Document:

EXHIBIT 10.1

 

FORM OF PURCHASE AGREEMENT

 

This
Purchase Agreement (this “Agreement”), dated as of August 2, 2010,
is by and among LTC Properties, Inc, a Maryland corporation (the “Company”),
each Purchaser listed under the heading “Direct Purchasers” on Schedule A
(each, a “Direct Purchaser”), each Investment Adviser listed under the
heading “Investment Advisers” on the signature pages hereto (each, an “Investment
Adviser”) who is entering into this Agreement on behalf of itself (as to
paragraph 4 of this Agreement) and those Purchasers which are a fund or
individual or other investment advisory client of such Investment Adviser
listed under its respective name on Schedule B (each, a “Client”),
and each Broker-Dealer listed on Schedule C (each, a “Broker-Dealer”)
which is entering into this Agreement on behalf of itself (as to paragraph 5 of
this Agreement) and those Purchasers which are customers for which it has power
of attorney to sign listed under its respective name on Schedule C
(each, a “Customer”).  Each of the
Customers, Direct Purchasers and Clients are referred to herein as
individually, a “Purchaser” and collectively, the “Purchasers”.

 

WHEREAS, the
Purchasers desire to purchase from the Company (or their Investment Advisers
and Broker-Dealers desire to purchase on their behalf from the Company), and
the Company desires to issue and sell to the Purchasers up to an aggregate of
1,970,000 shares (such number of shares actually sold pursuant to this
Agreement, the “Capital Shares”) of the Company’s Common Stock, par
value $0.01 per share (the “Common Stock”), with the number of Capital
Shares acquired by each Purchaser set forth opposite the name of such Purchaser
on Schedule A, Schedule B or Schedule C, as the case may
be.

 

NOW, THEREFORE, in consideration of the mutual promises
herein contained, the parties hereto agree as follows:

 

1.             Purchase and Sale.  Subject to the terms and conditions hereof,
the Investment Advisers and the Broker-Dealers (on behalf of Purchasers which
are Clients and Customers, respectively) and the other Purchasers hereby
severally and not jointly agree to purchase from the Company, and the Company
agrees to issue and sell to the several Purchasers, the number of Capital
Shares set forth next to such Purchaser’s name on Schedule A, Schedule B
or Schedule C, as the case may be, at a price per share of $24.70 for an
aggregate purchase amount in an amount as set forth on Schedule D hereof
(the “Purchase Price”) at the Closing (as defined below).

 

2.             Representations and Warranties of Purchaser.  Each Purchaser represents and warrants with
respect to itself that:

 

(a)           Due Authorization. 
Such Purchaser has full power and authority to enter into this Agreement
and is duly authorized to purchase the Capital Shares in the amount set forth
opposite its name on Schedule A, Schedule B or Schedule C,
as the case may be.  This Agreement has
been duly authorized by such Purchaser and duly executed and delivered by or on
behalf of such Purchaser.  This Agreement
constitutes a legal, valid and binding agreement of such Purchaser, enforceable
against such Purchaser in accordance 

 

 

with its terms except as may
be limited by (i) the effect of bankruptcy, insolvency, reorganization,
moratorium or other similar laws relating to or affecting the rights or
remedies of creditors or (ii) the effect of general principles of equity,
whether enforcement is considered in a proceeding in equity or at law and the
discretion of the court before which any proceeding therefor may be brought
(the “Enforceability Exceptions”).

 

(b)           Base Prospectus and Prospectus Supplement. Such
Purchaser has received a copy of the Company’s Base Prospectus dated June 9,
2010 and the Prospectus Supplement dated August 2, 2010 (each as defined
below).

 

(c)           Ownership of Excess Shares of Capital Stock.  For U.S. income tax purposes, as of the date
hereof and after giving effect to the transaction contemplated hereby, such
Purchaser, together with its subsidiaries and affiliates, does not own directly
or indirectly more than 9.8% in number of shares or value, whichever is more
restrictive, of the issued and outstanding capital stock of the Company.  Purchaser expressly acknowledges that the
provisions of the Company’s Articles of Incorporation, as amended or
supplemented and restated (the “Charter”), contain limitations on the
Purchaser’s ownership of the Company’s capital stock, which, among other
things, prohibit the direct or indirect ownership by Purchaser (together with
its subsidiaries and affiliates) of more than 9.8% in number of shares or
value, whichever is more restrictive, of the Company’s outstanding capital
stock and, in the event the shares of capital stock acquired by Purchaser
pursuant to this Agreement or otherwise exceed such limits, give the Company
certain repurchase rights on the terms set forth in the Company’s Charter and
result in the conversion of certain shares of capital stock held by the
Purchaser into excess stock which will be held for the benefit of a charitable
beneficiary on the terms set forth in the Company’s Charter.

 

3.             Representations and Warranties of Company.  The Company represents and warrants that:

 

(a)           The Company meets the requirements for use of Form S-3
under the Securities Act of 1933, as amended (the “Act”) and has
prepared and filed with the Securities and Exchange Commission (the “SEC”)
a registration statement (File Number 333-167433) relating to securities,
including the Capital Shares, on Form S-3, including a related Base
Prospectus, for registration under the Act of the offering and sale of certain
securities, including the Capital Shares. Such Registration Statement (as
defined below), including any amendments thereto filed prior to the date
hereof, has been declared effective by the SEC and no stop order suspending the
effectiveness of the Registration Statement or any part thereof has been issued
or is in effect and no proceeding for that purpose has been initiated or
threatened by the SEC, and no notice of objection of the SEC to the use of the
Registration Statement or any post-effective amendment thereto pursuant to Rule 401(g)(1) under
the Act has been received by the Company. The Company has paid the required SEC
filing fees relating to the Capital Shares. The Company has filed with the SEC
the Prospectus Supplement relating to the Capital Shares in accordance with Rule 424(b).  As filed and as delivered to CSCA Capital
Advisors, LLC, in its capacity as placement agent (the “Placement Agent”)
on the date hereof, the Prospectus contains all 

 

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information required by the Act and the rules thereunder
and  no order preventing or suspending
the use of the Prospectus or any Issuer Free Writing Prospectus has been issued
by the SEC. The Registration Statement, at the date hereof meets the
requirements set forth in Rule 415(a)(1)(x). The initial effective date of
the Registration Statement was not earlier than the date three years before the
date hereof.  “Registration Statement”
shall mean the registration statement referred to above, including exhibits and
financial statements, schedules and any prospectus supplement relating to the
Capital Shares that is filed with the SEC pursuant to Rule 424(b) and
deemed part of such registration statement pursuant to Rule 430B, as
amended at the date hereof and, in the event any post-effective amendment
thereto becomes effective, shall also mean such registration statement as so
amended.  “Base Prospectus” shall
mean the base prospectus referred to above contained in the Registration
Statement at the date hereof.  “Prospectus
Supplement” shall mean the most recent prospectus supplement relating to
the Capital Shares that was first filed pursuant to Rule 424(b) at or
prior to the date hereof.  “Prospectus”
shall mean the Base Prospectus, as supplemented by the most recent Prospectus
Supplement that was filed pursuant to Rule 424(b) prior to the date
hereof.  Any reference herein to the
Registration Statement, the Base Prospectus, the Prospectus Supplement or the
Prospectus shall be deemed to refer to and include the documents incorporated
by reference therein pursuant to Item 12 of Form S-3 which were filed
under the Securities Exchange Act of 1934, as amended (the “Exchange Act”),
on or before the effective date of the Registration Statement or the issue date
of the Base Prospectus, the Prospectus Supplement or the Prospectus, as the
case may be; and any reference herein to the terms “amend,” “amendment” or “supplement”
with respect to the Registration Statement, the Base Prospectus, the Prospectus
Supplement or the Prospectus shall be deemed to refer to and include the filing
of any document under the Exchange Act after the effective date of the
Registration Statement or the issue date of the Base Prospectus, the Prospectus
Supplement or the Prospectus, as the case may be, deemed to be incorporated
therein by reference.

 

(b)           Since the date as of which information is given in the
Registration Statement and the Prospectus, except as otherwise stated therein, (i) there
has been no material adverse change or any development which could reasonably
be expected to give rise to a prospective material adverse change in or
affecting the condition, financial or otherwise, or in the earnings, business
affairs or, to the Company’s knowledge, business prospects of the Company and
the subsidiaries of the Company, if any (the “Subsidiaries”), considered
as one enterprise, whether or not arising in the ordinary course of business, (ii) 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 (iii) other than regular quarterly dividends, there has
been no dividend or distribution of any kind declared, paid or made by the
Company on any class of its shares of equity securities.  The Registration Statement complies in all
material respects with the applicable requirements of the Act and the Exchange
Act and the respective rules thereunder (including the filing of any
required exhibits thereto) and does not contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements therein not misleading; and on the
date of any filing pursuant to Rule 424(b), on the date hereof and at all
times during which a prospectus is required by the Act to be 

 

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delivered (whether physically or through compliance
with Rule 172 or any similar rule) in connection with any offer or sale of
Capital Shares, the Prospectus (together with any supplement thereto) has
complied and complies on the date hereof in all material respects with the
applicable requirements of the Act and the Exchange Act and the respective rules thereunder
(the “Regulations”) (including the filing of any required exhibits
thereto) and does not include any 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.  The statements in the Prospectus and any
document that is incorporated by reference therein under the headings “Risk
Factors—Congress and the States Have Enacted Health Care Reform and Budget
Measures,” “Risk Factors—Provisions in Our Articles of Incorporation
May Limit Ownership of Shares of Our Capital Stock,” “Risk Factors—Certain
provisions of Maryland law and our Charter and Bylaws could hinder, delay or
prevent changes in control,” “General Description of the Offered Securities,” “Description
of Debt Securities,” “Description of Our Common Stock,” “Description of Our
Preferred Stock,” “Restrictions on Ownership and Transfer,” “Certain Provisions
of Maryland Law and of Our Charter and Bylaws,” “Business—Government
Regulation,” “Business—Legislative Developments” and “Business—Taxation of Our
Company” and insofar as such statements summarize legal matters, agreements,
documents or proceedings discussed therein, are accurate summaries or
descriptions thereof in all material respects.

 

(c)           The Company has been duly organized as a corporation and
is validly existing in good standing under the laws of the State of
Maryland.  Each of the Subsidiaries of
the Company has been duly organized and is validly existing in good standing
under the laws of its jurisdiction of organization.  Each of the Company and its Subsidiaries has
the required power and authority to own and lease its properties and to conduct
its business as described in the Prospectus; and each of the Company and its
Subsidiaries is duly qualified to transact business 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, to the Company’s knowledge,
business prospects of the Company and its Subsidiaries considered as one
enterprise.

 

(d)           As
of the date hereof, the authorized capital stock of the Company consists of
45,000,000 shares of Common Stock, par value $0.01 per share of which
23,799,484 shares of Common Stock were outstanding (without giving effect to
any Capital Shares issued or to be issued as contemplated by this Agreement),
and 15,000,000 shares of preferred stock, par value $0.01 per share (the “Preferred
Stock”, and together with the Common Stock, the “Securities”), of
which 2,000,000 shares have been designated as 8.5% Series C Cumulative
Convertible Preferred Stock, par value $0.01 per share, $19.25 liquidation
value per share of which 2,000,000 shares are issued and outstanding shares
(the “Series C Preferred Stock”), 
2,200,000 shares have been designated as 8.5% Series E Cumulative
Convertible Preferred Stock, par value $0.01 per share, $25 liquidation value
per share, of which 37,816 shares are issued and outstanding shares (the “Series E
Preferred Stock”) and 6,640,000 shares have been designated as 8.0%
Series F Cumulative 

 

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Preferred Stock par value $0.01 per share, $25 liquidation value per
share, of which 5,894,216 shares of the Series F Preferred Stock are
issued and outstanding shares(the “Series F Preferred Stock”).  The issued and outstanding shares of the
Company have been duly authorized and validly issued and are fully paid and
non-assessable; the Securities have been duly authorized, and when issued in
accordance with the terms of the Company’s Charter and delivered as
contemplated hereby, will be validly issued, fully paid and non-assessable and
will be listed, subject to notice of issuance, on the New York Stock Exchange,
effective as of the Closing; the Common Stock, and the Series C Preferred
Stock, the Series E Preferred Stock and the Series F Preferred Stock
of the Company conform to all statements relating thereto contained in the
Prospectus; and the issuance of the Securities is not subject to preemptive or
other similar rights.

 

(e)           Neither the Company nor any of its Subsidiaries is in
violation of its organizational documents or in default in the performance or
observance of any obligation, agreement, covenant or condition contained in any
material contract, indenture, mortgage, loan agreement, note, lease or other
instrument or agreement to which the Company or any of its Subsidiaries is a
party or by which it or any of them are bound, or to which any of the property
or assets of the Company or any of its Subsidiaries is subject, except where
such violation or default would not have a material adverse effect on the
condition, financial or otherwise, or the earnings, business affairs or, to the
Company’s knowledge, business prospects of the Company and its Subsidiaries
considered as one enterprise; and the execution, delivery and performance of
this Agreement, and the issuance and delivery of the Capital Shares and the
consummation of the transactions contemplated herein have been duly authorized
by all necessary action and will not conflict with or constitute a material
breach of, or material default under, or result in the creation or imposition
of any lien, charge or encumbrance upon any material property or assets of the
Company or any of its Subsidiaries pursuant to, any material contract,
indenture, mortgage, loan agreement, note, lease or other instrument or
agreement to which the Company or any of its Subsidiaries is a party or by
which it or any of them are bound, or to which any of the property or assets of
the Company or any of its Subsidiaries is subject, nor will any such action
result in any violation of the provisions of the Charter, by-laws or other
organizational documents of the Company or any of its Subsidiaries or any law,
administrative regulation or administrative or court decree applicable to the
Company.

 

(f)            Commencing with its taxable year ending December 31,
1992, the Company has been organized and operated in conformity with the
requirements for qualification and taxation as a “real estate investment trust”
under the Internal Revenue Code of 1986, as amended (the “Code”), and its
proposed method of operation, as described in the Charter or Bylaws of the
Company, the Registration Statement and the Prospectus, will enable the Company
to continue to meet the requirements for qualification and taxation as a “real
estate investment trust” under the Code.

 

(g)           The Company is not required to be registered under the
Investment Company Act of 1940, as amended.

 

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(h)           No legal or governmental proceedings are pending to which
the Company or any of its Subsidiaries is a party or to which the property of
the Company or any of its Subsidiaries is subject that are required to be
described in the Registration Statement or the Prospectus and are not described
therein, and no such proceedings have been threatened against the Company or
any of its Subsidiaries or with respect to any of their respective properties
that are required to be described in the Registration Statement or the Prospectus
and are not described therein.

 

(i)            No authorization, approval or consent of or filing with
any court or United States federal or state governmental authority or agency is
necessary in connection with the sale of the Capital Shares hereunder, except
such as may be required under the Act or the Regulations or state securities
laws or real estate syndication laws.

 

(j)            The Company and its Subsidiaries possess such
certificates, authorities or permits issued by the appropriate state, federal
or foreign regulatory agencies or bodies necessary to conduct the business now
conducted by them, except where the failure to possess such certificates,
authority or permits would not have a material adverse effect on the condition,
financial or otherwise, or the earnings, business affairs or, to the Company’s
knowledge, business prospects of the Company and its Subsidiaries considered as
one enterprise.  Neither the Company nor
any of its Subsidiaries has received any notice of proceedings relating to the
revocation or modification of any such certificate, authority or permit which,
singly or in the aggregate, if the subject of an unfavorable decision, ruling
or finding, would materially and adversely affect the condition, financial or
otherwise, or the earnings, business affairs or, to the Company’s knowledge,
business prospects of the Company and its Subsidiaries considered as one
enterprise, nor, to the knowledge of the Company, are any such proceedings
threatened or contemplated.

 

(k)           The Company has full power and authority to enter into
this Agreement, and this Agreement has been duly authorized, executed and
delivered by the Company and constitutes a legal, valid and binding agreement
of the Company, enforceable against the Company in accordance with its terms
except as may be limited by the Enforceability Exceptions.

 

(l)            As of the dates set forth therein or incorporated by
reference, the Company and its Subsidiaries had good and marketable title or
valid leasehold interest to all of the properties and assets reflected in the
audited financial statements contained in the Prospectus, subject to no lien,
mortgage, pledge or encumbrance of any kind except (i) those reflected in
such financial statements, (ii) as are otherwise described in the
Prospectus, (iii) as do not materially adversely affect the value of such
property or interests or interfere with the use made or proposed to be made of
such property or interests by the Company and each of its Subsidiaries or
(iv) those which constitute customary provisions of mortgage loans secured
by the Company’s properties creating obligations of the Company with respect to
proceeds of the properties, environmental liabilities and other customary
protections for the mortgagees.

 

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(m)          The Company and its Subsidiaries, and to the Company’s
knowledge, each tenant and each mortgagee, are (i) in compliance with any
and all applicable federal, state and local laws and regulations relating to
the protection of human health and safety, the environment or hazardous or
toxic substances or wastes, pollutants or contaminants (“Environmental Laws”),
(ii) have received and are in compliance with all permits, licenses or
other approvals required of them under applicable Environmental Laws to conduct
their respective businesses and (iii) have not received notice of any
actual or potential liability under any Environmental Laws, except where such
non-compliance with Environmental Laws, failure to receive required permits,
licenses or other approvals, or liability would not, individually or in the
aggregate, have a material adverse effect. 
Neither the Company nor any of the Subsidiaries has been named as a “potentially
responsible party” under the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as amended.  To the Company’s knowledge, there have been
no and are no (i) aboveground or underground storage tanks; (ii) polychlorinated
biphenyls (“PCBs”) or PCB-containing equipment; (iii) asbestos or
asbestos containing materials; (iv) lead based paints; (v) mold or
other airborne contaminants; or (vi) dry-cleaning facilities in, on, under
or about any property owned by the Company or any of its Subsidiaries.

 

(n)           Neither the issuance, sale and delivery of the Capital
Shares nor the application of the proceeds thereof by the Company as described
in the Prospectus will cause the Company to violate or be in violation of
Regulation T, U or X of the Board of Governors of the Federal Reserve System or
any other regulation of such Board of Governors.

 

(o)           The statements set forth in the Base Prospectus under the
caption “Description of Common Stock” in so far as such statements purport to
summarize provisions of laws or documents referred to therein, are correct in
all material respects and fairly present the information required to be
presented therein.

 

4.             Representation and Warranties of the Investment
Advisers.  To induce the Company to
enter into this Agreement, each of the Investment Advisers hereby represents
and warrants that:

 

(a)           It is an investment adviser duly registered with the SEC
under the Investment Advisers Act of 1940, as amended.

 

(b)           It has been duly authorized to act as investment adviser
on behalf of each Client on whose behalf it is signing this Agreement (as identified
under the name of such Investment Adviser on Schedule B hereto) and has
the sole authority to make the investment decision to purchase Capital Shares
hereunder on behalf of such Client.  An
investment in the Capital Stock is a suitable investment for each Client.

 

(c)           It has the power and authority to enter into and execute
this Agreement on behalf of each of the Clients listed under its name on Schedule
B hereto.

 

(d)           This Agreement has been duly authorized, executed and
delivered by it and, assuming it has been duly authorized, executed and
delivered by the Company, constitutes a legal, valid and binding agreement of
such Investment Adviser, enforceable against it in accordance with its terms
except as may be limited by the Enforceability Exceptions.

 

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(e)           It has received a copy of the Company’s Base Prospectus
dated June 9, 2010 and Prospectus Supplement dated August 2, 2010.

 

5.             Representation and Warranties of the Broker-Dealers.  To induce the Company to enter into this
Agreement, each Broker-Dealer represents and warrants that:

 

(a)           It is duly registered and in good standing as a
broker-dealer under the Exchange Act and is licensed or otherwise qualified to
do business as a broker-dealer with the Financial Industry Regulatory Authority
and in all states in which it will offer any Capital Shares pursuant to this
Agreement.

 

(b)           Assuming the Prospectus complies with all relevant
provisions of the Act in connection with the offer and sales of Capital Stock,
each Broker-Dealer will conduct all offers and sales of Capital Stock in
compliance with the Act, the Exchange Act and all rules and regulations
promulgated thereunder.

 

(c)           It has delivered a copy of the Prospectus to each
Purchaser set forth under its name on Schedule C hereto.

 

(d)           It has been granted a duly authorized power-of-attorney to
execute and deliver this Agreement on behalf of each Customer on whose behalf
it is signing this Agreement (as identified under the name of such
Broker-Dealer on Schedule C hereto) and such power has not been revoked.

 

(e)           This Agreement has been duly authorized, executed and
delivered by it and, assuming it has been duly authorized, executed and
delivered by the Company, constitutes a legal, valid and binding agreement of
such Broker-Dealer, enforceable against it in accordance with its terms except
as may be limited by the Enforceability Exceptions.

 

6.             Conditions to Obligations of the Parties.

 

(a)           The Purchasers’ several obligation to purchase the Capital
Shares shall be subject to the following conditions having been met:

 

(i)      the representations and warranties set forth in Section 3
of this Agreement shall be true and correct with the same force and effect as
though expressly made at and as of the Closing,

 

(ii)     the Placement Agent shall have received an opinion from Ballard
Spahr LLP, special Maryland counsel to the Company, dated as of the date of the
Closing, addressed to the Placement Agent and the Purchasers substantially in
the form attached hereto as Exhibit A,

 

(iii)    the Placement Agent shall have received an opinion from Reed
Smith LLP, special securities counsel to the Company, dated as of the date of
the Closing, addressed to the Placement Agent and the Purchasers substantially
in the form attached hereto as Exhibit B,

 

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(iv)    the Placement Agent shall have received a comfort letter from
Ernst & Young LLP, Certified Public Accountants, dated as of the
Closing, substantially in the form attached hereto as Exhibit C,
and

 

(v)     on the Closing Date, the Company shall have delivered to the
Placement Agent a certificate of the Chief Executive Officer and Chief
Financial Officer of the Company, dated as of the Closing Date, setting forth
that each of the representations and warranties contained in this Agreement
shall be true on and as of the Closing Date as if made as of the Closing Date
and each of the conditions and covenants contained herein shall have been
complied with to the extent compliance is required prior to Closing, and shall
have delivered such other customary certificates as the Placement Agent shall
have reasonably requested.

 

(b)           The Company’s obligation to issue and sell the Capital
Shares shall be subject to the following conditions having been met:

 

(i)      the representations and warranties set forth in Sections 2, 4
and 5 of this Agreement shall be true and correct with the same force and
effect as though expressly made at and as of the Closing and

 

(ii)     the Settlement Agent (as defined below) shall have received
payment in full for the Purchase Price for the Capital Shares by federal wire
of immediately available funds, not less than the aggregate amount of $48,659,000
million prior to the payment of fees and expenses.

 

7.             Closing. 
Provided that the conditions set forth in Section 6 hereto and the
last sentence of this Section 7 have been met or waived at such time, the
transactions contemplated hereby shall be consummated on August 5, 2010,
or at such other time and date as the parties hereto shall agree (each such
time and date of payment and delivery being herein called the “Closing”).  At the Closing, settlement shall occur
through Weeden & Co. LP (the “Settlement Agent”), or an
affiliate thereof, on a delivery versus payment basis through the DTC ID
System.

 

8.             Covenants. 
The Company hereby covenants and agrees that subject to all Purchasers
consummating the purchase of the Capital Shares at the Closing, the Company
will use the proceeds of the offering contemplated hereby as set forth under the
caption “Use of Proceeds” in the Prospectus Supplement.

 

9.             Termination. 
This Agreement may be terminated, and the transactions contemplated
hereby may be abandoned, by written notice promptly given to the other parties
hereto, at any time prior to the Closing by the Company, on the one hand, or if
the Closing shall not have occurred on or prior to August 16, 2010 by any
Purchaser on the other; provided that the Company or such Purchaser, as
the case may be, shall not be entitled to terminate this Agreement pursuant to
this Section 9 if the failure of Closing to occur on or prior to such
dates results primarily from such party itself having materially breached any
representation, warranty or covenant contained in this Agreement.

 

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10.           Notices. 
Except as otherwise herein provided, all statements, requests, notices
and agreements shall be in writing and, if to the Purchasers, shall be
sufficient in all respects if delivered or sent by facsimile to 212-446-9181 or
by certified mail to CSCA Capital Advisors, LLC, 280 Park Avenue, New York, New
York 10017, Attention: Bradley Razook, and, if to the Company, shall be
sufficient in all respects if delivered or sent to the Company by facsimile to
(805) 981-8663 or by certified mail to the Company at 31365 Oak Crest Drive, Suite 200,
Westlake Village, CA 91361, Attention: Wendy Simpson

 

11.           Governing Law. 
This Agreement shall be construed in accordance with and governed by the
substantive laws of the State of New York, without regard to conflict of laws
principles. The Purchasers, the Placement Agent and the Company hereby
irrevocable and unconditionally submit to the jurisdiction of any court of the
State of New York or any federal court sitting in the State of New York for
purposes of any suit, action or other proceeding arising out of this Agreement
(and the parties agree not to commence any action, suit or proceedings relating
thereto except in such courts) and agree that service of any process, summons,
notice or document delivered by hand or sent by U.S. registered mail to the
parties’ respective address set forth above shall be effective for service of
process for any action, suit or proceeding brought against such party in any
such court. The parties hereby irrevocably and unconditionally waive any
objection to the laying of venue of any action, suit or proceeding arising out
of this Agreement or any of the transactions contemplated hereby in the courts
of the State of New York or any federal court sitting in the State of New York.
THE PARTIES WAIVE THE RIGHT TO A TRIAL BY JURY IN ANY SUCH DISPUTE.

 

12.           Entire Agreement. 
This Agreement constitutes the entire agreement between the parties
hereto with respect to the subject matter hereof and may be amended only in a
writing that is executed by each of the parties hereto.

 

13.           Counterparts. 
This Agreement may be executed in separate counterparts, each of which
shall be deemed an original, and all of which together shall be deemed to
constitute one and the same instrument. 
Executed counterparts may be delivered by facsimile.

 

14.           Construction. 
When used herein, the phrase “to the knowledge of” the Company or “known
to” the Company or any similar phrase means the actual knowledge of the Chief
Executive Officer, Chief Financial Officer or Chief Operating Officer of the
Company and includes the knowledge that such officers would have obtained of
the matter represented after reasonable due and diligent inquiry of those
employees of the Company whom such officers reasonably believe would have
actual knowledge of the matters represented.

 

15.           Free Writing Prospectus Legend.  The Company has filed a registration
statement (including a prospectus) with the SEC for the offering to which this
communication relates. Before you invest, you should read the prospectus in
that registration statement and other documents the Company has filed with the
SEC for more complete information about the Company and this offering. You may
get these documents for free by visiting EDGAR on the SEC Web site at
www.sec.gov. Alternatively, the Company or CSCA Capital Advisors, LLC will
arrange to send you the prospectus if you request it by calling 212-446-9177.

 

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IN WITNESS WHEREOF, the parties hereto have
caused this Purchase Agreement to be executed and delivered as of the date
first above written.

 

	
   

  	
  LTC
  Properties, Inc.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Name: 

  	
  Wendy L. Simpson

  
	
   

  	
   

  	
   

  	
  Title:

  	
  Chief Executive Officer and President

  

 

 

	
   

  	
  DIRECT
  PURCHASERS

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

 

	
   

  	
  INVESTMENT
  ADVISERS

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  [                   ]
  on behalf of itself (solely with respect to paragraph 4) and each Client set
  forth under its name on Schedule B

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
  [              ]

  
	
   

  	
   

  	
  Title:

  	
  [              ]

  
					

 

 

	
   

  	
  CUSTOMERS

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Each of the Several persons or entities listed
  under the heading “Account Name” on Attachment [   ] to
  Schedule C hereto

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  [            ],
  as agent and attorney-in-fact

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  [            ]
  on behalf of itself and solely with respect to paragraph 5

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

 

SCHEDULE A

 

	
  NAME OF DIRECT PURCHASERS

  	
   

  	
  NUMBER OF SHARES

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  

 

1

 

SCHEDULE B

 

	
  NAME
  OF INVESTMENT ADVISER

  	
   

  	
  NUMBER OF SHARES

  
	
   

  	
   

  	
   

  
	
  [            ]

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  CLIENTS

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  [            ]

  	
   

  	
   

  

 

1

 

SCHEDULE C

 

	
  NAME
  OF BROKER DEALER:

  	
   

  	
  NUMBER OF SHARES

  
	
   

  	
   

  	
   

  
	
  [                            ]

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Customers
  for whom it is signing this Agreement as agent and attorney-in-fact:

  	
   

  	
  The
  amount set forth opposite such name on Attachment [  ] to Schedule C hereto under the heading
  “Amount” (in the aggregate
  [              ])

  
	
   

  	
   

  	
   

  
	
  Each
  of the several persons or entities set forth under the heading “Account Name”
  on  Attachment [  ] to Schedule C hereto

  	
   

  	
   

  

 

1

 

SCHEDULE D

 

Aggregate Purchase Amount

 

	
  [                   ]

  	
   

  	
  $

  	
  [            ]

  	
   

  

 

1

 

EXHIBIT A

 

Opinion
of Ballard Spahr LLP

 

·        The Company is a corporation duly
incorporated and validly existing under and by virtue of the laws of the State
of Maryland and is in good standing with the State Department of Assessments
and Taxation of Maryland.

 

·        The Company has the requisite corporate
power and authority to own or lease its properties and to conduct its business
as described in the Base Prospectus under the caption “Our Company”, to enter
into the Purchase Agreement and the Placement Agent Agreement (collectively,
the “Agreements”) and to carry out all the terms and provisions of the
Agreements to be carried out by it.

 

·        The authorized stock of the Company is
as set forth in the third paragraph of the section of the Base Prospectus
entitled “General Description of the Offered Securities” and consists of
(i) 45,000,000 shares of Common Stock, par value $0.01 per share (“Common
Stock”), and (ii) 15,000,000 shares of preferred stock, par value $0.01
per share (“Preferred Stock”) of which 2,000,000 shares  have been classified as 8.5% Series C
Cumulative Convertible Preferred Stock (the “Series C Preferred Stock”),
2,200,000 shares have been classified as 8.5% Series E Cumulative
Convertible Preferred Stock (the “Series E Preferred Stock”), and
6,640,000 shares have been classified as of 8.0% Series F Cumulative
Preferred Stock, (the “Series F Preferred Stock”).

 

·        The issuance and sale of the Securities
pursuant to the Purchase Agreement have been duly authorized by all necessary
corporate action on the part of the Company and, when issued and delivered by
the Company against payment of the agreed consideration therefor in accordance
with the provisions of the Purchase Agreement, the Securities will be validly
issued, fully paid and non-assessable.

 

·        No holders of outstanding shares of
stock of the Company are entitled to any preemptive or other similar rights under
the Maryland General Corporation Law (the “MGCL”) or under the Charter or
Bylaws of the Company to subscribe for or purchase any of the Capital Shares.

 

·        The execution and delivery of the
Agreement(s) have been duly authorized by all necessary corporate action
on the part of the Company and the Agreements have been executed and delivered
by the Company.

 

·        The execution, delivery and performance
of the Agreement(s) and the issuance and delivery of the Securities will
not conflict with or result in a violation of the provisions of the Charter or
Bylaws of the Company, the laws of the State of Maryland (other than securities
laws and tax laws as to which we express no opinion), or to our knowledge any
decree, judgment or order of any Maryland governmental authority applicable by
name to the Company.

 

 

·        The Securities conform as to legal
matters in all material respects to the description of the Common Stock of the
Company set forth in the section of Base Prospectus entitled “Description of
Our Common Stock”.

 

·        The Series C Preferred Stock
conforms as to legal matters in all material respects to the description
thereof set forth under the subheading “Series C Preferred Stock” in the
section of the Base Prospectus entitled “Description of Our Preferred Stock”.

 

·        The Series E Preferred Stock
conforms as to legal matters in all material respects to the description
thereof set forth under the subheading “Series E Preferred Stock” in the
section of the Base Prospectus entitled “Description of Our Preferred Stock”.

 

·        The Series F Preferred Stock
conforms as to legal matters in all material respects to the description
thereof set forth under the subheading “Series F Preferred Stock” in the
section of the Base Prospectus entitled “Description of Our Preferred Stock”.

 

·        The statements in the section of the
Base Prospectus entitled “Certain Provisions of Maryland Law and of Our Charter
and Bylaws”, insofar as such statements purport to summarize provisions of the
Charter or Bylaws of the Company or the MGCL, are accurate in all material
respects.

 

No authorization, approval,
order or consent of, or filing with, any court or governmental authority of the
State of Maryland pursuant to any law of the State of Maryland is necessary in
connection with the consummation of the transactions contemplated by the
Agreement(s), except those, if any, which have already been obtained or
rendered (and except as may be required under the securities laws or tax laws
of the State of Maryland, as to which we express no opinion).

 

 

EXHIBIT B

 

Opinion of Reed Smith LLP

 

·        The
Registration Statement has been declared effective under the Act; any required
filing of the Prospectus pursuant to Rule 424(b) under the Act has
been made in the manner and within the time period required by such Rule 424(b);
and, to the best of our knowledge, based solely on one or more certificates of
one or more officers of the Company and having been so advised by a member of
the staff of the SEC in a telephonic conversation on the date hereof, no stop
order suspending the effectiveness of the Registration Statement, and no order
directed at any document incorporated by reference in the Registration
Statement or the Prospectus or any amendment or supplement thereto, has been
issued, nor, to the best of our knowledge, based solely on one or more
certificates of one or more officers of the Company, has any proceeding for
that purpose been instituted or threatened by the SEC.

 

·        The
Registration Statement and the Prospectus (including the documents incorporated
by reference therein) comply as to form in all material respects with the
applicable requirements of the Act, the Exchange Act and the respective rules and
regulations of the SEC thereunder with respect to the offering of the
Securities by the Company; provided, however, that we express no opinion with respect to the
financial statements, the notes thereto and related schedules and the accuracy
of the other financial, numerical, statistical and accounting data included or
incorporated by reference therein, or omitted therefrom.  In passing upon the compliance as to form of
the Registration Statement and the Prospectus, we have assumed that the
statements made therein are correct and complete.  We express no opinion with respect to any
securities covered under the Registration Statement other than the Securities.

 

·        The
statements included or incorporated by reference in the Registration Statement
and the Prospectus under the captions “Risk Factors—Congress and the States
Have Enacted Health Care Reform and Budget Measures”, “Business—Government
Regulation” and “Business—Legislative Developments” insofar as such statements
constitute a summary of the legal matters referred to therein, constitute
accurate summaries or descriptions thereof in all material respects.

 

·        The
Company is not and, after giving effect to the offering and sale of the
Securities by the Company as provided for in the Purchase Agreement, will not
be an “investment company” or an entity “controlled” by an “investment company,”
as such terms are defined in the Investment Company Act.

 

·        Assuming
the due authorization, execution and delivery of the Agreements by the Company
and the other parties thereto (such other parties, the “Other Parties”):
(a) the execution, delivery and performance of the Agreements, and the
issuance, sale and delivery of the Securities by the Company as provided for in
the Agreements does not (i) violate any California, New York or federal
order, decree, judgment, statute, law, rule or regulation (other than
federal or state securities laws, which are specifically addressed elsewhere
herein) to which the Company or any of its property or assets is subject and of
which we have knowledge or (ii) result in a material breach of, or
constitute (upon notice or lapse of time or both) a material default under,

 

 

or
result in any material violation of, or result in the creation or imposition of
any lien, charge, encumbrance upon any material property or assets of the
Company and its Subsidiaries taken as a whole pursuant to, any material
contract, agreement, loan document or indenture filed as an exhibit to (A) the
Company’s Annual Report on Form 10-K for the year ended December 31,
2009, (B) the Company’s Quarterly Report on Form 10-Q for the period
ended March 31, 2010, or (C) the Company’s Quarterly Report on Form 10-Q
for the period ended June 30, 2010 and (b) each of the Agreements is
a valid and binding agreement of the Company, enforceable against the Company
in accordance with its terms.  No opinion
is expressed in this paragraph 1: (I) as to any antifraud laws that may be
applicable; or (II) with respect to, or the effect of, any financial,
numerical, statistical or accounting data or information.

 

·                       Except for
permits and similar authorizations required under state securities or Blue Sky
laws, as to which we express no opinion, to the best of our knowledge, no
consent, approval, license, authorization or other order of any California,
Delaware, New York or federal court, regulatory body, administrative agency or
other governmental body is required to be obtained by the Company in connection
with the issuance and delivery of the Securities by the Company as provided for
in the Purchase Agreement, except for any such consent, approval, license,
authorization or other order that has been obtained.

 

·                       Based solely on
one or more certificates of one or more officers of the Company and the
Subsidiaries, to the best of our knowledge, and with the additional
understanding that we have made no independent review or search of any dockets
or records or made inquiries of any court, administrative agency or
governmental authority or otherwise conducted any independent investigation, no
legal or governmental proceedings are pending or threatened to which the
Company or any of its Subsidiaries is a party or to which the property of the
Company is subject and that are required to be described in the Registration
Statement or the Prospectus and are not described therein.

 

·                       Commencing with
its taxable year ending December 31, 1992, the Company has been organized
and operated in conformity with the requirements for qualification and taxation
as a “real estate investment trust” under the Internal Revenue Code of 1986, as
amended (the “Code”), and its proposed
method of operation, as described in the Charter or Bylaws of the Company, the
Registration Statement, the Prospectus and the representations by the Company,
will enable the Company to continue to meet the requirements for qualification
and taxation as a “real estate investment trust” under the Code.

 

·                       The statements
included in the Company’s Annual Report on Form 10-K for the year ended December 31,
2009 set forth under the caption “Taxation of Our Company” and included in or
incorporated by reference in the Registration Statement and the Prospectus under
the captions “Certain U.S. Federal Income Tax Considerations,” to the extent
such information constitutes matters of law, summaries of legal matters, or
legal conclusions, have been reviewed by us and are accurate in all material
respects.

 

In
addition, in the course of the preparation of the Registration Statement and
the Prospectus, we have participated in conferences with officers and other
representatives of the Company and with representatives of the Company’s
independent auditors, at which conferences the contents of the Registration
Statement and the Prospectus and related matters were discussed.  

 

 

Although
we are not passing upon, and do not assume any responsibility for, the
accuracy, completeness or fairness of the statements contained in the
Registration Statement and the Prospectus and have not made any independent
check or verification thereof, during the course of such participation
(relying, as to the factual matters underlying the determination of
materiality, to a large extent upon the statements of officers or other
representatives of the Company), no facts came to our attention that caused us
to believe that the Registration Statement, at the time it became effective,
contained or contains any untrue statement of a material fact or omitted or
omits to state any material fact required to be stated therein or necessary to
make the statements therein not misleading, or that the Prospectus, as of its
date and the date hereof, contained or contains any untrue statement of a
material fact required to be stated therein or omitted or omits to state any
material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading; it being understood
that we express no belief with respect to (I) the financial statements,
the notes thereto and related schedules and other financial, numerical,
statistical and accounting data included in, incorporated by reference in, or
omitted from, the Registration Statement or Prospectus or (II) any of the
material contained under the heading “Plan of Distribution” in the Registration
Statement or the Prospectus.

 

 

EXHIBIT C

 

Comfort Letter

 

1.                                       We are an
independent registered public accounting firm with respect to the Company
within the meaning of the Act and the applicable rules and regulations
adopted by the Securities and Exchange Commission (the “SEC”) and the
Public Company Accounting Oversight Board (United States) (the “PCAOB”).

 

2.                                       In our opinion,
the consolidated financial statements and financial statement schedule audited
by us and included in the Company’s Annual Report on Form 10-K at December 31,
2009, and incorporated by reference in the Registration Statement comply as to
form in all material respects with the applicable accounting requirements of
the Act and the Securities Exchange Act of 1934 (the “Exchange Act”) and
the related rules and regulations adopted by the SEC.

 

3.                                       We have not
audited any financial statements of the Company as of any date or for any
period subsequent to December 31, 2009. We also have not audited the
effectiveness of the Company’s internal control over financial reporting as of
any date subsequent to December 31, 2009. The purpose (and therefore the
scope) of our audit for the year ended December 31, 2009 was to enable us
to express our opinion on (i) the consolidated financial statements at
December 31, 2009 and for the year then ended, but not on the financial
statements for any interim period within such year, and (ii) the
effectiveness of the Company’s internal control over financial reporting, as of
December 31, 2009, but not on the effectiveness of the Company’s internal
control over financial reporting as of any date or for any period within the
year ended December 31, 2009. Therefore, we are unable to express and do
not express an opinion on: the unaudited consolidated balance sheets at March 31,
2010 and June 30, 2010, the unaudited consolidated statements of income
for the three month-periods ended March 31, 2010 and 2009, and June 30,
2010 and 2009, and the six-month periods ended June 30, 2010 and 2009, or
the unaudited consolidated statements of cash flows for three-month periods
ended March 31, 2010 and 2009 and the six-month periods ended June 30,
2010 and 2009, all incorporated by reference in the Registration Statement from
the Company’s Quarterly Reports on Form 10-Q for the quarters ended March 31
and June 30, 2010; or on the financial position, results of operations or
cash flows as of any date or for any period subsequent to December 31,
2009; or on the effectiveness of the Company’s internal control over financial
reporting as of any date or for any period within the year ended December 31,
2009 or subsequent to December 31, 2009.

 

4.                                       For purposes of
this letter, we have read the 2010 minutes and written consent of the meetings
of the shareholders and the Board of Directors and committees thereof as set
forth in the minute books through August 2, 2010, officials of the Company
having advised us that the minutes of all such meetings through that date were
set forth therein except for the meetings of the Board of Directors, the Audit
Committee, the Compensation Committee, and the Nominating and Corporate
Governance Committee, which occurred on May 26, 2010; the meetings of the
Board of Directors and the Audit Committee, which occurred on June 25,
2010; and the meetings of the Board of Directors, the Audit 

 

C-1

 

Committee, the Compensation Committee, and the Nominating and Corporate
Governance Committee, which occurred on July 30,2010, for which minutes
have not been approved. With respect to these meetings, we have obtained from
the Secretary a summary of the topics discussed at these meetings. We have also
carried out other procedures to August 2, 2010:

 

a.               With respect to the
three-month periods ended March 31 and June 30, 2010 and 2009 and the
six-month periods ended June 30, 2010 and 2009, we have:

 

1)              performed the procedures
specified by the PCAOB for a review of interim financial information as described
in AU 722, Interim Financial Information, on
the unaudited consolidated financial statements for these periods, described in
3. above, included in the Company’s quarterly reports on Forms 10-Q for the
quarters ended March 31and June 30, 2010 incorporated by reference in
the Registration Statement; and

 

2)              inquired of certain
officials of the Company who have responsibility for financial and accounting
matters as to whether the unaudited condensed consolidated financial statements
referred to under 4.a.(1) comply as to form in all material respects with
the applicable accounting requirements of the Exchange Act as it applies to
Form 10-Q and the related rules and regulations adopted by the SEC.

 

The
foregoing procedures do not constitute an audit conducted in accordance with
the standards of the PCAOB. Also, they would not necessarily reveal matters of
significance with respect to the comments in the following paragraph.
Accordingly, we make no representations as to the sufficiency of the foregoing
procedures for your purposes.

 

5.                                       Officials of
the Company have advised us that no consolidated financial statements as of any
date or for any period subsequent to June 30, 2010 are available;
accordingly, the procedures carried out by us with respect to changes in
financial statement items after June 30, 2010 have, of necessity, been
even more limited than those with respect to the periods referred to in 4.
above. We have inquired of certain officials of the Company who have
responsibility for financial and accounting matters as to whether: (i) at
August 2, 2010 there was any increase in bank borrowings, mortgage loans
payable, bonds payable and capital lease obligations of the Company or any
decreases in consolidated total equity of the Company as compared with the
amounts shown on the December 31, 2009 audited consolidated balance sheet
incorporated by reference in the Registration Statement, or (ii) for the
period from July 1, 2010 to August 2, 2010 there were any decreases,
as compared with the corresponding period in the preceding year, in
consolidated revenue or consolidated income from continuing operations, except
in all instances for changes, increases, or decreases that the Registration
Statement discloses have occurred or may occur. On the basis of these inquiries
and our reading of the minutes as described in 4. above, nothing came to our
attention that caused us to believe that there was any such change, increase,
or decrease, except in all instances for changes, increases, or decreases that
the Registration Statement discloses have occurred or may occur.

 

 

6.                                       Audits of the
consolidated financial statements for the periods referred to in the
introductory paragraph of this letter were comprised of audit tests and
procedures deemed necessary for the purpose of expressing an opinion on such
financial statements taken as a whole. For neither the periods referred to
therein nor any other period did we perform audit tests for the purpose of
expressing an opinion on individual balances of accounts or summaries of
selected transactions such as those procedures enumerated below, and
accordingly, we do not express an opinion thereon.

 

7.                                       However, for
purposes of this letter we also read the items identified by you on the
attached copies of selected pages of the Company’s prospectus supplement
dated August 2, 2010, the Company’s Annual Report on Form 10-K for
the year ended December 31, 2009, the Company’s 2010 proxy statement, and
the Company’s Forms 10-Q for the quarters ended March 31 and June 30,
2010, and have performed the following additional procedures, identified in the
letters below:

 

A.           Compared to or derived from
amounts in the Company’s audited consolidated financial statements (including
the notes thereto) and related financial statement schedules included in the
Company’s Annual Report on Form 10-K for the year ended December 31,
2009 and found the amounts or percentages to be in agreement.

 

B.             Compared to or derived from
amounts in manually prepared analyses prepared by the Company from information
included in its accounting records and found the amounts or percentages to be
in agreement.  With respect to the
salary, fees earned or paid in cash, bonus, stock awards, option awards and all
other compensation disclosed or listed in the summary compensation  table and director compensation table and the
related footnotes on pages 19-21, 23, 27, and 33, respectively, of the
2010 proxy statement, we make no legal representations as to questions of legal
interpretation regarding the completeness or appropriateness of the Company’s
determination of what constitutes executive compensation for purposes of the
SEC disclosure requirements on executive compensation.

 

In addition, we do not comment on the following:

 

·                  Location

·                  Type of property

·                  Asset mix, investment asset
mix, operational asset mix, geographical asset mix

·                  Classification as and
definition of same store

 

C.             Verified the arithmetic
accuracy of the amount or percentage through recomputation.

 

D.            Compared to or derived from
amounts in the Company’s unaudited consolidated financial statements included
in the Company’s Quarterly Report on Forms 10-Q for the quarters ended March 31
and June 30, 2010 and found the amounts or percentages to be in agreement.

 

 

E.              Compared to or derived from
amounts in the Company’s audited consolidated financial statements (including
the notes thereto) and related financial statement schedules included in the
Company’s Annual Report on Form 10-K for the year ended December 31,
2009 and noted amount was different.  The
correct amount provided by the Company is noted adjacent to the typed amount.

 

F.              Proved the arithmetic
accuracy of the percentages or amounts within the capitalization table on page S-11
of the prospectus supplement, based on the data in the information as set forth
or incorporated by reference in the Registration Statement including the
Company’s prospectus supplement dated August 2, 2010, accounting records,
and analyses. We make no comment as to the appropriateness or completeness of
the Company’s determination of the Regulation S-K requirements for quantitative
and qualitative disclosures about market risks nor with respect to the
reasonableness of the assumptions underlying the disclosures.

 

8.                                       It should be
understood that we make no representations regarding questions of legal
interpretation or regarding the sufficiency for your purposes of the procedures
enumerated in the preceding paragraph; also, such procedures would not
necessarily reveal any material misstatement of the amounts or percentages
listed above.  Further, we have addressed
ourselves solely to the foregoing data as set forth in the registration
statement and make no representations regarding the adequacy of disclosure or
regarding whether any material facts have been omitted.EXHIBIT 10.2

 

August 2,
2010

 

CSCA
Capital Advisors, LLC

280 Park Avenue

New York, New York  10017

 

Re:  Placement of Common Stock
of LTC Properties, Inc.

 

Dear
Sirs:

 

This
letter (the “Agreement”) confirms our agreement to retain CSCA Capital
Advisors, LLC (the “Placement Agent”) as our exclusive agent for a
period commencing on the date of this letter and terminating on August 16,
2010, unless extended by the parties, to introduce LTC Properties, Inc., a
Maryland corporation (the “Company”), to certain investors as
prospective purchasers (the “Offer”) of up to 1,970,000 shares (such
number of shares actually sold, the “Securities”) of the Company’s
Common Stock, par value $0.01 per share (the “Shares”).  The engagement described herein (i) may
be terminated by the Company at any time prior to the Closing (as defined
below) and (ii) shall be in accordance with applicable laws and pursuant
to the following procedures and terms and conditions:

 

1.             The Company will:

 

A.            Cause the Company’s
independent public accountants to address to the Company and the Placement
Agent and deliver to the Company, the Placement Agent and the Purchasers (as
such term is defined in the Purchase Agreement dated the date hereof between
the Company and the purchasers party thereto (the “Purchase Agreement”) (i) a
letter or letters (which letters are frequently referred to as “comfort letters”)
dated the date hereof, and (ii) if so requested by the Placement Agent, a “bring-down”
letter delivered the date on which the sale of the Securities is consummated
pursuant to the Purchase Agreement (such date, a “Closing Date” and the
time of such consummation on the Closing Date, a “Closing,”), which,
with respect to the letter or letters referred to in clause (i) above,
will be substantially in the form attached hereto as Annex I, and with
respect to the letter or letters referred to in clause (ii) above, will be
in form and substance reasonably satisfactory to the Placement Agent.

 

B.            On the Closing Date, cause
special securities counsel to the Company to deliver opinions to the Placement
Agent and the Purchasers substantially in the form of Annex II hereto
and otherwise in form and substance reasonably satisfactory to the Placement
Agent and its counsel, and cause the Maryland counsel to the Company to deliver
opinions to the Placement Agent and the Purchasers substantially in the form of
Annex III hereto.

 

C.            Prior to the Closing, the
Company shall not sell or approve the solicitation of offers for the purchase
of additional Shares in excess of the amount which shall be authorized by the
Company or in excess of the aggregate offering price of the Shares registered
pursuant to the Registration Statement (as defined below).

 

 

D.            Use the proceeds of the
offering contemplated hereby as set forth under the caption “Use of Proceeds”
in the Prospectus Supplement (as defined below).

 

E.             On the Closing Date, the
Company shall deliver to the Placement Agent and the Purchasers a certificate
of the Chief Executive Officer and Chief Financial Officer of the Company,
dated as of the Closing Date, setting forth that each of the representations
and warranties contained in this Agreement shall be true on and as of the
Closing Date as if made as of the Closing Date and each of the conditions and
covenants contained herein shall have been complied with to the extent
compliance is required prior to the Closing Date, and shall have delivered such
other customary certificates as the Placement Agent shall have reasonably
requested.

 

2.             The Company authorizes the
Placement Agent to use the Prospectus (as defined below) in connection with the
Offer for such period of time as any such materials are required by law to be
delivered in connection therewith and the Placement Agent agrees to do so.

 

3.

 

(a)           The Placement Agent will use commercially reasonable
efforts on behalf of the Company in connection with the Placement Agent’s
services hereunder.  No offers or sales
of Securities shall be made to any person without the prior approval of such
person by the Company, such approval to be at the reasonable discretion of the
Company.  The Placement Agent’s aggregate
fee for its services hereunder will be an amount equal to $366,090 (such fee
payable by the Company at and subject to the consummation of the Closing).  The Company, upon consultation with the
Placement Agent, may establish in the Company’s discretion a minimum aggregate
amount of Shares to be sold in the offering contemplated hereby, which minimum
aggregate amount shall be reflected in the Prospectus.  The Placement Agent will not enter into any
agreement or arrangement with any broker, dealer or other person in connection
with the placement of Securities (individually, a “Participating Person”
and collectively, “Participating Persons”) which will obligate the
Company to pay additional fees or expenses to or on behalf of a Participating
Person without the prior written consent of the Company, it being understood
that Weeden & Co. LP will be acting as settlement agent (“Settlement
Agent”) in connection with the Closing and the Company will pay the fees
and expenses of the Settlement Agent which shall be calculated at the rate of
$0.02 per Security sold.

 

(b)           The Company agrees that it will pay its own costs
and expenses incident to the performance of its obligations hereunder whether
or not any Securities are offered or sold pursuant to the Offer, including,
without limitation, (i) the filing fees and expenses, if any, incurred
with respect to any filing with the New York Stock Exchange, (ii) all
costs and expenses incident to the preparation, issuance, execution and
delivery of the Securities, (iii) all costs and expenses (including filing
fees) incident to the preparation, printing and filing under the Securities Act
of 1933, as amended (the “Act”), of the Registration Statement and the
Prospectus, including, without limitation, in each case, all exhibits,
amendments and supplements thereto, (iv) all costs and expenses incurred
in connection with the required registration or qualification of the Securities
issuable under the laws of such jurisdictions as the Placement Agent may
reasonably designate, if any, (v) all costs and expenses incurred by the
Company in connection with the printing (including word processing and
duplication costs) and delivery of the Prospectus and Registration 

 

2

 

Statement (including, without limitation, any
preliminary and supplemental blue sky memoranda) including, without limitation,
mailing and shipping, (vi) all fees and expenses incurred in marketing the
Offer, and (vii) the fees and disbursements of Reed Smith LLP, special
securities counsel to the Company, Ballard Spahr LLP, special Maryland counsel
to the Company, any other counsel to the Company, and Ernst & Young
LLP, auditors to the Company.  In
addition, the Company agrees to reimburse the Placement Agent for all
out-of-pocket expenses of the Placement Agent in connection with the Offer
including, without limitation, the reasonable legal fees, expenses and
disbursements of the Placement Agent’s counsel in connection with the Offer in
an amount not to exceed $30,000.

 

(c)           The Company will indemnify and hold harmless the
Placement Agent and each of its partners, directors, officers, associates,
affiliates, subsidiaries, employees, consultants, attorneys, agents, and each
person, if any, controlling the Placement Agent or any of its affiliates within
the meaning of either Section 15 of the Act or Section 20 of the
Securities Exchange Act of 1934, as amended (the “Exchange Act”)
(collectively, the “Placement Agent Indemnitees”), from and against any
and all losses, claims, damages, liabilities or costs (and any reasonable legal
or other expenses incurred by such Placement Agent in investigating or
defending the same or in giving testimony or furnishing documents in response
to a request of any government agency or to a subpoena) in any way relating to,
arising out of or caused by any untrue statement or alleged untrue statement of
a material fact contained in the Registration Statement or in the Prospectus or
any Preliminary Prospectus (as defined below) or in any way relating to,
arising out of or caused by any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading.  Such indemnity agreement
shall not, however, apply to any such loss, claim, damage, liability, cost or
expense (i) if such statement or omission was made in reliance upon or in conformity
with information furnished in writing to the Company by the Placement Agent or
its affiliates or any of the Purchasers, Investment Advisors or
Broker-Dealers (as defined in the Purchase Agreement) or their respective
affiliates expressly for use in the Prospectus Supplement, or (ii) which
is held in a final judgment of a court of competent jurisdiction (not subject
to further appeal) to have arisen out of (x) the gross negligence or
willful misconduct of the Placement Agent, any Placement Agent Indemnitee
described in this paragraph 3(c), Purchaser, Investment Advisor, or
Broker-Dealer or (y) a breach of Placement Agent’s representations and
warranties in paragraph 5 hereof.

 

(d)           The Placement Agent will indemnify and hold harmless
the Company and each of its directors, officers, associates, affiliates,
subsidiaries, employees, consultants, attorneys, agents, and each person
controlling the Company or any of its affiliates within the meaning of either Section 15
of the Act or Section 20 of the Exchange Act from and against any and all
losses, claims, damages, liabilities, costs or expenses (and any reasonable
legal or other expenses incurred by such indemnitee in investigating or
defending the same or in giving testimony or furnishing documents in response
to a request of any government agency or to a subpoena) (i) which are held
in a final judgment of a court of competent jurisdiction (not subject to
further appeal) to have arisen out of the gross negligence or willful
misconduct of such Placement Agent or any of its respective partners,
directors, officers, associates, affiliates, subsidiaries, employees,
consultants, attorneys, agents, or any person controlling the Placement Agent
or any of its affiliates within the meaning of Section 15 of the Act or Section 20
of the Exchange Act or (ii) relating 

 

3

 

to, arising out of or caused by any untrue statement
or alleged untrue statement of a material fact contained in the Prospectus
Supplement or in any way relating to, arising out of or caused by any omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, if such statement or
omission was made in reliance upon or in conformity with information furnished
in writing to the Company by the Placement Agent or its affiliates or any of
the Purchasers, Investment Advisors or Broker-Dealers or their respective
affiliates expressly for use in the Prospectus Supplement, or (iii) which
result from violations by the Placement Agent of law or of requirements, rules or
regulations of federal or state securities regulators, self-regulatory
associations or organizations in the securities industry, stock exchanges or
organizations with similar functions or responsibilities with respect to
securities brokers or dealers, as determined by a court of competent
jurisdiction or applicable federal or state securities regulators,
self-regulatory associations or organizations in the securities industry or
stock exchanges or organizations, as applicable.

 

(e)           If any action, proceeding or investigation is
commenced as to which any indemnified party hereunder proposes to demand indemnification
under this letter agreement, such indemnified party will notify the
indemnifying party with reasonable promptness. 
The indemnifying party shall have the right to retain counsel of its own
choice (which counsel shall be reasonably satisfactory to the indemnified
party) to represent it and such counsel shall, to the extent consistent with
its professional responsibilities, cooperate with the indemnified party and any
counsel designated by the indemnified party; provided, however,
it is understood and agreed that if the indemnifying party assumes the defense
of a claim for which indemnification is sought hereunder, it shall have no
obligation to pay the expenses of separate counsel for the indemnified party,
unless defenses are available to the indemnified party that make it
impracticable for the indemnifying party and the indemnified party to be
represented by the same counsel in which case the indemnified party shall be
entitled to retain one counsel.  The indemnifying
party will not be liable under this letter agreement for any settlement of any
claim against the indemnified party made without the indemnifying party’s
written consent.

 

(f)            In order to provide for just and equitable
contribution, if a claim for indemnification pursuant to this paragraph 3 is
made but it is found in a final judgment by a court of competent jurisdiction
(not subject to further appeal) that such indemnification may not be enforced
in such case, even though the express provisions hereof provided for
indemnification in such case, then the Company, on the one hand, and the
Placement Agent, on the other hand, shall contribute to the losses, claims,
damages, liabilities or costs to which the indemnified persons may be subject
in accordance with the relative benefits received from the offering and sale of
the Securities by the Company, on the one hand, and the Placement Agent, on the
other hand (it being understood that, with respect to the Placement Agent, such
benefits received are limited to fees actually paid by the Company and received
by the Placement Agent pursuant to this Agreement), and also the relative fault
of the Company, on the one hand, and the Placement Agent, on the other hand, in
connection with the statements, acts or omissions which resulted in such
losses, claims, damages, liabilities or costs, and any relevant equitable
considerations shall also be considered. 
No person found liable for a fraudulent misrepresentation (within the
meaning of Section 11(f) of the Act) shall be entitled to
contribution from any person who is not also found liable for such fraudulent
misrepresentation.  Notwithstanding the
foregoing, the Placement Agent shall not be obligated to contribute any amount
hereunder that exceeds the fees received by the Placement Agent in respect to
the offering and sale of the Securities.

 

4

 

4.             The Company represents and
warrants to the Placement Agent as of the date hereof and as of the Closing
Date as follows:

 

(a)           The Company meets the
requirements for use of Form S-3 under the Securities Act of 1933, as
amended (the “Act”) and has prepared and filed with the Securities and
Exchange Commission (the “SEC”) a registration statement (File Number
333-167433) relating to securities, including the Capital Shares, on Form S-3,
including a related Base Prospectus, for registration under the Act of the
offering and sale of certain securities, including the Capital Shares. Such
Registration Statement (as defined below), including any amendments thereto
filed prior to the date hereof, has been declared effective by the SEC and no
stop order suspending the effectiveness of the Registration Statement or any
part thereof has been issued or is in effect and no proceeding for that purpose
has been initiated or threatened by the SEC, and no notice of objection of the
SEC to the use of the Registration Statement or any post-effective amendment
thereto pursuant to Rule 401(g)(1) under the Act has been received by
the Company. The Company has paid the required SEC filing fees relating to the
Capital Shares. The Company has filed with the SEC the Prospectus Supplement
relating to the Capital Shares in accordance with Rule 424(b).  As filed and as delivered to CSCA Capital
Advisors, LLC, in its capacity as placement agent (the “Placement Agent”)
on the date hereof, the Prospectus contains all information required by the Act
and the rules thereunder and  no
order preventing or suspending the use of the Prospectus or any Issuer Free
Writing Prospectus has been issued by the SEC. The Registration Statement, at
the date hereof meets the requirements set forth in Rule 415(a)(1)(x). The
initial effective date of the Registration Statement was not earlier than the
date three years before the date hereof. 
“Registration Statement” shall mean the registration statement
referred to above, including exhibits and financial statements, schedules and
any prospectus supplement relating to the Capital Shares that is filed with the
SEC pursuant to Rule 424(b) and deemed part of such registration statement
pursuant to Rule 430B, as amended at the date hereof and, in the event any
post-effective amendment thereto becomes effective, shall also mean such
registration statement as so amended.  “Base
Prospectus” shall mean the base prospectus referred to above contained in
the Registration Statement at the date hereof. 
“Prospectus Supplement” shall mean the most recent prospectus
supplement relating to the Capital Shares that was first filed pursuant to Rule 424(b) at
or prior to the date hereof.  “Prospectus”
shall mean the Base Prospectus, as supplemented by the most recent Prospectus
Supplement that was filed pursuant to Rule 424(b) prior to the date
hereof.  “Preliminary Prospectus”
means any preliminary form of Prospectus Supplement used in the marketing of
the Securities. Any reference herein to the Registration Statement, the Base
Prospectus, the Prospectus Supplement or the Prospectus shall be deemed to
refer to and include the documents incorporated by reference therein pursuant
to Item 12 of Form S-3 which were filed under the Securities Exchange Act
of 1934, as amended (the “Exchange Act”), on or before the effective
date of the Registration Statement or the issue date of the Base Prospectus,
the Prospectus Supplement or the Prospectus, as the case may be; and any
reference herein to the terms “amend,” “amendment” or “supplement” with respect
to the Registration 

 

5

 

Statement, the Base Prospectus, the Prospectus
Supplement or the Prospectus shall be deemed to refer to and include the filing
of any document under the Exchange Act after the effective date of the
Registration Statement or the issue date of the Base Prospectus, the Prospectus
Supplement or the Prospectus, as the case may be, deemed to be incorporated
therein by reference.

 

(b)           Since the date as of which
information is given in the Registration Statement and the Prospectus, except
as otherwise stated therein, (i) there has been no material adverse change
or any development which could reasonably be expected to give rise to a
prospective material adverse change in or affecting the condition, financial or
otherwise, or in the earnings, business affairs or, to the Company’s knowledge,
business prospects of the Company and the subsidiaries of the Company, if any
(the “Subsidiaries”), considered as one enterprise, whether or not
arising in the ordinary course of business, (ii) 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 (iii) other
than regular quarterly dividends, there has been no dividend or distribution of
any kind declared, paid or made by the Company on any class of its shares of
equity securities.  The Registration
Statement complies in all material respects with the applicable requirements of
the Act and the Exchange Act and the respective rules thereunder
(including the filing of any required exhibits thereto) and does not contain
any untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary in order to make the statements
therein not misleading; and on the date of any filing pursuant to Rule 424(b),
on the date hereof and at all times during which a prospectus is required by
the Act to be delivered (whether physically or through compliance with Rule 172
or any similar rule) in connection with any offer or sale of Capital Shares,
the Prospectus (together with any supplement thereto) has complied and complies
on the date hereof in all material respects with the applicable requirements of
the Act and the Exchange Act and the respective rules thereunder (the “Regulations”)
(including the filing of any required exhibits thereto) and does not include
any 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.  The statements in the Prospectus and any
document that is incorporated by reference therein under the headings “Risk
Factors—Congress and the States Have Enacted Health Care Reform and Budget
Measures,” “Risk Factors—Provisions in Our Articles of Incorporation
May Limit Ownership of Shares of Our Capital Stock,” “Risk Factors—Certain
provisions of Maryland law and our Charter and Bylaws could hinder, delay or
prevent changes in control,” “General Description of the Offered Securities,” “Description
of Debt Securities,” “Description of Our Common Stock,” “Description of Our
Preferred Stock,” “Restrictions on Ownership and Transfer,” “Certain Provisions
of Maryland Law and of Our Charter and Bylaws,” “Business—Government
Regulation,” “Business—Legislative Developments” and “Business—Taxation of Our
Company” insofar as such statements summarize legal matters, agreements,
documents or proceedings discussed therein, are accurate summaries or
descriptions thereof in all material respects.

 

6

 

(c)           The Company has been duly
organized as a corporation and is validly existing in good standing under the
laws of the State of Maryland.  Each of
the Subsidiaries of the Company has been duly organized and is validly existing
in good standing under the laws of its jurisdiction of organization.  Each of the Company and its Subsidiaries has
the required power and authority to own and lease its properties and to conduct
its business as described in the Prospectus; and each of the Company and its
Subsidiaries is duly qualified to transact business 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, to the Company’s knowledge,
business prospects of the Company and its Subsidiaries considered as one
enterprise.

 

(d)           As of the date hereof, the
authorized capital stock of the Company consists   of 45,000,000 shares of Common Stock, par
value $0.01 per share of which 23,799,484 shares of Common Stock were
outstanding (without giving effect to any Capital Shares issued or to be issued
as contemplated by this Agreement), and 15,000,000 shares of preferred stock,
par value $0.01 per share (the “Preferred Stock”, and together with the Common
Stock, the “Securities”), of which 2,000,000 shares have been designated as
8.5% Series C Cumulative Convertible Preferred Stock, par value $0.01 per
share, $19.25 liquidation value per share of which 2,000,000 shares are issued
and outstanding shares (the “Series C Preferred Stock”),  2,200,000 shares have been designated as 8.5%
Series E Cumulative Convertible Preferred Stock, par value $0.01 per
share, $25 liquidation value per share, of which 37,816 shares are issued and
outstanding shares (the “Series E Preferred Stock”) and 6,640,000 shares
have been designated as 8.0% Series F Cumulative Preferred Stock par value
$0.01 per share, $25 liquidation value per share, of which 5,894,216 shares of
the Series F Preferred Stock are issued and outstanding shares(the “Series F
Preferred Stock”).  The issued and
outstanding shares of the Company have been duly authorized and validly issued
and are fully paid and non-assessable; the Securities have been duly
authorized, and when issued in accordance with the terms of the Company’s
Charter and delivered as contemplated hereby, will be validly issued, fully
paid and non-assessable and will be listed, subject to notice of issuance, on
the New York Stock Exchange, effective as of the next trading day; the Common
Stock, and the Series C Preferred Stock, the Series E Preferred Stock
and the Series F Preferred Stock of the Company conform to all statements
relating thereto contained in the Prospectus; and the issuance of the
Securities is not subject to preemptive or other similar rights.

 

(e)           Neither the Company nor any
of its Subsidiaries is in violation of its organizational documents or in
default in the performance or observance of any obligation, agreement, covenant
or condition contained in any material contract, indenture, mortgage, loan
agreement, note, lease or other instrument or agreement to which the Company or
any of its Subsidiaries is a party or by which it or any of them are bound, or
to which any of the property or assets of the Company or any of its
Subsidiaries is subject except where such violation or default would not have a
material adverse effect on the condition, financial or otherwise, or the
earnings, business affairs or, to the Company’s knowledge, business prospects
of the Company and its Subsidiaries considered as one enterprise; and 

 

7

 

the execution, delivery and performance of this
Agreement, and the issuance and delivery of the Securities and the consummation
of the transactions contemplated herein have been duly authorized by all
necessary action and will not conflict with or constitute a material breach of,
or material default under, or result in the creation or imposition of any lien,
charge or encumbrance upon any material property or assets of the Company or
any of its Subsidiaries pursuant to, any material contract, indenture,
mortgage, loan agreement, note, lease or other instrument or agreement to which
the Company or any of its Subsidiaries is a party or by which it or any of them
are bound, or to which any of the property or assets of the Company or any of
its Subsidiaries is subject, nor will any such action result in any violation
of the provisions of the Charter of the Company, as amended and supplemented,
by-laws or other organizational documents of the Company or any of its
Subsidiaries or any law, administrative regulation or administrative or court
decree applicable to the Company.

 

(f)            Commencing with its taxable
year ending December 31, 1992, the Company has been organized and operated
in conformity with the requirements for qualification and taxation as a “real
estate investment trust” under the Internal Revenue Code of 1986, as amended
(the “Code”), and its proposed method of operation, as described in the
Charter or Bylaws of the Company, the Registration Statement and the
Prospectus, will enable the Company to continue to meet the requirements for
qualification and taxation as a “real estate investment trust” under the Code.

 

(g)           The Company is not required
to be registered under the Investment Company Act of 1940, as amended.

 

(h)           No legal or governmental
proceedings are pending to which the Company or any of its Subsidiaries is a
party or to which the property of the Company or any of its Subsidiaries is
subject that are required to be described in the Registration Statement or the
Prospectus and are not described therein, and no such proceedings have been
threatened against the Company or any of its Subsidiaries or with respect to
any of their respective properties that are required to be described in the
Registration Statement or the Prospectus and are not described therein.

 

(i)            No authorization, approval
or consent of any court or United States federal or state governmental
authority or agency is necessary in connection with the sale of the Securities
as contemplated hereunder, except such as may be required under the Act or the
Regulations or state securities laws or real estate syndication laws.

 

(j)            The Company and its
Subsidiaries possess such certificates, authorities or permits issued by the
appropriate state, federal or foreign regulatory agencies or bodies necessary
to conduct the business now conducted by them, except where the failure to
possess such certificates, authority or permits would not have a material
adverse effect on the condition, financial or otherwise, or the earnings,
business affairs or, to the Company’s knowledge, business prospects of the
Company and its Subsidiaries considered as one enterprise.  Neither the Company nor any of its
Subsidiaries has received any notice of proceedings relating to the revocation
or modification of any such certificate, authority or permit which, singly or
in the aggregate, if the subject of an unfavorable decision, ruling

 

8

 

or finding, would materially and adversely affect
the condition, financial or otherwise, or the earnings, business affairs or, to
the Company’s knowledge, business prospects of the Company and its Subsidiaries
considered as one enterprise, nor, to the knowledge of the Company, are any
such proceedings threatened or contemplated.

 

(k)           The Company has full power
and authority to enter into this Agreement, and this Agreement has been duly
authorized, executed and delivered by the Company and constitutes a legal,
valid and binding agreement of the Company, enforceable against the Company in
accordance with its terms except as may be limited by (i) the effect of
bankruptcy, insolvency, reorganization, moratorium or other similar laws
relating to or affecting the rights or remedies of creditors or (ii) the
effect of general principles of equity, whether enforcement is considered in a
proceeding in equity or at law and the discretion of the court before which any
proceeding therefor may be brought.

 

(l)            As of the dates set forth
therein or incorporated by reference, the Company or its Subsidiaries had good
and marketable title or valid leasehold interest to all of the properties and
assets reflected in the audited financial statements contained in the
Prospectus, subject to no lien, mortgage, pledge or encumbrance of any kind
except (i) those reflected in such financial statements, (ii) as are
otherwise described in the Prospectus, (iii) as do not materially
adversely affect the value of such property or interests or interfere with the
use made or proposed to be made of such property or interests by the Company
and each of its Subsidiaries or (iv) those which constitute customary
provisions of mortgage loans secured by the Company’s properties creating
obligations of the Company with respect to proceeds of the properties,
environmental liabilities and other customary protections for the mortgagees.

 

(m)          The Company and its
Subsidiaries, and to the Company’s knowledge, each tenant and each mortgagee,
are (i) in compliance with any and all applicable federal, state and local
laws and regulations relating to the protection of human health and safety, the
environment or hazardous or toxic substances or wastes, pollutants or
contaminants (“Environmental Laws”), (ii) have received and are in
compliance with all permits, licenses or other approvals required of them under
applicable Environmental Laws to conduct their respective businesses and (iii) have
not received notice of any actual or potential liability under any
Environmental Laws, except where such non-compliance with Environmental Laws,
failure to receive required permits, licenses or other approvals, or liability
would not, individually or in the aggregate, have a material adverse
effect.  Neither the Company nor any of
the Subsidiaries has been named as a “potentially responsible party” under the
Comprehensive Environmental Response, Compensation, and Liability Act of 1980,
as amended.  To the Company’s knowledge,
there have been no and are no (i) aboveground or underground storage
tanks; (ii) polychlorinated biphenyls (“PCBs”) or PCB-containing
equipment; (iii) asbestos or asbestos containing materials; (iv) lead
based paints; (v) mold or other airborne contaminants; or (vi) dry-cleaning
facilities in, on, under or about any property owned by the Company or any of
its Subsidiaries.

 

9

 

(n)           Any certificate signed by
any officer of the Company and delivered to the Placement Agent or to counsel
for the Placement Agent shall be deemed a representation and warranty by the
Company to the Placement Agent as to the matters covered thereby.

 

(o)           Neither the issuance, sale
and delivery of the Securities nor the application of the proceeds thereof by
the Company as described in the Prospectus will cause the Company to violate or
be in violation of Regulation T, U or X of the Board of Governors of the
Federal Reserve System or any other regulation of such Board of Governors.

 

(p)           The statements set forth in
the Base Prospectus under the caption “Description of Common Stock” in so far
as such statements purport to summarize provisions of laws or documents
referred to therein, are correct in all material respects and fairly present
the information required to be presented therein.

 

(q)           There is no contract,
agreement, indenture or other document to which the Company or any of its
Subsidiaries is a party required to be filed as an exhibit to the Company’s
Annual Report on Form 10-K for the fiscal year ended December 31,
2010 or any subsequent Exchange Act filings prior to the date hereof that has
not been so filed as required.

 

5.             The Placement Agent
represents and warrants to the Company that (i) it is duly registered and
in good standing as a broker-dealer under the Exchange Act and licensed or
otherwise qualified to do business as a broker-dealer with the Financial
Industry Regulatory Authority and  in all
states in which it will offer any of the Securities pursuant to this Agreement,
(ii) assuming the Prospectus complies with all relevant provisions of the
Act in connection with the offer and sale of the Securities, the Placement
Agent will conduct all offers and sales of the Securities in compliance with
the relevant provisions of the Act, the Regulations, the Exchange Act and the
regulations promulgated thereunder, and various state securities laws and
regulations (iii) the Placement Agent will only act as agent in those
jurisdictions in which it is authorized to do so and (iv) the Placement
Agent will not distribute to any Purchaser, Investment Advisor or
Broker-Dealer any written material relating to the offering contemplated hereby
other than the Registration Statement, or the Prospectus or any Preliminary
Prospectus.

 

6.             Except as otherwise herein provided, all statements,
requests, notices and agreements shall be in writing and:

 

(a)           if to the Placement Agent,
shall be sufficient in all respects if delivered or sent by facsimile to
212-446-9181 or by certified mail to CSCA Capital Advisors, LLC, 280 Park
Avenue, New York, NY, 10017, Attention: 
Bradley Razook

 

(b)           if to the Company, shall be
sufficient in all respects if delivered or sent to the Company by facsimile to
(805) 981-8663 or by certified mail to LTC Properties, Inc. 31365 Oak
Crest Drive Suite 200 Westlake Village, CA 91361, Attention:  Wendy Simpson.

 

5.
            The obligations
and liabilities of the Company and the Placement Agent under this Agreement are
not dependent on the several obligations of the Company and the Manager under
the Purchase Agreement or upon the consummation of the Purchase Agreement by
the Manager.

 

10

 

6.             This Agreement shall be
governed by the laws of the State of New York governing contracts made and to
be performed in such State without giving effect to principles of conflicts of
law.

 

7.             This Agreement may be
executed in any number of counterparts, each of which shall be deemed to be an
original and all of which together shall be deemed to be the same
Agreement.  Executed counterparts may be
delivered by facsimile.

 

8.             When used herein, the phrase
“to the knowledge of” the Company or “known to” the Company or any similar
phrase means the actual knowledge of the Chief Executive Officer or Chief
Financial Officer of the Company and includes the knowledge that such officers
would have obtained of the matter represented after reasonable due and diligent
inquiry of those employees of the Company whom such officers reasonably believe
would have actual knowledge of the matters represented.

 

11

 

If
the foregoing is in accord with your understanding of our agreement, please
sign in the space provided below and return a signed copy of this letter to the
Company.

 

	
   

  	
  Sincerely,

  
	
   

  	
   

  
	
   

  	
  LTC
  Properties, Inc.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Wendy Simpson

  
	
   

  	
   

  	
  Name:

  	
  Wendy
  Simpson

  
	
   

  	
   

  	
  Title:

  	
  CEO &
  President

  

 

 

Accepted by:

 

	
  CSCA CAPITAL ADVISORS, LLC

  
	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/
  Laurent X. de Marval

  	
   

  
	
   

  	
  Name:
  Laurent X. de Marval

  	
   

  
	
   

  	
  Title:
  Managing Director

  	
   

  

 

 

Annex I

 

Comfort Letter

 

1.                                       We are an
independent registered public accounting firm with respect to the Company
within the meaning of the Act and the applicable rules and regulations
adopted by the Securities and Exchange Commission (the “SEC”) and the
Public Company Accounting Oversight Board (United States) (the “PCAOB”).

 

2.                                       In our opinion,
the consolidated financial statements and financial statement schedule audited
by us and included in the Company’s Annual Report on Form 10-K at December 31,
2009, and incorporated by reference in the Registration Statement comply as to
form in all material respects with the applicable accounting requirements of
the Act and the Securities Exchange Act of 1934 (the “Exchange Act”) and
the related rules and regulations adopted by the SEC.

 

3.                                       We have not
audited any financial statements of the Company as of any date or for any
period subsequent to December 31, 2009. We also have not audited the
effectiveness of the Company’s internal control over financial reporting as of
any date subsequent to December 31, 2009. The purpose (and therefore the
scope) of our audit for the year ended December 31, 2009 was to enable us
to express our opinion on (i) the consolidated financial statements at
December 31, 2009 and for the year then ended, but not on the financial
statements for any interim period within such year, and (ii) the
effectiveness of the Company’s internal control over financial reporting, as of
December 31, 2009, but not on the effectiveness of the Company’s internal
control over financial reporting as of any date or for any period within the
year ended December 31, 2009. Therefore, we are unable to express and do
not express an opinion on: the unaudited consolidated balance sheets at March 31,
2010 and June 30, 2010, the unaudited consolidated statements of income
for the three month-periods ended March 31, 2010 and 2009, and June 30,
2010 and 2009, and the six-month periods ended June 30, 2010 and 2009, or
the unaudited consolidated statements of cash flows for three-month periods
ended March 31, 2010 and 2009 and the six-month periods ended June 30,
2010 and 2009, all incorporated by reference in the Registration Statement from
the Company’s Quarterly Reports on Form 10-Q for the quarters ended March 31
and June 30, 2010; or on the financial position, results of operations or
cash flows as of any date or for any period subsequent to December 31,
2009; or on the effectiveness of the Company’s internal control over financial
reporting as of any date or for any period within the year ended December 31,
2009 or subsequent to December 31, 2009.

 

4.                                       For purposes of
this letter, we have read the 2010 minutes and written consent of the meetings
of the shareholders and the Board of Directors and committees thereof as set
forth in the minute books through August 2, 2010, officials of the Company
having advised us that the minutes of all such meetings through that date were
set forth therein except for the meetings of the Board of Directors, the Audit
Committee, the Compensation Committee, and the Nominating and Corporate
Governance Committee, which occurred on May 26, 2010; the meetings of the
Board of Directors and the Audit Committee, which occurred on June 25,
2010; and the meetings of the Board of Directors, the Audit 

 

C-1

 

Committee, the Compensation Committee, and the Nominating and Corporate
Governance Committee, which occurred on July 30,2010, for which minutes
have not been approved. With respect to these meetings, we have obtained from
the Secretary a summary of the topics discussed at these meetings. We have also
carried out other procedures to August 2, 2010:

 

a.               With respect to the
three-month periods ended March 31 and June 30, 2010 and 2009 and the
six-month periods ended June 30, 2010 and 2009, we have:

 

1)              performed the procedures
specified by the PCAOB for a review of interim financial information as
described in AU 722, Interim Financial
Information, on the unaudited consolidated financial statements for
these periods, described in 3. above, included in the Company’s quarterly
reports on Forms 10-Q for the quarters ended March 31and June 30,
2010 incorporated by reference in the Registration Statement; and

 

2)              inquired of certain
officials of the Company who have responsibility for financial and accounting
matters as to whether the unaudited condensed consolidated financial statements
referred to under 4.a.(1) comply as to form in all material respects with
the applicable accounting requirements of the Exchange Act as it applies to
Form 10-Q and the related rules and regulations adopted by the SEC.

 

The
foregoing procedures do not constitute an audit conducted in accordance with
the standards of the PCAOB. Also, they would not necessarily reveal matters of
significance with respect to the comments in the following paragraph.
Accordingly, we make no representations as to the sufficiency of the foregoing
procedures for your purposes.

 

5.                                       Officials of
the Company have advised us that no consolidated financial statements as of any
date or for any period subsequent to June 30, 2010 are available; accordingly,
the procedures carried out by us with respect to changes in financial statement
items after June 30, 2010 have, of necessity, been even more limited than
those with respect to the periods referred to in 4. above. We have inquired of
certain officials of the Company who have responsibility for financial and
accounting matters as to whether: (i) at August 2, 2010 there was any
increase in bank borrowings, mortgage loans payable, bonds payable and capital
lease obligations of the Company or any decreases in consolidated total equity
of the Company as compared with the amounts shown on the December 31, 2009
audited consolidated balance sheet incorporated by reference in the
Registration Statement, or (ii) for the period from July 1, 2010 to
August 2, 2010 there were any decreases, as compared with the
corresponding period in the preceding year, in consolidated revenue or
consolidated income from continuing operations, except in all instances for
changes, increases, or decreases that the Registration Statement discloses have
occurred or may occur. On the basis of these inquiries and our reading of the
minutes as described in 4. above, nothing came to our attention that caused us
to believe that there was any such change, increase, or decrease, except in all
instances for changes, increases, or decreases that the Registration Statement
discloses have occurred or may occur.

 

 

6.                                       Audits of the
consolidated financial statements for the periods referred to in the
introductory paragraph of this letter were comprised of audit tests and
procedures deemed necessary for the purpose of expressing an opinion on such
financial statements taken as a whole. For neither the periods referred to
therein nor any other period did we perform audit tests for the purpose of expressing
an opinion on individual balances of accounts or summaries of selected
transactions such as those procedures enumerated below, and accordingly, we do
not express an opinion thereon.

 

7.                                       However, for
purposes of this letter we also read the items identified by you on the
attached copies of selected pages of the Company’s prospectus supplement
dated August 2, 2010, the Company’s Annual Report on Form 10-K for
the year ended December 31, 2009, the Company’s 2010 proxy statement, and
the Company’s Forms 10-Q for the quarters ended March 31 and June 30,
2010, and have performed the following additional procedures, identified in the
letters below:

 

A.           Compared to or derived from
amounts in the Company’s audited consolidated financial statements (including
the notes thereto) and related financial statement schedules included in the
Company’s Annual Report on Form 10-K for the year ended December 31,
2009 and found the amounts or percentages to be in agreement.

 

B.             Compared to or derived from
amounts in manually prepared analyses prepared by the Company from information
included in its accounting records and found the amounts or percentages to be
in agreement.  With respect to the
salary, fees earned or paid in cash, bonus, stock awards, option awards and all
other compensation disclosed or listed in the summary compensation  table and director compensation table and the
related footnotes on pages 19-21, 23, 27, and 33, respectively, of the
2010 proxy statement, we make no legal representations as to questions of legal
interpretation regarding the completeness or appropriateness of the Company’s
determination of what constitutes executive compensation for purposes of the
SEC disclosure requirements on executive compensation.

 

In addition, we do not comment on the following:

 

·                  Location

·                  Type of property

·                  Asset mix, investment asset
mix, operational asset mix, geographical asset mix

·                  Classification as and
definition of same store

 

C.             Verified the arithmetic
accuracy of the amount or percentage through recomputation.

 

D.            Compared to or derived from
amounts in the Company’s unaudited consolidated financial statements included
in the Company’s Quarterly Report on Forms 10-Q for the quarters ended March 31
and June 30, 2010 and found the amounts or percentages to be in agreement.

 

 

E.              Compared to or derived from
amounts in the Company’s audited consolidated financial statements (including
the notes thereto) and related financial statement schedules included in the
Company’s Annual Report on Form 10-K for the year ended December 31,
2009 and noted amount was different.  The
correct amount provided by the Company is noted adjacent to the typed amount.

 

F.              Proved the arithmetic
accuracy of the percentages or amounts within the capitalization table on page S-11
of the prospectus supplement, based on the data in the information as set forth
or incorporated by reference in the Registration Statement including the
Company’s prospectus supplement dated August 2, 2010, accounting records,
and analyses. We make no comment as to the appropriateness or completeness of
the Company’s determination of the Regulation S-K requirements for quantitative
and qualitative disclosures about market risks nor with respect to the
reasonableness of the assumptions underlying the disclosures.

 

8.                                       It should be
understood that we make no representations regarding questions of legal
interpretation or regarding the sufficiency for your purposes of the procedures
enumerated in the preceding paragraph; also, such procedures would not
necessarily reveal any material misstatement of the amounts or percentages
listed above.  Further, we have addressed
ourselves solely to the foregoing data as set forth in the registration
statement and make no representations regarding the adequacy of disclosure or
regarding whether any material facts have been omitted.

 

 

Annex II

 

Opinion of Reed Smith LLP

 

·                       The
Registration Statement has been declared effective under the Act; any required
filing of the Prospectus pursuant to Rule 424(b) under the Act has
been made in the manner and within the time period required by such Rule 424(b);
and, to the best of our knowledge, based solely on one or more certificates of
one or more officers of the Company and having been so advised by a member of
the staff of the SEC in a telephonic conversation on the date hereof, no stop
order suspending the effectiveness of the Registration Statement, and no order
directed at any document incorporated by reference in the Registration
Statement or the Prospectus or any amendment or supplement thereto, has been
issued, nor, to the best of our knowledge, based solely on one or more certificates
of one or more officers of the Company, has any proceeding for that purpose
been instituted or threatened by the SEC.

 

·                       The
Registration Statement and the Prospectus (including the documents incorporated
by reference therein) comply as to form in all material respects with the
applicable requirements of the Act, the Exchange Act and the respective rules and
regulations of the SEC thereunder with respect to the offering of the
Securities by the Company; provided, however, that we express no opinion with respect to the
financial statements, the notes thereto and related schedules and the accuracy
of the other financial, numerical, statistical and accounting data included or
incorporated by reference therein, or omitted therefrom.  In passing upon the compliance as to form of
the Registration Statement and the Prospectus, we have assumed that the
statements made therein are correct and complete.  We express no opinion with respect to any
securities covered under the Registration Statement other than the Securities.

 

·                       The statements
included or incorporated by reference in the Registration Statement and the
Prospectus under the captions “Risk Factors—Congress and the States Have
Enacted Health Care Reform and Budget Measures”, “Business—Government
Regulation” and “Business—Legislative Developments” insofar as such statements
constitute a summary of the legal matters referred to therein, constitute
accurate summaries or descriptions thereof in all material respects.

 

·                       The Company is
not and, after giving effect to the offering and sale of the Securities by the
Company as provided for in the Purchase Agreement, will not be an “investment
company” or an entity “controlled” by an “investment company,” as such terms
are defined in the Investment Company Act.

 

·                       Assuming the
due authorization, execution and delivery of the Agreements by the Company and
the other parties thereto (such other parties, the “Other Parties”): (a) the
execution, delivery and performance of the Agreements, and the issuance, sale
and delivery of the Securities by the Company as provided for in the Agreements
does not (i) violate any California, New York or federal order, decree,
judgment, statute, law, rule or regulation (other than federal or state
securities laws, which are specifically addressed elsewhere herein) to which
the Company or any of its property or assets is subject and of which we have
knowledge or (ii) result in a 

 

 

material
breach of, or constitute (upon notice or lapse of time or both) a material
default under, or result in any material violation of, or result in the
creation or imposition of any lien, charge, encumbrance upon any material
property or assets of the Company and its Subsidiaries taken as a whole
pursuant to, any material contract, agreement, loan document or indenture filed
as an exhibit to (A) the Company’s Annual Report on Form 10-K for the
year ended December 31, 2009, (B) the Company’s Quarterly Report on Form 10-Q
for the period ended March 31, 2010, or (C) the Company’s Quarterly
Report on Form 10-Q for the period ended June 30, 2010 and (b) each
of the Agreements is a valid and binding agreement of the Company, enforceable
against the Company in accordance with its terms.  No opinion is expressed in this paragraph 1:
(I) as to any antifraud laws that may be applicable; or (II) with
respect to, or the effect of, any financial, numerical, statistical or
accounting data or information.

 

·                       Except for
permits and similar authorizations required under state securities or Blue Sky
laws, as to which we express no opinion, to the best of our knowledge, no
consent, approval, license, authorization or other order of any California,
Delaware, New York or federal court, regulatory body, administrative agency or
other governmental body is required to be obtained by the Company in connection
with the issuance and delivery of the Securities by the Company as provided for
in the Purchase Agreement, except for any such consent, approval, license,
authorization or other order that has been obtained.

 

·                       Based solely on
one or more certificates of one or more officers of the Company and the
Subsidiaries, to the best of our knowledge, and with the additional
understanding that we have made no independent review or search of any dockets
or records or made inquiries of any court, administrative agency or
governmental authority or otherwise conducted any independent investigation, no
legal or governmental proceedings are pending or threatened to which the
Company or any of its Subsidiaries is a party or to which the property of the
Company is subject and that are required to be described in the Registration
Statement or the Prospectus and are not described therein.

 

·                       Commencing with
its taxable year ending December 31, 1992, the Company has been organized
and operated in conformity with the requirements for qualification and taxation
as a “real estate investment trust” under the Internal Revenue Code of 1986, as
amended (the “Code”), and its proposed
method of operation, as described in the Charter or Bylaws of the Company, the
Registration Statement, the Prospectus and the representations by the Company,
will enable the Company to continue to meet the requirements for qualification
and taxation as a “real estate investment trust” under the Code.

 

·                       The statements
included in the Company’s Annual Report on Form 10-K for the year ended December 31,
2009 set forth under the caption “Taxation of Our Company” and included in or
incorporated by reference in the Registration Statement and the Prospectus under
the captions “Certain U.S. Federal Income Tax Considerations,” to the extent
such information constitutes matters of law, summaries of legal matters, or
legal conclusions, have been reviewed by us and are accurate in all material
respects.

 

In
addition, in the course of the preparation of the Registration Statement and
the Prospectus, we have participated in conferences with officers and other
representatives of the

 

2

 

Company
and with representatives of the Company’s independent auditors, at which
conferences the contents of the Registration Statement and the Prospectus and
related matters were discussed.  Although
we are not passing upon, and do not assume any responsibility for, the
accuracy, completeness or fairness of the statements contained in the
Registration Statement and the Prospectus and have not made any independent
check or verification thereof, during the course of such participation
(relying, as to the factual matters underlying the determination of
materiality, to a large extent upon the statements of officers or other
representatives of the Company), no facts came to our attention that caused us
to believe that the Registration Statement, at the time it became effective,
contained or contains any untrue statement of a material fact or omitted or
omits to state any material fact required to be stated therein or necessary to
make the statements therein not misleading, or that the Prospectus, as of its
date and the date hereof, contained or contains any untrue statement of a
material fact required to be stated therein or omitted or omits to state any
material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading; it being understood
that we express no belief with respect to (I) the financial statements,
the notes thereto and related schedules and other financial, numerical,
statistical and accounting data included in, incorporated by reference in, or
omitted from, the Registration Statement or Prospectus or (II) any of the
material contained under the heading “Plan of Distribution” in the Registration
Statement or the Prospectus.

 

3

 

Annex III

 

Opinion of Ballard Spahr LLP

 

·                       The Company is
a corporation duly incorporated and validly existing under and by virtue of the
laws of the State of Maryland and is in good standing with the State Department
of Assessments and Taxation of Maryland.

 

·                       The Company has
the requisite corporate power and authority to own or lease its properties and
to conduct its business as described in the Base Prospectus under the caption “Our
Company”, to enter into the Purchase Agreement and the Placement Agent
Agreement (collectively, the “Agreements”) and to carry out all the terms and
provisions of the Agreements to be carried out by it.

 

·                       The authorized
stock of the Company is as set forth in the third paragraph of the section of
the Base Prospectus entitled “General Description of the Offered Securities”
and consists of (i) 45,000,000 shares of Common Stock, par value $0.01 per
share (“Common Stock”), and (ii) 15,000,000 shares of preferred stock, par
value $0.01 per share (“Preferred Stock”) of which 2,000,000 shares  have been classified as 8.5% Series C
Cumulative Convertible Preferred Stock (the “Series C Preferred Stock”),
2,200,000 shares have been classified as 8.5% Series E Cumulative
Convertible Preferred Stock (the “Series E Preferred Stock”), and
6,640,000 shares have been classified as of 8.0% Series F Cumulative
Preferred Stock, (the “Series F Preferred Stock”).

 

·                       The issuance
and sale of the Securities pursuant to the Purchase Agreement have been duly
authorized by all necessary corporate action on the part of the Company and,
when issued and delivered by the Company against payment of the agreed
consideration therefor in accordance with the provisions of the Purchase
Agreement, the Securities will be validly issued, fully paid and
non-assessable.

 

·                       No holders of
outstanding shares of stock of the Company are entitled to any preemptive or
other similar rights under the Maryland General Corporation Law (the “MGCL”) or
under the Charter or Bylaws of the Company to subscribe for or purchase any of
the Capital Shares.

 

·                       The execution
and delivery of the Agreement(s) have been duly authorized by all necessary
corporate action on the part of the Company and the agreements have been
executed and delivered by the Company.

 

·                       The execution,
delivery and performance of the Agreement(s) and the issuance and delivery of
the Securities will not conflict with or result in a violation of the
provisions of the Charter or Bylaws of the Company, the laws of the State of
Maryland (other than 

 

 

securities
laws and tax laws as to which we express no opinion), or to our knowledge any
decree, judgment or order of any Maryland governmental authority applicable by
name to the Company.

 

·                       The Securities
conform as to legal matters in all material respects to the description of the
Common Stock of the Company set forth in the section of Base Prospectus
entitled “Description of Our Common Stock”.

 

·                       The Series C
Preferred Stock conforms as to legal matters in all material respects to the
description thereof set forth under the subheading “Series C Preferred
Stock” in the section of the Base Prospectus entitled “Description of Our
Preferred Stock”.

 

·                       The Series E
Preferred Stock conforms as to legal matters in all material respects to the
description thereof set forth under the subheading “Series E Preferred
Stock” in the section of the Base Prospectus entitled “Description of Our
Preferred Stock”.

 

·                       The Series F
Preferred Stock conforms as to legal matters in all material respects to the
description thereof set forth under the subheading “Series F Preferred
Stock” in the section of the Base Prospectus entitled “Description of Our
Preferred Stock”.

 

·                       The statements
in the section of the Base Prospectus entitled “Certain Provisions of Maryland
Law and of Our Charter and Bylaws”, insofar as such statements purport to
summarize provisions of the Charter or Bylaws of the Company or the MGCL, are
accurate in all material respects.

 

·                       No
authorization, approval, order or consent of, or filing with, any court or
governmental authority of the State of Maryland pursuant to any law of the
State of Maryland is necessary in connection with the consummation of the transactions
contemplated by the Agreement(s), except those, if any, which have already been
obtained or rendered (and except as may be required under the securities laws
or tax laws of the State of Maryland, as to which we express no opinion).

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