Exhibit 1.1
BROOKDALE SENIOR LIVING INC.
Shares
COMMON STOCK
FORM OF UNDERWRITING AGREEMENT
dated , 2005
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 Xxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Brookdale Senior Living Inc., a Delaware corporation (the "Company"),
proposes, subject to the terms and conditions stated herein, to issue and sell
to the Underwriters named in Schedule I hereto (the "Underwriters") an aggregate
of shares and, at the election of the Underwriters, up to
additional shares of Common Stock ("Stock") of the Company and the stockholders
of the Company named in Schedule II hereto (the "Selling Stockholders") propose,
subject to the terms and conditions stated herein, to sell to the Underwriters
an aggregate of shares. The aggregate of shares to be sold
by the Company and the Selling Stockholders is herein called the "Firm Shares"
and the aggregate of additional shares to be sold by the Company 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 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 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.
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. 333-127372) (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"; and such
final prospectus, in the form first filed pursuant to Rule 424(b) under
the Act, is hereinafter called the "Prospectus");
(ii) No order preventing or suspending the use of any Preliminary
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,
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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 a Selling Stockholder
expressly for use therein;
(iii) 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 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 a Selling Stockholder expressly for use therein;
(iv) Neither the Company nor any of its subsidiaries has sustained
since the date of the latest audited financial statements included in 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 Prospectus;
and, since the respective dates as of which information is given in the
Registration Statement 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 Prospectus;
(v) 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
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 Prospectus or as would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect;
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(vi) 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 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 each subsidiary of the Company that is
listed on Schedule III 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;
(vii) The Company has an authorized capitalization as set forth in
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 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;
(viii) 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 Prospectus;
(ix) 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 consummation of the transactions herein 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 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 (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, except the registration under the Act of
the Shares and such consents,
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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;
(x) 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, 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;
(xi) The statements set forth in 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;
(xii) Other than as set forth in 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 or 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;
(xiii) The Company is not and, after giving effect to the offering
and sale of the Shares, will not be an "investment company", as such term
is defined in the Investment Company Act of 1940, as amended (the
"Investment Company Act");
(xiv) The financial statements included in the Registration
Statement and the Prospectus (taken together with the related notes and
schedules thereto) present fairly the financial position of the Company
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 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 Prospectus provide a reasonable basis for presenting the
significant effects
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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;
(xv) Ernst & Young LLP, who have certified certain financial
statements of the Company and its subsidiaries, and KPMG LLP, who have
certified certain financial statements of Alterra Healthcare Corporation,
are each independent public accountants as required by the Act and the
rules and regulations of the Commission thereunder;
(xvi) The Company (individually and on a consolidated basis) and
each of its subsidiaries maintain a system of internal accounting controls
sufficient to provide reasonable assurance that (A) transactions are
executed in accordance with management's general or specific
authorizations; (B) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted
accounting principles and to maintain asset accountability; (C) access to
assets is permitted only in accordance with management's general or
specific authorization; and (D) the recorded accountability for assets is
compared with the existing assets at reasonable intervals and appropriate
action is taken with respect to any differences;
(xvii) 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
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;
(xviii) 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
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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
Prospectus does not infringe on the rights of any person;
(xix) 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;
(xx) Except as disclosed in 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;
(xxi) Except as disclosed in 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;
(xxii) 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
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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; and
(xxiii) 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 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
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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).
(xxiv) The Registration Statement, 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 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.
(b) Each of the Selling Stockholders severally 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 such 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 such Selling
Stockholder hereunder, have been obtained; and such Selling Stockholder
has full right, 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 such Selling Stockholder hereunder;
(ii) The sale of the Shares to be sold by such Selling Stockholder
hereunder and the compliance by such 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 such Selling Stockholder is a party or by
which such Selling Stockholder is bound or to which
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any of the property or assets of such Selling Stockholder is subject, (y)
the Certificate of Incorporation or By-laws of such Selling Stockholder or
the Certificate of Formation or Limited Liability Company Operating
Agreement of such Selling Stockholder, as applicable, or (z) any statute
or any order, rule or regulation of any court or governmental agency or
body having jurisdiction over such Selling Stockholder or the property of
such 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 such
Selling Stockholder or on the ability of such Selling Stockholder to
deliver good and valid title to such Shares;
(iii) Such Selling Stockholder has, and immediately prior to the
Time of Delivery (as defined in Section 4 hereof) such Selling Stockholder
will have, good and valid title to the Shares to be sold by such 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) Such 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
Registration Statement, any Preliminary Prospectus, the Prospectus or any
amendment or supplement thereto are made in reliance upon and in
conformity with written information furnished to the Company by such
Selling Stockholder expressly for use therein, such Preliminary Prospectus
and the Registration Statement did, and the Prospectus and any further
amendments or supplements to the Registration Statement and 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;
(vi) 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, such 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);
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(vii) Certificates in negotiable form representing all of the Shares
to be sold by such 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 such Selling
Stockholder to [Name of Custodian], as custodian (the "Custodian"), and
such Selling Stockholder has duly executed and delivered a Power of
Attorney, in the form heretofore furnished to you (the "Power of
Attorney"), appointing the persons indicated in Schedule II hereto, and
each of them, as such Selling Stockholder's attorneys-in-fact (the
"Attorneys-in-Fact") with authority to execute and deliver this Agreement
on behalf of such Selling Stockholder, to determine the purchase price to
be paid by the Underwriters to the Selling Stockholders as provided in
Section 2 hereof, to authorize the delivery of the Shares to be sold by
such Selling Stockholder hereunder and otherwise to act on behalf of such
Selling Stockholder in connection with the transactions contemplated by
this Agreement and the Custody Agreement; and
(viii) The Shares represented by the certificates held in custody
for such Selling Stockholder under the Custody Agreement are subject to
the interests of the Underwriters hereunder; the arrangements made by such
Selling Stockholder for such custody, and the appointment by such Selling
Stockholder of the Attorneys-in-Fact by the Power of Attorney, are to that
extent irrevocable; the obligations of the Selling Stockholders hereunder
shall not be terminated by operation of law, whether by the death or
incapacity of any individual Selling Stockholder or, in the case of an
estate or trust, by the death or incapacity of any executor or trustee or
the termination of such estate or trust, or in the case of a partnership
or corporation, by the dissolution of such partnership or corporation, or
by the occurrence of any other event; if any individual Selling
Stockholder or any such executor or trustee should die or become
incapacitated, or if any such estate or trust should be terminated, or if
any such partnership or corporation 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 Stockholders in accordance with the terms and conditions of
this Agreement and of the Custody Agreements; and actions taken by the
Attorneys-in-Fact pursuant to the Powers of Attorney shall be as valid as
if such death, incapacity, termination, 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
death, incapacity, termination, dissolution or other event.
2. Subject to the terms and conditions herein set forth, (a) the Company
and each of the Selling Stockholders agree, 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 each of the Selling Stockholders,
at a purchase price per share of $ , 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
each of the Selling Stockholders as set forth opposite their respective names in
Schedule II hereto by a fraction, the
11
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 all of the Selling
Stockholders 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 Company agrees to sell to each of the Underwriters, and each of the
Underwriters agrees, severally and not jointly, to purchase from the Company, 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 Company hereby grants to the Underwriters the right to purchase at
their election up to 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 Company,
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 Company 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, Xxxxx & Co. may request upon at least forty-eight hours' prior
notice to the Company and the Selling Stockholders shall be delivered by or on
behalf of the Company and the Selling Stockholders to Xxxxxxx, Sachs & 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 each of the Selling Stockholders to Xxxxxxx, Xxxxx
& 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, Sachs & 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 , 2005 or such other time and date as Xxxxxxx, Xxxxx
& Co. and the Company may agree upon in writing, and,
12
with respect to the Optional Shares, 9:30 a.m., New York time, on the date
specified by Xxxxxxx, Sachs & Co. in the written notice given by Xxxxxxx, Xxxxx
& Co. of the Underwriters' election to purchase such Optional Shares, or such
other time and date as Xxxxxxx, Sachs & 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 7 hereof, including the cross
receipt for the Shares and any additional documents requested by the
Underwriters pursuant to Section 7(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 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 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
prospectus, 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 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
13
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 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, 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 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 120 days after the date of the Prospectus (the initial
"Lock-Up Period"), 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 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 or (ii) 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 (x) the aggregate market value of all such
shares may not exceed $100 million and (y) 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 120 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-
14
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, Sachs & Co. and Xxxxxx Brothers Inc. each waive, in writing, such
extension; the Company will provide the representatives and any co-managers with
prior notice of any such announcement that gives rise to an extension of the
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) 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 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 of 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;
15
(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; and
(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.
(j) 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. The Company and each of the Selling Stockholders 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
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
5(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 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 6; and (c) such Selling Stockholder
will pay or cause to be paid all costs and expenses incident to the performance
of such Selling Stockholder's obligations hereunder which are not otherwise
specifically provided for in this Section 6, including (i) any fees and expenses
of counsel for such Selling Stockholder, (ii) such Selling
16
Stockholder's pro rata share of the fees and expenses of the Attorneys-in-Fact
and the Custodian, and (iii) all expenses and taxes incident to the sale and
delivery of the Shares to be sold by such Selling Stockholder to the
Underwriters hereunder. In connection with clause (c) of the preceding sentence,
Xxxxxxx, Xxxxx & Co. agrees to pay New York State stock transfer tax, and such
Selling Stockholder agrees to reimburse Xxxxxxx, Sachs & Co. for associated
carrying costs if such tax payment is not rebated on the day of payment and for
any portion of such tax payment not rebated. It is understood, however, that the
Company shall bear, and the Selling Stockholders 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 6, and Sections 8 and 11 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.
7. 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 each Selling
Stockholder, shall be subject, in their discretion, to the condition that all
representations and warranties and other statements of such Selling Stockholder
herein are, at and as of such Time of Delivery, true and correct, the condition
that such 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; 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; 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 or opinions (a draft of each
such opinion is attached as Annex III(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 their written opinion (a draft of such
opinion is attached as Annex III(b) hereto), dated such Time of Delivery, in
form and substance satisfactory to you;
(d) The respective counsel for each of the Selling Stockholders, as
indicated in Schedule II hereto, each shall have furnished to you their written
opinion with respect to each of the Selling Stockholders for whom they are
acting as counsel (a draft of each such opinion is
17
attached as Annex III(c) hereto), dated the First 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 I hereto (the executed copy of the letter delivered prior to the
execution of this Agreement is attached as Annex I(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 I(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 II hereto (the executed copy of the letter delivered prior to the
execution of this Agreement is attached as Annex II(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 II(b) hereto);
(g) (i) Neither the Company nor any of its subsidiaries shall have
sustained since the date of the latest audited financial statements included in
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 Prospectus, and (ii) since the respective dates as
of which information is given in the Prospectus there shall not have been any
change in the capital stock or long-term debt of the Company or any 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 and its
subsidiaries taken as a whole, otherwise than as set forth or contemplated in
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 Prospectus;
(h) On or after the date hereof (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;
(i) On or after the date hereof there shall not have occurred any of
the following: (i) a suspension or material limitation in trading in securities
generally on the
18
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;
(j) The Company has obtained and delivered to the Underwriters
executed copies of an agreement from each stockholder of the Company other than
the Selling Stockholders, providing that, during the Lock-Up Period such
stockholders shall not 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 pursuant
to 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), 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. waive, in writing, such extension;
(k) The Shares at such Time of Delivery shall have been duly listed,
subject to notice of issuance, on the Exchange;
(l) 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;
(m) The Company and the Selling Stockholders 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 Stockholders, respectively, satisfactory to
you as to the accuracy of the representations and warranties of the Company and
the Selling Stockholders, respectively, herein at and as of such Time of
Delivery, as to the performance by the Company and the Selling Stockholders 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) and (f) of this
Section 7; and
19
(n) 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 III(d) hereto), dated such Time of
Delivery, in form and substance satisfactory to you;
8. (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 or the Prospectus, or any amendment or supplement thereto, or arise
out of or are based upon the omission or alleged omission to state in any
Preliminary Prospectus, the Registration Statement or the Prospectus, or in any
amendment or supplement thereto, any 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 any Preliminary
Prospectus, the Registration Statement or the Prospectus or any such amendment
or supplement 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) Each of the Selling Stockholders 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 or the Prospectus, or any amendment or supplement
thereto, or arise out of or are based upon the omission or alleged omission to
state in any Preliminary Prospectus, the Registration Statement or the
Prospectus, or in any amendment or supplement thereto, any 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 or the Prospectus or
any such amendment or supplement thereto in reliance upon and in conformity with
written information furnished to the Company by such 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 such 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 or the Prospectus or any such amendment or supplement 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.
20
(c) Each Underwriter will indemnify and hold harmless the Company
and each Selling Stockholder against any losses, claims, damages or liabilities
to which the Company or such 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 or the Prospectus, or any amendment or
supplement thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in any Preliminary
Prospectus, the Registration Statement or the Prospectus or any such amendment
or supplement 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 each Selling Stockholder for any legal or other expenses reasonably incurred
by the Company or such 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 Section 10(g) hereof in respect of a claim or action referred
to in Section 10(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 Section 10(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.
21
(e) If the indemnification provided for in this Section 8 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 Stockholders 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 Stockholders 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 Stockholders 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 Stockholders 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 Stockholders 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, each of the
Selling Stockholders 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 Stockholders
under this Section 8 shall be in addition to any liability which the Company and
the respective Selling Stockholders 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 8 shall be in addition to any liability which
the respective
22
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 any 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.
9. (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 Stockholders 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 Stockholders that you have so arranged for the purchase of such Shares,
or the Company and the Selling Stockholders notify you that they have so
arranged for the purchase of such Shares, you or the Company and the Selling
Stockholders 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 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 9 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 Stockholders as provided in subsection (a) above, the aggregate
number of such Shares which remains
23
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 Stockholders 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 Stockholders 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 Stockholders 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 Stockholders, except for the expenses
to be borne by the Company and the Selling Stockholders and the Underwriters as
provided in Section 6 hereof and the indemnity and contribution agreements in
Section 8 hereof; but nothing herein shall relieve a defaulting Underwriter from
liability for its default.
10. The respective indemnities, agreements, representations, warranties
and other statements of the Company, the Selling Stockholders 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 Stockholders, or any officer
or director or controlling person of the Company, or any controlling person of
any Selling Stockholder, and shall survive delivery of and payment for the
Shares.
11. If this Agreement shall be terminated pursuant to Section 9 hereof,
neither the Company nor the Selling Stockholders shall then be under any
liability to any Underwriter except as provided in Sections 6 and 8 hereof; but,
if for any other reason any Shares are not delivered by or on behalf of the
Company and the Selling Stockholders as provided herein, the Company and each of
the Selling Stockholders pro rata (based on the number of Shares to be sold by
the Company and such 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 Stockholders shall then
be under no further liability to any Underwriter in respect of the Shares not so
delivered except as provided in Sections 6 and 8 hereof.
12. 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 &
24
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 such Selling Stockholder made or given by any or all of the
Attorneys-in-Fact for such Selling Stockholder.
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., 00 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Registration
Department and Xxxxxx Brothers Inc., 000 Xxxx Xxxxxx, 0xx Xxxxx, Xxx Xxxx, Xxx
Xxxx 00000, Attention: Syndicate Department; if to any Selling Stockholder shall
be delivered or sent by mail, telex or facsimile transmission to counsel for
such Selling Stockholder at its address set forth in Schedule II hereto; 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 8(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 Stockholders 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, Xxxxx & 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.
13. This Agreement shall be binding upon, and inure solely to the benefit
of, the Underwriters, the Company and the Selling Stockholders and, to the
extent provided in Sections 8 and 10 hereof, the officers and directors of the
Company and each person who controls the Company, any 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.
14. The Company and each of the Selling Stockholders 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 such 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 such Selling Stockholder, (iii) no Underwriter
has assumed an advisory or fiduciary responsibility in favor of the Company or
such 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 such Selling Stockholder on other matters)
or any other obligation to the Company or such Selling Stockholder except the
obligations expressly set forth in this Agreement and (iv) the Company or such
Selling Stockholder has consulted its own legal and financial advisors to the
extent it deemed appropriate. The Company and each 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
25
owes a fiduciary or similar duty to the Company or such Selling Stockholder, in
connection with such transaction or the process leading thereto.
15. 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.
16. This Agreement shall be governed by and construed in accordance with
the laws of the State of New York.
17. 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.
18. Notwithstanding anything herein to the contrary, the Company and the
Selling Stockholders 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 Stockholders 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 each of the Selling Stockholders. 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 Stockholders
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 such Selling Stockholder pursuant to a validly existing and
binding Power of Attorney which authorizes such Attorney-in-Fact to take such
action.
26
Very truly yours,
BROOKDALE SENIOR LIVING INC.
By:
------------------------------------
Name:
Title:
EMERITUS CORPORATION
NW SELECT LLC
By:
------------------------------------
Name:
Title:
As Attorney-in-Fact acting on behalf
of each of the Selling Stockholders
named in Schedule II to this
Agreement.
Accepted as of the date hereof at ,
----
:
-----------------------------------
XXXXXXX, XXXXX & CO.
By:
----------------------------
(Xxxxxxx, Sachs & Co.)
XXXXXX BROTHERS INC.
By:
----------------------------
Name:
Title
On behalf of each of the Underwriters
27
