Exhibit 1.1
BROOKDALE LIVING COMMUNITIES, INC.
(a Delaware corporation)
[AMOUNT AND TYPE OF SECURITY]
FORM OF UNDERWRITING AGREEMENT
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, 199_
[NAME(S) OF REPRESENTATIVE(S) OF THE UNDERWRITERS]
As Representatives of the Several Underwriters
[Address of Lead Underwriter]
Ladies and Gentlemen:
Brookdale Living Communities, Inc., a Delaware corporation (the "Company"),
confirms its agreement with [Name(s) of Representative(s) of the Underwriters]
(collectively, the "Representatives") and the underwriters listed on Schedule A
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attached hereto (collectively, the "Underwriters," which term shall also include
any underwriter substituted as provided in Section 9 hereof), for whom the
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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 [Amount of Securities] (the
"Firm Shares") of the Company's [Type of Security] and with respect to the grant
by the Company to the Underwriters of the option described in Section 2(b)
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hereof to purchase all or any part of an additional [Amount and Type of
Security] (the "Option Shares") to cover overallotments. The Firm Shares and the
Option Shares are collectively hereinafter called the "Shares."
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
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A hereto (the "Pricing Agreement"). The Pricing Agreement may take the form of
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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
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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-3 (No. 333-53969) 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.
1(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
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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
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, provided, however,
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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
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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) [reserved]
(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 1(a)(iv)
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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.
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(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 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
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(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 [Type of Security] of the Company
conform in all material respects to all statements relating thereto contained in
the Prospectus. All such [Type of Security] 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
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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, 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
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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.
(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
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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
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further that the indemnification provisions of this Agreement may be
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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
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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.
(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
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recognized financial responsibility of the types and in the amounts generally
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) [reserved]
(xxvi) [reserved]
(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.
(xxviii) 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 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
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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.
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 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
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(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.
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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
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hereof, unless otherwise agreed to by the Company and the Representative.
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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 [Amount and Type of Security], 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 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 [Name and
Address of Lead Underwriter], 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
abovementioned offices of [Name of Lead Underwriter], 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 in same day funds by wire transfer
to an account specified by the Company in accordance with the instructions
provided by the Company, 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. [Name of Lead
Underwriter], individually and not as a Representative of the Underwriters, may
(but shall not be obligated to) make payment of the
11
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, 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.
(iii) Promptly from time to time, the Company will take such action
as the
12
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 security
holders 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, 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,
13
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 [Type of
Security] continues to be listed on the [Name of Exchange/Interdealer Quotation
System] 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 [Name of Lead Underwriter], directly or indirectly, sell,
offer to sell, grant any option for the sale of, or otherwise dispose of, any
[Type of Security] or any other security convertible into or exchangeable into
or exercisable for [Type of Security], 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 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
14
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 and
(viii) the fees and expenses incurred in connection with the listing of the
[Type of Security] on the [Name of Exchange/Interdealer Quotation System],
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.
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:
(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.
15
(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 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
16
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.
(xi) 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.
(xii) The statements made in the Prospectus and 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).
(xiii) 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.
(xiv) 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, except that (a) such counsel need
17
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)(xii) and the paragraph immediately following paragraph
5(b)(xvi).
(xv) 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.
(xvi) 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.
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 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).
18
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) [Name of Underwriters' Counsel], 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).
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
19
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.
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 [Name
of Exchange/Interdealer Quotation System].
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
20
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 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 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
21
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 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
---------------
22
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 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 1933 Act.
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. The Company shall then be under no further
liability to the Underwriters in respect of the Shares not so delivered except
as provided in Section 4 and Section 6 hereof.
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 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:
23
(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 [Name and Address of Lead
Underwriter], Attention: ____________ (fax no. ___-___-_____; 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. 312-977-
3701). 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.
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.
24
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.
[Signatures on Next Page]
25
Very truly yours,
BROOKDALE LIVING
COMMUNITIES, INC.
By:________________________
Name:
Title:
CONFIRMED AND ACCEPTED,
as of the date first above written:
[NAME(S) OF REPRESENTATIVE(S) OF THE UNDERWRITERS]
As Representatives of the
Several Underwriters listed
on Schedule A attached hereto
By: [Name of Lead Underwriter]
By:_______________________
Name:
Title:
26
SCHEDULE A
Number of Firm
Shares to be
Underwriter Purchased
Total Underwriters........................................
27
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
28
financial statements from which such data and items were derived, and any such
unaudited data and items were not determined on a basis 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.
29
EXHIBIT A
BROOKDALE LIVING COMMUNITIES, INC.
(a Delaware corporation)
[Amount and Type of Security]
PRICING AGREEMENT
, 199_
[NAME(S) OF REPRESENTATIVE(S) OF
UNDERWRITERS]
As Representatives of the Several Underwriters
[Name and Address of
Lead Underwriter]
Ladies and Gentlemen:
Reference is made to the Underwriting Agreement, dated ____________, 199_
(the "Underwriting Agreement"), relating to the purchase by [Name of Lead
Underwriter] 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.
30
Very truly yours,
BROOKDALE LIVING
COMMUNITIES, INC.
By:____________________
Name:
Title:
CONFIRMED AND ACCEPTED,
as of the date first above written:
[NAME(S) OF REPRESENTATIVE(S) OF THE
UNDERWRITERS]
As Representatives of the
Several Underwriters listed
on Schedule A attached hereto
By: [Name of Lead Underwriter]
By:_______________________
Name:
Title:
31
