registration Statement, any Preliminary Prospectus,
the Prospectus or any amendment or supplement thereto, or (b) the
omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not
misleading, and will reimburse each Underwriter and each such
controlling person for any legal or other expenses reasonably incurred
by such Underwriter or such controlling person in connection with
investigating or defending any such loss, claim, damage, liability,
action or proceeding; provided, however, that the Company will not be
liable in any such case to the extent that any such loss, claim, damage
or liability arises out of or is based upon an untrue statement or
alleged untrue statement, or omission or alleged omission made or
incorporated by reference in the Registration Statement, any
Preliminary Prospectus, the Prospectus, or such amendment or
supplement, in reliance upon and in conformity with written information
furnished to the Company by or through the Representatives specifically
for use in the preparation thereof; and provided further that as to any
Preliminary Prospectus this indemnity agreement shall not inure to the
benefit of any Underwriter or any person controlling that Underwriter
on account of any loss, claim, damage, liability or action arising from
the sale of any Shares to any person by that Underwriter if that
Underwriter failed to send or give a copy of the Prospectus, as the
same may be amended or supplemented, to that person within the time
required by the Act, and the untrue statement or alleged untrue
statement of a material fact or omission or alleged omission to state a
material fact in such Preliminary Prospectus was corrected in the
Prospectus, unless such failure resulted from non-compliance by the
Company with Section 4(iv) or Section 4(v). This indemnity agreement
will be in addition to any liability which the Company may otherwise
have.
(ii) Each Underwriter, severally and not jointly, will
indemnify and hold harmless the Company, each of its directors, each of
its officers who have signed the Registration Statement, and each
person, if any, who controls the Company within the meaning of the Act,
against any losses, claims, damages or liabilities to which the Company
or any such director, officer or controlling person may become subject
under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions or proceedings in respect thereof) arise out of
or are based upon any untrue statement or alleged untrue statement of
any material fact contained or incorporated by reference in the
Registration Statement, any Preliminary Prospectus, the Prospectus or
any amendment or supplement thereto, or arise out of or are based upon
the omission or the alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements
therein not misleading in the light of the circumstances under which
they were made; and will reimburse any legal or other expenses
reasonably incurred by the Company or any such director, officer or
controlling person in connection with investigating or defending any
such loss, claim, damage, liability, action or proceeding; provided,
however, that each Underwriter will be liable in each case to the
extent, but only to the extent, that such untrue statement or alleged
untrue statement or omission or alleged omission has been made or
incorporated by reference in the Registration Statement, any
Preliminary Prospectus, the Prospectus or such amendment or supplement,
in reliance upon and in conformity with written information furnished
to the Company by or through the Representatives specifically for use
in the preparation thereof. This indemnity agreement will be in
addition to any liability which such Underwriter may otherwise have.
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<PAGE> 16
(iii) In case any proceeding (including any governmental
investigation) shall be instituted involving any person in respect of
which indemnity may be sought pursuant to this Section 8, such person
(the "indemnified party") shall promptly notify the person against whom
such indemnity may be sought (the "indemnifying party") in writing. No
indemnification provided for in Sections 8(i) or (ii) shall be
available to any party who shall fail to give notice as provided in
this Section 8(iii) if the party to whom notice was not given was
unaware of the proceeding to which such notice would have related and
was prejudiced by the failure to give such notice, but the failure to
give such notice shall not relieve the indemnifying party or parties
from any liability which it or they may have to the indemnified party
for contribution or otherwise than on account of the provisions of
Sections 8(i) or (ii). In case any such proceeding shall be brought
against any indemnified party and it shall notify the indemnifying
party of the commencement thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it shall wish
jointly with any other indemnifying party similarly notified, to assume
the defense thereof, with counsel satisfactory to such indemnified
party and shall pay as incurred the fees and disbursements of such
counsel related to such proceeding. In any such proceeding, any
indemnified party shall have the right to retain its own counsel at its
own expense. Notwithstanding the foregoing, the indemnifying party
shall pay as incurred the fees and expenses of the counsel retained by
the indemnified party in the event (a) the indemnifying party and the
indemnified party shall have mutually agreed to the retention of such
counsel or (b) the named parties to any such proceeding (including any
impleaded parties) include both the indemnifying party and the
indemnified party and representation of both parties by the same
counsel would be inappropriate due to actual or potential differing
interests between them, in which case the indemnifying party shall not
be entitled to assume the defense of such suit notwithstanding its
obligation to bear the fees and expenses of such counsel. It is
understood that the indemnifying party shall not, in connection with
any proceeding or related proceedings in the same jurisdiction, be
liable for the reasonable fees and expenses of more than one separate
firm for all such indemnified parties. Such firm shall be designated in
writing by you in the case of parties indemnified pursuant to Section
8(i) and by the Company in the case of parties indemnified pursuant to
Section 8(ii). The indemnifying party shall not be liable for any
settlement of any proceeding effected without its written consent but
if settled with such consent or if there be a final judgment for the
plaintiff, the indemnifying party agrees to indemnify the indemnified
party from and against any loss or liability by reason of such
settlement or judgment. Notwithstanding the foregoing sentence, if at
any time an indemnified party shall have requested an indemnifying
party to reimburse the indemnified party for fees and expenses of
counsel as contemplated by the fifth sentence of this paragraph, the
indemnifying party agrees that it shall be liable for any settlement of
any proceeding effected without its written consent to which the
indemnification obligations of the Company hereunder are applicable if
(a) such settlement is entered into more than 30 days after receipt by
such indemnifying party of the aforesaid request and (b) such
indemnifying party shall not have reimbursed the indemnified party in
accordance with such request prior to the date of such settlement.
(iv) If the indemnification provided for in this Section 8 is
unavailable to or insufficient to hold harmless to the extent required
therein an indemnified party under Sections 8(i) or (ii) above in
respect of any losses, claims, damages or liabilities (or actions or
proceedings in respect thereof) referred to therein, then each
indemnifying party shall contribute to the amount paid or payable by
such indemnified party as a result of such losses, claims, damages or
liabilities (or actions or proceedings in respect thereof) in such
proportion as is appropriate to reflect the relative benefits received
by the Company and the Underwriters from
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<PAGE> 17
the offering of the Shares. If, however, the allocation provided by the
immediately preceding sentence is not permitted by applicable law or if
the indemnified party failed to give the notice required under Section
8(iii) above, then each indemnifying party shall contribute to such
amount paid or payable by such indemnified party in such proportion as
is appropriate to reflect not only such relative benefits but also the
relative fault of the Company and the Underwriters in connection with
the statements or omissions which resulted in such losses, claims,
damages or liabilities (or actions or proceedings in respect thereof),
as well as any other relevant equitable considerations. The relative
benefits received by the Company and the Underwriters shall be deemed
to be in the same proportion as the total net proceeds from the
offering (before deducting expenses) received by the Company and the
Underwriters bear to the total proceeds of the offering (the proceeds
received by the Underwriters being equal to the total underwriting
discounts and commissions received by the Underwriters), in each case
as set forth in the table on the cover page of the Prospectus. The
relative fault shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or
the omission or alleged omission to state a material fact relates to
information supplied by the Company or the Underwriters and the
parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission.
The Company and the Underwriters agree that it would not be
just and equitable if contributions pursuant to this Section 8(iv) were
determined by pro rata allocation (even if the Underwriters were
treated as one entity for such purpose) or by any other method of
allocation which does not take account of the equitable considerations
referred to above in this Section 8(iv). The amount paid or payable by
an indemnified party as a result of the losses, claims, damages or
liabilities (or actions or proceedings in respect thereof) referred to
above in this Section 8(iv) shall be deemed to include any legal or
other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 8(iv), (a) no
Underwriter shall be required to contribute any amount in excess of the
underwriting discounts and commissions applicable to the Shares
purchased by such Underwriter and (b) no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation. The Underwriters' obligations in
this Section 8(d) to contribute are several in proportion to their
respective underwriting obligations and not joint.
(v) In any proceeding relating to the Registration Statement,
any Preliminary Prospectus, the Prospectus or any supplement or
amendment thereto, each party against whom contribution may be sought
under this Section 8 hereby consents to the jurisdiction over any other
contributing party, agrees that process issuing from such court may be
served upon him or it by any other contributing party and consents to
the service of such process and agrees that any other contributing
party may join him or it as an additional defendant in any such
proceeding in which such other contributing party is a party.
9. DEFAULT BY THE UNDERWRITERS. If on the Closing Date or the Option
Closing Date, as the case may be, any Underwriter shall fail to purchase and pay
for the portion of the Shares which such Underwriter has agreed to purchase and
pay for on such date (otherwise than by reason of any default on the part of the
Company), you, as Representatives of the Underwriters, shall use your best
efforts to procure within 24 hours thereafter one or more of the other
Underwriters, or any others, to purchase from the Company such amounts as may be
agreed upon and upon the terms set forth herein, the Firm Shares
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<PAGE> 18
or Option Shares, as the case may be, which the defaulting Underwriter or
Underwriters failed to purchase. If during such 24 hours you, as such
Representatives, shall not have procured such other Underwriters, or any others,
to purchase the Firm Shares or Option Shares, as the case may be, agreed to be
purchased by the defaulting Underwriter or Underwriters, then (a) if the
aggregate number of shares with respect to which such default shall occur does
not exceed 10% of the Firm Shares or Option Shares, as the case may be, covered
hereby, the other Underwriters shall be obligated, severally, in proportion to
the respective numbers of Firm Shares or Option Shares, as the case may be,
which they are obligated to purchase hereunder, to purchase the Firm Shares or
Option Shares, as the case may be, which such defaulting Underwriter or
Underwriters failed to purchase, or (b) if the aggregate number of shares of
Firm Shares or Option Shares, as the case may be, with respect to which such
default shall occur exceeds 10% of the Firm Shares or Option Shares, as the case
may be, covered hereby, the Company or you as the Representatives of the
Underwriters will have the right, by written notice given within the next
24-hour period to the parties to this Agreement, to terminate this Agreement
without liability on the part of the non-defaulting Underwriters or of the
Company except to the extent provided in Section 8 hereof. In the event of a
default by any Underwriter or Underwriters, as set forth in this Section 9, the
Closing Date or Option Closing Date, as the case may be, may be postponed for
such period, not exceeding seven days, as you, as Representatives, may determine
in order that the required changes in the Registration Statement or in the
Prospectus or in any other documents or arrangements may be effected. The term
"Underwriter" includes any person substituted for a defaulting Underwriter. Any
action taken under this Section 9 shall not relieve any defaulting Underwriter
from liability in respect of any default of such Underwriter under this
Agreement.
10. NOTICES. All communications hereunder shall be in writing and,
except as otherwise provided herein, will be mailed, delivered or telegraphed
and confirmed as follows: if to you, as Representatives of the several
Underwriters, to BT Alex. Brown Incorporated, One South Street, Baltimore,
Maryland 21202, Attention: Thomas J. DeRosa; if to the Company, to Health Care
REIT, Inc., One SeaGate, Suite 1500, Toledo, Ohio 43603-1475, Attention: George
L. Chapman, Chairman of the Board, Chief Executive Officer and President.
11. TERMINATION. This Agreement may be terminated by you by notice to
the Company as follows:
(i) at any time prior to the earlier of (a) the time the
Shares are released by you for sale by notice to the Underwriters, or
(b) 11:30 A.M. on the first business day following the date of this
Agreement;
(ii) at any time prior to the Closing Date if any of the
following has occurred: (a) since the respective dates as of which
information is given in the Registration Statement and the Prospectus,
any material adverse change or any development involving a prospective
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 arising in the
ordinary course of business, (b) any outbreak or escalation of
hostilities or declaration of war or national emergency after the date
hereof or other national or international calamity or crisis or change
in economic or political conditions if the effect of such outbreak,
escalation, declaration, emergency, calamity, crisis or change on the
financial markets of the United States would, in your reasonable
judgment, make the offering or delivery of the Shares impracticable or
inadvisable, (c) trading in securities on the New York Stock Exchange
or the American Stock Exchange shall have been suspended or materially
limited (other than
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limitations on hours or numbers of days of trading) or minimum prices
shall have been established for securities on either such Exchange, (d)
the enactment, publication, decree or other promulgation of any federal
or state statute, regulation, rule or order of any court or other
governmental authority which in your reasonable opinion materially and
adversely affects or will materially or adversely affect the business
or operations of the Company, (e) declaration of a banking moratorium
by either federal or New York State authorities, (f) the taking of any
action by any federal, state or local government or agency in respect
of its monetary or fiscal affairs which in your reasonable opinion has
a material adverse effect on the securities markets in the United
States, or (g) any litigation or proceeding is pending or threatened
against the Underwriters which seeks to enjoin or otherwise restrain,
or seeks damages in connection with, or questions the legality or
validity of this Agreement or the transactions contemplated hereby; or
(iii) as provided in Section 6 of this Agreement.
This Agreement also may be terminated by you, by notice to the
Company, as to any obligation of the Underwriters to purchase the Option Shares,
upon the occurrence at any time prior to the Option Closing Date of any of the
events described in subparagraph (ii) above or as provided in Section 6 of this
Agreement.
12. SUCCESSORS. This Agreement has been and is made solely for the
benefit of the Underwriters and the Company and their respective successors,
executors, administrators, heirs and assigns, and the officers, directors and
controlling persons referred to herein, and no other person will have any right
or obligation hereunder. The term "successors" shall not include any purchaser
of the Shares merely because of such purchase.
13. MISCELLANEOUS. The reimbursement, indemnification and contribution
agreements contained in this Agreement and the representations, warranties and
covenants in this Agreement shall remain in full force and effect regardless of
(i) any termination of this Agreement, (ii) any investigation made by or on
behalf of any Underwriter or controlling person thereof, or by or on behalf of
the Company or its directors or officers and (iii) delivery of and payment for
the Shares under this Agreement.
This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
This Agreement shall be governed by, and construed in
accordance with, the laws of the State of Maryland.
19
<PAGE> 20
If the foregoing letter is in accordance with your
understanding of our agreement, please sign and return to us the enclosed
duplicates hereof, whereupon it will become a binding agreement among the
Company and the several Underwriters in accordance with its terms.
Very truly yours,
HEALTH CARE REIT, INC.
By: /s/ Edward F. Lange, Jr.
------------------------------------------
Edward F. Lange, Jr., Vice President,
Chief Financial Officer and Treasurer
The foregoing Underwriting Agreement
is hereby confirmed and accepted as
of the date first above written.
BT ALEX. BROWN INCORPORATED
SMITH BARNEY INC.
EVEREN SECURITIES, INC.
RAYMOND JAMES & ASSOCIATES, INC.
As Representatives of the several Underwriters
listed in Schedule I
By: BT ALEX. BROWN INCORPORATED
By: /s/ Thomas J. DeRosa
-------------------------------------
Its: Managing Director
-------------------------------------
20
<PAGE> 21
SCHEDULE I
----------
SHARES
------
BT Alex. Brown Incorporated . . . . . . . . . . . . . . . . 1,000,000
Smith Barney Inc. . . . . . . . . . . . . . . . . . . . . . 1,000,000
EVEREN Securities, Inc. . . . . . . . . . . . . . . . . . . 500,000
Raymond James & Associates,Inc. . . . . . . . . . . . . . . 500,000
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in the
Prospectus Supplement dated May 7, 1998 to the Registration Statement (Form S-3
No. 333-43177) and related Prospectus of Health Care REIT, Inc. for the
registration of 3,000,000 shares of 8 7/8% Series B Cumulative Redeemable
Preferred Stock and to the incorporation by reference therein of our report
dated January 30, 1998, with respect to the consolidated financial statements
and schedules of Health Care REIT, Inc. included in its Annual Report (Form
10-K), as amended, for the year ended December 31, 1997, filed with the
Securities and Exchange Commission.
ERNST & YOUNG LLP
Toledo, Ohio
May 5, 1998
