EXHIBIT 1.1
BROOKDALE LIVING COMMUNITIES, INC.
(a Delaware corporation)
2,000,000 Shares
Common Stock
(Par Value $0.01 Per Share)
UNDERWRITING AGREEMENT
----------------------
December ___,1997
FRIEDMAN, BILLINGS, XXXXXX & CO., INC.,
XXXXX & COMPANY
As Representatives of the Several Underwriters
c/o Friedman, Billings, Xxxxxx & Co., Inc.
0000 Xxxxxxxxxx Xxxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Ladies and Gentlemen:
Brookdale Living Communities, Inc., a Delaware corporation (the
"Company"), confirms its agreement with Friedman, Billings, Xxxxxx & Co., Inc.
and Xxxxx & Company (collectively, the "Representatives") and the underwriters
listed on Schedule A attached hereto (collectively, the "Underwriters," which
term shall also include any underwriter substituted as provided in Section 9
hereof), for whom the Representatives are acting as representatives, subject to
the terms and conditions stated herein, with respect to the sale by the Company
to the Underwriters, acting severally and not jointly, of 2,000,000 shares (the
"Firm Shares") of the Company's Common Stock, par value $0.01 per share (the
"Common Stock"), and with respect to the grant by the Company to the
Underwriters of the option described in Section 2(b) hereof to purchase all or
any part of an additional 300,000 shares of Common Stock (the "Option Shares")
to cover over-allotments. The Firm Shares and the Option Shares are
collectively hereinafter called the "Shares." For purposes hereof and of the
representations and warranties contained herein, the operations of the Company
are deemed to include the operations of the senior housing division of The Prime
Group, Inc., an Illinois corporation and a stockholder of the Company ("Prime"),
on and before May 7, 1997.
Prior to the purchase and public offering of the Shares by the
Underwriters, the Company and the Representatives, acting on behalf of the
Underwriters, shall enter into an agreement substantially in the form of Exhibit
A hereto (the "Pricing Agreement"). The Pricing Agreement may take the form of
an exchange of any standard form of written telecommunication between the
Company and the Representative and shall specify such applicable information as
is indicated in Exhibit A hereto. The offering of the Shares will be governed
by this Agreement, as supplemented by the Pricing
Agreement. From and after the date of the execution and delivery of the Pricing
Agreement, this Agreement shall be deemed to incorporate the Pricing Agreement.
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-1 (No. 333-41191) and a related
preliminary prospectus for the registration of the Shares under the Securities
Act of 1933, as amended (the "1933 Act"), and has filed such amendments thereto
and such amended preliminary prospectuses as may have been required to the date
hereof, and will file such additional amendments thereto and such amended
prospectuses as may hereafter be required. Such registration statement when it
becomes effective (as amended, if applicable) and the prospectus constituting a
part thereof (including in each case the information, if any, deemed to be a
part thereof pursuant to Rule 430A(b) of the rules and regulations under the
1933 Act (the "1933 Act Regulations")), as from time to time amended or
supplemented pursuant to the 1933 Act or otherwise, are hereinafter referred to
as the "Registration Statement" and the "Prospectus," respectively, except that
if any revised prospectus shall be provided to the Underwriters by the Company
for use in connection with the offering of the Shares which differs from the
Prospectus on file at the Commission at the time the Registration Statement
becomes effective (whether or not such revised prospectus is required to be
filed by the Company pursuant to Rule 424(b) of the 1933 Act Regulations), the
term "Prospectus" shall refer to such revised prospectus from and after the time
it is first provided to the Underwriters for such use.
The Company understands that the Underwriters propose to make a public
offering of the Shares as soon as the Representatives deem advisable after the
Registration Statement becomes effective and the Pricing Agreement has been
executed and delivered.
Section 1. Representations and Warranties of the Company.
(a) The Company represents and warrants to, and agrees with, each
Underwriter as of the date hereof and as of the date of the Pricing Agreement
(such later date being hereinafter referred to as the "Representation Date") as
follows:
(i) At the time the Registration Statement becomes effective and at
the Representation Date, the Registration Statement, if applicable, will comply
in all material respects with the requirements of the 1933 Act and the 1933 Act
Regulations and will not contain an untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to make the
statements therein not misleading, and the Prospectus, at the Representation
Date (unless the term "Prospectus" refers to a prospectus that has been provided
to the Underwriters by the Company for use in connection with the offering of
the Shares which differs from the Prospectus on file at the Commission at the
time the Registration Statement becomes effective, in which case at the time it
is first provided to the Underwriters for such use) and at the Closing Time
referred to in Section 2(c) hereof, will comply in all material respects with
the
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requirements of the 1933 Act and the 1933 Act Regulations and will not contain
an untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided, however,
that the representations and warranties in this subsection shall not apply to
statements in or omissions from the Registration Statement or Prospectus made in
reliance upon and in conformity with information contained in the first, second
and fourth paragraphs of the section of the Prospectus captioned "Underwriting."
(ii) The Registration Statement has become effective or will become
effective prior to execution of the Pricing Agreement and no stop order
suspending the effectiveness of the Registration Statement or any part thereof
has been issued and no proceeding for that purpose has been instituted or, to
the knowledge of the Company, threatened by the Commission or by the state
securities authority of any jurisdiction. No order preventing or suspending the
use of the Prospectus has been issued and no proceeding for that purpose has
been instituted or, to the knowledge of the Company, threatened by the
Commission or by the state securities authority of any jurisdiction.
(iii) Ernst & Young LLP, who have certified the financial statements
and financial statement schedules included in the Registration Statement, are
independent public accountants as required by the 1933 Act and the 1933 Act
Regulations.
(iv) The financial statements (including the notes thereto) included
in the Registration Statement and the Prospectus present fairly the financial
position of the respective entity or entities presented therein at the
respective dates indicated and the results of their operations for the
respective periods specified, and except as otherwise stated in the Registration
Statement, such financial statements have been prepared in conformity with
generally accepted accounting principles applied on a consistent basis. The
financial statement schedules included in the Registration Statement present
fairly the information required to be stated therein. The financial information
and data included in the Registration Statement and the Prospectus present
fairly the information included therein and have been prepared on a basis
consistent with that of the financial statements included in the Registration
Statement and the Prospectus and the books and records of the respective
entities presented therein. Other than the historical financial statements (and
schedules) included therein, no other historical or pro forma financial
statements (or schedules) are required by the 1933 Act or the 1933 Act
Regulations to be included in the Registration Statement. Except as reflected
or disclosed in the financial statements included in the Registration Statement
or otherwise set forth in the Prospectus, none of the Company or the
Subsidiaries (as hereinafter defined) are subject to any material indebtedness,
obligation, or liability, contingent or otherwise, known to the Company.
(v) All of the consolidated corporations and partnerships in which the
Company has a direct or indirect ownership interest are listed in Exhibit 21.1
to the Registration Statement (collectively, the "Subsidiaries"). The Company's
ownership,
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leasehold or management interest in each of the facilities listed in the
Prospectus under the caption "Business-Facilities" is owned, leased or managed
by the Company directly or indirectly through one or more such wholly-owned
Subsidiaries.
(vi) Since the respective dates as of which information is given in the
Registration Statement and the Prospectus, except as otherwise stated therein,
(A) there has been no material adverse change in the condition, financial or
otherwise, or in the earnings, assets, or business affairs of the Company and
the Subsidiaries considered as a single enterprise, whether or not arising in
the ordinary course of business, (B) no material casualty loss or material
condemnation or other material adverse event has occurred with respect to any of
the Company's facilities, (C) there have been no acquisitions or other
transactions entered into by the Company or any Subsidiary that are material
with respect to such entities, considered as a single enterprise, or would
result in any inaccuracy in the representations contained in Section l(a)(iv)
above, (D) there has been no dividend or distribution of any kind declared,
paid, or made by the Company on any class of its capital stock, (E) there has
been no change in the capital stock of the Company or any Subsidiary, and (F)
there has been no increase in the indebtedness of the Company or any Subsidiary
that is material to such entities, considered as a single enterprise.
(vii) The Company has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the State of Delaware, with
the corporate power and authority to own its properties, conduct its business as
described in the Prospectus and to enter into and perform its obligations under
this Agreement. The Company has been duly qualified as a foreign corporation
for the transaction of business and is in good standing under the laws of each
other jurisdiction in which such qualification is required, whether by reason of
the ownership, leasing, or management of any properties or the conduct of any
other business, except where the failure to so qualify would not have a material
adverse effect on the condition, financial or otherwise, or the earnings, assets
or business affairs of the Company and the Subsidiaries considered as a single
enterprise.
(viii) Each Subsidiary that is a corporation (a "Corporate
Subsidiary") has been duly organized, is validly existing as a corporation in
good standing under the laws of the jurisdiction of its incorporation and has
the corporate power and authority to own, lease and operate its properties and
to conduct its business as described in the Prospectus, and is duly qualified
and is in good standing as a foreign corporation authorized to do business in
each jurisdiction in which the nature of its business or its ownership or
leasing of property requires such qualification, except where the failure to be
so qualified would not have a material adverse effect on the condition
(financial or otherwise), business, prospects, properties, net worth or results
of operations of the Company and the Subsidiaries, considered as a single
enterprise. All of the outstanding shares of capital stock of each Corporate
Subsidiary have been duly authorized and validly issued, are fully paid and
nonassessable, were issued and sold in compliance with
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all applicable federal and state securities laws, were not issued in violation
of or subject to any preemptive or similar rights, and are owned by the Company
directly, or indirectly through one of the other Subsidiaries, free and clear of
any security interest, claim, lien, encumbrance or adverse interest of any
nature, except (i) for those encumbrances disclosed in the Prospectus, (ii) for
interests or liens held by others as security for indebtedness of the Company or
any Subsidiary disclosed in the Prospectus and (iii) for transfer restrictions
under applicable federal and state securities and real estate syndication laws.
(ix) Each Subsidiary that is a general partnership or a limited
partnership (in each case, a "Partnership Subsidiary") has been duly organized
and is existing as a general partnership or limited partnership, as the case may
be, in good standing under the laws of its jurisdiction of organization and has
the partnership power and authority to own, lease and operate its properties and
to conduct its business as described in the Prospectus, and is duly qualified
and is in good standing (where applicable) as a foreign partnership authorized
to do business in each jurisdiction in which the nature of its business or its
ownership or leasing of property requires such qualification, except where the
failure to be so qualified would not have a material adverse effect on the
condition (financial or otherwise), business, prospects, properties, net worth
or results of operations of the Company and the Subsidiaries, considered as a
single enterprise. All outstanding partnership interests in the Partnership
Subsidiaries were issued and sold in compliance with the applicable partnership
or limited partnership agreements of such Partnership Subsidiaries and all
applicable federal and state securities laws, and the partnership interests
therein held directly or indirectly by the Company are owned free and clear of
any security interest, claim, lien, encumbrance or adverse interest of any
nature, except (i) for those encumbrances disclosed in the Prospectus, (ii) for
interests or liens held by others as security for indebtedness of the Company or
any Subsidiary disclosed in the Prospectus, (iii) to the extent provided in the
applicable partnership agreements of such Partnership Subsidiaries and (iv) for
transfer restrictions under applicable federal and state securities and real
estate syndication laws. To the knowledge of the Company, each partnership
agreement pursuant to which the Company or a Subsidiary holds a partnership
interest in a Partnership Subsidiary is in full force and effect and constitutes
the legal, valid and binding agreement of the parties thereto, enforceable
against such parties in accordance with the terms thereof, except as enforcement
thereof may be limited by bankruptcy, insolvency or other similar laws affecting
the enforcement of creditors' rights generally or by general equitable
principles. There has been no material breach of or default under, and no event
which with notice or lapse of time would constitute a material breach of or
default under, such partnership or limited partnership agreements by the Company
or any Subsidiary or, to the Company's knowledge, any other party to such
agreements.
(x) The Company has an authorized capitalization as set forth in the
Prospectus, and all of the issued shares of Common Stock of the Company conform
in all material respects to all statements relating thereto contained in the
Prospectus. All such
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shares of Common Stock have been or will be duly and validly authorized and
issued, fully paid and non-assessable, and are not or will not be subject to
preemptive or other similar rights, and have been or will be offered and sold in
compliance with all applicable laws (including federal and state securities
laws). No shares of capital stock of the Company are reserved for any purpose
except in connection with the stock option plan of the Company as described in
the Prospectus. Except as described in the Prospectus, there are no outstanding
securities convertible into or exchangeable for any capital stock of the Company
and no outstanding options, rights (preemptive or otherwise) or warrants to
purchase or to subscribe for such shares or any other securities of the Company.
(xi) The Shares to be issued and sold by the Company to the Underwriters
hereunder have been duly and validly authorized for issuance and sale to the
Underwriters, and, when issued and delivered by the Company pursuant to this
Agreement against payment of the consideration set forth in the Pricing
Agreement, will be duly and validly issued and fully paid and non-assessable and
will be sold free and clear of any pledge, lien, security interest, encumbrance,
claim or equitable interest. The terms of the Shares conform to all statements
and descriptions related thereto contained in the Prospectus and comply with all
applicable legal requirements. The Shares conform to the provisions of the
Company's charter. The form of share certificate to be used to evidence the
Shares is in due and proper form and complies with all applicable legal
requirements. No preemptive right, co-sale right, tag along right,
registration right, right of first refusal or other similar right of
stockholders exists with respect to any of the Shares or the issuance and sale
thereof, other than those that have been expressly waived prior to the date
hereof and those that will automatically expire upon the consummation of the
transactions contemplated by this Agreement on the date of Closing. No further
consent, approval or authorization of any stockholder, the Board of Directors of
the Company, any court or governmental agency or body, or others is required for
the issuance and sale or transfer of the Shares except as may be required under
the federal securities laws or under any state or other securities, Blue Sky or
real estate syndication laws and except as may be required to be obtained by the
Underwriters. Except as disclosed in the Prospectus, there are no stockholders
agreements or voting agreements with respect to the Common Stock to which the
Company is a party or, except as disclosed in the Prospectus, to the knowledge
of the Company, between or among any of the Company's stockholders.
(xii) None of the Company or any Subsidiary is in violation of its
charter, by-laws, certificate of limited partnership, partnership agreement, or
other organizational document, as applicable. None of the Company or any
Subsidiary is in default in the performance or observance of any obligation,
agreement, covenant, or condition contained in any material contract, indenture,
mortgage, deed of trust, loan agreement or other material agreement or
instrument to which the Company or any Subsidiary is, or at the Closing Time
will be, a party or by which the Company or any Subsidiary is, or at the Closing
Time will be, bound or to which any of the property or assets of the Company or
any Subsidiary is, or at the Closing Time will be, subject,
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except where a default thereunder would not have a material adverse effect on
the condition, financial or otherwise, or the earnings, assets, or business
affairs of the Company and the Subsidiaries, considered as a single enterprise.
For purposes of this paragraph the phrase "material contract, indenture,
mortgage, deed of trust, loan agreement or other material agreement or
instrument" shall mean any contract, indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument that is required to be filed as an
exhibit to the Company's registration statement on Form S-1 pursuant to Section
601(b) of Regulation S-K under the 1933 Act Regulations ("Regulation S-K").
Neither the Company nor any of the Subsidiaries is in material violation of any
order, writ, injunction, judgment or decree of any court, government or
governmental agency or body, domestic or foreign, having jurisdiction over the
Company or any of the Subsidiaries or over any of their respective property.
(xiii) Except as described in the Prospectus, the Company or all
Subsidiaries have operated and currently operate their business in conformity
with all applicable laws, rules and regulations of each jurisdiction in which it
is conducting business, except where the failure to be so in compliance would
not have a material adverse effect on the condition (financial or otherwise),
business, prospects, properties, net worth or results of operations of the
Company and the Subsidiaries, considered as a single enterprise. The operations
of the Company and its Subsidiaries with respect to any real property currently
leased, owned or managed by the Company or any Subsidiary are in material
compliance with all federal, state and local laws, ordinances, rules and
regulations relating to occupational health and safety and the environment. The
Company and each of the Subsidiaries operates its business as described in the
Prospectus and has such permits, licenses, franchises and authorizations of
governmental or regulatory authorities ("permits"), including, without
limitation, under any applicable environmental laws and any applicable state
laws to furnish assisted living services as described under the heading
"Business - Services" on page 27 of the Prospectus, as are necessary to own,
lease and operate its respective properties and to conduct its business in the
manner described in the Prospectus, except where the failure to obtain any
required permit would not have a material adverse effect on the condition
(financial or otherwise), business, prospects, properties, net worth or results
of operations of the Company and the Subsidiaries, considered as a single
enterprise; the Company and each of the Subsidiaries has fulfilled and performed
all of its material obligations with respect to such permits and no event has
occurred which allows, or after notice or lapse of time would allow, revocation
or termination thereof or results in any other material impairment of the rights
of the holder of any such permit; and, except as described in the Prospectus,
such permits contain no restrictions that are materially burdensome to the
Company or any of the Subsidiaries. The Company and the Subsidiaries are not
aware of any existing or imminent matter which could reasonably be expected to
adversely impact the operations or business prospects of the Company and the
Subsidiaries, considered as a single enterprise, other than as disclosed in the
Prospectus.
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(xiv) This Agreement has been duly authorized, executed, and delivered
by the Company, and, assuming due authorization, execution, and delivery hereof
by the Representatives on behalf of the Underwriters, is a valid and binding
agreement of the Company, enforceable against the Company in accordance with its
terms; and at the Representation Date, the Pricing Agreement will have been duly
authorized, executed, and delivered by the Company and, assuming due
authorization, execution, and delivery thereof by the Representatives on behalf
of the Underwriters, will be a valid and binding agreement of the Company,
enforceable against the Company in accordance with its terms; provided that the
enforceability of this Agreement and the Pricing Agreement may be limited by
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
similar laws of general applicability relating to or affecting creditors' rights
and to general principles of equity; provided further that the indemnification
provisions of this Agreement may be unenforceable under general principles of
equity or public policy.
(xv) The issuance and sale of the Firm Shares and the Option Shares by
the Company, the performance by the Company and the Subsidiaries of their
respective obligations under this Agreement, the Pricing Agreement, and the
consummation of the transactions herein and therein contemplated, including the
application of the net proceeds from the sale of the Firm Shares and the Option
Shares as described in the Prospectus will not (A) conflict with or result in a
breach or violation of any of the terms or provisions of, constitute a default
under, or result in the acceleration of the maturity of any indebtedness under,
any material contract, indenture, mortgage, deed of trust, loan agreement or
other material agreement or instrument to which the Company or any Subsidiary is
a party or by which the Company or any Subsidiary is bound or to which any of
the property or assets of the Company or any Subsidiary is subject, (B) result
in any violation of the provisions of the charter or by-laws or other
organizational documents, as the case may be, of the Company or any Subsidiary,
or any statute or any order, rule or regulation of any court or governmental
agency or body having jurisdiction over the Company or any Subsidiary or any of
their respective properties, or (C) result in the loss of tax-exempt status of
any tax-exempt bonds described in the Prospectus. For purposes of this
paragraph the phrase "material contract, indenture, mortgage, deed of trust,
loan agreement or other material agreement or instrument" shall mean any
contract, indenture, mortgage, deed of trust, loan agreement or other agreement
or instrument that is required to be filed as an exhibit to the Company's
registration statement on Form S-1 pursuant to Section 601(b) of Regulation S-K.
(xvi) Except to the extent obtained prior to the Closing Time, no
consent, approval, authorization, order, registration or qualification of or
with any court or governmental agency or body or any other person is required
for the issue and sale of the Shares or the consummation by the Company and the
Subsidiaries of the transactions contemplated by this Agreement and the Pricing
Agreement except the registration under the 1933 Act of the Shares and such
consents, approvals, authorizations, registrations or qualifications as may be
required under state or foreign securities or Blue Sky laws in connection with
the purchase and distribution of the Shares by the Underwriters.
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(xvii) Other than as set forth or contemplated in the Prospectus,
there are no legal or governmental proceedings pending to which the Company or
any Subsidiary is a party or of which any property of the Company or any
Subsidiary is the subject which, (i) are required to be set forth in the
Registration Statement or (ii) if determined adversely to the Company or any
Subsidiary, would individually or in the aggregate be reasonably expected to
have a material adverse effect on the consolidated financial position,
stockholders' equity or results of operations of the Company and the
Subsidiaries, considered as a single enterprise and, to the best knowledge of
the Company, no such proceedings are threatened or contemplated by governmental
authorities or threatened by others.
(xviii) The Company and the Subsidiaries have good and marketable
title in fee simple to all real property and good and marketable title to all
personal property owned by them, as described in the Prospectus, in each case
free and clear of all liens, encumbrances and defects except such as are
described in the Prospectus or such as do not materially adversely affect the
value of such property and do not materially adversely interfere with the use
made and proposed to be made of such property by the Company and the
Subsidiaries; and any real property and buildings described in the Prospectus as
being held under lease by the Company or any Subsidiary are held by it under
valid, subsisting and enforceable leases with such exceptions as are not
material and do not materially adversely interfere with the use made and
proposed to be made of such property and buildings by the Company and the
Subsidiaries.
(xix) Assuming that the agreements to which the Company or any of
the Subsidiaries is a party described in the Registration Statement and
Prospectus have been duly authorized, executed and delivered by all parties
thereto (other than the Company or any affiliate of the Company), such
agreements are valid agreements, enforceable by the Company and the Subsidiaries
(as applicable), except as the enforcement thereof may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws
relating to or affecting creditors' rights generally or by general equitable
principles and, to the Company's knowledge, the other contracting party or
parties thereto are not in material breach or material default under any of such
agreements.
(xx) Except as disclosed in the Prospectus, there are no consensual
encumbrances or restrictions on the ability of any Subsidiary (i) to pay any
dividends or make any distributions on the capital stock of any Subsidiary which
is a Corporate Subsidiary or the partnership interests of any Subsidiary which
is a Partnership Subsidiary or to pay any indebtedness owed to the Company or
any other Subsidiary, (ii) to make any loans or advances to, or investments in,
the Company or any other Subsidiary, or (iii) to transfer any of its properties
or assets to the Company or any other Subsidiary.
(xxi) The Company and the Subsidiaries maintain insurance with
insurers of recognized financial responsibility of the types and in the amounts
generally
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deemed adequate for their respective businesses and consistent with customary
insurance coverage maintained by similar companies in similar businesses,
including, but not limited to, insurance covering real and personal property
owned or leased by the Company or the Subsidiaries against theft, damage,
destruction, acts of vandalism and all other risks customarily insured against,
all of which insurance is in full force and effect.
(xxii) Neither the Company nor any of the Subsidiaries is, or after
giving effect to the issuance and sale of the Shares by the Company, will be (i)
an "investment company" or a company "controlled" by an "investment company"
within the meaning of the Investment Company Act of 1940, as amended (the
"Investment Company Act"), or (ii) a "holding company" or a "subsidiary company"
of a "registered holding company," as defined in the Public Utility Holding
Company Act of 1935, as amended.
(xxiii) Except as disclosed in the Prospectus, no holder of any
securities of the Company has any rights to require the Company to register any
securities of the Company under the 1933 Act.
(xxiv) Other than this Agreement and the Pricing Agreement, the
Company is not a party to any contract, agreement or understanding with any
person that would give rise to a valid claim against the Company for a brokerage
commission, finder's fee or like payment in connection with the sale of the
Shares.
(xxv) The Shares have been authorized for inclusion in the Nasdaq
National Market System, subject to official notice of issuance.
(xxvi) The Company has filed a registration statement pursuant to
Section 12(g) of the Exchange Act to register the Common Stock.
(xxvii) Except as disclosed in the Prospectus, there are no business
relationships or related party transactions required to be disclosed therein by
Item 404 of Regulation S-K.
(xxiii) The Company and each of the Subsidiaries maintains a system of
internal accounting controls sufficient to provide reasonable assurance that (i)
transactions are executed in accordance with management's general or specific
authorizations; (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted
accounting principles and to maintain asset accountability; (iii) access to
assets is permitted only in accordance with management's general or specific
authorization; and (iv) the recorded accountability for assets is compared with
the existing assets at reasonable intervals and appropriate action is taken with
respect to any differences.
(xxix) Neither the Company nor any of the Subsidiaries, nor to the
knowledge of the Company, any agent or other person acting on behalf of the
Company
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or any Subsidiary has, directly or indirectly, used any corporate funds for
unlawful contributions, gift, entertainment or other unlawful expenses related
to foreign or domestic political activity; made any unlawful payment to foreign
or domestic government officials or employees or to foreign or domestic
political parties or campaigns from corporate funds; failed to disclose fully
any contribution in violation of law; violated in any material respect any
provision of the Foreign Corrupt Practices Act of 1977, as amended; or made any
unlawful bribe, rebate, payoff, influence, kick-back or other unlawful payment.
(xxx) No statement, representation, warranty or covenant made by the
Company in any certificate or document required by this Agreement to be
delivered to the Underwriters was or will be, when made, inaccurate, untrue or
incorrect in any material respect.
(xxxi) Neither the Company nor any of its directors, officers or
controlling persons, has taken or will take, directly or indirectly, any action
resulting in a violation of Rule 102 of Regulation M under the Securities
Exchange Act of 1934, as amended (the "1934 Act"), or designed to cause or
result in or that has constituted or reasonably might be expected to constitute,
the stabilization or manipulation of the price of any security of the Company to
facilitate the sale or resale of the Shares.
(xxxii) Neither the execution, delivery or performance of the
transactions contemplated by the Formation (as defined in the Company's
prospectus dated May 1, 1997) nor the consummation of the transactions
contemplated thereby nor the acquisition and/or net lease of The Gables at
Farmington, The Classic at West Palm Beach or The Brendenwood Retirement
Community] (collectively, the "Acquisitions") (i) required any consent,
approval, authorization or other order of, or registration or filing with, any
court, regulatory body, administrative agency or other governmental body, agency
or official which was not obtained or filed, (ii) conflicted with or constituted
a default under, the charter or by-laws, or other organizational documents, of
the Company or any of the Subsidiaries, (iii) except as disclosed in the
Prospectus, conflicted with or constituted a breach of or default under, any
material agreement, indenture, lease, or other instrument to which the Company
or any of the Subsidiaries is a party or by which any of them or any of their
respective properties may be bound, or violated any statute, law, regulation or
filing of judgment, injunction, order or decree applicable to the Company or any
of the Subsidiaries or any of the respective properties, or resulted in the
creation or imposition of any lien, charge or encumbrance upon any property or
assets of the Company or any of the Subsidiaries pursuant to the terms of any
agreement or instrument to which the Company or any of the Subsidiaries may be
bound or to which any of the property or assets of any of them is subject, in
each case described in clauses (i), (ii) and (iii) of this paragraph which,
individually or in the aggregate, would result in a material adverse change in
the condition (financial or otherwise), business, properties, prospects, net
worth or results of operations of the Company and the Subsidiaries, considered
as a single enterprise.
-11-
(xxxv) The Company estimates that approximately 99.6% of its revenue
has been derived from private pay sources.
-12-
Section 2. Sale and Delivery to Underwriters; Closing; Reservation of
Shares.
2(a) On the basis of the representations and warranties herein contained and
subject to the terms and conditions herein set forth, the Company agrees to sell
to the Underwriters the 2,000,000 Firm Shares in the aggregate, and each
Underwriter, severally and not jointly, agrees to purchase from the Company, at
the price per share set forth in the Pricing Agreement, the number of Firm
Shares set forth in Schedule A hereto opposite the name of such Underwriter
(except as otherwise provided in the Pricing Agreement), plus any additional
number of Firm Shares which such Underwriter may become obligated to purchase
pursuant to Section 9 hereof.
If the Company has elected not to rely upon Rule 430A under the 1933 Act
Regulations, the public offering price and the purchase price per share to be
paid by the Underwriters for the Shares have each been determined and set forth
in the Pricing Agreement, dated the date hereof, and an amendment to the
Registration Statement and the Prospectus reflecting such information will be
filed before the Registration Statement becomes effective.
If the Company has elected to rely upon Rule 430A under the 1933 Act
Regulations, the purchase price per share to be paid by the Underwriters for the
Shares shall be an amount equal to the public offering price, less an amount per
share to be determined by agreement between the Representatives and the Company.
The public offering price per share of the Shares shall be a fixed price to be
determined by agreement between the Representatives and the Company. The public
offering price and the purchase price, when so determined, shall be set forth in
the Pricing Agreement. In the event that such prices have not been agreed upon
and the Pricing Agreement has not been executed and delivered by all parties
thereto by the close of business on the fourth business day following the date
of this Agreement, this Agreement shall terminate forthwith, without liability
of any party to any other party hereunder other than pursuant to Section 6
hereof, unless otherwise agreed to by the Company and the Representative.
2(b) In addition, on the basis of the representations and warranties herein
contained and subject to the terms and conditions herein set forth, the Company
hereby grants an option to the Underwriters to purchase up to an additional
300,000 shares of Common Stock, as Option Shares, at the price per share set
forth in the Pricing Agreement. The option hereby granted will expire 30 days
after the date hereof (or, if the Company has elected to rely upon Rule 430A
under the 1933 Act Regulations, 30 days after the Representation Date) and may
be exercised in whole or in part from time to time only for the purpose of
covering over-allotments which may be made in connection with the offering and
distribution of the Firm Shares upon notice by the Representatives to the
Company setting forth the number of Option Shares as to which the Underwriters
are then exercising the option and the time, date and place of payment and
delivery for such Option Shares. Any such time and date of delivery (an "Option
Closing Date") shall be
-13-
determined by the Representatives but shall not be later than seven full
business days after the exercise of said option, nor in any event prior to the
Closing Time (as hereinafter defined) unless otherwise agreed upon by the
Representatives and the Company. If the option is exercised as to all or any
portion of the Option Shares, the Option Shares shall be purchased by the
Underwriters, severally and not jointly, in proportion to their respective Firm
Share underwriting obligations as set forth in Schedule A hereto (except as may
be otherwise provided in the Pricing Agreement).
2(c) Payment of the purchase price for and delivery of certificates for the
Firm Shares (the "Closing") shall be made at the offices of Friedman, Billings,
Xxxxxx & Co., Inc., 0000 Xxxxxxxxxx Xxxxxx Xxxxx, Xxxxxxxxx, Xxxxxxxx, or at
such other place as shall be agreed upon by the Representatives and the Company,
at 10:00 a.m., Washington, D.C. time, on the third business day following the
date the Registration Statement becomes effective if the sale of the Shares is
priced before 4:30 p.m. Eastern time or on the fourth business day following the
date the Registration Statement becomes effective if the sale of the Shares is
priced after 4:30 p.m. Eastern time (or, if the Company has elected to rely upon
Rule 430A, the third business day after the Representation Date (or the fourth
business day after the Representation Date if the sale of the Shares is priced
after 4:30 p.m. Eastern time)), or such other time not later than 10 business
days after such date as shall be agreed upon by the Representatives and the
Company (such time and date of payment and delivery being herein called "Closing
Time"). In addition, in the event that any or all of the Option Shares are
purchased by the Underwriters, payment of the purchase price for and the
delivery of such Option Shares shall be made at the above-mentioned offices of
Friedman, Billings, Xxxxxx & Co., Inc., or at such other place as shall be
mutually agreed upon by the Representatives and the Company, on each Option
Closing Date as specified in the notice from the Representatives to the Company.
Payment shall be made to the Company by certified or official bank check or
checks in New York Clearing House or similar next day funds payable to the order
of the Company or, at the election of the Company made at the time of execution
of this Agreement, in same day funds, provided that the Company reimburses the
Underwriters for the additional cost of same day funds, in each case against
delivery to the Representatives for the respective accounts of the Underwriters
of certificates for the Shares to be purchased by the Underwriters. The
certificates for the Firm Shares and the Option Shares shall be in such
authorized denominations and registered in such names as the Representatives may
request in writing at least two business days before Closing Time or each Option
Closing Date, as the case may be. It is understood that each Underwriter has
authorized the Representatives, for its account, to accept delivery of, receipt
for, and make payment of the purchase price for, the Shares which it has agreed
to purchase. Friedman, Billings, Xxxxxx & Co., Inc., individually and not as a
Representative of the Underwriters, may (but shall not be obligated to) make
payment of the purchase price for the Shares to be purchased by any Underwriter
whose check has not been received by Closing Time, but such payment shall not
relieve such Underwriter from its obligations hereunder. The certificates for
the Firm Shares and the Option Shares will be made available for examination and
packaging by the Underwriters not later than 10:00 a.m., Washington,
-14-
D.C. time, on the last business day prior to Closing Time or each Option Closing
Date, as the case may be.
Section 3. Covenants of the Company. The Company covenants with each
Underwriter as follows:
(i) The Company will (i) prepare the Prospectus in a form approved by the
Representatives and file such Prospectus pursuant to Rule 424(b) of the 1933 Act
Regulations not later than the Commission's close of business on the second
business day following the execution and delivery of this Agreement, or, if
applicable, such earlier time as may be required by Rule 430A(a)(3) of the 1933
Act Regulations; (ii) advise the Representatives, promptly after it receives
notice thereof, of the time when the Registration Statement, or any amendment
thereto, has been filed or becomes effective or any supplement to the Prospectus
or any amended Prospectus has been filed; (iii) advise the Representatives,
promptly after it receives notice thereof, of (A) the receipt of any comments
from the Commission, (B) the issuance by the Commission of any stop order or of
any order preventing or suspending the use of any preliminary prospectus or the
Prospectus, (C) the suspension of the qualification of the Shares for offering
or sale in any jurisdiction, (D) the initiation or threatening of any proceeding
for any such purpose, or (E) any request by the Commission for the amending or
supplementing of the Registration Statement or Prospectus or for additional
information; (iv) advise the Representatives promptly of the occurrence of any
event, during such period as a prospectus is required by law to be delivered in
connection with sales by an Underwriter or a dealer, which makes any statement
of a material fact made in the Registration Statement or the Prospectus untrue
or which requires the making of any additions to or changes in the Registration
Statement or the Prospectus in order to make any statement of a material fact
therein not misleading; and, (v) in the event of the issuance of any stop order
or any order preventing or suspending the use of any preliminary prospectus or
the Prospectus or suspending any such qualification, use promptly its best
efforts to obtain its withdrawal.
(ii) The Company will (i) give the Representatives notice of its
intention to prepare or file any amendment to the Registration Statement
(including any post-effective amendment) or any amendment or supplement to the
Prospectus (including any revised prospectus that the Company proposes for use
by the Underwriters in connection with the offering of the Shares that differs
from the prospectus on file at the Commission at the time the Registration
Statement becomes effective, whether or not such revised prospectus is required
to be filed pursuant to Rule 424(b) of the 1933 Act Regulations), (ii) furnish
the Underwriters with copies of any such amendments or supplements a reasonable
time prior to the proposed filing or use thereof, and (iii) not file any such
amendment or any supplement or use any such prospectus to which the
Representatives shall reasonably object promptly after reasonable notice
thereof.
-15-
(iii) Promptly from time to time, the Company will take such action as
the Representatives may reasonably request to qualify the Shares for offering
and sale under the securities laws of such jurisdictions as the Representatives
may request and to comply with such laws so as to permit the continuance of
sales and dealings therein in such jurisdictions for as long as may be necessary
to complete the distribution of the Shares, provided that in connection
therewith the Company shall not be required to qualify as a foreign corporation
or to file a general consent to service of process in any jurisdiction.
(iv) The Company will furnish each Underwriter with copies of the
Prospectus in such quantities as such Underwriter may from time to time
reasonably request. If the delivery of a prospectus is required at any time
prior to the expiration of nine months after the time of issue of the Prospectus
in connection with the offering or sale of the Shares, and if at such time any
event shall have occurred as a result of which the Prospectus as then amended or
supplemented would include an untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made when such Prospectus
is delivered, not misleading, or, if for any other reason it shall be necessary
during such period to amend or supplement the Prospectus in order to comply with
the 1933 Act and the 1933 Act Regulations, the Company will notify the
Representatives and upon the Representatives' request will prepare and furnish
without charge to the Underwriters and to any dealer in securities as many
copies as the Underwriters may from time to time reasonably request of an
amended Prospectus or a supplement to the Prospectus which will correct such
statement or omission or effect such compliance. In case that the Underwriters
are required to deliver a prospectus in connection with sales of any of the
Shares at any time nine months or more after the time of issue of the
Prospectus, upon the Underwriters' request but at the Underwriters' expense, the
Company will prepare and deliver to the Underwriters as many copies as the
Underwriters may request of an amended or supplemented Prospectus complying with
Section 10(a)(3) of the 1933 Act.
(v) The Company will make generally available to its securityholders as
soon as practicable, but in any event not later than eighteen months after the
"effective date of the Registration Statement" (as defined in Rule 158(c) of the
1933 Act Regulations), an earnings statement of the Company and its subsidiaries
(which need not be audited) complying with Section 11(a) of the 1933 Act and the
1933 Act Regulations (including, at the option of the Company, Rule 158).
(vi) The Company will furnish to its stockholders, as soon as practicable
after the end of each fiscal year, an annual report (including a balance sheet
and statements of income, stockholders' equity and cash flow of the Company and
its consolidated subsidiaries certified by independent public accountants) and,
as soon as practicable after the end of each of the first three quarters of each
fiscal year,
-16-
consolidated summary financial information of the Company and its subsidiaries
for such quarter in reasonable detail.
(vii) During a period of five years from the effective date of the
Registration Statement, the Company will furnish to the Representatives copies
of all reports or other communications (financial or other) furnished to its
stockholders, and deliver to the Representatives, as soon as they are available,
copies of any reports and financial statements furnished to or filed with the
Commission or any national securities exchange or quotation system on which any
class of securities of the Company is listed.
(viii) The Company will not invest, reinvest or otherwise use the
proceeds received by the Company from the sale of the Firm Shares or Option
Shares in such a manner, or take any action or omit to take any action, that
would cause the Company to become an "investment company" as that term is
defined in the Investment Company Act.
(ix) The Company will use the net proceeds of the sale of the Firm Shares
and Option Shares for the purposes described in the Prospectus under "Use of
Proceeds."
(x) The Company will take all action to ensure that the Common Stock
continues to be listed on the Nasdaq National Market or any national securities
exchange.
(xi) Except for the authorization of actions permitted to be taken by the
Underwriters as contemplated herein or in the Prospectus, the Company will not
(A) take, directly or indirectly, any action designed to cause or to result in,
or that might reasonably be expected to constitute, the stabilization or
manipulation of the price of any security of the Company to facilitate the sale
or resale of the Shares, or (B) for a period of 90 days following the
Representation Date: (i) sell, bid for or purchase the Shares or pay any person
any compensation for soliciting purchases of the Shares, or (ii) pay or agree to
pay to any person any compensation for soliciting another to purchase any other
securities of the Company.
(xii) During the period from the date of the Pricing Agreement until
ninety (90) days after the Closing Time, the Company will not, without the prior
written consent of Friedman, Billings, Xxxxxx & Co., directly or indirectly,
sell, offer to sell, grant any option for the sale of, or otherwise dispose of,
any Common Stock or shares of Common Stock or any other security convertible
into or exchangeable into or exercisable for Common Stock, other than (i) in
accordance with this Agreement, (ii) in connection with the Company's stock
option plan described in the Prospectus, or (iii) as otherwise contemplated in
the Prospectus.
(xiii) The Company shall use its best efforts to do and perform all
things required or necessary to be done and performed under this Agreement by
the Company
-17-
prior to the Closing Time and to satisfy all conditions precedent on the
Company's part to the delivery of the Shares.
Section 4. Payments of Fees and Expenses. The Company covenants and
agrees with the Underwriters that (a) the Company will pay or cause to be paid
the following: (i) expenses incurred in connection with the printing and filing
of the Registration Statement as originally filed and of each amendment thereto,
(ii) expenses incurred in connection with the preparation, issuance and delivery
of the certificates for the Shares to the Underwriters, (iii) the fees and other
charges of the Company's counsel and accountants, (iv) expenses incurred in
connection with the qualification of the Shares under securities laws, including
filing fees and the reasonable fees and other charges of counsel for the
Underwriters in connection therewith and in connection with the preparation of
the Blue Sky Memorandum, (v) expenses incurred in connection with the printing
and delivery to the Underwriters of copies of the Registration Statement as
originally filed and of each amendment thereto, of the preliminary prospectuses,
and of the Prospectus and any amendments or supplements thereto, (vi) expenses
incurred in connection with the printing and delivery to the Underwriters of
copies of the Blue Sky Memorandum; (vii) the fee of the NASD, including the
reasonable fees and other charges of counsel for the Underwriters in connection
with the NASD's review of the terms of the proposed public offering of the
Shares and (viii) the fees and expenses incurred in connection with the listing
of the Common Stock on the Nasdaq National Market, including filing and listing
fees
Section 5. Conditions of Underwriters' Obligations. The obligations of
the Underwriters hereunder, as to the Shares to be delivered at the Closing Time
and each Option Closing Date, shall be subject to the condition that all
representations and warranties and other statements of the Company herein are,
at and as of the Closing Time and such Option Closing Date, true and correct in
all material respects, the condition that the Company shall have performed all
of its obligations hereunder theretofore to be performed, and the following
additional conditions:
5(a) The Registration Statement shall have become effective not later than
5:30 p.m. Eastern time on the first business day following the date hereof, no
stop order suspending the effectiveness of the Registration Statement or any
part thereof shall have been issued and no proceeding for that purpose shall
have been initiated or threatened by the Commission; and all requests for
additional information on the part of the Commission shall have been complied
with to the Representatives' reasonable satisfaction. If the Company has
elected to rely upon Rule 430A of the 1933 Act Regulations, the price of the
Shares and any price-related information previously omitted from the effective
Registration Statement pursuant to such Rule 430A shall have been transmitted to
the Commission for filing pursuant to Rule 424(b) of the 1933 Act Regulations
within the applicable time period prescribed for such filing by the 1933 Act
Regulations and in accordance with Section 3(a) hereof, or a post-effective
amendment providing such information shall have been promptly filed and declared
effective in accordance with the requirements of Rule 430A of the 1933 Act
Regulations.
-18-
5(b) Winston & Xxxxxx, counsel for the Company, shall have furnished to the
Representatives their written opinion, dated the Closing Time and such Option
Closing Date, in form and substance satisfactory to the Representatives, to the
effect that (except that the opinion set forth in paragraph 5(b)(xi), with
respect to the tax-exempt bonds relating to the Hawthorn Lakes facility, may be
given by Ballard, Spahr, Xxxxxxx & Ingersoll, special bond counsel for the
Company):
(i) The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Delaware and has the
corporate power and authority to own its properties and conduct its business as
described in the Prospectus.
(ii) Each of the Corporate Subsidiaries has been duly incorporated and is
validly existing as a corporation in good standing under the laws of its
jurisdiction of incorporation and has the corporate power and authority to own
its properties and conduct its business as described in the Prospectus.
(iii) Each Limited Partnership Subsidiary has been formed and is
validly existing under the laws of its jurisdiction of formation and has the
limited partnership power and authority to own its properties and conduct its
business as described in the Prospectus.
(iv) The authorized capital stock of the Company conforms as to legal
matters to the description thereof contained in the Prospectus; all of the
issued shares of capital stock of the Company as described in the Prospectus
have been duly and validly authorized and issued and are fully paid and
nonassessable; and the terms of such shares of capital stock conform in all
material respects to all statements and descriptions related thereto contained
in the Prospectus and comply with all applicable legal requirements.
(v) The Company and each of the Subsidiaries has been duly qualified as a
foreign corporation, limited partnership, or otherwise, as appropriate, for the
transaction of business and is in good standing (to the extent applicable) under
the laws of each other jurisdiction specified in such opinion (which shall
include each jurisdiction in which the Company or any Subsidiary owns, leases,
or manages properties, or conducts any other business, so as to require such
qualification, or is subject to no material liability or disability by reason of
failure to be so qualified in any such jurisdiction (such counsel being entitled
to rely in respect of the opinion in this clause in respect of matters of fact
upon certificates of officers of the Company and governmental authorities).
(vi) All of the outstanding shares of capital stock of each Corporate
Subsidiary have been duly and validly authorized and issued and are fully paid
and nonassessable, and are directly or indirectly owned by the Company, free and
clear of
-19-
any security interest, claim, lien, encumbrance or adverse interest of any
nature known to such counsel.
(vii) To such counsel's knowledge and other than as set forth in the
Prospectus, there are no legal or governmental proceedings, domestic or foreign,
pending to which the Company, any Subsidiary or any officer or director of the
Company or any subsidiary is a party or of which any property of the Company or
any Subsidiary is the subject which are required to be disclosed in the
Prospectus; and, to the best of such counsel's knowledge, no such proceedings
are threatened or contemplated by governmental authorities or threatened by
others.
(viii) This Agreement has been duly authorized, executed and
delivered by the Company. The Pricing Agreement has been duly authorized,
executed and delivered by the Company.
(ix) The issuance and sale of the Shares being delivered at the Closing
Time and such Option Closing Date by the Company, the performance by the Company
of its obligations under this Agreement and the Pricing Agreement, and the
consummation by the Company and the Subsidiaries, as applicable, of the
transactions herein and therein contemplated, including the application of the
net proceeds from the sale of the Shares as described in the Prospectus will not
(A) conflict with or result in a breach or violation of any of the terms or
provisions of, constitute a default under, or result in the acceleration of the
maturity of any indebtedness under, any material indenture, mortgage, deed of
trust or loan agreement known to such counsel or other material agreement or
instrument known to such counsel to which the Company or any Subsidiary is a
party or by which the Company or any Subsidiary is bound or to which any of the
property or assets of the Company or any Subsidiary is subject or (B) result in
any violation of the provisions of the certificate of incorporation or by-laws,
certificate of limited partnership, partnership agreement or other
organizational documents, as the case may be, of the Company or any Subsidiary,
or any statute or any order, rule or regulation known to such counsel of any
court or governmental agency or body having jurisdiction over the Company or any
Subsidiary or any of their respective properties.
(x) The Shares to be issued and sold by the Company to the Underwriters
hereunder have been duly and validly authorized for issuance and sale to the
Underwriters, and, when issued and delivered by the Company pursuant to this
Agreement against payment of the consideration set forth in the Pricing
Agreement, will be duly and validly issued and fully paid and non-assessable.
The issuance of the Shares is not subject to any preemptive or similar rights.
The terms of the Shares conform in all material respects to all statements and
descriptions related thereto contained in the Prospectus and comply with all
applicable legal requirements. The Shares conform to the provisions of the
Company's charter. The form of share certificate to be used to evidence the
Shares is in due and proper form and complies with all applicable legal
requirements.
-20-
(xi) The issuance and sale of the Shares being delivered at such Closing
Time or Option Closing Date by the Company, the performance by the Company of
its obligations under this Agreement and the Pricing Agreement, and the
consummation by the Company and the Subsidiaries, as applicable, of the
transactions herein and therein contemplated, including the application of the
proceeds from the sale of the Shares as described in the Prospectus will not
adversely affect the exclusion from gross income for federal tax purposes of the
interest on the bonds designated "tax-exempt bonds" in the Prospectus.
(xii) No consent, approval, authorization, order, registration or
qualification of or with any court or governmental agency or body or other
person is required for the issuance and sale of the Shares by the Company or the
performance by the Company of its obligations under this Agreement and the
Pricing Agreement, and the consummation by the Company and the Subsidiaries, as
applicable, of the transactions herein and therein contemplated, except the
registration under the 1933 Act of the Shares and such consents, approvals,
authorizations, registrations or qualifications as have been obtained prior to
the Closing Time or may be required under state securities or Blue Sky laws in
connection with the purchase and distribution of the Shares by the Underwriters.
(xiii) The statements made under the captions "Risk Factors,"
"Management's Discussion and Analysis of Financial Condition and Results of
Operation - Overview," "Business - Facilities," "Business - Hospital and Health
Care Network Affiliations," "Business - Acquisitions, Leases and Development,"
"Business -Government Regulation," "Management - Compensation of Directors;
Indemnification Agreements," "Management--Stock Incentive Plan," "Management-
Employment Agreements", "Certain Transactions," "Description of Capital Stock,"
and "Shares Eligible for Future Sale," in the Prospectus and Items 14 and 15 of
Part II of the Registration Statement, to the extent such statements constitute
a summary of the legal matters or documents referred to therein, are accurate in
all material respects and fairly present the information required to be shown
(it being understood that such counsel need express no opinion as to the
financial statements and related notes thereto and the other financial,
statistical and accounting data included in the Registration Statement or
Prospectus).
(xiv) The Company is not, and (assuming the application by the
Company of the net proceeds of the issue and sale of the Shares in the manner
described in the Prospectus under the caption "Use of Proceeds") after giving
effect to the issuance and sale of the Shares by the Company will not be, an
"investment company" or a company "controlled" by an "investment company" within
the meaning of the Investment Company Act.
(xv) The Registration Statement, as of the Effective Date, and the
Prospectus, as of its date, appeared on their face to be appropriately
responsive in all material respects to the requirements of the 1933 Act and the
1933 Act Regulations,
-21-
except that (a) such counsel need express no opinion as to the financial
statements and related notes thereto and the other financial, statistical, and
accounting data included in the Registration Statement or the Prospectus, and
(b) such counsel need express no opinion or assurance as to the accuracy,
completeness or fairness of the statements contained in the Registration
Statement, except to the extent set forth in paragraph 5(b)(xiii) and the
paragraph immediately following paragraph 5(b)(xix).
(xvi) The Company and each of the Subsidiaries has such permits,
licenses, franchises and authorizations of governmental or regulatory
authorities ("permits"), including, without limitation, under any applicable
environmental laws, as are necessary to own, lease and operate its respective
properties and to conduct its business in the manner described in the Prospectus
except where the failure to obtain any required permit would not have a material
adverse effect on the condition (financial or otherwise), business, prospects,
properties, net worth or results of operations of the Company and the
Subsidiaries, considered as a single enterprise; to such counsel's knowledge
after due inquiry, the Company and each of the Subsidiaries has fulfilled and
performed all of its material obligations with respect to such permits and no
event has occurred which allows, or after notice or lapse of time would allow,
revocation or termination thereof or results in any other material impairment of
the rights of the holder of any such permit, subject in each case to such
qualification as may be set forth in the Prospectus; and, except as described in
the Prospectus, such permits contain no restrictions that are materially
burdensome to the Company or any of the Subsidiaries. Without limiting the
foregoing, each of the Company's facilities currently holds (or has pending a
renewal application for) the appropriate permit authorizing such facility to
furnish services as described under the heading "Business - Services" on page 27
of the Prospectus.
(xvii) To the knowledge of such counsel, there are no contracts or
documents of a character that are required to be described in the Prospectus or
filed as exhibits to or incorporated by reference into the Registration
Statement by the 1933 Act or the 1933 Act Regulations that have not been so
described or filed.
(xviii) The Formation (as such term is defined in the Company's
prospectus dated May 1, 1997) and the Acquisitions and each of the documents and
agreements executed and delivered by the Company, the Subsidiaries and Prime in
connection with the Formation and the Acquisitions have been duly authorized,
executed and delivered by the parties thereto, are the valid and binding
agreements of the parties thereto enforceable by the Company in accordance with
their terms (except as enforcement thereof may be limited by bankruptcy,
reorganization, insolvency, fraudulent conveyance or transfer, moratorium or
similar laws of general applicability relating to or affecting creditors' rights
and to general principles of equity).
In giving its opinion required by this Section 5(b), such counsel shall
additionally state that, although it has not independently verified and is not
passing upon and assumes
-22-
no responsibility for the accuracy, completeness or fairness of the statements
contained in the Registration Statement or Prospectus (except to the extent set
forth in paragraph (xiii) above), no facts have come to the attention of such
counsel that cause such counsel to believe that (A) the Registration Statement
or any further amendment thereto at the time it became effective under the 1933
Act (but after giving effect to any modifications incorporated therein pursuant
to Rule 430A under the 1933 Act), contained an untrue statement of a material
fact or omitted to state a material fact required to be stated therein or
necessary to make the statements therein not misleading (it being understood
that such counsel need express no opinion as to the financial statements and
related notes thereto and the other financial, statistical, and accounting data
included in the Registration Statement or the Prospectus) or that (B) the
Prospectus or any further amendment or supplement thereto on the date it was
filed pursuant to the 1933 Act Regulations and as of the Closing Time or the
Option Closing Date, as the case may be, contained an untrue statement of a
material fact or omitted to state a material fact necessary to make the
statements therein, in light of the circumstances in which they were made, not
misleading (it being understood that such counsel need express no opinion as to
the financial statements and related notes thereto and the other financial,
statistical, and accounting data included in the Registration Statement or the
Prospectus).
In rendering such opinion, such counsel may state that they express no opinion
as to the laws of any jurisdiction other than the laws of the United States, the
general corporate law of Illinois and the general corporate law of Delaware.
5(c) Xxxxxx & Bird LLP, counsel for the Underwriters, shall have furnished to
the Representatives such opinion or opinions, dated the Closing Time and the
Option Closing Date, as the case may be, with respect to the incorporation of
the Company, this Agreement, the Pricing Agreement, the validity of the Shares
being delivered at the Closing Time and such Option Closing Date, as the case
may be, the Registration Statement, the Prospectus, and other related matters as
the Representatives may reasonably request, and such counsel shall have received
such papers and information as they may reasonably request to enable them to
pass upon such matters.
5(d) At the time of the execution of this Agreement and on the effective date
of any post-effective amendment to the Registration Statement and also at the
Closing Time and each Option Closing Date, Ernst & Young LLP shall have
furnished to the Representatives a letter or letters, dated the respective date
of delivery thereof, in form and substance satisfactory to the Representatives,
to the effect set forth in Annex I hereto and, if the Company has elected to
rely upon Rule 430A of the 1933 Act Regulations, to the further effect that they
have carried out procedures specified in paragraph (v) of Annex I with respect
to certain amounts, percentages, and financial information specified by the
Representatives and deemed to be part of the Registration Statement pursuant to
Rule 430A(b) and have found such amounts, percentages and financial information
to be in agreement with the records specified in such paragraph (v).
-23-
5(e) The Registration Statement and the Prospectus shall contain all
statements that are required to be stated therein in accordance with the 1933
Act and the 1933 Act Regulations and shall conform in all material respects to
the requirements of the 1933 Act and the 1933 Act Regulations. Neither the
Registration Statement nor the Prospectus shall contain any untrue statement of
a material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein not misleading.
5(f) No action, suit, or proceeding at law or in equity shall be pending or,
to the knowledge of the Company, be threatened against the Company or any
Subsidiary, that would be required to be described in the Prospectus other than
as described therein.
5(g) (A) Neither the Company nor any of its Subsidiaries shall have sustained
since the date of the latest audited financial statements included in the
Prospectus (i) any material adverse change, or any development involving a
prospective material adverse change, in the condition (financial or otherwise),
business, prospects, properties, net worth or results of operations, whether or
not arising in the ordinary course of business or (ii) any loss or interference
with its business from fire, explosion, flood or other calamity, whether or not
covered by insurance, or from any labor dispute or court or governmental action,
order or decree, otherwise than as set forth or contemplated in the Prospectus,
and (B) since the respective dates as of which information is given in the
Prospectus, there shall not have been any change in the capital stock or long-
term debt of the Company or any Subsidiary or any change, or any development
involving a prospective change, in or affecting the general affairs, management,
financial position, stockholders' equity or results of operations of the Company
and the Subsidiaries, otherwise than as set forth or contemplated in the
Prospectus, the effect of which, in any such case described in clause (A) or
(B), is in the Representatives' judgment so material and adverse as to make it
impracticable or inadvisable to proceed with the public offering or the delivery
of the Shares being delivered at the Closing Time or such Option Closing Date on
the terms and in the manner contemplated in the Prospectus.
5(h) On or after the date hereof there shall not have occurred any of the
following: (i) a suspension or material limitation of trading in securities
generally on either the Nasdaq National Market or any national stock exchange;
(ii) a general moratorium on commercial banking activities declared by either
Federal or District of Columbia authorities; or (iii) the outbreak or material
escalation of major hostilities involving the United States or the declaration
by the United States of a national emergency or war or any other calamity or
crisis or material adverse change in general economic, political or financial
conditions having an effect on the U.S. financial markets, if the effect of any
such event specified in this clause (iii), in the Representatives' judgment,
makes it impracticable or inadvisable to proceed with the public offering or the
delivery of the Shares being delivered at the Closing Time or such Option
Closing Date on the terms and in the manner contemplated by the Prospectus.
-24-
5(i) The Shares to be sold by the Company at the Closing Time and such
Option Closing Date shall have been duly authorized for inclusion on the Nasdaq
National Market.
5(j) The Company shall have furnished or caused to be furnished to the
Representatives at the Closing Time and such Option Closing Date certificates of
officers of the Company satisfactory to the Underwriters as to the accuracy of
the representations and warranties of the Company herein at and as of such
Closing Time and Option Closing Date, as to the performance by the Company of
all of its obligations hereunder to be performed at or prior to such Closing
Time and Option Closing Date, as to the matters set forth in subsections (a) and
(e) through (g) of this Section and as to such other matters as the
Representatives may reasonably request.
If any condition specified in this Section 5 shall not have been fulfilled
when and as required to be fulfilled, this Agreement may be terminated by the
Underwriters by notice to the Company at any time at or prior to the Closing
Time, and such termination shall be without liability of any party to any other
party except as provided in Section 8 hereof.
Section 6. Indemnification.
6(a) The Company will indemnify and hold harmless each Underwriter and each
person, if any, who controls any Underwriter within the meaning of Section 15 of
the 1933 Act, against any losses, claims, damages, or liabilities to which any
Underwriter or such controlling person may become subject, under the 1933 Act or
otherwise, insofar as such losses, claims, damages, or liabilities (or actions
in respect thereof) arise out of or are based upon an untrue statement or
alleged untrue statement of a material fact contained in any preliminary
prospectus, the Registration Statement, or the Prospectus, or any amendment or
supplement thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, and will reimburse the
Underwriters and such controlling persons for any legal or other expenses
reasonably incurred by the Underwriters or such controlling persons in
connection with investigating or defending any such action or claim as such
expenses are incurred; provided, however, that (i) the Company shall not be
liable in any such case to the extent that any such loss, claim, damage, or
liability arises out of or is based upon an untrue statement or alleged untrue
statement or omission or alleged omission made in the first, second or fourth
paragraph under the caption "Underwriting" in the Prospectus and (ii) such
indemnity with respect to any preliminary prospectus shall not inure to the
benefit of the Underwriters (or any person controlling the Underwriters) if the
person asserting any such loss, claim, damage or liability did not receive a
copy of the Prospectus (or the Prospectus as supplemented) at or prior to the
confirmation of the sale of Shares to such person in any case where such
delivery is required by the 1933 Act and the untrue statement or omission of a
material
-25-
fact contained in such preliminary prospectus was corrected in the Prospectus
(or the Prospectus as supplemented).
6(b) Each Underwriter severally agrees to indemnify and hold harmless the
Company and each of the Company's directors, each officer of the Company who
signed the Registration Statement and each other person who controls the Company
within the meaning of the 1933 Act, against any losses, claims, damages, or
liabilities to which the Company or each such other person may become subject,
under the 1933 Act or otherwise, insofar as such losses, claims, damages, or
liabilities (or actions in respect thereof) arise out of or are based upon an
untrue statement or alleged untrue statement of a material fact contained in any
preliminary prospectus, the Registration Statement, or the Prospectus, or any
amendment or supplement thereto, or arise out of or are based upon the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, in each case
to the extent, but only to the extent, that such untrue statement or alleged
untrue statement or omission or alleged omission was made in the first, second
or fourth paragraph under the caption "Underwriting" in the Prospectus, and will
reimburse the Company or each such other person for any legal or other expenses
reasonably incurred by the Company or such other person in connection with
investigating or defending any such action or claim as such expenses are
incurred.
6(c) Promptly after receipt by an indemnified party under subsection 6(a) or
(b) above of notice of the commencement of any action, such indemnified party
shall, if a claim in respect thereof is to be made against the indemnifying
party under such subsection, notify the indemnifying party in writing of the
commencement thereof; but the omission so to notify the indemnifying party shall
not relieve it from any liability which it may have to any indemnified party
otherwise than under such subsection. In case any such action shall be brought
against any indemnified party and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to participate
therein and, to the extent that it shall wish, jointly with any other
indemnifying party similarly notified, to assume the defense thereof, with
counsel reasonably satisfactory to such indemnified party (who shall not, except
with the consent of the indemnified party, be counsel to the indemnifying
party), and, after notice from the indemnifying party to such indemnified party
of its election so to assume the defense thereof, the indemnifying party shall
not be liable to such indemnified party under such subsection for any legal
expenses of other counsel or any other expenses, in each case subsequently
incurred by such indemnified party, in connection with the defense thereof other
than reasonable costs of investigation, unless such indemnified party reasonably
objects to such assumption on the ground that the named parties to any such
action (including any impleaded parties) include both such indemnified party and
an indemnifying party and such indemnified party reasonably believes that there
may be legal defenses available to it that are different from or in addition to
those available to such indemnifying party. In no event shall the indemnifying
parties be liable for fees and expenses of more than one counsel (in addition to
local counsel) separate from their own
-26-
counsel for all indemnified parties in connection with any one action or
separate but similar related actions in the same jurisdiction arising out of the
same general allegations or circumstances.
6(d) If the indemnification provided for in this Section 6 is unavailable to,
or insufficient to hold harmless, an indemnified party under subsection 6(a) or
(b) above in respect of any losses, claims, damages or liabilities (or actions
in respect thereof) referred to therein, then each indemnifying party shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages or liabilities (or actions in respect thereof)
in such proportion as is appropriate to reflect the relative benefits received
by the Company on the one hand and the Underwriters on the other from the
offering of the Shares. If, however, the allocation provided by the immediately
preceding sentence is not permitted by applicable law or if the indemnified
party failed to give the notice required under subsection 6(c) above, then each
indemnifying party shall contribute to such amount paid or payable by such
indemnified party in such proportion as is appropriate to reflect not only such
relative benefits but also the relative fault of the Company on the one hand and
the Underwriters on the other in connection with the statements or omissions
which resulted in such losses, claims, damages or liabilities (or actions in
respect thereof), as well as any other relevant equitable considerations. The
relative benefits received by the Company on the one hand and the Underwriters
on the other shall be deemed to be in the same proportion as the total net
proceeds from the offering of the Shares purchased under this Agreement (before
deducting expenses) received by the Company bear to the total underwriting
discounts and commissions received by the Underwriters with respect to the
Shares purchased under this Agreement, in each case as set forth in the table on
the cover page of the Prospectus. The relative fault shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company on the one hand or the
Underwriters on the other and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Company and the Underwriters agree that it would not be just and equitable
if contributions pursuant to this subsection 6(d) were determined by pro rata
allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to above in this subsection 6(d). The amount
paid or payable by an indemnified party as a result of the losses, claims,
damages or liabilities (or actions in respect thereof) referred to above in this
subsection 6(d) shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any such action or claim. Notwithstanding the provisions of this
subsection 6(d), no Underwriter shall be required to contribute any amount in
excess of the amount by which the total price at which the Shares underwritten
by it and distributed to the public were offered to the public exceeds the
amount of any damages which such Underwriter has otherwise been required to pay
by reason of such untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent
-27-
misrepresentation (within the meaning of Section 11(f) of the 0000 Xxx) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations to contribute pursuant to this
Section 6(d) are several in proportion to the respective number of shares
purchased by each of the Underwriters hereunder and not joint.
6(e) The obligations of the Company under this Section 6 shall be in addition
to any liability which the Company may otherwise have and shall extend, upon the
same terms and conditions, to each person, if any, who controls the Underwriters
within the meaning of the 1933 Act; and the obligations of the Underwriters
under this Section 6 shall be in addition to any liability which the
Underwriters may otherwise have and shall extend, upon the same terms and
conditions, to each officer and director of the Company (including any person
who, with his or her consent, is named in the Registration Statement as about to
become a director of the Company) and to each person, if any, who controls the
Company within the meaning of the 0000 Xxx.
6(f) The provisions of this Section 6 shall supersede the indemnification
provisions included in the letter agreement dated [November 26, 1997] between
Friedman, Billings, Xxxxxx & Co., Inc., on the one hand, and the Company, on the
other hand (the "Engagement Letter"), insofar, but only insofar, as such
indemnification provisions relate to any such loss, claim, damage or liability
that arises out of or is based upon an untrue statement or alleged untrue
statement or omission or alleged omission made in any preliminary prospectus,
the Registration Statement or the Prospectus or any amendment or supplement
thereto. In all other respects, the provisions of the Engagement Letter shall
remain in full force and effect.
Section 7. Representations, Warranties and Agreements to Survive
Delivery. The respective indemnities, agreements, representations, warranties
and other statements of the Company and the Underwriters, as set forth in this
Agreement and the Pricing Agreement or made by or on behalf of them,
respectively, pursuant to this Agreement, shall remain in full force and effect,
regardless of any investigation (or any statement as to the results thereof)
made by or on behalf of the Underwriters or any controlling person of the
Underwriters, or the Company, or any officer or director or controlling person
of the Company, and shall survive delivery of and payment for the Shares.
Section 8. Termination of Agreement. The Underwriters may terminate this
Agreement, by notice to the Company, at any time at or prior to the Closing
Time, pursuant to Section 5.
Section 9. Default by One or More of the Underwriters. If one or more
of the Underwriters shall fail at Closing Time to purchase the Shares which it
or they are obligated to purchase under this Agreement and the Pricing Agreement
(the "Defaulted Shares"), the Representatives shall have the right, within 24
hours thereafter, to make
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arrangements for one or more of the non-defaulting Underwriters, or any other
underwriters, to purchase all, but not less than all, of the Defaulted Shares in
such amounts as may be agreed upon and upon the terms herein set forth; if,
however, the Representatives shall not have completed such arrangements within
such 24-hour period, then:
(a) if the number of Defaulted Shares does not exceed ten percent (10%) of the
Shares, the non-defaulting Underwriters shall be obligated to purchase the full
amount thereof in the proportions that their respective underwriting obligations
hereunder bear to the underwriting obligations of all non-defaulting
Underwriters; or
(b) if the number of Defaulted Shares exceeds ten percent (10%) of the Shares,
this Agreement shall terminate without liability on the part of any non-
defaulting Underwriter.
No action taken pursuant to this Section 9 shall relieve any defaulting
Underwriter from liability in respect of its default.
In the event of any such default which does not result in a termination of
this Agreement, the Representatives and the Company each shall have the right to
postpone the Closing Time for a period not exceeding seven days in order to
effect any required changes in the Registration Statement or Prospectus or in
any other documents or arrangements.
Section 10. Notices. All statements, requests, notices and agreements
hereunder shall be in writing, and, if to the Underwriters, shall be delivered
or sent by mail or facsimile transmission to Friedman, Billings, Xxxxxx & Co.,
Inc., 0000 Xxxxxxxxxx Xxxxxx Xxxxx, Xxxxxxxxx, Xxxxxxxx 00000, Attention: Xxxx
Xxxxxxxx (fax no. 000-000-0000); if to the Company, shall be delivered or sent
by mail or facsimile transmission to the address of the Company set forth in the
Registration Statement, Attention: Xxxx X. Xxxxxxx (fax no. 000-000-0000), with
a copy to Xxxxxx X. Xxxxxx, Esq. (fax no. 000-000-0000). Any such statements,
requests, notices or agreements shall take effect at the time of receipt
thereof.
Section 11. Parties. This Agreement and the Pricing Agreement shall be
binding upon, and inure solely to the benefit of, (i) the Underwriters and the
Company and (ii) to the extent provided in Sections 6 and 7 hereof, the officers
and directors of the Company and the Underwriters and each person who controls
the Company or the Underwriters, and their respective heirs, executors,
administrators, successors and assigns, and no other person shall acquire or
have any right under or by virtue of this Agreement or the Pricing Agreement.
No purchaser of any of the Shares from the Underwriters shall be deemed a
successor or assign merely by reason of such purchase.
-29-
Section 12. Time of Essence. Time shall be of the essence of this Agreement
and the Pricing Agreement. As used herein, the term "business day" shall mean
any day when the Commission's office in Washington, D.C. is open for business.
Section 13. Choice of Law. This Agreement and the Pricing Agreement shall be
governed by and construed in accordance with the internal laws of the State of
Illinois (without regard to conflict of laws provisions thereof).
Section 14. Counterparts. This Agreement may be executed by any one or more
of the parties hereto in any number of counterparts, each of which shall be
deemed to be an original, but all such counterparts shall together constitute
one and the same instrument.
If the foregoing is in accordance with your understanding, please sign and
return to us four counterparts hereof, and, upon such acceptance hereof by the
Representatives, this letter and such acceptance hereof shall constitute a
binding agreement between the Underwriters and the Company.
Very truly yours,
BROOKDALE LIVING COMMUNITIES, INC.
By:________________________
Name:
Title:
CONFIRMED AND ACCEPTED,
as of the date first above written:
FRIEDMAN, BILLINGS, XXXXXX & CO., INC.
XXXXX & COMPANY
As Representatives of the
Several Underwriters listed
on Schedule A attached hereto
By: Friedman, Billings, Xxxxxx & Co., Inc.
By:_________________________
Name:____________________
Title:_____________________
-30-
SCHEDULE A
Number of
Firm Shares
Underwriter to be Purchased
Friedman, Billings, Xxxxxx & Co., Inc.
Xxxxx & Company
-31-
ANNEX I
Pursuant to Section 5(d) of the Underwriting Agreement, the accountants shall
furnish letters to the Representatives to the effect that:
(i) They are independent certified public accountants with respect to the
Company and its subsidiaries within the meaning of the 1933 Act and the
applicable rules and regulations thereunder;
(ii) In their opinion, the financial statements and any supplemental
financial information and schedules audited (and, if applicable, and/or pro
forma financial information examined) by them and included in the Prospectus or
the Registration Statement comply as to form in all material respects with the
applicable accounting requirements of the 1933 Act and the related published
rules and regulations thereunder; and, if applicable, they have made a review in
accordance with standards established by the American Institute of Certified
Public Accountants of the unaudited consolidated interim financial statements as
indicated in their reports thereon, copies of which have been furnished to the
Underwriters;
(iii) The unaudited selected financial information with respect to the
consolidated results of operations and financial position of the Company for the
five most recent fiscal years included in the Prospectus agrees with the
corresponding amounts (after restatements where applicable) in the audited
consolidated financial statements for such five fiscal years for such fiscal
years;
(iv) On the basis of limited procedures, not constituting an audit in
accordance with generally accepted auditing standards, consisting of a reading
of the unaudited financial statements and other information referred to below, a
reading of the latest available interim financial statements of the Company and
its subsidiaries, inspection of the minute books of the Company and its
subsidiaries since the date of the latest audited financial statements included
in the Prospectus, inquiries of officials of the Company and its subsidiaries
responsible for financial and accounting matters and such other inquiries and
procedures as may be specified in such letter, nothing came to their attention
that caused them to believe that:
(A) the unaudited consolidated statements of income, consolidated
balance sheets and consolidated statements of cash flows included in the
Prospectus do not comply as to form in all material respects with the applicable
accounting requirements of the 1933 Act and the related published rules and
regulations thereunder, or are not in conformity with generally accepted
accounting principles applied on a basis substantially consistent with the basis
for the audited consolidated statements of income, consolidated balance sheets
and consolidated statements of cash flows included in the Prospectus;
(B) any other unaudited income statement data and balance sheet items
included in the Prospectus do not agree with the corresponding items in the
unaudited consolidated financial statements from which such data and items were
derived, and any such unaudited data and items were not determined on a basis
-32-
substantially consistent with the basis for the corresponding amounts in the
audited consolidated financial statements included in the Prospectus;
(C) the unaudited financial statements which were not included in the
Prospectus but from which were derived any unaudited condensed financial
statements referred to in Clause (A) and any unaudited income statement data and
balance sheet items included in the Prospectus and referred to in Clause (B)
were not determined on a basis substantially consistent with the basis for the
audited consolidated financial statements included in the Prospectus;
(D) as of a specified date not more than five days prior to the date
of such letter, there have been any changes in the consolidated capital stock
(other than issuances of capital stock upon exercise of options and stock
appreciation rights, upon earn-outs of performance shares and upon conversions
of convertible securities, in each case which were outstanding on the date of
the latest financial statements included in the Prospectus) or any increase in
the consolidated long-term debt of the Company and its subsidiaries, or any
decreases in consolidated net current assets or other items specified by the
Underwriters or any increases in any items specified by the Underwriters, in
each case as compared with amounts shown in the latest balance sheet included in
the Prospectus, except in each case for changes, increases or decreases which
the Prospectus discloses have occurred or may occur or which are described in
such letter; and
(E) for the period from the date of the latest financial statements
included in the Prospectus to the specified date referred to in Clause (D) there
were any decreases in consolidated net revenues or operating profit or the total
or per share amounts of consolidated net income or other items specified by the
Underwriters, or any increases in any items specified by the Underwriters, in
each case as compared with the comparable period of the preceding year and with
any other period of corresponding length specified by the Underwriters, except
in each case for decreases or increases which the Prospectus discloses have
occurred or may occur or which are described in such letter; and
(v) In addition to the audit referred to in their report(s) included in
the Prospectus and the limited procedures, inspection of minute books, inquiries
and other procedures referred to in paragraphs (iii) and (iv) above, they have
carried out certain specified procedures, not constituting an audit in
accordance with generally accepted auditing standards, with respect to certain
amounts, percentages and financial information specified by the Underwriters,
which are derived from the general accounting records of the Company and its
subsidiaries, which appear in the Prospectus, or in Part II of, or in exhibits
and schedules to, the Registration Statement specified by the Underwriters, and
have compared certain of such amounts, percentages and financial information
with the accounting records of the Company and its subsidiaries and have found
them to be in agreement.
-33-
EXHIBIT A
BROOKDALE LIVING COMMUNITIES, INC.
(a Delaware corporation)
2,000,000 Shares
Common Sock
(Par value $0.01 Per Share)
PRICING AGREEMENT
December __, 1997
FRIEDMAN, BILLINGS, XXXXXX & CO., INC.
XXXXX & COMPANY
As Representatives of the Several Underwriters
c/o Friedman, Billings, Xxxxxx & Co., Inc.
0000 Xxxxxxxxxx Xxxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Ladies and Gentlemen:
Reference is made to the Underwriting Agreement, dated December __, 1997 (the
"Underwriting Agreement"), relating to the purchase by Friedman, Billings,
Xxxxxx & Co., Inc. and those underwriters listed on Schedule A thereto
(collectively, the "Underwriters") of the Firm Shares and Option Shares (as each
such term is defined in the Underwriting Agreement (collectively, the
"Shares")), of Brookdale Living Communities, Inc. (the "Company").
Pursuant to Section 2 of the Underwriting Agreement, the Company agrees with
each Underwriter as follows:
1. The public offering price per share for the Shares determined as provided
in such Section 2, shall be $______________.
2. The purchase price per share for the Shares to be paid by the several
Underwriters shall be $_______, being an amount equal to the public offering
price set forth above less $________ per share.
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to the Company a counterpart hereof, whereupon this
instrument, along with all counterparts, will become a binding agreement between
the Underwriters and the Company in accordance with its terms.
-34-
Very truly yours,
BROOKDALE LIVING COMMUNITIES, INC.
By:________________________
Name:
Title:
CONFIRMED AND ACCEPTED,
as of the date first above written:
FRIEDMAN, BILLINGS, XXXXXX & CO., INC.
XXXXX & COMPANY
As Representatives of the
Several Underwriters listed
on Schedule A attached hereto
By: Friedman, Billings, Xxxxxx & Co., Inc.
By:__________________________
Name:
Title:
-35-
