Exhibit 1.1
Brookdale Senior Living Inc.
Common Stock
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Underwriting Agreement
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July 19, 2006
Xxxxxxx, Xxxxx & Co.,
Xxxxxx Brothers Inc.
As representatives of the several Underwriters
named in Schedule I hereto,
c/o Goldman, Xxxxx & Co.
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
and
Xxxxxx Brothers Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Brookdale Senior Living Inc., a Delaware corporation (the "Company"),
proposes, severally and not jointly with the Selling Stockholder, subject to
the terms and conditions set forth herein, to issue and sell, and Health
Partners, a Bermuda exempted partnership (the "Selling Stockholder"), proposes
severally and not jointly with the Company, subject to the terms and conditions
stated herein, to sell to the Underwriters named in Schedule I hereto (the
"Underwriters") an aggregate of 17,721,519 and 1,514,584 shares, respectively,
of common stock, par value $0.01 per share, of the Company ("Stock") and, the
Selling Stockholder proposes to sell, at the election of the Underwriters, up
to 2,885,415 additional shares of Stock, subject to the terms and conditions
stated herein. The aggregate of 19,236,103 shares to be sold by the Company and
the Selling Stockholder is herein called the "Firm Shares" and the aggregate of
2,885,415 additional shares to be sold by the Selling Stockholder at the
election of the Underwriters is herein called the "Optional Shares". The Firm
Shares and the Optional Shares that the Underwriters elect to purchase pursuant
to Section 2 hereof are herein collectively called the "Shares".
It is understood that approximately 5% of the Firm Shares (the
"Directed Shares") will initially be reserved by the several Underwriters for
offer and sale upon the terms and conditions set forth in the Prospectus and in
accordance with the rules and regulations of the National Association of
Securities Dealers, Inc. (the "NASD") to employees of the Company and its
subsidiaries, employees of Fortress Investment Group LLC and its subsidiaries,
and persons having business relationships with the Company and its subsidiaries
who have heretofore delivered to Xxxxxx Brothers Inc. offers or indications of
interest to purchase Firm Shares in form satisfactory to Xxxxxx Brothers Inc.
(such program, the "Directed Share Program") and that any allocation of such
Firm Shares among such persons will be made in accordance with timely
directions received by Xxxxxx Brothers Inc. from the Company; provided, that
under no circumstances will Xxxxxx Brothers Inc. or any Underwriter be liable
to the Company or to any such person for any action taken or omitted in good
faith in connection with such Directed Share Program. It is further understood
that any Firm Shares which are not purchased by such persons will be offered by
the Underwriters to the public upon the terms and conditions set forth in the
Prospectus.
The Company agrees to pay all fees and disbursements incurred by the
Underwriters in connection with the Directed Share Program and any stamp duties
or other taxes incurred by the Underwriters in connection with the Directed
Share Program.
On May 12, 2006, the Company entered into an Agreement and Plan of
Merger (the "Merger Agreement") with Beta Merger Sub Corporation, a Delaware
corporation and wholly owned subsidiary of the Company ("Merger Sub"), and
American Retirement Corporation, a Tennessee corporation ("ARC"), pursuant to
which Merger Sub will be merged with and into ARC with ARC continuing as the
surviving corporation and as a wholly owned subsidiary of the Company.
Simultaneously with entering into the Merger Agreement, on May 12, 2006, the
Company entered into that certain Investment Agreement with RIC Coinvestment
Fund LP, a fund managed by an affiliate of Fortress Investment Group (the
"Investment Agreement" and together with the Merger Agreement and all other
documents related to the transactions contemplated by the Merger Agreement and
the Investment Agreement, the "ARC Merger Agreements" and such merger and any
related financing made pursuant to the ARC Merger Agreements are hereinafter
referred to as the "ARC Merger"). The offering of the Shares pursuant to the
Initial Registration Statement (as defined below) is conditioned on the closing
of the ARC Merger. The Company intends to use a portion of the net proceeds
received from the offering of the Shares to be sold by the Company hereunder to
consummate the ARC Merger.
1. (a) The Company represents and warrants to, and agrees with, each
of the Underwriters that:
(i) A registration statement on Form S-1 (File No.
333-135030) (the "Initial Registration Statement") in respect of the
Shares has been filed with the Securities and Exchange Commission (the
"Commission"); the Initial Registration Statement and any
post-effective amendment thereto, each in the form heretofore
delivered to you, and, excluding exhibits thereto, to you for each of
the other Underwriters, have been declared effective by the Commission
in such form; other than a registration statement, if any, increasing
the size of the offering (a "Rule 462(b) Registration Statement"),
filed pursuant to Rule 462(b) under the Securities Act of 1933, as
amended (the "Act"), which became effective upon filing, no other
document with respect to the Initial Registration Statement has
heretofore been filed with the Commission; and no stop order
suspending the effectiveness of the Initial Registration Statement,
any post-effective amendment thereto or the Rule 462(b) Registration
Statement, if any, has been issued and no proceeding for that purpose
has been initiated or threatened by the Commission (any preliminary
prospectus included in the Initial Registration Statement or filed
with the Commission pursuant to Rule 424(a) of the rules and
regulations of the Commission under the Act is hereinafter called a
"Preliminary Prospectus"; the various parts of the Initial
Registration Statement and the Rule 462(b) Registration Statement, if
any, including all exhibits thereto and including the information
contained in the form of final prospectus filed with the Commission
pursuant to Rule 424(b) under the Act in accordance with Section 5(a)
hereof and deemed by virtue of Rule 430A under the Act to be part of
the Initial Registration Statement at the time it was declared
effective, each as amended at the time such part of the Initial
Registration Statement became effective or such part of the Rule
462(b) Registration Statement, if any, became or hereafter becomes
effective, are hereinafter collectively called the "Registration
Statement"; the Preliminary Prospectus relating to the Shares that was
included in the Registration Statement immediately prior to the
Applicable Time (as defined in Section 1(a)(iii) hereof) is
hereinafter called the "Pricing Prospectus"; such final prospectus, in
the form first filed pursuant to Rule 424(b) under the Act, is
hereinafter called the "Prospectus"; and any "issuer free writing
prospectus" as defined in Rule 433 under the Act relating to the
Shares is hereinafter called an "Issuer Free Writing Prospectus");
(ii) No order preventing or suspending the use of any
Preliminary Prospectus or any Issuer Free Writing Prospectus has been
issued by the Commission, and each Preliminary Prospectus, at the time
of filing thereof, conformed in all material respects to the
requirements of the Act and the rules and regulations of the
Commission thereunder, and did 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, in the light of
the circumstances under which they were made, not misleading;
provided, however, that this representation and warranty shall not
apply to any statements or omissions made in reliance upon and in
conformity with information furnished in writing to the Company by an
Underwriter through Xxxxxxx, Xxxxx & Co. or Xxxxxx Brothers Inc. or by
the Selling Stockholder concerning the Selling Stockholder expressly
for use therein;
(iii) For the purposes of this Agreement, the "Applicable
Time" is 8:00 a.m. (Eastern Time) on July 20, 2006; the Pricing
Prospectus (as supplemented by the Issuer Free Writing Prospectus
listed on Schedule III(b) hereto, taken together (collectively, the
"Pricing Disclosure Package")), as of the Applicable Time, did not
include any 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, not misleading;
and each Issuer Free Writing Prospectus listed on Schedule III(a) or
Schedule III(b) hereto does not conflict with the information contained
in the Registration Statement, the Pricing Disclosure Package or the
Prospectus and each such Issuer Free Writing Prospectus, as
supplemented by and taken together with the Pricing Prospectus as of
the Applicable Time, did not include any 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, not misleading; provided, however, that this representation
and warranty shall not apply to statements or omissions made in an
Issuer Free Writing Prospectus in reliance upon and in conformity with
information furnished in writing to the Company by an Underwriter
through Xxxxxxx, Xxxxx & Co. or Xxxxxx Brothers Inc. expressly for use
therein;
(iv) The Registration Statement conforms, and the Prospectus
and any further amendments or supplements to the Registration
Statement or the Prospectus will conform, in all material respects to
the requirements of the Act and the rules and regulations of the
Commission thereunder and do not and will not, as of the applicable
effective date as to each part of the Registration Statement and any
amendment thereto and as of the applicable filing date as to the
Prospectus and any amendment or supplement thereto, 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; provided, however, that this representation and warranty
shall not apply to any statements or omissions made in reliance upon
and in conformity with information furnished in writing to the Company
by an Underwriter through Xxxxxxx, Xxxxx & Co. or Xxxxxx Brothers Inc.
or by the Selling Stockholder concerning the Selling Stockholder
expressly for use therein;
(v) Neither the Company nor any of its subsidiaries has
sustained since the date of the latest audited financial statements
included in the Pricing Prospectus and the Prospectus, any material
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 Pricing Prospectus and the
Prospectus, and, since the respective dates as of which information is
given in the Registration Statement and the Pricing Prospectus and the
Prospectus, there has not been any change in the capital stock or
long-term debt of the Company or any of its subsidiaries or any
material adverse change, or any development that would reasonably be
expected to involve a prospective material adverse change, in or
affecting the general affairs, management, financial position,
stockholders' equity, assets or results of operations of the Company
and its subsidiaries taken as a whole, otherwise than as set forth or
contemplated in the Pricing Prospectus and the Prospectus;
(vi) The Company and its 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, in each case
free and clear of all liens, encumbrances and defects except such as
(A) are described in the Pricing Prospectus and the Prospectus, (B) do
not, individually or in the aggregate, result in a material adverse
effect on the current or future consolidated financial position,
stockholders' equity, assets or results of operations of the Company
and its subsidiaries (a "Material Adverse Effect"), or (C) would not,
individually or in the aggregate, reasonably be expected to result in
a Material Adverse Effect; and any real property and buildings held
under lease by the Company and its subsidiaries are held by them under
valid, subsisting and enforceable leases with such exceptions as are
described in the Pricing Prospectus and the Prospectus or as would
not, individually or in the aggregate, reasonably be expected to have
a Material Adverse Effect;
(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 power and authority (corporate and other) to own its
properties and conduct its business as described in the Pricing
Prospectus and the Prospectus, and 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 it owns or
leases properties or conducts any business so as to require such
qualification, except to the extent that the failure to be so
qualified would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect; and Merger Sub and each
subsidiary of the Company that is listed on Schedule IV to this
Agreement has been duly organized, is validly existing and is in good
standing under the laws of its jurisdiction of incorporation or
formation, as applicable;
(viii) The Company has an authorized capitalization as set
forth in the Pricing Prospectus and the Prospectus, and all of the
issued shares of capital stock of the Company have been duly and
validly authorized and issued, are fully paid and non-assessable and
conform to the description of the Stock contained in the Pricing
Disclosure Package and the Prospectus; and all of the issued shares of
capital stock of each subsidiary of the Company have been duly and
validly authorized and issued, are fully paid and non-assessable and
(except for directors' qualifying shares) are owned directly or
indirectly by the Company, free and clear of all liens, encumbrances,
equities or claims;
(ix) The unissued Shares to be issued and sold by the Company
to the Underwriters hereunder have been duly and validly authorized
and, when issued and delivered against payment therefor as provided
herein, will be duly and validly issued and fully paid and
non-assessable and will conform to the description of the Stock
contained in the Pricing Prospectus and the Prospectus;
(x) The issue and sale of the Shares to be sold by the
Company and the compliance by the Company with all of the provisions
of this Agreement and the compliance by the Company and Merger Sub
with all of the provisions of the ARC Merger Agreements and the
consummation of the transactions contemplated herein and by the ARC
Merger Agreements will not conflict with or result in a breach or
violation of any of the terms or provisions of, or constitute a
default under, (x) any indenture, mortgage, deed of trust, loan
agreement, lease, sublease or other agreement or instrument to which
the Company or any of its subsidiaries is a party or by which the
Company or any of its subsidiaries is bound or to which any of the
property or assets of the Company or any of its subsidiaries is
subject, (y) the Amended and Restated Certificate of Incorporation or
Amended and Restated By-laws of the Company or Merger Sub or (z) any
statute or any order, rule or regulation of any court or governmental
agency or body having jurisdiction over the Company or any of its
subsidiaries or any of their properties, except in the case of clauses
(x) and (z) for such conflicts, breaches, defaults or violations that
would not, individually or in the aggregate, reasonably be expected to
result in a Material Adverse Effect; and no consent, approval,
authorization, order, registration or qualification of or with any
such court or governmental agency or body or any other third party is
required for the issue and sale of the Shares or the consummation by
the Company of the transactions contemplated by this Agreement or the
consummation by the Company and Merger Sub of the transactions
contemplated by the ARC Merger Agreements, except the registration
under the Act of the Shares and, except for such consents, approvals,
authorizations, registrations or qualifications as may be required
under state securities or Blue Sky laws in connection with the
purchase and distribution of the Shares by the Underwriters; and
except for the consents to be obtained in connection with the ARC
Merger set forth on Schedule V to this Agreement.
(xi) Neither the Company nor any of its subsidiaries is (x)
in violation of its certificate of incorporation, by-laws, limited
liability company operating agreement or partnership agreement, as
applicable, or (y) in default in the performance or observance of any
obligation, agreement, covenant or condition contained in any
indenture, mortgage, deed of trust, loan agreement, lease or other
agreement or instrument to which it is a party or by which it or any
of its properties may be bound, except in the case of clause (x), but
only with respect to subsidiaries of the Company (other than Merger
Sub), and clause (y) for such violations or defaults that would not,
individually or in the aggregate, reasonably be expected to result in
a Material Adverse Effect;
(xii) The statements set forth in the Pricing Prospectus and
the Prospectus under the caption "Description of Capital Stock",
insofar as they purport to constitute a summary of the terms of the
Stock, under the captions "Material U.S. Federal Income and Estate Tax
Considerations to Non-U.S. Holders", "Business -- Government
Regulation", "Business -- Environmental Matters", "Business -- Leases",
"Description of Indebtedness" and "Underwriting", insofar as they
purport to describe the provisions of the laws and documents referred
to therein, are accurate, complete and fair;
(xiii) Other than as set forth in the Pricing Prospectus and
the Prospectus, there are no legal or governmental proceedings pending
to which the Company or any of its subsidiaries is a party or of which
any property of the Company or any of its subsidiaries is the subject
which, if determined adversely to the Company, any of its
subsidiaries, would individually or in the aggregate have a Material
Adverse Effect; and, to the best of the Company's knowledge, no such
proceedings or any investigations are threatened or contemplated by
governmental authorities or threatened by others;
(xiv) The Company is not and, after giving effect to the
offering and sale of the Shares and the ARC Merger, will not be an
"investment company", as such term is defined in the Investment
Company Act of 1940, as amended (the "Investment Company Act");
(xv) The financial statements included in the Registration
Statement and the Pricing Prospectus and the Prospectus (taken
together with the related notes and schedules thereto) present fairly,
in all material respects, the financial position of the Company and
its subsidiaries and ARC and its subsidiaries as of the dates shown
and their results of operations and cash flows for the periods shown,
and such financial statements have been prepared in conformity with
the generally accepted accounting principles in the United States
applied on a consistent basis and the schedules included in each
Registration Statement present fairly, in all material respects, the
information required to be stated therein; and the assumptions used in
preparing the pro forma financial statements included in the
Registration Statement and the Pricing Prospectus and the Prospectus
provide a reasonable basis for presenting the significant effects
directly attributable to the transactions or events described therein,
the related pro forma adjustments, in all material respects, give
appropriate effect to those assumptions, and the pro forma columns
therein reflect, in all material respects, the proper application of
those adjustments to the corresponding historical financial statement
amounts;
(xvi) (1) Ernst & Young LLP, who have certified certain
financial statements of the (A) Company and its subsidiaries and (B)
CMCP -- Properties, Inc and its subsidiaries, (2) KPMG LLP, who have
certified certain financial statements of (A) Alterra Healthcare
Corporation and (B) ARC and its subsidiaries and (3) Deloitte & Touche
LLP, are each independent public accountants as required by the Act
and the rules and regulations of the Commission thereunder;
(xvii) The Company maintains a system of internal control
over financial reporting (as such term is defined in Rule 13a-15(f)
under the Exchange Act) that complies and upon consummation of the ARC
Merger will continue to comply with the requirements of the Exchange
Act and has been designed by the Company's principal executive officer
and principal financial officer, or under their supervision, to
provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting principles.
The Company's internal control over financial reporting is, and upon
consummation of the ARC Merger will remain, effective and the Company
is not aware of any material weaknesses in its internal control over
financial reporting. Except as is otherwise set forth in the
Registration Statement, the Company is not aware of any weaknesses in
ARC's internal control over financial reporting that would have a
material weaknesses in the Company's internal control over financial
reporting upon the consummation of the ARC Merger;
(xviii) Since the date of the latest audited financial
statements of the Company included in the Pricing Prospectus and the
Prospectus, there has been no change in the Company's internal control
over financial reporting that has materially affected, or is
reasonably likely to materially affect, the Company's internal control
over financial reporting. Since the date of the latest audited
financial statements of ARC included in the Pricing Prospectus and the
Prospectus, the Company is not aware of any change in ARC's internal
control over financial reporting that has materially affected, or is
reasonably likely to materially affect, the internal control over
financial reporting of ARC or the Company upon the consummation of the
ARC Merger;
(xix) The Company maintains disclosure controls and
procedures (as such term is defined in Rule 13a-15(e) under the
Exchange Act) that comply with the requirements of the Exchange Act
and upon consummation of the ARC Merger will continue to comply with
the requirements of the Exchange Act; such disclosure controls and
procedures have been designed to ensure that material information
relating to the Company and its subsidiaries is made known to the
Company's principal executive officer and principal financial officer
by others within those entities; and such disclosure controls and
procedures are effective and upon consummation of the ARC Merger will
continue to be effective;
(xx) Each of the Company and its subsidiaries (x) has all
certificates, consents, exemptions, orders, permits, licenses,
authorizations, or other approvals (each, an "Authorization") of and
from, and has made all declarations and filings with, all federal,
state, local and other governmental authorities, all self-regulatory
organizations and all courts and other tribunals, necessary or
required to engage in the business currently conducted by it in the
manner described in the Pricing Prospectus and the Prospectus; (y) all
such Authorizations are valid and in full force and effect; and (z)
each of the Company and its subsidiaries is in compliance in with the
terms and conditions of all such Authorizations and with the rules and
regulations of the regulatory authorities and governing bodies having
jurisdiction with respect thereto, except, with respect to (x), (y)
and (z), as would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect; and there are no
proceedings pending or, to the best of the Company's knowledge,
threatened, to revoke, cancel or terminate such Authorizations and
applications and the Company is not aware of any basis on which such
Authorizations could not be renewed or, in the case of applications,
will not be issued without contest;
(xxi) Each of the Company and its subsidiaries owns or
possesses or has the right to use the licenses, material copyrights,
know-how (including trade secrets and other unpatented and/or
unpatentable proprietary or confidential information, systems or
procedures), domain names, trademarks, service marks and trade names
(collectively, the "Intellectual Property") presently employed by it
in connection with its operations, except where the failure to own or
possess or have the right to use such Intellectual Property would not,
individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect; and neither the Company nor any of its
subsidiaries has received any notice of infringement of or conflict
with asserted rights of others with respect to the foregoing. To the
knowledge of the Company and its subsidiaries, the use of such
Intellectual Property in connection with the business and operations
of the Company and its subsidiaries as described in the Pricing
Prospectus does not infringe on the rights of any person;
(xxii) All tax returns required to be filed by the Company
and its subsidiaries in all jurisdictions have been timely and duly
filed, other than those filings being contested in good faith and
except where the failure to file would not, individually or in the
aggregate, have a Material Adverse Effect. There are no tax returns of
the Company or its subsidiaries that are currently being audited by
state, local or federal taxing authorities or agencies (and with
respect to which the Company or its subsidiaries has received notice),
where the findings of such audit could reasonably be expected to
result in a Material Adverse Effect. All taxes, including withholding
taxes, penalties and interest, assessments, fees and other charges due
or claimed to be due from such entities, have been paid, other than
those being contested in good faith and for which adequate reserves
have been provided or those currently payable without penalty or
interest or those that could not reasonably be expected to result in a
Material Adverse Effect;
(xxiii) Except as disclosed in the Pricing Prospectus and the
Prospectus, each of the Company and its subsidiaries maintains
insurance covering its properties, operations, personnel and
businesses which insures against such losses and risks as are adequate
in accordance with its reasonable business judgment to protect the
Company and its subsidiaries and their businesses;
(xxiv) Except as disclosed in the Pricing Prospectus and the
Prospectus, there are no material business relationships or related
party transactions which would be required to be disclosed therein by
Item 404 of Regulation S-K of the Commission and such business
relationship or related party transaction described therein is a fair
and accurate description in all material respects of the relationships
and transactions so described;
(xxv) Each of the Company and its subsidiaries is in
compliance in all material respects with all presently applicable
provisions of the Employee Retirement Income Security Act of 1974, as
amended, including the regulations and published interpretations
thereunder ("ERISA"); no "reportable event" (as defined in ERISA) has
occurred with respect to any "pension plan" (as defined in ERISA) for
which the Company or any of its subsidiaries would have any material
liability; each of the Company and its subsidiaries has not incurred
and does not reasonably expect to incur liability under (i) Title IV
of ERISA with respect to termination of, or withdrawal from, any
"pension plan" or (ii) Section 412 or 4971 of the Internal Revenue
Code of 1986, as amended, including the regulations and published
interpretations thereunder (the "Code"); and each "pension plan" for
which the Company or any of its subsidiaries would have any material
liability, that is intended to be qualified under Section 401(a) of
the Code is so qualified in all material respects and nothing has
occurred, whether by action or by failure to act, which would cause
the loss of such qualification;
(xxvi) Each of the Company and its subsidiaries is and has
been in compliance with all applicable Environmental Laws (as defined
below), except where failure to comply would not, individually or in
the aggregate, reasonably be expected to have a Material Adverse
Effect. To the best of the Company's knowledge, there has been no
material seepage, leak, escape, xxxxx, discharge, injection, release,
emission, spill, pumping, pouring, emptying, dumping, disposing, or
migrating or any threat thereof of any Hazardous Material (as defined
below) on, in, under, or from any real property referred to in the
Pricing Prospectus and the Prospectus which requires any disclosure,
investigation, cleanup, remediation, monitoring, maintenance,
abatement or deed or use restriction, or which will give rise to any
other costs or liabilities to the Company or its subsidiaries under
any Environmental Laws. There are no past, present or, to the
Company's knowledge, reasonably anticipated future events, conditions,
circumstances, activities, practices, actions, omissions or plans that
could reasonably be expected to interfere with or prevent compliance
by the Company or its subsidiaries with Environmental Laws, or that
could reasonably be expected to give rise to any material costs or
liabilities, which could reasonably be expected to, either
individually or in the aggregate, have a Material Adverse Effect.
There are no judicial or administrative proceedings of an
environmental nature pending, or to the best of the Company's
knowledge, threatened against the Company or its subsidiaries which
could reasonably be expected to be material to the business or
financial condition of the Company and its subsidiaries to involve
potential damages, monetary sanctions, capital expenditures, deferred
charges or charges to income exceeding ten percent of the current
assets of the Company and its subsidiaries or to involve potential
monetary sanctions of $100,000.00 or more. None of the Company or its
subsidiaries has received notice from any governmental agency or body
or other person of any actual or alleged violation of or actual or
alleged liability under any Environmental Law, and does not otherwise
have knowledge of, any occurrence, condition or circumstance which,
with notice, passage of time, or failure to act, would give rise to
any claim or liability under or pursuant to any Environmental Law. The
Company or its subsidiaries, has not arranged for the disposal of any
Hazardous Material at, or transported any Hazardous Material to, any
site which could result in material liability for the Company or its
subsidiaries. The Company or its subsidiaries has not entered into any
agreement relating to any alleged violation of any Environmental Law
or any actual or alleged release or threatened release or cleanup at
any location of any Hazardous Materials. As used herein,
"Environmental Law" means any federal, state, local or foreign law,
statute, ordinance, rule, regulation, order, decree, judgment,
injunction, permit, license, authorization or other binding
requirement, or common law, relating to health, safety or the
protection, cleanup or restoration of the environment or natural
resources, including, but not limited to, those relating to the
distribution, processing, generation, treatment, storage, disposal,
transportation, other handling or release or threatened release of
Hazardous Materials, and "Hazardous Materials" means any material
(including, without limitation, pollutants, contaminants, hazardous or
toxic substances or wastes, asbestos, silica, mixed dust, petroleum or
constituents thereof, bacteria, radon, mold or fungi) that is
regulated by or may give rise to liability under any Environmental
Law. The Company has provided you copies of all materials and
potentially material environmental studies, investigations, reports or
assessments concerning the Company, or any currently or previously
owned or leased properties within its possession or control. In the
ordinary course of its business, the Company conducts a periodic
review of the effect of the Environmental Laws on its business,
operations and properties, in the course of which it identifies and
evaluates associated costs and liabilities (including, without
limitation, any capital or operating expenditures required for
cleanup, closure of properties or compliance with the Environmental
Laws or any permit, license or approval, any related constraints on
operating activities and any potential liabilities to third parties);
(xxvii) The Registration Statement, the Pricing Prospectus,
the Prospectus and any Preliminary Prospectus comply, and any further
amendments or supplements thereto will comply, with any applicable
laws or regulations of foreign jurisdictions in which the Pricing
Prospectus, the Prospectus or any Preliminary Prospectus, as amended
or supplemented, if applicable, are distributed in connection with the
Directed Share Program. No consent, approval, authorization or order
of, or filing or registration with, any court or governmental agency
or body, other than such as have been obtained, is required under the
securities laws and regulations of any foreign jurisdiction in which
the Directed Shares are offered or sold outside the United States;
(xxviii) At the time of filing the Initial Registration
Statement the Company was not and is not an "ineligible issuer," as
defined under Rule 405 under the Act; and
(xxix) All of the representations and warranties of ARC and
its subsidiaries in the ARC Merger Agreement are true and correct
except as qualified therein.
(b) The Selling Stockholder represents and warrants to, and agrees
with, each of the Underwriters and the Company that:
(i) All consents, approvals, authorizations and orders
necessary for the execution and delivery by the Selling Stockholder of
this Agreement and the Power of Attorney and the Custody Agreement
hereinafter referred to, and for the sale and delivery of the Shares
to be sold by the Selling Stockholder hereunder, have been obtained;
and the Selling Stockholder has all necessary corporate power and
authority to enter into this Agreement, the Power of Attorney and the
Custody Agreement and to sell, assign, transfer and deliver the Shares
to be sold by the Selling Stockholder hereunder;
(ii) The sale of the Shares to be sold by the Selling
Stockholder hereunder and the compliance by the Selling Stockholder
with all of the provisions of this Agreement, the Power of Attorney
and the Custody Agreement and the consummation of the transactions
herein and therein contemplated will not conflict with or result in a
breach or violation of any of the terms or provisions of, or
constitute a default under, (x) any statute, indenture, mortgage, deed
of trust, loan agreement or other agreement or instrument to which the
Selling Stockholder is a party or by which the Selling Stockholder is
bound or to which any of the property or assets of the Selling
Stockholder is subject, (y) the terms of the Certificate of
Registration for an Exempted Partnership dated February 26, 1999
issued by the Registrar of Companies in respect of the Selling
Stockholder and the Second Amended and Restated Partnership Agreement
of the Selling Stockholder dated January 1, 2005 or (z) any statute or
any order, rule or regulation of any court or governmental agency or
body having jurisdiction over the Selling Stockholder or the property
of the Selling Stockholder, except in the case of clauses (x) and (z)
for such conflicts, breaches, defaults or violations that would not,
individually or in the aggregate, reasonably be expected to have a
material adverse effect on the validity of the Shares to be sold by
the Selling Stockholder or on the ability of the Selling Stockholder
to deliver good and valid title to such Shares;
(iii) The Selling Stockholder has, and immediately prior to
the Time of Delivery (as defined in Section 4 hereof) the Selling
Stockholder will have, good and valid title to the Shares to be sold
by the Selling Stockholder hereunder, free and clear of all liens,
encumbrances, equities or claims; and, upon delivery of such Shares
and payment therefor pursuant hereto, good and valid title to such
Shares, free and clear of all liens, encumbrances, equities or claims,
will pass to the several Underwriters;
(iv) The Selling Stockholder has not taken and will not take,
directly or indirectly, any action which is designed to or which has
constituted or which might reasonably be expected to cause or result
in stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of the Shares;
(v) To the extent that any statements or omissions made in the
Pricing Disclosure Package are made in reliance upon and in conformity
with written information furnished to the Company by the Selling
Stockholder concerning the Selling Stockholder expressly for use
therein, the Pricing Disclosure Package, as of the Applicable Time, did
not include any 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, not
misleading; each Issuer Free Writing Prospectus listed on Schedule
III(a) or Schedule III(b) hereto, to the extent that any statements or
omissions made therein are made in reliance upon and in conformity with
written information furnished to the Company by the Selling Stockholder
concerning the Selling Stockholder expressly for use therein, does not
conflict with the information contained in the Registration Statement,
the Pricing Prospectus or the Prospectus and each such Issuer Free
Writing Prospectus, as supplemented by and taken together with the
Pricing Disclosure Package as of the Applicable Time, did not include
any 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, not misleading;
(vi) To the extent that any statements or omissions made in
the Registration Statement, any Preliminary Prospectus, the Pricing
Disclosure Package, the Prospectus or any amendment or supplement
thereto, are made in reliance upon and in conformity with written
information furnished to the Company by the Selling Stockholder
concerning the Selling Stockholder expressly for use therein, such
Preliminary Prospectus and the Registration Statement did, and the
Pricing Disclosure Package, the Prospectus and any further amendments
or supplements to the Registration Statement, the Pricing Disclosure
Package or the Prospectus, when they become effective or are filed with
the Commission, as the case may be, will conform in all material
respects to the requirements of the Act and the rules and regulations
of the Commission thereunder and will not 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;
(vii) In order to document the Underwriters' compliance with
the reporting and withholding provisions of the Tax Equity and Fiscal
Responsibility Act of 1982 with respect to the transactions herein
contemplated, the Selling Stockholder will deliver to you prior to or
at the First Time of Delivery (as hereinafter defined) a properly
completed and executed United States Treasury Department Form W-9 (or
other applicable form or statement specified by Treasury Department
regulations in lieu thereof);
(viii) Certificates in negotiable form representing all of
the Shares to be sold by the Selling Stockholder hereunder have been
placed in custody under a Custody Agreement, in the form heretofore
furnished to you (the "Custody Agreement"), duly executed and
delivered by the Selling Stockholder to American Stock Transfer &
Trust Company, as custodian (the "Custodian"), and the Selling
Stockholder has duly executed and delivered a Power of Attorney, in
the form heretofore furnished to you (the "Power of Attorney"),
appointing Xxxx X. Xxxxxxx, Xxxxxxx Xxxxx and Xxxxxxx X. Xxxxxx, and
each of them, as the Selling Stockholder's attorneys-in-fact (the
"Attorneys-in-Fact") with authority to execute and deliver this
Agreement on behalf of the Selling Stockholder, to determine the
purchase price to be paid by the Underwriters to the Selling
Stockholder as provided in Section 2 hereof, to authorize the delivery
of the Shares to be sold by the Selling Stockholder hereunder and
otherwise to act on behalf of the Selling Stockholder in connection
with the transactions contemplated by this Agreement and the Custody
Agreement;
(ix) The Shares represented by the certificates held in
custody for the Selling Stockholder under the Custody Agreement are
subject to the interests of the Underwriters hereunder; the
arrangements made by the Selling Stockholder for such custody, and the
appointment by the Selling Stockholder of the Attorneys-in-Fact by the
Power of Attorney, are to that extent irrevocable; the obligations of
the Selling Stockholder hereunder shall not be terminated by operation
of law; if the Selling Stockholder should be dissolved, or if any
other such event should occur, before the delivery of the Shares
hereunder, certificates representing the Shares shall be delivered by
or on behalf of the Selling Stockholder in accordance with the terms
and conditions of this Agreement and the Custody Agreement; and
actions taken by the Attorneys-in-Fact pursuant to the Power of
Attorney shall be as valid as if such dissolution or other event had
not occurred, regardless of whether or not the Custodian, the
Attorneys-in-Fact, or any of them, shall have received notice of such
dissolution or other event;
(x) The Selling Stockholder shall execute and deliver to the
Underwriters, a lock-up agreement in the form attached hereto as Annex
I which shall be in full force and effect; and
(xi) The Selling Stockholder is not prompted to sell its
Shares by any information concerning the Company or any subsidiary of
the Company, ARC or any of its subsidiaries which is not set forth in
the Pricing Disclosure Package and the Prospectus.
2. Subject to the terms and conditions herein set forth, (a) the
Company and the Selling Stockholder agrees, severally and not jointly, to sell
to each of the Underwriters, and each of the Underwriters agrees, severally and
not jointly, to purchase from the Company and the Selling Stockholder, at a
purchase price per share of $38.1175, the number of Firm Shares (to be adjusted
by you so as to eliminate fractional shares, provided that the total number of
Firm Shares shall not be reduced by such adjustment) determined by multiplying
the aggregate number of Firm Shares to be sold by the Company and the Selling
Stockholder as set forth opposite their respective names in Schedule II hereto
by a fraction, the numerator of which is the aggregate number of Firm Shares to
be purchased by such Underwriter as set forth opposite the name of such
Underwriter in Schedule I hereto and the denominator of which is the aggregate
number of Firm Shares to be purchased by all of the Underwriters from the
Company and the Selling Stockholder hereunder and (b) in the event and to the
extent that the Underwriters shall exercise the election to purchase Optional
Shares as provided below, the Selling Stockholder agrees to sell to each of the
Underwriters, and each of the Underwriters agrees, severally and not jointly, to
purchase from the Selling Stockholder, at the purchase price per share set forth
in clause (a) of this Section 2, that portion of the number of Optional Shares
as to which such election shall have been exercised (to be adjusted by you so as
to eliminate fractional shares, provided that the total number of shares subject
to such election shall not be reduced by such adjustment) determined by
multiplying such number of Optional Shares by a fraction, the numerator of which
is the maximum number of Optional Shares which such Underwriter is entitled to
purchase as set forth opposite the name of such Underwriter in Schedule I hereto
and the denominator of which is the maximum number of Optional Shares that all
of the Underwriters are entitled to purchase hereunder.
The Selling Stockholder hereby grants to the Underwriters the right to
purchase at their election up to 2,885,415 Optional Shares, at the purchase
price per share set forth in the paragraph above, for the sole purpose of
covering sales of shares in excess of the number of Firm Shares, provided that
the purchase price per Optional Share shall be reduced by an amount per share
equal to any dividends or distributions declared by the Company and payable on
the Firm Shares but not payable on the Optional Shares. Any such election to
purchase Optional Shares may be exercised only by written notice from you to
the Selling Stockholder, given within a period of 30 calendar days after the
date of this Agreement and setting forth the aggregate number of Optional
Shares to be purchased and the date on which such Optional Shares are to be
delivered, as determined by you but in no event earlier than the First Time of
Delivery (as defined in Section 4 hereof) or, unless you and the Selling
Stockholder otherwise agree in writing, earlier than two or later than ten
business days after the date of such notice.
3. Upon the authorization by you of the release of the Firm Shares,
the several Underwriters propose to offer the Firm Shares for sale upon the
terms and conditions set forth in the Prospectus.
4. (a) The Shares to be purchased by each Underwriter hereunder, in
definitive form, and in such authorized denominations and registered in such
names as Xxxxxxx, Sachs & Co. may request upon at least forty-eight hours' prior
notice to the Company and the Selling Stockholder shall be delivered by or on
behalf of the Company and the Selling Stockholder to Xxxxxxx, Xxxxx & Co.,
through the facilities of the Depositary Trust Company for the account of such
Underwriter, against payment by or on behalf of such Underwriter of the purchase
price therefor by wire transfer of Federal (same-day) funds to the account
specified by the Company and the Selling Stockholder to Xxxxxxx, Sachs & Co. at
least forty-eight hours in advance. The Company will cause the certificates
representing the Shares to be made available for checking and packaging at least
twenty-four hours prior to the Time of Delivery (as defined below) with respect
thereto at the office of Xxxxxxx, Xxxxx & Co., 00 Xxxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx 00000 (the "Designated Office"). The time and date of such delivery and
payment shall be, with respect to the Firm Shares, 9:30 a.m., New York time, on
July 25, 2006 or such other time and date as Xxxxxxx, Sachs & Co. and the
Company may agree upon in writing, and, with respect to the Optional Shares,
9:30 a.m., New York time, on the date specified by Xxxxxxx, Xxxxx & Co. in the
written notice given by Xxxxxxx, Sachs & Co. of the Underwriters' election to
purchase such Optional Shares, or such other time and date as Xxxxxxx, Xxxxx &
Co. and the Company may agree upon in writing. Such time and date for delivery
of the Firm Shares is herein called the "First Time of Delivery", such time and
date for delivery of the Optional Shares, if not the First Time of Delivery, is
herein called the "Second Time of Delivery", and each such time and date for
delivery is herein called a "Time of Delivery".
(b) The documents to be delivered at each Time of Delivery by or on
behalf of the parties hereto pursuant to Section 8 hereof, including the cross
receipt for the Shares and any additional documents requested by the
Underwriters pursuant to Section 8(l) hereof, will be delivered at the offices
of Xxxxxxx Xxxx & Xxxxxxxxx LLP, 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000
(the "Closing Location"), and the Shares will be delivered at the Designated
Office, all at such Time of Delivery. A meeting will be held at the Closing
Location at 1:00 p.m., New York City time, on the New York Business Day (as
defined herein) next preceding such Time of Delivery, at which meeting the
final drafts of the documents to be delivered pursuant to the preceding
sentence will be available for review by the parties hereto. For the purposes
of this Section 4, "New York Business Day" shall mean each Monday, Tuesday,
Wednesday, Thursday and Friday which is not a day on which banking institutions
in New York are generally authorized or obligated by law or executive order to
close.
5. The Company agrees with each of the Underwriters:
(a) To prepare the Prospectus in a form approved by you and to file
such Prospectus pursuant to Rule 424(b) under the Act 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) under the Act; to make no further
amendment or any supplement to the Registration Statement or Prospectus which
shall be disapproved by you promptly after reasonable notice thereof; to file
promptly all material required to be filed by the Company with the Commission
pursuant to Rule 433(d) under the Act; to advise you, promptly after it
receives notice thereof, of the time when any amendment to the Registration
Statement has been filed or becomes effective or any supplement to the
Prospectus or any amended Prospectus has been filed and to furnish you with
copies thereof; to advise you, promptly after it receives notice thereof, of
the issuance by the Commission of any stop order or of any order preventing or
suspending the use of any Preliminary Prospectus or other prospectus in respect
of the Shares, of the suspension of the qualification of the Shares for
offering or sale in any jurisdiction, of the initiation or threatening of any
proceeding for any such purpose, or of any request by the Commission for the
amending or supplementing of the Registration Statement or Prospectus or for
additional information; and, in the event of the issuance of any stop order or
of any order preventing or suspending the use of any Preliminary Prospectus or
other prospectus or suspending any such qualification, promptly to use its best
efforts to obtain the withdrawal of such order;
(b) Promptly from time to time to take such action as you may
reasonably request to qualify the Shares for offering and sale under the
securities laws of such jurisdictions as you 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;
(c) Prior to 10:00 A.M., New York City time, on the New York Business
Day next succeeding the date of this Agreement and from time to time, to
furnish the Underwriters with written and electronic copies of the Prospectus
in New York City in such quantities as you may reasonably request, and, if the
delivery of a prospectus (or in lieu thereof, the notice referred to in Rule
173(a) under the Act) 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 events 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 (or in lieu thereof, the notice referred to in Rule 173(a) under the
Act is given), 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 Act, to notify you and upon your request to prepare and furnish
without charge to each Underwriter and to any dealer in securities as many
written and electronic copies as you 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, and in case any
Underwriter is required to deliver a prospectus (or in lieu thereof, give the
notice referred to in Rule 173(a) under the Act) 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 your request but at the expense of such Underwriter, to
prepare and deliver to such Underwriter as many written and electronic copies
as you may request of an amended or supplemented Prospectus complying with
Section 10(a)(3) of the Act;
(d) To make generally available to the Company's securityholders as
soon as practicable, but in any event not later than eighteen months after the
effective date of the Registration Statement (as defined in Rule 158(c) under
the Act), an earnings statement of the Company and its subsidiaries (which need
not be audited) complying with Section 11(a) of the Act and the rules and
regulations of the Commission thereunder (including, at the option of the
Company, Rule 158);
(e) During the period beginning from the date hereof and continuing to
and including the date 60 days after the date of the Prospectus (the "Initial
Lock-Up Period"), not to file any registration statement on behalf of Fortress
Investment Group LLC, Deutsche Bank or any of their respective affiliates and
not to offer, sell, contract to sell or otherwise dispose of, except as
provided hereunder, any securities of the Company that are substantially
similar to the Shares, including but not limited to any securities that are
convertible into or exchangeable for, or that represent the right to receive,
Stock or any such substantially similar securities (other than (i) pursuant to
the Company's Omnibus Stock Incentive Plan or any other employee stock option
plans existing on, or upon the conversion or exchange of convertible or
exchangeable securities outstanding as of, the date of this Agreement, (ii) in
connection with the issuance of shares of Stock by the Company pursuant to the
Investment Agreement, (iii) in connection with the issuance of shares of Stock
by the Company to ARC officers and employees, and the corresponding grants of
restricted shares of Stock to ARC officers and employees, pursuant to
employment agreements with certain ARC officers and optionee agreements with
certain ARC employees, in each case, as contemplated by the Merger Agreement,
provided that (w) the Company shall not waive any transfer restriction or
accelerate the vesting period of any such shares (such transfer restrictions
and vesting periods with respect to the shares referred to in clause (iii)
being set forth on Schedule VI hereto), and shall instruct the Company's
transfer agent not to effect the transfer of any shares referred to in clauses
(ii) or (iii), during the Initial Lock-Up Period, as such period may be
extended pursuant to this Section 5(e), and (x) the Company shall not grant or
sell any shares in connection with the ARC Merger other than subject to the
transfer restrictions and vesting periods set forth on Schedule VI hereto, and
(iv) the issuance of shares of Stock in exchange for the assets of, or a
majority or controlling portion of the equity of, another entity in connection
with the acquisition by the Company or any of its subsidiaries of such entity);
provided, however, that, (y) except with respect to the issuances and grants
contemplated by clauses (ii) and (iii) above, the aggregate market value of all
such shares may not exceed $100 million and (z) except with respect to the
issuances and grants contemplated by clause (iii) above, prior to the issuance
of such shares, each recipient of such shares shall agree in writing with you,
in an agreement in the form to be agreed to by the Underwriters, not to sell,
offer, dispose or otherwise transfer any such shares or options during such
60-day period, without your prior written consent), without your prior written
consent; provided, however, that if (1) during the last 17 days of the Initial
Lock-Up Period, the Company releases earnings results or announces material
news or a material event or (2) prior to the expiration of the initial Lock-Up
Period, the Company announces that it will release earnings results during the
15-day period following the last day of the Initial Lock-Up Period, then in
each case the Lock-Up Period will be automatically extended until the
expiration of the 18-day period beginning on the date of release of the
earnings results or the announcement of the material news or material event, as
applicable, unless Xxxxxxx, Xxxxx & Co. and Xxxxxx Brothers Inc. each waive, in
writing, such extension; the Company will provide the representatives, any
co-managers and the Selling Stockholder with prior notice of any such
announcement that gives rise to an extension of the Initial Lock-Up Period;
(f) Unless otherwise publicly available in electronic format on the
website of the Company or the Commission, to furnish to the Company's
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 flows 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 (beginning with
the fiscal quarter ending after the effective date of the Registration
Statement), to make available to the Company's stockholders consolidated
summary financial information of the Company and its subsidiaries for such
quarter in reasonable detail;
(g) Unless otherwise publicly available in electronic format on the
website of the Company or the Commission, during a period of three years from
the effective date of the Registration Statement, to furnish to you copies of
all reports or other communications (financial or other) furnished to the
Company's stockholders, and to deliver to you (i) 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 on which any class of
securities of the Company is listed, other than such reports and financial
statements that are publicly available on the Commission's XXXXX system; and
(ii) such additional information concerning the business and financial
condition of the Company as you may from time to time reasonably request (such
financial statements to be on a consolidated basis to the extent the accounts
of the Company and its subsidiaries are consolidated in reports furnished to
its stockholders generally or to the Commission);
(h) To use the net proceeds received by the Company from the sale of
the Shares pursuant to this Agreement in the manner specified in the Pricing
Prospectus and the Prospectus under the caption "Use of Proceeds";
(i) To use its best efforts to list, subject to notice of issuance,
the Shares on the New York Stock Exchange (the "Exchange");
(j) To file with the Commission such information on Form 10-Q or Form
10-K as may be required by Rule 463 under the Act;
(k) If the Company elects to rely upon Rule 462(b), the Company shall
file a Rule 462(b) Registration Statement with the Commission in compliance
with Rule 462(b) by 10:00 P.M., Washington, D.C. time, on the date of this
Agreement, and the Company shall at the time of filing either pay to the
Commission the filing fee for the Rule 462(b) Registration Statement or give
irrevocable instructions for the payment of such fee pursuant to Rule 111(b)
under the Act;
(l) Upon request of any Underwriter, to furnish, or cause to be
furnished, to such Underwriter an electronic version of the Company's
trademarks, servicemarks and corporate logo for use on the website, if any,
operated by such Underwriter for the purpose of facilitating the on-line
offering of the Shares (the "License"); provided, however, that the License
shall be used solely for the purpose described above, is granted without any
fee and may not be assigned or transferred;
(m) In connection with the Directed Share Program, to ensure that the
Directed Shares will be restricted to the extent required by the NASD or the
rules of such association from sale, transfer, assignment, pledge or
hypothecation for a period of three months following the date of the
effectiveness of the Registration Statement, and Xxxxxx Brothers Inc. will
notify the Company as to which Directed Share participants will need to be so
restricted. At the request of Xxxxxx Brothers Inc., the Company will direct the
transfer agent to place stop transfer restrictions upon such securities for
such period of time; and
(n) To comply with all applicable securities and other applicable
laws, rules and regulations in each foreign jurisdiction in which the Directed
Shares are offered in connection with the Directed Share Program.
6. Additional Agreements of the Company and the Underwriters
(a) The Company represents and agrees that, without the prior consent
of Xxxxxxx, Sachs & Co. and Xxxxxx Brothers Inc., it has not made and will not
make any offer relating to the Shares that would constitute a "free writing
prospectus" as defined in Rule 405 under the Act; each Underwriter represents
and agrees that, without the prior consent of the Company and Xxxxxxx, Sachs &
Co. and Xxxxxx Brothers Inc., it has not made and will not make any offer
relating to the Shares that would constitute a free writing prospectus; any
such free writing prospectus the use of which has been consented to by the
Company and Xxxxxxx, Sachs & Co. and Xxxxxx Brother Inc. is listed on Schedule
III(a) or Schedule III(b) hereto;
(b) The Company has complied and will comply with the requirements of
Rule 433 under the Act applicable to any Issuer Free Writing Prospectus,
including timely filing with the Commission or retention where required and
legending;
(c) The Company agrees that if at any time following issuance of an
Issuer Free Writing Prospectus any event occurred or occurs as a result of
which such Issuer Free Writing Prospectus would conflict with the information
in the Registration Statement, the Pricing Prospectus or the Prospectus or
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 then prevailing, not misleading, the Company will give
prompt notice thereof to Xxxxxxx, Sachs & Co. and Xxxxxx Brothers Inc. and, if
requested by Xxxxxxx, Sachs & Co. or Xxxxxx Brothers Inc., will prepare and
furnish without charge to each Underwriter an Issuer Free Writing Prospectus or
other document which will correct such conflict, statement or omission;
provided, however, that this agreement shall not apply to any statements or
omissions in an Issuer Free Writing Prospectus made in reliance upon and in
conformity with information furnished in writing to the Company by an
Underwriter through Xxxxxxx, Sachs & Co. or Xxxxxx Brothers Inc. expressly for
use therein.
7. The Company and the Selling Stockholder covenant and agree with one
another and with the several Underwriters that (a) the Company will pay or
cause to be paid the following: (i) the fees, disbursements and expenses of the
Company's counsel and accountants in connection with the registration of the
Shares under the Act and all other expenses in connection with the preparation,
printing and filing of the Registration Statement, any Preliminary Prospectus,
any Issuer Free Writing Prospectus and the Prospectus and amendments and
supplements thereto and the mailing and delivering of copies thereof to the
Underwriters and dealers; (ii) the cost of printing or producing any Agreement
among Underwriters, this Agreement, the Blue Sky Memorandum, closing documents
(including any compilations thereof) and any other documents in connection with
the offering, purchase, sale and delivery of the Shares; (iii) all expenses in
connection with the qualification of the Shares for offering and sale under
state securities laws as provided in Section 6(b) hereof, including the fees
and disbursements of counsel for the Underwriters in connection with such
qualification and in connection with the Blue Sky survey; (iv) all fees and
expenses in connection with listing the Shares on the Exchange; (v) the filing
fees incident to, and the fees and disbursements of counsel for the
Underwriters in connection with, securing any required review by the National
Association of Securities Dealers, Inc. of the terms of the sale of the Shares;
and (vi) all fees and expenses of the Attorneys-in-Fact and the Custodian; and
(vii) all costs, expenses, fees and taxes incident to and in connection with
the offer and sale of Firm Shares by the Underwriters in connection with the
Directed Share Program, including the fees and disbursements of counsel to the
Underwriters related thereto, the costs and expenses of preparation, printing
and distribution of the Directed Share Program material and all stamp duties or
other taxes incurred by the Underwriters in connection with the Directed Share
Program; and (b) the Company will pay or cause to be paid: (i) the cost of
preparing stock certificates; (ii) the cost and charges of any transfer agent
or registrar and (iii) all other costs and expenses incident to the performance
of its obligations hereunder which are not otherwise specifically provided for
in this Section 7; and (c) the Selling Stockholder will pay or cause to be paid
all costs and expenses incident to the performance of the Selling Stockholder's
obligations hereunder which are not otherwise specifically provided for in this
Section 7, including (i) any fees and expenses of counsel for the Selling
Stockholder and (ii) all expenses and taxes incident to the sale and delivery
of the Shares to be sold by the Selling Stockholder to the Underwriters
hereunder. It is understood, however, that the Company shall bear, and the
Selling Stockholder shall not be required to pay or to reimburse the Company
for, the cost of any other matters not directly relating to the sale and
purchase of the Shares pursuant to this Agreement, and that, except as provided
in this Section 7, and Sections 9 and 12 hereof, the Underwriters will pay all
of their own costs and expenses, including the fees of their counsel, stock
transfer taxes on resale of any of the Shares by them, and any advertising
expenses connected with any offers they may make.
8. The obligations of the Underwriters hereunder, as to the Shares to
be delivered at each Time of Delivery (i) by the Company, shall be subject, in
their discretion, to the condition that all representations and warranties and
other statements of the Company herein are, at and as of such Time of Delivery,
true and correct, the condition that the Company shall have performed all of
its obligations hereunder theretofore to be performed, and (ii) by the Selling
Stockholder, shall be subject, in their discretion, to the condition that all
representations and warranties and other statements of the Selling Stockholder
herein are, at and as of such Time of Delivery, true and correct, the condition
that the Selling Stockholder shall have performed all of its obligations
hereunder theretofore to be performed and the following additional conditions:
(a) The Prospectus shall have been filed with the Commission pursuant
to Rule 424(b) within the applicable time period prescribed for such filing by
the rules and regulations under the Act and in accordance with Section 5(a)
hereof; all material required to be filed by the Company pursuant to Rule
433(d) under the Act shall have been filed with the Commission within the
applicable time period prescribed for such filing by Rule 433; if the Company
has elected to rely upon Rule 462(b), the Rule 462(b) Registration Statement
shall have become effective by 10:00 P.M., Washington, D.C. time, on the date
of this Agreement; 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; no stop order suspending or preventing the use of the Prospectus or
any Issuer Free Writing Prospectus 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 your reasonable satisfaction;
(b) Xxxxxxx Xxxx & Xxxxxxxxx LLP, counsel for the Underwriters, shall
have furnished to you such written opinion and statement (a draft of such is
attached as Annex II(a) hereto), dated such Time of Delivery, with respect to
such matters as you 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;
(c) Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP, counsel for the Company,
shall have furnished to you (i) their written opinion as counsel for the
Company (a draft of such opinion is attached as Annex II(b)(i)); (ii) the tax
opinion as special tax counsel for the Company (a draft of such opinion is
attached as Annex II(b)(ii)), and (iii) the negative assurance letter as
counsel for the Company (a draft of such letter is attached as Annex
II(b)(iii)), and Xxxxx & Lardner LLP, as special regulatory counsel for the
Company, shall have furnished to you their written opinion (a draft of such
opinion is attached as Annex II(b)(iv)), in each case dated such Time of
Delivery, in form and substance satisfactory to you;
(d) Weil, Gotshal & Xxxxxx LLP and Xxxxxxx Xxxxxxxx Xxxxxx, counsel
for the Selling Stockholder, shall have furnished to you their written opinion
(a draft of each such opinion is attached as Annex II(c)(i) and Annex II(c)(ii)
hereto respectively), dated such Time of Delivery, in form and substance
satisfactory to you;
(e) On the date of the Prospectus at a time prior to the execution of
this Agreement, at 9:30 a.m., New York City time, on the effective date of any
post-effective amendment to the Registration Statement filed subsequent to the
date of this Agreement and also at each Time of Delivery, Ernst & Young LLP
shall have furnished to you a letter or letters, dated the respective dates of
delivery thereof, in form and substance satisfactory to you, to the effect set
forth in Annex III hereto (the executed copy of the letter delivered prior to
the execution of this Agreement is attached as Annex III(a) hereto and a draft
of the form of letter to be delivered on the effective date of any
post-effective amendment to the Registration Statement and as of each Time of
Delivery is attached as Annex III(b) hereto);
(f) On the date of the Prospectus at a time prior to the execution of
this Agreement, at 9:30 a.m., New York City time, on the effective date of any
post-effective amendment to the Registration Statement filed subsequent to the
date of this Agreement and also at each Time of Delivery, KPMG LLP shall have
furnished to you a letter or letters, dated the respective dates of delivery
thereof, in form and substance satisfactory to you, to the effect set forth in
Annex IV hereto (the executed copy of the letter delivered prior to the
execution of this Agreement is attached as Annex IV(a) hereto and a draft of
the form of letter to be delivered on the effective date of any post-effective
amendment to the Registration Statement and as of each Time of Delivery is
attached as Annex IV(b) hereto);
(g) On the date of the Prospectus at a time prior to the execution of
this Agreement, at 9:30 a.m., New York City time, on the effective date of any
post-effective amendment to the Registration Statement filed subsequent to the
date of this Agreement and also at each Time of Delivery, KPMG LLP shall have
furnished to you a letter or letters, dated the respective dates of delivery
thereof, in form and substance satisfactory to you, to the effect set forth in
Annex V hereto (the executed copy of the letter delivered prior to the
execution of this Agreement is attached as Annex V(a) hereto and a draft of the
form of letter to be delivered on the effective date of any post-effective
amendment to the Registration Statement and as of each Time of Delivery is
attached as Annex V(b) hereto);
(h) On the date of the Prospectus at a time prior to the execution of
this Agreement, at 9:30 a.m., New York City time, on the effective date of any
post-effective amendment to the Registration Statement filed subsequent to the
date of this Agreement and also at each Time of Delivery, Deloitte & Touche LLP
shall have furnished to you a letter or letters, dated the respective dates of
delivery thereof, in form and substance satisfactory to you, to the effect set
forth in Annex VI hereto (the executed copy of the letter delivered prior to
the execution of this Agreement is attached as Annex VI(a) hereto and a draft
of the form of letter to be delivered on the effective date of any
post-effective amendment to the Registration Statement and as of each Time of
Delivery is attached as Annex VI(b) hereto);
(i) (i) Neither the Company, any of its subsidiaries, ARC nor any of
its subsidiaries shall have sustained since the date of the latest audited
financial statements included in the Pricing Prospectus and the Prospectus 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 Pricing Prospectus and the Prospectus, and (ii) since the
respective dates as of which information is given in the Pricing Prospectus and
the Prospectus there shall not have been any change in the capital stock or
long-term debt of the Company or any of its subsidiaries or any change, or any
development involving a prospective change, in or affecting the general
affairs, management, financial position, stockholders' equity, assets or
results of operations of the Company, its subsidiaries, ARC or its
subsidiaries, taken as a whole, otherwise than as set forth or contemplated in
the Pricing Prospectus and the Prospectus, the effect of which, in any such
case described in clause (i) or (ii), is in the judgment of the Representatives
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 such
Time of Delivery on the terms and in the manner contemplated in the Pricing
Prospectus and the Prospectus;
(j) On or after the Applicable Time (i) no downgrading shall have
occurred in the rating accorded the Company's debt securities by any
"nationally recognized statistical rating organization", as that term is
defined by the Commission for purposes of Rule 436(g)(2) under the Act, and
(ii) no such organization shall have publicly announced that it has under
surveillance or review, with possible negative implications, its rating of any
of the Company's debt securities;
(k) On or after the Applicable Time there shall not have occurred any
of the following: (i) a suspension or material limitation in trading in
securities generally on the Exchange; (ii) a suspension or material limitation
in trading in the Company's securities on the Exchange; (iii) a general
moratorium on commercial banking activities declared by either Federal or New
York State authorities or a material disruption in commercial banking or
securities settlement or clearance services in the United States; (iv) the
outbreak or escalation of hostilities involving the United States or the
declaration by the United States of a national emergency or war or (v) the
occurrence of any other calamity or crisis or any change in financial,
political or economic conditions in the United States or elsewhere, if the
effect of any such event specified in clause (iv) or (v) in the judgment of the
Representatives makes it impracticable or inadvisable to proceed with the
public offering or the delivery of the Shares being delivered at such Time of
Delivery on the terms and in the manner contemplated in the Prospectus;
(l) The Merger Agreement and the Investment Agreement shall be in full
force and effect and shall not have been terminated; the Company shall not have
amended or waived any condition set forth in Section 7.01 or Section 7.02 of
the Merger Agreement without the prior written approval of Xxxxxxx, Xxxxx & Co.
and Xxxxxx Brothers Inc. and concurrently with the First Time of Delivery, the
ARC Merger shall be consummated;
(m) The Company has obtained and delivered to the Underwriters
executed copies of a lock-up agreement from each of Xxxxxx Xxxxxx, the
directors of the Company, the executive officers of the Company and FIT-ALT
Investor LLC, FIT Holdings LLC, FRIT Holdings LLC, Fortress Registered
Investment Trust, Fortress Brookdale Investment Fund LLC, Drawbridge Special
Opportunities Fund Ltd., Drawbridge Special Opportunities Fund LP, Drawbridge
Global Macro Master Fund Ltd., RIC Coinvestment Fund LP and the Selling
Stockholder (being all of the beneficial holders of 5% or more of the Company's
Stock), in the form attached hereto as Annex I which shall be in full force and
effect. Notwithstanding the foregoing, (i) the lock-up agreement for FRIT
Holdings LLC shall not limit or otherwise affect in any respect the rights of
the Lender or the Agent (each as defined below) under the (w) Margin Loan
Agreement, dated as of June 28, 2006 (the "FRIT Credit Agreement"), by and
between FRIT Holdings LLC and Deutsche Bank AG, London Branch, as agent (the
"Agent") and the sole lender (the "Lender"), and (x) under the Security
Agreement, dated June 28, 2006, by FRIT Holdings LLC in favor of the Agent, in
the event of a default under the FRIT Credit Agreement, to (subject to any
restrictions set forth in the respective documents) dispose of, seize, or take
any other action with respect to the 7,400,000 shares of Common Stock pledged
by FRIT Holdings LLC to the Agent, including, without limitation, the filing of
a shelf registration statement with respect to the shares of Common Stock
pledged thereunder and (ii) the lock-up agreements for FIT Holdings LLC and
FIT-ALT Investor LLC shall not limit or otherwise affect in any respect the
rights of the Lender or the Agent under (y) the Margin Loan Agreement, dated as
of June 28, 2006 (the "FIT Credit Agreement"), by and between FIT Holdings LLC
and the Agent and Lender and (z) under the Security Agreement, dated June 28,
2006, by FIT Holdings LLC in favor of the Agent, in the event of a default
under the FIT Credit Agreement, to (subject to any restrictions set forth in
the respective documents) dispose of, seize, or take any other action with
respect to the 20,000,000 shares of Common Stock pledged by FIT Holdings LLC to
the Agent and the 13,228,000 shares of Common Stock pledged by FIT-ALT Investor
LLC to the Agent, including, without limitation, the filing of a shelf
registration statement with respect to the shares of Common Stock pledged
thereunder;
(n) The Shares at such Time of Delivery shall have been duly listed,
subject to notice of issuance, on the Exchange;
(o) The Company shall have complied with the provisions of Section
5(c) hereof with respect to the furnishing of prospectuses on the New York
Business Day next succeeding the date of this Agreement;
(p) The Company and the Selling Stockholder shall have furnished or
caused to be furnished to you at such Time of Delivery certificates of officers
of the Company and of the Selling Stockholder, respectively, satisfactory to
you as to the accuracy of the representations and warranties of the Company and
the Selling Stockholder, respectively, herein at and as of such Time of
Delivery, as to the performance by the Company and the Selling Stockholder of
all of their respective obligations hereunder to be performed at or prior to
such Time of Delivery, and as to such other matters as you may reasonably
request, and the Company shall have furnished or caused to be furnished
certificates as to the matters set forth in subsections (a), (i) and (l) of
this Section 8; and
(q) Xxxxxxx X. Xxxxxx, Executive Vice President, Secretary and General
Counsel of the Company, shall have furnished to you her written opinion (a
draft of such opinion is attached as Annex II(d) hereto), dated such Time of
Delivery, in form and substance satisfactory to you.
9. (a) The Company will indemnify and hold harmless each Underwriter
against any losses, claims, damages or liabilities, joint or several, to which
such Underwriter may become subject, under the 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, the Pricing Prospectus or the Prospectus, or any amendment or
supplement thereto, or any Issuer Free Writing Prospectus or any "issuer
information" filed or required to be filed pursuant to Rule 433(d) under the
Act, 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 each Underwriter
for any legal or other expenses reasonably incurred by such Underwriter in
connection with investigating or defending any such action or claim as such
expenses are incurred; provided, however, that 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 Registration Statement, any
Preliminary Prospectus, the Pricing Prospectus or the Prospectus, or any
amendment or supplement thereto, or any Issuer Free Writing Prospectus, in
reliance upon and in conformity with written information furnished to the
Company by any Underwriter through Xxxxxxx, Sachs & Co. or Xxxxxx Brothers Inc.
expressly for use therein.
(b) The Selling Stockholder will indemnify and hold harmless each
Underwriter against any losses, claims, damages or liabilities, joint or
several, to which such Underwriter may become subject, under the 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, the Pricing Prospectus or the
Prospectus, or any amendment or supplement thereto or any Issuer Free Writing
Prospectus 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 any Preliminary Prospectus, the
Registration Statement, the Pricing Prospectus or the Prospectus or any such
amendment or supplement thereto, or any Issuer Free Writing Prospectus, in
reliance upon and in conformity with written information furnished to the
Company by the Selling Stockholder concerning the Selling Stockholder expressly
for use therein; and will reimburse each Underwriter for any legal or other
expenses reasonably incurred by such Underwriter in connection with
investigating or defending any such action or claim as such expenses are
incurred; provided, however, that the Selling Stockholder 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 any Preliminary Prospectus, the
Registration Statement, the Pricing Prospectus or the Prospectus, or any
amendment or supplement thereto, or any Issuer Free Writing Prospectus, in
reliance upon and in conformity with written information furnished to the
Company by any Underwriter through Xxxxxxx, Sachs & Co. or Xxxxxx Brothers Inc.
expressly for use therein; provided, further, that the indemnification and
contribution liabilities of the Selling Stockholder pursuant to this Agreement
shall not exceed the product of the number of Shares sold by the Selling
Stockholder (including any Optional Shares) and the initial public offering
price per share of the Shares as set forth in the Prospectus. The written
information furnished to the Company by the Selling Stockholder concerning the
Selling Stockholder expressly for use in any Preliminary Prospectus, the
Registration Statement, the Pricing Prospectus or the Prospectus or any such
amendment or supplement thereto, or any Issuer Free Writing Prospectus is the
information regarding the Selling Stockholder set forth in the table appearing
under the heading "Principal Stockholders and Selling Stockholder" and
footnotes 4, 5 and 6 thereto.
(c) Each Underwriter will indemnify and hold harmless the Company and
the Selling Stockholder against any losses, claims, damages or liabilities to
which the Company or the Selling Stockholder may become subject, under the 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, the Pricing Prospectus or the
Prospectus, or any amendment or supplement thereto, or any Issuer Free Writing
Prospectus 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 any Preliminary Prospectus, the
Registration Statement, the Pricing Prospectus or the Prospectus or any
amendment or supplement thereto, or any Issuer Free Writing Prospectus, in
reliance upon and in conformity with written information furnished to the
Company by such Underwriter through Xxxxxxx, Sachs & Co. or Xxxxxx Brothers
Inc. expressly for use therein; and will reimburse the Company and the Selling
Stockholder for any legal or other expenses reasonably incurred by the Company
or the Selling Stockholder in connection with investigating or defending any
such action or claim as such expenses are incurred.
(d) Promptly after receipt by an indemnified party under subsection
(a), (b) or (c) 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 failure to so notify the
indemnifying party shall not relieve it from any liability which it may have to
any indemnified party otherwise than under such subsection. In case any such
action shall be brought against any indemnified party and it shall notify the
indemnifying party of the commencement thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it shall wish, jointly
with any other indemnifying party similarly notified, to assume the defense
thereof, with counsel reasonably satisfactory to such indemnified party (who
shall not, except with the consent of the indemnified party, be counsel to the
indemnifying party), and, after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof, the
indemnifying party shall not be liable to such indemnified party under such
subsection for any legal expenses of other counsel or any other expenses, in
each case subsequently incurred by such indemnified party, in connection with
the defense thereof other than reasonable costs of investigation.
Notwithstanding anything contained herein to the contrary, if indemnity may be
sought pursuant to subsection (g) hereof in respect of a claim or action
referred to in Section subsection (g), then in addition to such separate firm
for the indemnified parties, the indemnifying party shall be liable for the
fees and expenses of not more than one separate firm (in addition to any local
counsel) for the Xxxxxx Brothers Entities (as defined in subsection (g)) for
the defense of any loss, claim, damage, liability or action arising out of the
Directed Share Program. No indemnifying party shall, without the written
consent of the indemnified party, effect the settlement or compromise of, or
consent to the entry of any judgment with respect to, any pending or threatened
action or claim in respect of which indemnification or contribution may be
sought hereunder (whether or not the indemnified party is an actual or
potential party to such action or claim) unless such settlement, compromise or
judgment (i) includes an unconditional release of the indemnified party from
all liability arising out of such action or claim and (ii) does not include a
statement as to or an admission of fault, culpability or a failure to act, by
or on behalf of any indemnified party.
(e) If the indemnification provided for in this Section 9 is
unavailable to or insufficient to hold harmless an indemnified party under
subsection (a), (b) or (c) 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 and the Selling Stockholder 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 (d) above, then each indemnifying party shall
contribute to such amount paid or payable by such indemnified party in such
proportion as is appropriate to reflect not only such relative benefits but
also the relative fault of the Company and the Selling Stockholder 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 and the Selling
Stockholder 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
(before deducting expenses) received by the Company and the Selling Stockholder
bear to the total underwriting discounts and commissions received by the
Underwriters, in each case as set forth in the table on the cover page of the
Prospectus. The relative fault shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or
the omission or alleged omission to state a material fact relates to
information supplied by the Company or the Selling Stockholder 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, the Selling Stockholder and the Underwriters agree that
it would not be just and equitable if contributions pursuant to this subsection
(e) 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 (e). 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 (e) shall be deemed to include
any legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this subsection (e), 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 Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations in this subsection (e) to
contribute are several in proportion to their respective underwriting
obligations and not joint.
(f) The obligations of the Company and the Selling Stockholder under
this Section 9 shall be in addition to any liability which the Company and the
Selling Stockholder may otherwise have and shall extend, upon the same terms
and conditions, to each person, if any, who controls any Underwriter within the
meaning of the Act; and the obligations of the Underwriters under this Section
9 shall be in addition to any liability which the respective 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 or the
Selling Stockholder within the meaning of the Act.
(g) The Company shall indemnify and hold harmless Xxxxxx Brothers Inc.
(including its directors, officers and employees) and each person, if any, who
controls Xxxxxx Brothers Inc. within the meaning of Section 15 of the
Securities Act ("Xxxxxx Brothers Entities"), from and against any loss, claim,
damage or liability or any action in respect thereof to which any of the Xxxxxx
Brothers Entities may become subject, under the Securities Act or otherwise,
insofar as such loss, claim, damage, liability or action (i) arises out of, or
is based upon, any untrue statement or alleged untrue statement of a material
fact contained in any material prepared by or with the approval of the Company
for distribution to Directed Share participants in connection with the Directed
Share Program or any omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein
not misleading, (ii) arises out of, or is based upon, the failure of the
Directed Share Participant to pay for and accept delivery of Directed Shares
that the Directed Share Participant agreed to purchase or (iii) is otherwise
related to the Directed Share Program; provided that, the Company shall not be
liable under this clause (iii) for any loss, claim, damage, liability or action
that is determined in a final judgment by a court of competent jurisdiction to
have resulted from the gross negligence or willful misconduct of the Xxxxxx
Brothers Entities. The Company shall reimburse the Xxxxxx Brothers Entities
promptly upon demand for any legal or other expenses reasonably incurred by
them in connection with investigating or defending or preparing to defend
against any such loss, claim, damage, liability or action as such expenses are
incurred.
10. (a) If any Underwriter shall default in its obligation to purchase
the Shares which it has agreed to purchase hereunder at a Time of Delivery, you
may in your discretion arrange for you or another party or other parties to
purchase such Shares on the terms contained herein. If within thirty-six hours
after such default by any Underwriter you do not arrange for the purchase of
such Shares, then the Company and the Selling Stockholder shall be entitled to
a further period of thirty-six hours within which to procure another party or
other parties satisfactory to you to purchase such Shares on such terms. In the
event that, within the respective prescribed periods, you notify the Company
and the Selling Stockholder that you have so arranged for the purchase of such
Shares, or the Company and the Selling Stockholder notify you that they have so
arranged for the purchase of such Shares, you or the Company and the Selling
Stockholder shall have the right to postpone a Time of Delivery for a period of
not more than seven days, in order to effect whatever changes may thereby be
made necessary in the Registration Statement or the Prospectus, or in any other
documents or arrangements, and the Company agrees to file promptly any
amendments or supplements to the Registration Statement or the Prospectus which
in your opinion may thereby be made necessary. The term "Underwriter" as used
in this Agreement shall include any person substituted under this Section 10
with like effect as if such person had originally been a party to this
Agreement with respect to such Shares.
(b) If, after giving effect to any arrangements for the purchase of
the Shares of a defaulting Underwriter or Underwriters by you and the Company
and the Selling Stockholder as provided in subsection (a) above, the aggregate
number of such Shares which remains unpurchased does not exceed one-eleventh of
the aggregate number of all the Shares to be purchased at such Time of
Delivery, then the Company and the Selling Stockholder shall have the right to
require each non-defaulting Underwriter to purchase the number of Shares which
such Underwriter agreed to purchase hereunder at such Time of Delivery and, in
addition, to require each non-defaulting Underwriter to purchase its pro rata
share (based on the number of Shares which such Underwriter agreed to purchase
hereunder) of the Shares of such defaulting Underwriter or Underwriters for
which such arrangements have not been made; but nothing herein shall relieve a
defaulting Underwriter from liability for its default.
(c) If, after giving effect to any arrangements for the purchase of
the Shares of a defaulting Underwriter or Underwriters by you and the Company
and the Selling Stockholder as provided in subsection (a) above, the aggregate
number of such Shares which remains unpurchased exceeds one-eleventh of the
aggregate number of all of the Shares to be purchased at such Time of Delivery,
or if the Company and the Selling Stockholder shall not exercise the right
described in subsection (b) above to require non-defaulting Underwriters to
purchase Shares of a defaulting Underwriter or Underwriters, then this
Agreement (or, with respect to the Second Time of Delivery, the obligations of
the Underwriters to purchase and of the Company to sell the Optional Shares)
shall thereupon terminate, without liability on the part of any non-defaulting
Underwriter or the Company or the Selling Stockholder, except for the expenses
to be borne by the Company and the Selling Stockholder and the Underwriters as
provided in Section 7 hereof and the indemnity and contribution agreements in
Section 9 hereof; but nothing herein shall relieve a defaulting Underwriter
from liability for its default.
11. The respective indemnities, agreements, representations,
warranties and other statements of the Company, the Selling Stockholder and the
several Underwriters, as set forth in this 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 any Underwriter or any controlling person of
any Underwriter, or the Company, or any of the Selling Stockholder, or any
officer or director or controlling person of the Company, or any controlling
person of the Selling Stockholder, and shall survive delivery of and payment
for the Shares.
12. If this Agreement shall be terminated pursuant to Section 10
hereof, neither the Company nor the Selling Stockholder shall then be under any
liability to any Underwriter except as provided in Sections 7 and 9 hereof; but
if for any other reason any Shares are not delivered by or on behalf of the
Company or the Selling Stockholder as provided herein, the Company and the
Selling Stockholder pro rata (based on the number of Shares to be sold by the
Company and the Selling Stockholder hereunder) will reimburse the Underwriters
through you for all out-of-pocket expenses approved in writing by you,
including fees and disbursements of counsel, reasonably incurred by the
Underwriters in making preparations for the purchase, sale and delivery of the
Shares not so delivered, but the Company and the Selling Stockholder shall then
be under no further liability to any Underwriter in respect of the Shares not
so delivered except as provided in Sections 7 and 9 hereof.
13. (a) In all dealings hereunder, you shall act on behalf of each of
the Underwriters, and the parties hereto shall be entitled to act and rely upon
any statement, request, notice or agreement on behalf of any Underwriter made
or given by you jointly or by Xxxxxxx, Xxxxx & Co. or Xxxxxx Brothers Inc. on
behalf of you as the representatives; and in all dealings with any Selling
Stockholder hereunder, you and the Company shall be entitled to act and rely
upon any statement, request, notice or agreement on behalf of the Selling
Stockholder made or given by any or all of the Attorneys-in-Fact for the
Selling Stockholder.
(b) All statements, requests, notices and agreements hereunder shall be
in writing, and if to the Underwriters shall be delivered or sent by mail, telex
or facsimile transmission to you as the representatives in care of Xxxxxxx,
Xxxxx & Co., Xxx Xxx Xxxx Xxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention: Registration Department and Xxxxxx Brothers Inc., 000 Xxxxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000, Attention: Syndicate Registration (Fax: 000-000-0000),
with a copy, in the case of any notice pursuant to Section 9, to the Director of
Litigation, Office of the General Counsel, Xxxxxx Brothers Inc., 000 Xxxx
Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000 (Fax: 000-000-0000); if to the
Selling Stockholder shall be delivered or sent by mail, telex or facsimile
transmission to counsel for the Selling Stockholder at c/o Capital Z Management,
LLC, 000 Xxxx Xxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000; and if to the Company
shall be delivered or sent by mail, telex or facsimile transmission to the
address of the Company set forth in the Registration Statement, Attention:
Secretary; provided, however, that any notice to an Underwriter pursuant to
Section 9(c) hereof shall be delivered or sent by mail, telex or facsimile
transmission to such Underwriter at its address set forth in its Underwriters'
Questionnaire or telex constituting such Questionnaire, which address will be
supplied to the Company or the Selling Stockholder by you on request; provided,
however, that notices under subsection 5(e) shall be in writing, and if to the
Underwriters shall be delivered or sent by mail, telex or facsimile transmission
to you as the representatives at Xxxxxxx, Sachs & Co., 00 Xxxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000, Attention: Control Room and Xxxxxx Brothers Inc., 000 Xxxx
Xxxxxx, 0xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Syndicate Department.
Any such statements, requests, notices or agreements shall take effect upon
receipt thereof.
14. This Agreement shall be binding upon, and inure solely to the
benefit of, the Underwriters, the Company and the Selling Stockholder and, to
the extent provided in Sections 9 and 11 hereof, the officers and directors of
the Company and each person who controls the Company, the Selling Stockholder
or any Underwriter, 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. No purchaser of any of the Shares from
any Underwriter shall be deemed a successor or assign by reason merely of such
purchase.
15. Each of the Company and the Selling Stockholder acknowledges and
agrees that (i) the purchase and sale of the Shares pursuant to this Agreement
is an arm's-length commercial transaction between the Company or the Selling
Stockholder, as applicable, on the one hand, and the several Underwriters, on
the other, (ii) in connection therewith and with the process leading to such
transaction each Underwriter is acting solely as a principal and not the agent
or fiduciary of the Company or the Selling Stockholder, (iii) no Underwriter
has assumed an advisory or fiduciary responsibility in favor of the Company or
the Selling Stockholder with respect to the offering contemplated hereby or the
process leading thereto (irrespective of whether such Underwriter has advised
or is currently advising the Company or the Selling Stockholder on other
matters) or any other obligation to the Company or the Selling Stockholder
except the obligations expressly set forth in this Agreement and (iv) the
Company or the Selling Stockholder has consulted its own legal and financial
advisors to the extent it deemed appropriate. The Company and the Selling
Stockholder agrees that it will not claim that the Underwriters, or any of
them, has rendered advisory services of any nature or respect, or owes a
fiduciary or similar duty to the Company or the Selling Stockholder, in
connection with such transaction or the process leading thereto.
16. Time shall be of the essence of this 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.
17. This Agreement shall be governed by and construed in accordance
with the laws of the State of New York.
18. 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.
19. Notwithstanding anything herein to the contrary, the Company and
the Selling Stockholder are authorized to disclose to any persons the U.S.
federal and state income tax treatment and tax structure of the potential
transaction and all materials of any kind (including tax opinions and other tax
analyses) provided to the Company and the Selling Stockholder relating to that
treatment and structure, without the Underwriters imposing any limitation of
any kind. However, any information relating to the tax treatment and tax
structure shall remain confidential (and the foregoing sentence shall not
apply) to the extent necessary to enable any person to comply with securities
laws. For this purpose, "tax structure" is limited to any facts that may be
relevant to that treatment.
If the foregoing is in accordance with your understanding, please sign
and return to us one for the Company and each of the Representatives plus one
for each counsel and the Custodian, if any counterparts hereof, and upon the
acceptance hereof by you, on behalf of each of the Underwriters, this letter
and such acceptance hereof shall constitute a binding agreement among each of
the Underwriters, the Company and the Selling Stockholder. It is understood
that your acceptance of this letter on behalf of each of the Underwriters is
pursuant to the authority set forth in a form of Agreement among Underwriters,
the form of which shall be submitted to the Company and the Selling Stockholder
for examination, upon request, but without warranty on your part as to the
authority of the signers thereof.
Any person executing and delivering this Agreement as Attorney-in-Fact
for a Selling Stockholder represents by so doing that he has been duly
appointed as Attorney-in-Fact by the Selling Stockholder pursuant to a validly
existing and binding Power of Attorney which authorizes such Attorney-in-Fact
to take such action.
Very truly yours,
BROOKDALE SENIOR LIVING INC.
By: /s/ Xxxx X. Xxxxxxx
-----------------------------------
Name: Xxxx X. Xxxxxxx
Title: Chief Executive Officer
HEALTH PARTNERS
By: /s/ Xxxx X. Xxxxxxx
-----------------------------------
Name: Xxxx X. Xxxxxxx
Title:
As Attorney-in-Fact acting on behalf
of the Selling Stockholder
Accepted as of the date hereof on
behalf of each of the Underwriters:
XXXXXXX, SACHS & CO.
By: /s/ Xxxxxxx, Xxxxx & Co.
-----------------------------------
(Xxxxxxx, Sachs & Co.)
XXXXXX BROTHERS INC.
By: /s/ Xxxxxxx XxXxxxx
----------------------------------
Name: Xxxxxxx XxXxxxx
Title Managing Director
