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OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
INTEGRATED LIVING COMMUNITIES, INC.
AT
$11.50 NET PER SHARE
BY
SLC ACQUISITION CORP.,
A WHOLLY OWNED SUBSIDIARY
OF
WHITEHALL STREET REAL ESTATE
LIMITED PARTNERSHIP VII
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON WEDNESDAY, JULY 2, 1997, UNLESS THE OFFER IS EXTENDED.
THE BOARD OF DIRECTORS OF INTEGRATED LIVING COMMUNITIES, INC. ("THE
COMPANY") HAS UNANIMOUSLY APPROVED THE MERGER AGREEMENT (DESCRIBED HEREIN) AND
THE TRANSACTIONS CONTEMPLATED THEREBY, AND HAS DETERMINED THAT THE TERMS OF THE
OFFER AND THE MERGER ARE FAIR TO, AND IN THE BEST INTERESTS OF, THE COMPANY'S
STOCKHOLDERS AND RECOMMENDS THAT SUCH STOCKHOLDERS ACCEPT THE OFFER AND TENDER
THEIR SHARES PURSUANT TO THE OFFER.
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THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, (I) THERE BEING VALIDLY
TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER SUCH NUMBER OF
SHARES OF COMMON STOCK WHICH CONSTITUTES AT LEAST A MAJORITY OF THE OUTSTANDING
SHARES OF COMMON STOCK OF THE COMPANY ON A FULLY-DILUTED BASIS ON THE DATE OF
PURCHASE, (II) THE EXPIRATION OR TERMINATION OF ANY WAITING PERIOD UNDER THE
▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ ANTITRUST IMPROVEMENTS ACT OF 1976, AS AMENDED, AND THE
REGULATIONS THEREUNDER APPLICABLE TO THE PURCHASE OF SHARES PURSUANT TO THE
OFFER AND (III) THE SATISFACTION OF THE OTHER CONDITIONS DESCRIBED IN SECTION 14
HEREIN.
THE OFFER IS NOT SUBJECT TO ANY FINANCING CONDITION.
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IMPORTANT
Any stockholder desiring to tender all or any portion of such stockholder's
shares of common stock should either (a) complete and sign the Letter of
Transmittal (or a facsimile thereof) in accordance with the instructions in the
Letter of Transmittal, have such stockholder's signature thereon guaranteed if
required by Instruction 1 to the Letter of Transmittal, and mail or deliver it
together with the certificates representing tendered shares, and any other
required documents, to the Depositary or tender such shares pursuant to the
procedure for book-entry transfer set forth in Section 3 or (b) request a
broker, dealer, commercial bank, trust company or other nominee to effect the
transaction for the stockholder. A stockholder whose shares are registered in
the name of a broker, dealer, commercial bank, trust company or other nominee
must contact such broker, dealer, commercial bank, trust company or other
nominee in order to tender such shares.
Any stockholder who desires to tender shares and whose certificates
representing such shares are not immediately available or who cannot comply with
the procedures for book-entry transfer on a timely basis may tender such shares
by following the procedures for guaranteed delivery set forth in Section 3.
Questions and requests for assistance may be directed to the Information
Agent at its address and telephone number set forth on the back cover of this
Offer to Purchase. Additional copies of this Offer to Purchase, the Letter of
Transmittal, the Notice of Guaranteed Delivery and other related materials may
be obtained from the Information Agent, brokers, dealers, commercial banks and
trust companies.
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The Dealer Managers for the Offer are:
▇▇▇▇▇▇▇, ▇▇▇▇▇ & CO.
The date of the Offer to Purchase is June 5, 1997
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TABLE OF CONTENTS
PAGE
----
Introduction............................................................................ 1
Section 1. Terms of the Offer, Expiration Date...................................... 3
Section 2. Acceptance for Payment and Payment for Shares............................ 4
Section 3. Procedure for Tendering Shares........................................... 5
Section 4. Withdrawal Rights........................................................ 8
Section 5. Certain Federal Income Tax Consequences of the Offer..................... 8
Section 6. Price Range of Shares.................................................... 9
Section 7. Effect of the Offer on the Market for Shares, Margin Regulations and
Registration Under the Exchange Act...................................... 10
Section 8. Certain Information Concerning the Company............................... 11
Section 9. Certain Information Concerning the Purchaser and the Parent.............. 14
Section 10. Source and Amount of Funds............................................... 15
Section 11. Background of the Offer, Contacts with the Company....................... 16
Section 12. Purpose of the Offer, Merger, Plans for the Company...................... 17
Section 13. Dividends and Distributions.............................................. 27
Section 14. Certain Conditions of the Offer.......................................... 27
Section 15. Certain Legal Matters.................................................... 29
Section 16. Fees and Expenses........................................................ 31
Section 17. Miscellaneous............................................................ 31
Schedule I Information with Respect to the Directors and Executive Officers of WH
Advisors, Inc. VII and the Purchaser..................................... S-1
Schedule II Information with Respect to the Directors and Members of the Executive
Committee of The ▇▇▇▇▇▇▇ ▇▇▇▇▇ Corporation and the Members of the
Executive Committee of The ▇▇▇▇▇▇▇ ▇▇▇▇▇ Group, L.P. .................... S-3
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To the Holders of Common Stock of
Integrated Living Communities, Inc.:
INTRODUCTION
SLC Acquisition Corp., a Delaware corporation (the "Purchaser"), and a
wholly owned subsidiary of Whitehall Street Real Estate Limited Partnership VII,
a Delaware limited partnership (the "Parent"), hereby offers to purchase all
outstanding shares of common stock, par value $0.01 per share (the "Shares"), of
INTEGRATED LIVING COMMUNITIES, INC., a Delaware corporation (the "Company"), at
$11.50 per Share, net to the seller in cash, without interest upon the terms and
subject to the conditions set forth in this Offer to Purchase and in the related
Letter of Transmittal (which collectively constitute the "Offer"). Stockholders
of the Company (the "Holders") who tender Shares will not be obligated to pay
brokerage fees or commissions or, except as set forth in Instruction 3 to the
Letter of Transmittal, transfer taxes on the purchase of Shares by the Purchaser
pursuant to the Offer. The Purchaser will pay all charges and expenses of
ChaseMellon Shareholder Services, L.L.C. (the "Depositary") and MacKenzie
Partners, Inc. (the "Information Agent") related to the Offer. See Section 16.
The Board of Directors of the Company has unanimously approved the Merger
Agreement and the transactions contemplated thereby and has determined that the
terms of the Offer and the Merger are fair to, and in the best interests of, the
Holders and recommends that Holders accept the Offer and tender their Shares
pursuant to the Offer.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, (I) THERE BEING VALIDLY
TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION DATE (AS DEFINED BELOW) THAT
NUMBER OF SHARES WHICH CONSTITUTES AT LEAST A MAJORITY OF THE OUTSTANDING SHARES
ON A FULLY-DILUTED BASIS ON THE DATE OF PURCHASE (THE "MINIMUM CONDITION"), (II)
THE EXPIRATION OR TERMINATION OF ANY WAITING PERIOD UNDER THE ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇
ANTITRUST IMPROVEMENTS ACT OF 1976, AS AMENDED, AND THE REGULATIONS THEREUNDER
(THE "HSR ACT") APPLICABLE TO THE PURCHASE OF SHARES PURSUANT TO THE OFFER AND
(III) THE SATISFACTION OF THE OTHER CONDITIONS SET FORTH IN SECTION 14. THE
OFFER IS NOT SUBJECT TO ANY FINANCING CONDITION.
Pursuant to a Voting and Tender Agreement, dated as of May 29, 1997 (the
"Voting and Tender Agreement"), with the Purchaser and the Parent, Integrated
Health Services, Inc. a Delaware corporation ("IHS"), the owner of approximately
37.3% of the outstanding Shares, has agreed, among other things, to tender its
Shares in the Offer. See Section 12 -- "Related Agreements."
The Offer is being made pursuant to an Agreement and Plan of Merger, dated
as of May 29, 1997 (the "Merger Agreement"), among the Company, the Parent and
the Purchaser. The Merger Agreement provides, among other things, for the making
of the Offer, and further provides that as promptly as practicable following the
completion of the Offer and the satisfaction or waiver of certain other
conditions set forth in Section 12, the Purchaser will be merged with and into
the Company (the "Merger") and the Company will continue as the surviving
corporation (the "Surviving Corporation") in the Merger and become a wholly
owned subsidiary of the Parent. Notwithstanding the foregoing, the Parent may
elect at any time prior to the consummation of the Merger, instead of merging
the Purchaser into the Company as provided above, to merge the Company with and
into the Purchaser. In addition, at the election of the Parent, any wholly owned
subsidiary of the Parent may be substituted for the Purchaser as a constituent
corporation in the Merger. At the effective time of the Merger (the "Effective
Time"), each Share outstanding immediately prior to the Effective Time (other
than Shares held by the Purchaser, the Parent or any direct or indirect
subsidiary of the Parent, the Company or any of its subsidiaries, which shall be
cancelled, and other than Shares, if any, held by Holders who have not voted in
favor of the Merger or consented thereto in writing and who have properly
demanded appraisal rights with respect thereto under Delaware law (the
"Dissenting Shares")) will, by virtue of the Merger and without any action on
the part of the Holder thereof, be converted into the right to receive $11.50 in
cash or any higher price paid per Share in
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the Offer (the "Merger Consideration") payable to the Holder thereof, without
interest thereon, upon surrender of the certificate formerly representing such
Share. See Section 12. If the Minimum Condition is satisfied and the Purchaser
accepts Shares for payment pursuant to the Offer, the Parent will have the
right, which it intends to exercise, to approve the Merger without the
affirmative vote of any other Holder. In the event that the Purchaser owns at
least 90% of the Shares, the only class of outstanding capital stock of the
Company, the "short form" merger provisions of the Delaware General Corporation
Law (the "DGCL") would permit the Merger to occur without calling for a vote of
the Holders. Upon completion of the Offer, pursuant to a Stock Option Agreement,
dated May 29, 1997 (the "Stock Option"), among the Purchaser, the Parent and the
Company, upon consummation of the Offer and subject to certain conditions, the
Purchaser has the right to purchase additional Shares from the Company to ensure
that the Purchaser will own 90% of the Shares following completion of the Offer.
See Section 12 -- "Related Agreements."
THE COMPANY HAS ADVISED THE PURCHASER THAT THE BOARD OF DIRECTORS OF THE
COMPANY HAS UNANIMOUSLY APPROVED THE MERGER AGREEMENT AND THE TRANSACTIONS
CONTEMPLATED THEREBY; AND HAS DETERMINED THAT THE TERMS OF THE OFFER AND THE
MERGER ARE FAIR TO, AND IN THE BEST INTERESTS OF, THE HOLDERS AND RECOMMENDS
THAT HOLDERS ACCEPT THE OFFER AND TENDER THEIR SHARES PURSUANT TO THE OFFER. THE
COMPANY HAS INFORMED THE PURCHASER THAT EACH OF THE COMPANY'S EXISTING DIRECTORS
INTENDS TO TENDER HIS OR HER SHARES PURSUANT TO THE OFFER.
The Company has also advised the Purchaser that ▇▇▇▇▇ ▇▇▇▇▇▇ Inc., the
Company's financial advisor ("▇▇▇▇▇ ▇▇▇▇▇▇"), has delivered to the Board of
Directors of the Company a written opinion, dated May 29, 1997, to the effect
that, as of such date and based upon and subject to certain matters stated
therein, the $11.50 per Share cash consideration to be received by the Holders
(other than the Parent and its affiliates) pursuant to the Offer and the Merger
was fair to such Holders from a financial point of view. A copy of such opinion,
together with a description of the recommendation of the Board of Directors of
the Company, is contained in the Company's Solicitation/Recommendation Statement
on Schedule 14D-9, which is being mailed to Holders in connection with this
Offer, and Holders are urged to review the opinion in its entirety.
The Merger Agreement provides that following the satisfaction or waiver of
the conditions to the Offer, the Purchaser will accept for payment, in
accordance with the terms of the Offer, all Shares validly tendered and not
withdrawn pursuant to the Offer as soon as practicable after the Expiration
Date. The initial expiration date of the Offer is 12:00 Midnight, New York City
time, on Wednesday, July 2, 1997. However, certain conditions may not be
satisfied as of such date. See Section 14. The Merger Agreement provides that
the Purchaser may extend the Offer beyond the scheduled expiration date, if at
the scheduled expiration date of the Offer any of the conditions to the
Purchaser's obligation to accept for payment and pay for the Shares shall not
have been satisfied or waived, until such time that the conditions are satisfied
or waived, and under certain circumstances, the Purchaser is required to extend
the Offer for up to 35 business days (as defined below) from the commencement of
the Offer. See Section 12 -- "The Offer."
The purpose of the Offer is to facilitate the acquisition of all of the
outstanding Shares by the Purchaser and thereby to enable the Parent to acquire
control of the Company. Following the purchase of Shares pursuant to the Offer
and upon the terms and subject to the conditions set forth in the Merger
Agreement, the Parent intends to cause the Purchaser to consummate the Merger in
order to acquire all of the remaining outstanding Shares of the Company. See
Section 12.
According to the Company, as of May 29, 1997, there were 6,697,900 Shares
outstanding and options outstanding to purchase an additional 831,750 Shares.
Therefore, the Minimum Condition would be satisfied if 3,772,355 Shares are
validly tendered and not properly withdrawn.
The Purchaser has been advised by the Company that, to the best of its
knowledge, all of the Company's executive officers and directors currently
intend to tender all Shares owned by them pursuant to the Offer. Such executive
officers and directors currently own 6,100 Shares (excluding Shares issuable
upon the exercise of stock options), or .1% of the outstanding Shares which,
when
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taken together with the Shares owned by IHS which are required to be tendered
pursuant to the Voting and Tender Agreement, constitute 2,504,000 Shares, or
approximately 37.3% of the outstanding Shares. See Section 12.
THIS OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL CONTAIN
IMPORTANT INFORMATION WHICH SHOULD BE READ CAREFULLY BEFORE ANY DECISION IS MADE
WITH RESPECT TO THE OFFER. THE OFFER IS SUBJECT TO CERTAIN CONDITIONS. SEE
SECTION 14.
1. TERMS OF THE OFFER, EXPIRATION DATE.
Upon the terms and subject to the conditions of the Offer (including, if
the Offer is extended or amended, the terms and conditions of any extension or
amendment), the Purchaser will accept for payment and pay for all Shares which
are validly tendered on or prior to the Expiration Date and not withdrawn as
provided in Section 4. The term "Expiration Date" shall mean 12:00 midnight, New
York City time, on Wednesday, July 2, 1997, unless and until the Purchaser,
pursuant to the terms of the Merger Agreement, shall have extended the period of
time for which the Offer is open, in which event "Expiration Date" shall mean
the latest time and date at which the Offer, as so extended by the Purchaser,
shall expire. The Offer shall initially expire 20 business days (as defined
below) after the date of its commencement; provided, however, that, unless the
Merger Agreement is terminated in accordance with Article VIII thereof (other
than due to the failure to satisfy the Minimum Condition or the failure to occur
of the expiration or termination of any applicable waiting period under the HSR
Act, in which case the Offer (whether or not previously extended in accordance
with the terms of the Merger Agreement) shall expire on such date of
termination), the Purchaser will be obligated to extend the Expiration Date of
the Offer from time to time to the earlier of (i) the date on which the
Purchaser purchases or becomes obligated to purchase, pursuant to the Offer,
that number of Shares that would satisfy the Minimum Condition and (ii) the date
that is 35 business days after the date of its commencement. In addition, the
Purchaser may, without the consent of the Company, extend the Offer (i) if at
the then scheduled expiration date of the Offer any of the conditions to the
Purchaser's obligations to accept for payment and pay for Shares shall not be
satisfied or waived, until up to such time as such conditions are satisfied or
waived and (ii) for any period required by any rule, regulation, interpretation
or position of the Securities and Exchange Commission (the "Commission") or its
staff applicable to the Offer. UNDER NO CIRCUMSTANCES WILL INTEREST BE PAID ON
THE OFFER PRICE FOR TENDERED SHARES, WHETHER OR NOT THE PURCHASER EXERCISES ITS
RIGHT TO EXTEND THE OFFER.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, (I) THE SATISFACTION OF
THE MINIMUM CONDITION, (II) THE EXPIRATION OR TERMINATION OF ANY WAITING PERIOD
UNDER THE HSR ACT APPLICABLE TO THE PURCHASE OF SHARES PURSUANT TO OFFER AND
(III) THE SATISFACTION OF THE OTHER CONDITIONS SET FORTH IN SECTION 14.
If any condition to the Purchaser's obligation to purchase Shares under the
Offer is not satisfied prior to the Expiration Date, the Purchaser reserves the
right (but shall not be obligated) to (i) decline to purchase any of the Shares
tendered and terminate the Offer, subject to certain obligations to extend the
Offer for up to 35 business days following the commencement of the Offer, (ii)
waive such unsatisfied condition, subject to the Merger Agreement and applicable
rules and regulations of the Commission, and purchase all Shares validly
tendered, (iii) extend the Offer and, subject to the right of Holders to
withdraw Shares until the Expiration Date, retain the Shares which have been
tendered during the period or periods for which the Offer is extended or (iv)
subject to the terms of the Merger Agreement, amend the Offer. The Merger
Agreement provides that although the Purchaser may in its sole discretion
increase the price per Share payable in the Offer, neither the Purchaser nor the
Parent will, without the prior written consent of the Company, decrease the
price per Share payable in the Offer, change the form of consideration payable
in the Offer, decrease the numbers of Shares sought in the Offer, change the
conditions to the Offer, impose additional conditions to the Offer or amend the
Offer in any manner that would adversely affect the Holders.
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There can be no assurances that the Purchaser will exercise its right to
extend the Offer. Any extension, amendment or termination will be followed as
promptly as practicable by public announcement. In the case of an extension,
Rule 14e-1(d) under the Securities Exchange Act of 1934, as amended, and the
regulations thereunder (the "Exchange Act"), requires that the announcement be
issued no later than 9:00 a.m., Eastern time, on the next business day after the
previously scheduled Expiration Date in accordance with the public announcement
requirements of Rule 14d-4(c) under the Exchange Act. Subject to applicable law
(including Rules 14d-4(c) and 14d-6(d) under the Exchange Act, which require
that any material change in the information published, sent or given to
stockholders in connection with the Offer be promptly disseminated to
stockholders in a manner reasonably designed to inform stockholders of such
change), and without limiting the manner in which the Purchaser may choose to
make any public announcement, the Purchaser will not have any obligation to
publish, advertise or otherwise communicate any such public announcement other
than by making a release to the Dow ▇▇▇▇▇ News Service. As used in this Offer to
Purchase, "business day" means any day other than a Saturday, Sunday or federal
holiday and consists of the time period from 12:01 a.m. through 12:00 midnight,
New York City time.
If the Purchaser extends the Offer or if the Purchaser (whether before or
after its acceptance for payment of Shares) is delayed in its purchase of or
payment for Shares or is unable to pay for Shares pursuant to the Offer in
accordance with the terms of the Merger Agreement, then, without prejudice to
the Purchaser's rights under the Offer, the Depositary may retain tendered
Shares on behalf of the Purchaser, and such Shares may not be withdrawn except
to the extent tendering Holders are entitled to withdrawal rights as described
in Section 4. However, the ability of the Purchaser to delay the payment for
Shares which the Purchaser has accepted for payment is limited by Rule 14e-1(c)
under the Exchange Act, which requires that a bidder pay the consideration
offered or return the securities deposited by or on behalf of holders of
securities promptly after the termination or withdrawal of the Offer.
If the Purchaser makes a material change in the terms of the Offer or the
information concerning the Offer, or waives a material condition of the Offer,
subject to the Merger Agreement, the Purchaser will disseminate additional
tender offer materials and extend the Offer to the extent required by Rules
14d-4(c) and 14d-6(d) under the Exchange Act. The minimum period during which
the Offer must remain open following material changes in the terms of the Offer
or information concerning the Offer, other than a change in price or a change in
percentage of securities sought, will depend upon the facts and circumstances,
including the relative materiality of the terms or information. If, prior to the
Expiration Date, the Purchaser should (with the prior written consent of the
Company) decrease the percentage of Shares being sought, or increase or (with
the prior written consent of the Company) decrease the consideration offered
pursuant to the Offer to Holders, such increase or decrease would be applicable
to all Holders whose Shares are accepted for payment pursuant to the Offer and
if, at the time notice of any increase or decrease is first published, sent or
given to Holders of Shares, the Offer is scheduled to expire at any time earlier
than the tenth business day from and including the date that such notice is
first so published, sent or given, the Offer would be extended at least until
the expiration of such ten business day period.
The Company has provided to the Purchaser its list of Holders and security
position listings for the purpose of disseminating the Offer to Holders. This
Offer to Purchase and the related Letter of Transmittal and other relevant
materials is being mailed to record holders of Shares and will be furnished to
brokers, dealers, commercial banks, trust companies and similar persons whose
names, or the names of whose nominees, appear on the stockholder list or, if
applicable, who are listed as participants in a clearing agency's security
position listing, for subsequent transmittal to beneficial owners of Shares.
2. ACCEPTANCE FOR PAYMENT AND PAYMENT FOR SHARES.
Upon the terms and subject to the conditions of the Offer (including, if
the Offer is extended or amended, the terms and conditions of any such extension
or amendment), the Purchaser will
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accept for payment, and will pay for, all Shares validly tendered prior to the
Expiration Date (and not properly withdrawn) as soon as practicable after the
Expiration Date. In all cases, payment for Shares purchased pursuant to the
Offer will be made only upon timely receipt by the Depositary of (i)
certificates for such Shares or timely confirmation (a "Book-Entry
Confirmation") of a book-entry transfer of such Shares into the Depositary's
account at The Depository Trust Company and the Philadelphia Depository Trust
Company (each, a "Book-Entry Transfer Facility") pursuant to the procedures set
forth in Section 3, (ii) the Letter of Transmittal (or facsimile thereof),
properly completed and duly executed, and (iii) any other documents required by
the Letter of Transmittal.
For purposes of the Offer, the Purchaser will be deemed to have accepted
for payment, and thereby purchased, Shares validly tendered and not withdrawn
as, if and when the Purchaser gives oral or written notice to the Depositary of
the Purchaser's acceptance for payment of such Shares pursuant to the Offer.
Upon the terms and subject to the conditions of the Offer, payment for Shares
accepted for payment pursuant to the Offer will be made by deposit of the
purchase price with the Depositary, which will act as agent for tendering
Holders for the purpose of receiving payment from the Purchaser and transmitting
payment to Holders whose Shares have been accepted for payment. UNDER NO
CIRCUMSTANCES WILL INTEREST ON THE OFFER PRICE OF TENDERED SHARES BE PAID,
REGARDLESS OF ANY DELAY IN MAKING PAYMENT AFTER THE EXPIRATION DATE.
If any tendered Shares are not accepted for payment for any reason, or if
certificates are submitted for more Shares than are tendered, certificates
evidencing such unpurchased or untendered Shares will be returned, without
expense, to the tendering Holder (or, in the case of Shares delivered by
book-entry transfer within a Book-Entry Transfer Facility pursuant to the
procedures set forth in Section 3, such Shares will be credited to an account
maintained within such Book-Entry Transfer Facility), as promptly as practicable
following the expiration, termination or withdrawal of the Offer.
If the Purchaser varies the terms of the Offer by increasing the
consideration to be paid per Share, the Purchaser shall pay such increased
consideration for all Shares purchased pursuant to the Offer whether or not such
Shares have been tendered prior to such increase.
3. PROCEDURE FOR TENDERING SHARES.
Valid Tender. For Shares to be validly tendered pursuant to the Offer, the
Letter of Transmittal (or facsimile thereof), properly completed and duly
executed, with any required signature guarantees and any other required
documents, must be received by the Depositary at one of its addresses set forth
on the back cover of this Offer to Purchase prior to the Expiration Date. In
addition, either (i) certificates representing such Shares must be received by
the Depositary along with the Letter of Transmittal or such Shares must be
tendered pursuant to the procedure for book-entry transfer set forth below, and
a Book-Entry Confirmation must be received by the Depositary, in each case at or
prior to the Expiration Date, or (ii) the tendering Holder must comply with the
guaranteed delivery procedures set forth below.
THE METHOD OF DELIVERY OF SHARES, THE LETTER OF TRANSMITTAL AND ALL OTHER
REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH ANY BOOK-ENTRY TRANSFER FACILITY,
IS AT THE ELECTION AND RISK OF THE TENDERING HOLDER. SHARES WILL BE DEEMED
DELIVERED ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY (INCLUDING, IN THE CASE
OF A BOOK-ENTRY TRANSFER, BY BOOK-ENTRY CONFIRMATION). IF DELIVERY IS BY MAIL,
REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS RECOMMENDED.
IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY.
Book Entry Transfer. The Depositary will establish accounts with respect to
the Shares at a Book-Entry Transfer Facility for purposes of the Offer within
two business days after the date of this Offer to Purchase. Any financial
institution that is a participant in any of the Book-Entry Transfer Facility
systems may make book-entry delivery of Shares by causing a Book-Entry Transfer
Facility
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to transfer such Shares into the Depositary's account at a Book-Entry Transfer
Facility, in accordance with such Book-Entry Transfer Facility's procedures for
transfer. However, although delivery of Shares may be effected through
book-entry transfer at a Book-Entry Transfer Facility, a Letter of Transmittal
(or facsimile thereof), properly completed and duly executed, together with any
required signature guarantees, or an Agent's Message (as defined below), and any
other required documents must, in any case, be transmitted to and received by
the Depositary at one of its addresses set forth on the back cover page of this
Offer to Purchase prior to the Expiration Date, or the tendering Holder must
comply with guaranteed delivery procedures set forth below.
The term "Agent's Message" means a message transmitted through electronic
means by a Book-Entry Transfer Facility, in accordance with the normal
procedures of such Book-Entry Transfer Facility and the Depositary, to and
received by the Depositary and forming a part of a Book-Entry Confirmation,
which states that such Book-Entry Transfer Facility has received an express
acknowledgment from the participant in such Book-Entry Transfer Facility
tendering the Shares which are the subject of such Book-Entry Confirmation that
such participant has received and agrees to be bound by the terms of the Letter
of Transmittal and that the Purchaser may enforce such agreement against the
participant. The term Agent's Message shall also include any hard copy printout
evidencing such message generated by a computer terminal maintained at the
Depositary's office.
Signature Guarantees. Signatures on all Letters of Transmittal must be
guaranteed by a participant in the Security Transfer Agents Medallion Program,
the New York Stock Exchange Medallion Signature Guarantee Program of the Stock
Exchange Medallion Program (each of the foregoing being referred to as an
"Eligible Institution"), except no signature guarantee is required where such
Shares are tendered (i) by a registered Holder who has not completed either the
box entitled "Special Delivery Instructions" or the box entitled "Special
Payment Instructions" on the Letter of Transmittal or (ii) for the account of an
Eligible Institution. See Instruction 1 of the Letter of Transmittal.
If the Share certificates are registered in the name of a person other than
the signer of the Letter of Transmittal, or if payment is to be made, or Share
certificates not accepted for payment, or not tendered are to be returned, to a
person other than the registered Holder, then the tendered Share certificates
must be endorsed or accompanied by appropriate stock powers, in either case
signed exactly as the name or names of the registered holder or holders appear
on the certificates, with the signature(s) on such certificates or stock powers
guaranteed as described above. See Instructions 1 and 5 of the Letter of
Transmittal.
If Share certificates are forwarded separately to the Depositary, a Letter
of Transmittal (or manually signed facsimile thereof), properly completed and
duly executed, must accompany each such delivery.
Guaranteed Delivery. If a Holder desires to tender Shares pursuant to the
Offer and such ▇▇▇▇▇▇'s Share certificates are not immediately available or such
Holder cannot deliver the Share certificates and all other required documents to
the Depositary prior to the Expiration Date, or such Holder cannot complete the
procedure for delivery by book-entry transfer on a timely basis, such Shares may
nevertheless be tendered if all of the following conditions are satisfied:
(i) such tender is made by or through an Eligible Institution;
(ii) a properly completed and duly executed Notice of Guaranteed
Delivery, substantially in the form provided by the Purchaser herewith, is
received by the Depositary, as provided below, on or prior to the
Expiration Date; and
(iii) the certificates representing all tendered Shares in proper form
for transfer (or a Book-Entry Confirmation) in each case together with a
properly completed and duly executed Letter of Transmittal (or facsimile
thereof) are received by the Depositary within three National
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Association of Securities Dealers Automated Quotation -- National Market
("NASDAQ National Market") trading days after the date of execution of the
Notice of Guaranteed Delivery.
The Notice of Guaranteed Delivery may be delivered by hand or transmitted
by telegram, telex, facsimile transmission or mail to the Depositary and must
include a guarantee by an Eligible Institution in the form set forth in such
Notice of Guaranteed Delivery.
Notwithstanding any other provisions hereof, payment for Shares purchased
pursuant to the Offer will be made only after timely receipt by the Depositary
of (a) certificates for (or a timely Book-Entry Confirmation with respect to)
such Shares, (b) a Letter of Transmittal (or facsimile thereof), properly
completed and duly executed, with any required signature guarantees, or, in the
case of a book-entry transfer, an Agent's Message, and (c) any other documents
required by the Letter of Transmittal. Accordingly, tendering stockholders may
be paid at different times depending upon when certificates for Shares or
Book-Entry Confirmations with respect to Shares are actually received by the
Depositary.
Determination of Validity. All questions as to the validity, form,
eligibility (including time of receipt) and acceptance for payment of any
tendered Shares pursuant to any of the procedures described above will be
determined by the Purchaser, in its sole discretion, which determination shall
be final and binding on all parties. The Purchaser reserves the absolute right
to reject any or all tenders of any Shares determined by it not to be in proper
form or the acceptance of or payment for which may, in the opinion of the
Purchaser's counsel, be unlawful. The Purchaser also reserves the absolute
right, in its sole discretion, subject to the terms of the Merger Agreement, to
waive any of the conditions of the Offer or any defect or irregularity in any
tender with respect to Shares of any particular Holder, and the Purchaser's
interpretation of the terms and conditions of the Offer (including the Letter of
Transmittal and the Instructions thereto) will be final and binding. None of the
Purchaser, the Parent, the Depositary, the Information Agent, the Dealer
Managers or any other person will be under any duty to give notification of any
defects or irregularities in tenders or incur any liability for failure to give
any such notification.
Appointment. By executing a Letter of Transmittal as set forth above, a
tendering Holder irrevocably appoints designees of the Purchaser as the Holder's
attorneys-in-fact and proxies, each with full power of substitution, in the
manner set forth in the Letter of Transmittal, to the fullest extent of such
Holder's rights with respect to the Shares tendered by such Holder and accepted
for payment by the Purchaser. All such proxies shall be considered coupled with
an interest in the tendered Shares. This appointment will be effective when, and
only to the extent that, the Purchaser accepts such Shares for payment. Upon
acceptance for payment, all prior proxies given by the Holder with respect to
the Shares will be revoked, without further action, and no subsequent proxies
may be given by or any subsequent written consent executed by such ▇▇▇▇▇▇ (and,
if given or executed, will not be deemed effective) with respect thereto. The
designees of the Purchaser will, with respect to the Shares, be empowered to
exercise all voting and other rights of such Holder as they in their sole
discretion may deem proper at any annual, special or adjourned meeting of the
Company's stockholders, by written consent or otherwise. The Purchaser reserves
the right to require that, in order for Shares to be validly tendered,
immediately upon the acceptance for payment of such Shares the Purchaser is able
to exercise full voting and other rights of a record and beneficial Holder,
including rights in respect of acting by written consent, with respect to such
Shares.
A tender of Shares pursuant to one of the procedures described above will
constitute the tendering Holder's acceptance of the terms and conditions of the
Offer. The Purchaser's acceptance for payment of Shares tendered pursuant to the
Offer will constitute a binding agreement between the tendering Holder and the
Purchaser upon the terms and subject to the conditions of the Offer.
Back-up Federal Income Tax Withholding. UNLESS AN EXEMPTION APPLIES UNDER
THE APPLICABLE LAW AND REGULATIONS CONCERNING "BACKUP WITHHOLDING" OF FEDERAL
INCOME TAX, THE DEPOSITARY WILL BE REQUIRED TO WITHHOLD, AND WILL WITHHOLD, 31%
OF THE GROSS PROCEEDS OTHERWISE PAYABLE TO A
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HOLDER OR OTHER PAYEE PURSUANT TO THE OFFER UNLESS THE HOLDER OR OTHER PAYEE
PROVIDES HIS TAXPAYER IDENTIFICATION NUMBER (SOCIAL SECURITY NUMBER OR EMPLOYEE
IDENTIFICATION NUMBER) AND CERTIFIES THAT SUCH NUMBER IS CORRECT (OR CERTIFIES
THAT HE IS AWAITING A TAXPAYER IDENTIFICATION NUMBER). To prevent back-up
federal income tax withholding on payments made to certain Holders with respect
to the purchase price of Shares purchased pursuant to the Offer, a tendering
Holder must provide the Depositary with such Holder's correct taxpayer
identification number and certify that such Holder is not subject to back-up
federal income tax withholding by completing the Substitute Form W-9 included in
the Letter of Transmittal.
4. WITHDRAWAL RIGHTS.
Tenders of Shares made pursuant to the Offer are irrevocable, except that
Shares tendered pursuant to the Offer may be withdrawn pursuant to the
procedures set forth below at any time prior to the Expiration Date and, unless
theretofore accepted for payment as provided herein, may also be withdrawn at
any time on or after August 4, 1997. If the Purchaser extends the Offer, is
delayed in its acceptance for payment of Shares or is unable to purchase or pay
for Shares validly tendered for any reason, then, without prejudice to the
Purchaser's rights hereunder, tendered Shares may be retained by the Depositary
on behalf of the Purchaser and may not be withdrawn except to the extent that
tendering Holders are entitled to withdrawal rights as set forth in this Section
4.
For a withdrawal to be effective, a written, telegraphic, telex or
facsimile transmission notice of withdrawal must be timely received by the
Depositary at one of its addresses set forth on the back cover of this Offer to
Purchase. Any such notice of withdrawal must specify the name of the person who
tendered the Shares to be withdrawn, the number of Shares to be withdrawn and
the name of the registered Holder, if different from that of the person who
tendered such Shares. If certificates for Shares have been delivered or
otherwise identified to the Depositary, then prior to the release of such
certificates, the serial numbers shown on the particular certificates evidencing
the Shares to be withdrawn, and a signed notice of withdrawal with signatures,
guaranteed by an Eligible Institution (except in the case of Shares tendered for
the account of the Eligible Institution), must also be furnished to the
Depositary as described above. If Shares have been tendered pursuant to the
procedure for book-entry transfer set forth in Section 3, any notice of
withdrawal must also specify the name and number of the account at the
applicable Book-Entry Transfer Facility to be credited with the withdrawn Shares
and otherwise comply with such Book-Entry Transfer Facility's procedures.
All questions as to the form and validity (including time of receipt) of
notices of withdrawal will be determined by the Purchaser, in its sole
discretion, which determination shall be final and binding. None of the
Purchaser, the Parent, the Depositary, the Information Agent, the Dealer Manager
or any other person will be under any duty to give notification of any defects
or irregularities in any notice of withdrawal or incur any liability for failure
to give any such notification. ANY SHARES PROPERLY WITHDRAWN WILL BE DEEMED NOT
VALIDLY TENDERED FOR PURPOSES OF THE OFFER. However, withdrawn Shares may be
retendered by following one of the procedures described in Section 3 at any time
prior to the Expiration Date.
5. CERTAIN FEDERAL INCOME TAX CONSEQUENCES OF THE OFFER.
The following is a summary of the material United States federal income tax
consequences of the receipt of cash for Shares pursuant to the Offer or the
Merger. This summary is for general information only and does not address all
aspects of income taxation that may be relevant to Holders. For example, this
discussion does not address tax consequences under any applicable foreign,
state, local or other tax laws. In addition, this discussion does not address
the federal income tax consequences of the receipt of cash for Shares pursuant
to the Offer or the Merger to particular categories of taxpayers subject to
special treatment under the United States federal income tax laws, such as
trusts, financial institutions, broker-dealers, persons who are not citizens or
residents of the United States, tax-exempt organizations, life insurance
companies, employees
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who acquire their Shares through the exercise of an employee stock option or
otherwise as compensation, and persons who receive payments in respect of
options to acquire Shares. HOLDERS ARE URGED TO CONSULT THEIR TAX ADVISORS WITH
RESPECT TO THE SPECIFIC TAX CONSEQUENCES OF THE OFFER AND THE MERGER TO THEM,
INCLUDING THE CONSEQUENCES UNDER FEDERAL, STATE, LOCAL, FOREIGN AND OTHER TAX
LAWS.
The receipt of cash for Shares pursuant to the Offer or the Merger will be
a taxable transaction for federal income tax purposes. In general, a Holder who
receives cash for Shares pursuant to the Offer or the Merger will recognize gain
or loss for federal income tax purposes equal to the difference between the
amount of cash received in exchange for the Shares sold and such ▇▇▇▇▇▇'s
adjusted tax basis in such Shares. Provided that the Shares constitute capital
assets in the hands of the Holders, such gain or loss will be treated as capital
gain or loss and will be treated as long-term capital gain or loss if the Holder
has held the Shares for more than one year at the time of sale. However, because
the Shares (other than Shares held by IHS) were first issued to the public on
October 3, 1996, if the Offer and the Merger are consummated prior to October 3,
1997, gains or losses on such Shares will be treated as short-term capital gains
or losses. Gain or loss will be calculated separately for each block of Shares
(i.e., a group of Shares with the same tax basis and holding period).
Legislative proposals have recently been introduced in Congress to reduce
effective tax rates applicable to net long-term capital gains and to limit
further the deductibility of long-term capital losses. If the proposals were
enacted into law, and the effective date of such legislation were to be such
that the Offer and the Merger were covered by such legislation, it is possible
that capital gains recognized as a result of such transactions would generally
be taxed at reduced effective tax rates, and that capital losses would be
subject to further limitations on deductibility. However, it is not clear
whether the proposals will be enacted, and, if enacted, whether the proposals
will apply with respect to the sale of Shares pursuant to the Offer and/or the
Merger.
6. PRICE RANGE OF SHARES.
The Shares, which were initially offered to the public on October 3, 1996
at a price of $8.00 per share, are traded in the over-the-counter market and are
quoted on the NASDAQ National Market under the symbol "ILCC."
The following table sets forth, for the quarters indicated, the high and
low sale prices for the Shares on the NASDAQ National Market based on the
Company's 1996 Annual Report on Form 10-K (the "Company's 1996 Form 10-K") by
the Dow ▇▇▇▇▇ Historical Stock Quote Reporter and other publicly available
sources.
SHARES
QUARTER ------------
ENDING HIGH LOW
------------------------------------------------------ ---- ---
12/31/96.............................................. 8 1/2 4 3/4
3/31/97............................................... 7 5/8 4 7/8
6/30/97 (through June 4, 1997)........................ 11 1/2 5 3/8
On May 29, 1997, the last full trading day prior to the announcement of the
execution of the Merger Agreement and the Purchaser's intention to commence the
Offer, the closing price of the Shares as reported on NASDAQ National Market was
$9 1/16. As of June 4, 1997, such closing price was $11 5/16. Holders are urged
to obtain current market quotations for the Shares.
The Purchaser has been advised by the Company that since the Company's
initial public offering in October 1996, the Company has neither paid nor
declared any dividends on the Shares.
Under the terms of the Merger Agreement, the Company has agreed that it
will not (i) declare, set aside for payment or pay any dividend or make any
distribution on its capital stock, (ii) issue or
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deliver or sell, or authorize or propose the issuance, delivery or sale of, any
capital stock of the Company or any of its subsidiaries or any security
convertible into or exercisable into such capital stock (other than the issuance
of shares of common stock upon the exercise of certain options described in the
Merger Agreement), (iii) split, combine or reclassify any capital stock of the
Company or any of its subsidiaries or issue or authorize the issuance of any
other securities in respect of, in lieu of or in substitution for such shares of
capital stock and (iv) except as required or permitted by the Merger Agreement,
repurchase, redeem or otherwise acquire an shares of capital stock of the
Company or any of its subsidiaries or any security thereof or any rights,
warrants or options to acquire any such shares or other securities.
7. EFFECT OF THE OFFER ON THE MARKET FOR SHARES, MARGIN REGULATIONS AND
REGISTRATION UNDER THE EXCHANGE ACT.
Market for the Shares. The purchase of Shares pursuant to the Offer will
reduce the number of Shares that might otherwise trade publicly and the number
of holders of Shares and could adversely affect the liquidity and market value
of the remaining Shares held by the public.
Depending on the number of Shares purchased pursuant to the Offer, the
Shares may no longer meet the requirements of the National Association of
Securities Dealers, Inc. (the "NASD") for continued inclusion in the NASDAQ
National Market, which require the issuer have (i) at least 200,000 publicly
held shares with a market value of $1,000,000, (ii) 400 shareholders or 300
shareholders of round lots, (iii) net tangible assets of $1,000,000, $2,000,000
or $4,000,000, depending on the profitability of the issuer during the four most
recent fiscal years and (iv) a minimum bid price per share of $1.00 or, in the
alternative, market value of public float of $3,000,000 and $4,000,000 of net
tangible assets. In the event that Shares were no longer eligible for NASDAQ
National Market quotation, quotations might still be available from other
sources. The extent of the public market for the Shares and the availability of
such quotations would, however, depend upon the number of holders of Shares
remaining at such time, the interest in maintaining a market in the Shares on
the part of securities firms, the possible termination of registration under the
Exchange Act, as described below, and other factors. The Company has informed
the Purchaser that there are approximately 12 Holders of record of the Shares
and that as of May 29, 1997, 6,697,900 Shares were outstanding. If as a result
of the Offer, the Shares no longer meet the requirements of the NASD for
continued trading and the trading of Shares on the NASDAQ National Market is
discontinued, the market for the Shares could be adversely affected. It is the
present intention of the Purchaser to have the trading of the Shares
discontinued on the NASDAQ National Market as promptly as possible after
completion of the Offer.
Margin Regulations. The Shares are currently "margin securities" under the
regulations of the Board of Governors of the Federal Reserve System (the
"Federal Reserve Board"), which has the effect, among other things, of allowing
brokers to extend credit on the collateral of the Shares. Depending upon factors
similar to those described above regarding listing and market quotations,
following the Offer it is possible that the Shares would no longer constitute
"margin securities" for the purposes of the margin regulations of the Federal
Reserve Board and therefore could no longer be used as collateral for loans made
by brokers.
Registration Under the Exchange Act. The Shares are currently registered
under the Exchange Act.Registration of the Shares under the Exchange Act may be
terminated upon application of the Company to the Commission if the Shares are
not listed on a national securities exchange and there are fewer than 300 record
holders of the Shares. Termination of registration of the Shares under the
Exchange Act would reduce substantially the information required to be furnished
by the Company to the Holders and to the Commission and would make certain
provisions of the Exchange Act, such as the short-swing profit recovery
provisions of Section 16(b), the requirement of furnishing a proxy statement in
connection with stockholders' meetings pursuant to Section 14(a) and the
requirements of Rule 13e-3 under the Exchange Act with respect to "going
private" transactions no longer applicable to the Company. Furthermore, if the
Purchaser acquires a substantial number of
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Shares or the registration of the Shares under the Exchange Act were to be
terminated, the ability of "affiliates" of the Company and persons holding
"restricted securities" of the Company to dispose of such securities pursuant to
Rule 144 under the Securities Act of 1933, as amended, may be impaired or
eliminated. If registration of the Shares under the Exchange Act were terminated
prior to the consummation of the Merger, the Shares would no longer be "margin
securities" or be eligible for NASDAQ National Market reporting.
The Purchaser currently intends to cause the Company to make an application
for termination of registration of the Shares under the Exchange Act after
consummation of the Merger, and may cause such an application to be filed prior
to the consummation of the Merger if a sufficient number of Shares are purchased
pursuant to the Offer. If registration of the Shares is not terminated prior to
the Merger, trading of the Shares on the NASDAQ National Market will be
discontinued, and the registration of the Shares under the Exchange Act will be
terminated, following consummation of the Merger.
8. CERTAIN INFORMATION CONCERNING THE COMPANY.
The information concerning the Company contained in this Offer to Purchase,
including financial information, has been furnished by the Company or taken
from, or based upon, publicly available documents and records on file with the
Commission and other public sources. The summary information concerning the
Company in this Section 8 and elsewhere in this Offer to Purchase is derived
from the Company's 1996 Form 10-K and the Company's Quarterly Report on Form
10-Q for the quarter ended March 31, 1997 (the "Company's 1997 Form 10-Q"). The
summary information set forth below is qualified in its entirety by reference to
such documents (which may be obtained and inspected as described below) and
should be considered in conjunction with the more comprehensive financial and
other information in such documents and other publicly available reports and
documents filed by the Company with the Commission. The Purchaser assumes no
responsibility for the accuracy or completeness of the information contained in
such documents and records, or for any failure by the Company to disclose events
that may have occurred and may affect the significance or accuracy of any such
information but which are not known to the Purchaser.
General. The Company, a Delaware corporation, was formed in November 1995
as a wholly owned subsidiary of IHS to operate the assisted living and other
senior housing facilities owned, leased and managed by IHS. The Company
completed its initial public offering in October 1996. The effect of the
offering was to reduce IHS' ownership of the Company from 100% to approximately
37.3%. The Company's principal executive offices are located at ▇▇▇▇▇ ▇▇▇ ▇▇
▇▇▇▇, ▇▇▇▇▇ ▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇.
The Company provides assisted living and related services to the private
pay elderly market. Assisted living facilities combine housing, personalized
support and healthcare services in a cost effective non-institutional setting
designed to address the individual needs of the elderly who need regular
assistance with the activities of daily living, such as eating, bathing,
dressing and personal hygiene, but who do not need the level of healthcare
provided in a skilled nursing facility.
As of May 5, 1997, the Company operated 24 facilities consisting of 11
owned, 9 leased and 4 managed facilities for a total of 2,481 beds. As of such
date, the Company also had 28 sites in various stages of development and
construction. Approximately 99% of the revenues from the Company's assisted
living facilities were derived from private pay sources in 1996.
Summary Historical Financial Data. Set forth below is certain selected
consolidated financial data with respect to the Company and its subsidiaries
that has been excerpted or derived from information contained in the Company's
1996 Form 10-K and the Company's 1997 Form 10-Q. More comprehensive financial
information is included in such reports and in other documents filed by the
Company with the Commission, and the following summary is qualified in its
entirety by reference to such reports and other documents and all of the
financial data and notes contained therein. Such
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reports and other documents may be examined and copies may be obtained from the
offices of the Commission in the manner set forth below under "Available
Information."
INTEGRATED LIVING COMMUNITIES, INC.
SELECTED SUMMARY CONSOLIDATED FINANCIAL DATA
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
THREE MONTHS
YEAR ENDED DECEMBER ENDED
31, MARCH 31,
--------------------- -----------------
1996 1995 1997 1996
-------- -------- ------ ------
(UNAUDITED)
Operating data:
Total revenues.................................. $ 24,229 $ 16,269 $8,428 $5,615
Total expenses.................................. 23,245 20,219 8,674 4,823
Operating income (loss)......................... 984 (3,950) (246) 792
Earnings (loss) before income taxes and minority
interest..................................... 727 (3,950) (489) 792
Net earnings (loss)............................. 447 (3,344) (489) 487
Earnings (loss) per common share................ .10 (.86) (.07) .12
THREE MONTHS
YEAR ENDED ENDED
DECEMBER 31, MARCH 31,
------------------- -----------------
1996 1995 1997
------- ------- -----------------
(UNAUDITED)
Balance sheet data:
Total current assets............................. $ 5,467 $ 1,126 $ 4,813
Total assets..................................... 75,575 25,774 93,437
Total current liabilities........................ 6,816 1,441 7,398
Total liabilities................................ 17,608 11,001 35,959
Stockholders' equity (deficit)................... 57,966 14,773 57,478
Certain Company Projections. In connection with the Parent's review of the
Company and in the course of the negotiations between the Company and the Parent
described in Section 10 which led to the execution of the Merger Agreement, the
Company provided the Parent with certain business and financial information
which the Parent and the Purchaser believe is not publicly available.
Such information included (i) projected 1997 operating revenue, operating
expense and EBITDAR (as defined below) for each of the Company's existing sites
and for sites scheduled to become operational in 1997 pursuant to the Company's
acquisition and development program and (ii) projected 1997 corporate general
and administrative expense, including the rental payments for the Company's
headquarters in Bonita Springs, Florida. The information described in clause (i)
above is presented below on a consolidated basis.
INTEGRATED LIVING COMMUNITIES, INC.
PROJECTED FINANCIAL INFORMATION
1997
-----------
Operating Revenue............................................. $41,559,103
Operating Expense............................................. $26,452,176
Corporate General and Administrative Expense.................. $ 9,771,711
EBITDAR....................................................... $ 5,335,216
The Parent also was provided with projected 1998 operating revenue,
operating expense and EBITDAR for the Company's sites which are in development
or are expected to be acquired and, in each case, are expected to become
operational in 1997 or 1998. This information is presented
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below on an aggregate basis and does not include operating results for any of
the Company's sites that became operational prior to January 1, 1997.
PROJECTED FINANCIAL INFORMATION WITH
RESPECT TO ACQUISITION AND DEVELOPMENT PROPERTIES
1998
-----------
Operating Revenue............................................. $32,057,462
Operating Expense............................................. $20,237,663
EBITDAR....................................................... $11,819,800
As used herein, the term "EBITDAR" means, for any period, the sum of (i)
the income (or deficit) from all operations before provision of income taxes for
such period and without deduction for actual management fees paid or incurred,
plus (ii) the interest charges paid or accrued during such period (including
imputed interest on lease (capital or operating) obligations, but excluding
amortization of debt discount and expense), plus(iii) all amounts in respect of
depreciation and amortization for such period, plus (iv) the rent due under all
leases (capital or operating) for such period.
THE COMPANY DOES NOT AS A MATTER OF COURSE MAKE PUBLIC ANY PROJECTIONS AS
TO FUTURE PERFORMANCE OR EARNINGS, AND THE PROJECTIONS SET FORTH ABOVE ARE
INCLUDED IN THIS OFFER TO PURCHASE ONLY BECAUSE THE INFORMATION WAS MADE
AVAILABLE TO THE PARENT AND THE PURCHASER BY THE COMPANY. THE COMPANY HAS
INFORMED THE PARENT AND THE PURCHASER THAT THESE PROJECTIONS WERE NOT PREPARED
WITH A VIEW TO PUBLIC DISCLOSURE OR COMPLIANCE WITH THE PUBLISHED GUIDELINES OF
THE COMMISSION OR THE GUIDELINES ESTABLISHED BY THE AMERICAN INSTITUTE OF
CERTIFIED PUBLIC ACCOUNTANTS REGARDING PROJECTIONS AND FORECASTS. THE COMPANY
HAS ALSO INFORMED THE PARENT AND THE PURCHASER THAT ITS INTERNAL FINANCIAL
FORECASTS (UPON WHICH THE PROJECTIONS PROVIDED TO THE PARENT AND THE PURCHASER
WERE BASED IN PART) ARE, IN GENERAL, PREPARED SOLELY FOR INTERNAL USE AND
CAPITAL BUDGETING AND OTHER MANAGEMENT DECISION-MAKING PURPOSES AND ARE
SUBJECTIVE IN MANY RESPECTS AND THUS SUSCEPTIBLE TO VARIOUS INTERPRETATIONS AND
PERIODIC REVISION BASED ON ACTUAL EXPERIENCE AND BUSINESS DEVELOPMENTS.
PROJECTED INFORMATION OF THIS TYPE IS BASED ON ESTIMATES AND ASSUMPTIONS THAT
ARE INHERENTLY SUBJECT TO SIGNIFICANT ECONOMIC AND COMPETITIVE UNCERTAINTIES AND
CONTINGENCIES, ALL OF WHICH ARE DIFFICULT TO PREDICT AND MANY OF WHICH ARE
BEYOND THE CONTROL OF THE COMPANY, THE PURCHASER OR THE PARENT OR THEIR
RESPECTIVE FINANCIAL ADVISORS. MANY OF THE ASSUMPTIONS UPON WHICH THE FOREGOING
PROJECTIONS WERE BASED, NONE OF WHICH WERE APPROVED BY THE PARENT OR THE
PURCHASER, ARE DEPENDENT UPON ECONOMIC FORECASTING (BOTH GENERAL AND SPECIFIC TO
THE COMPANY'S BUSINESSES), WHICH IS INHERENTLY UNCERTAIN AND SUBJECTIVE. NONE OF
THE PARENT, THE PURCHASER, THE COMPANY OR THEIR RESPECTIVE FINANCIAL ADVISORS
ASSUMES ANY RESPONSIBILITY FOR THE ACCURACY OR VALIDITY OF ANY OF SUCH
PROJECTIONS. INCLUSION OF THE FOREGOING PROJECTIONS SHOULD NOT BE REGARDED AS AN
INDICATION THAT PARENT, THE PURCHASER, THE COMPANY OR ANY OTHER PERSON WHO
RECEIVED SUCH INFORMATION CONSIDERS IT AN ACCURATE PREDICTION OF FUTURE EVENTS,
AND NEITHER THE PURCHASER NOR THE PARENT HAS RELIED ON THEM AS SUCH. NONE OF THE
PARENT, THE PURCHASER OR THE COMPANY, OR THEIR RESPECTIVE FINANCIAL ADVISORS, OR
ANY OTHER PARTY, INTENDS TO PUBLICLY UPDATE OR OTHERWISE PUBLICLY REVISE THE
PROJECTIONS SET FORTH ABOVE.
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THE INDEPENDENT ACCOUNTANTS FOR THE COMPANY, THE PARENT AND THE PURCHASER
HAVE NOT EXAMINED OR COMPILED THESE PROJECTIONS AND ACCORDINGLY DO NOT EXPRESS
AN OPINION OR ANY OTHER FORM OF ASSURANCE WITH RESPECT TO THEM.
Available Information. The Company is subject to the informational filing
requirements of the Exchange Act and, in accordance therewith, the Company files
periodic reports, proxy statements and other information with the Commission
under the Exchange Act relating to its business, financial condition and other
matters. The Company is required to disclose in such proxy statements certain
information, as of particular dates, concerning the Company's directors and
officers, their remuneration, options granted to them, the principal holders of
the Company's securities and any material interest of such persons in
transactions with the Company. Such reports, proxy statements and other
information may be inspected at the Commission's office at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇,
▇.▇., ▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇, and should also be available for inspection and
copying at the regional offices of the Commission located at Seven World Trade
Center, 13th Floor, New York, New York 10048 and Citicorp Center, ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ (▇▇▇▇▇ ▇▇▇▇), ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇. Copies may be obtained by mail,
upon payment of the Commission's customary fees from the Public Reference
Section of the Commission's principal office at Judiciary Plaza, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇.▇., ▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇. In addition, the Commission maintains a
Web site that contains reports, proxy and information statements and other
information regarding the Company (and other registrants that file
electronically with the Commission). The address of such Web site is
(▇▇▇▇://▇▇▇.▇▇▇.▇▇▇). Such material should also be available for inspection at
NASDAQ National Market, ▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇.
9. CERTAIN INFORMATION CONCERNING THE PURCHASER AND THE PARENT.
The Purchaser, a Delaware corporation and wholly owned subsidiary of the
Parent, was incorporated on May 27, 1997 for the purpose of acquiring the
Company and has not engaged in any other business activity except in connection
with the Offer and the Merger. The Parent is a Delaware limited partnership that
engages in the business of investing in debt and equity interests in real estate
assets and businesses. WH Advisors, L.P. VII, a Delaware limited partnership
("WH Advisors, L.P."), acts as the sole general partner of the Parent, and WH
Advisors, Inc. VII, a Delaware corporation ("WH Advisors, Inc."), acts as the
sole general partner of WH Advisors, L.P. Neither WH Advisors, L.P. nor WH
Advisors, Inc. engages in any business other than in connection with its role as
a general partner.
WH Advisors, Inc. is a wholly owned subsidiary of The ▇▇▇▇▇▇▇ ▇▇▇▇▇ Group,
L.P., a Delaware limited partnership ("GS Group"). GS Group is a holding
partnership that (directly and indirectly through subsidiaries or affiliated
companies or both) is a leading international investment banking organization in
the business of buying and selling securities, both foreign and domestic, and in
making investments on behalf of its partners. The ▇▇▇▇▇▇▇ ▇▇▇▇▇ Corporation, a
Delaware corporation ("GS Corp."), is the sole general partner of GS Group. The
principal address of the Parent, the Purchaser, WH Advisors, Inc., GS Group and
GS Corp. is ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇.
The name, business address, present principal occupation or employment,
five-year employment history and citizenship (i) of each director and of each
executive officer of WH Advisors, Inc., the sole general partner of WH Advisors,
L.P., which is the sole general partner of the Parent, and (ii) of each director
and of each executive officer of the Purchaser are set forth in Schedule I
hereto. The name, business address, present principal occupation or employment
and citizenship of each director and of each member of the Executive Committee
of GS Corp. and of each member of the Executive Committee of GS Group are set
forth in Schedule II hereto.
▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co. ("▇▇▇▇▇▇▇, ▇▇▇▇▇"), a New York limited partnership of
which GS Group is a general partner, are acting as the Dealer Managers in the
Offer.
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Except with respect to the Stock Option and Voting and Tender Agreement
(see Section 12 -- "Related Agreements"), neither the Purchaser nor, to the best
knowledge of the Purchaser, any of the persons listed on Schedules I and II
hereto or any associate of the Purchaser, including the Parent, or any of the
persons so listed, beneficially owns or has a right to acquire directly or
indirectly any securities of the Company. Neither the Purchaser, nor the Parent,
nor to the best knowledge of the Purchaser, any of the persons or entities
referred to above, or any of the respective executive officers, directors or
subsidiaries of any of the foregoing, has effected any transactions in the
securities of the Company during the past 60 days.
Except as described in this Offer to Purchase, and except with respect to
the Stock Option and Voting and Tender Agreement (see Section 12 -- "Related
Agreements") neither the Purchaser nor Parent, nor to the best knowledge of the
Purchaser, any of the persons listed on Schedules I and II hereto, has any
contract, arrangement, understanding or relationship with any other person with
respect to any securities of the Company, including, but not limited to,
contracts, arrangements, understandings or relationships concerning the transfer
or voting of such securities, joint ventures, loan or option arrangements, puts
or calls, guaranties of loans, guaranties against loss or the giving or
withholding of proxies. Except as described in this Offer to Purchase, neither
the Purchaser nor the Parent, nor to the best knowledge of the Purchaser, any of
the persons listed on Schedules I and II hereto, has had since the formation of
the Company any business relationships or transactions with the Company or any
of its executive officers, directors or affiliates that are required to be
reported under the rules and regulations of the Commission applicable to the
Offer. Except as described in this Offer to Purchase, since the formation of the
Company, there have been no contacts, negotiations or transactions between the
Purchaser, the Parent or, to the best knowledge of the Purchaser, any of the
persons listed in Schedules I and II hereto, on the one hand, and the Company or
its affiliates, on the other hand, concerning a merger, consolidation or
acquisition, a tender offer or other acquisition of securities, an election of
directors, or a sale or other transfer of a material amount of assets.
10. SOURCE AND AMOUNT OF FUNDS.
The Purchaser estimates that approximately $83.0 million will be required
to (i) purchase Shares pursuant to the Offer and the Merger, (ii) pay the
holders of outstanding stock options an amount equal to the excess of the price
per Share pursuant to the Offer over the exercise price of such stock option,
multiplied by the number of Shares subject to such stock option and (iii) pay
the fees and expenses related to the Offer.
The Purchaser will obtain the necessary funds for the Offer from the
Parent. The Parent will obtain such funds from (i) capital contributions from
its partners, which contributions such partners are unconditionally required to
make at the Parent's request, and (ii) a loan from GS Group described below. GS
Group's existing capitalization and financial assets are sufficient to provide
the required funds. The loan from GS Group will represent less than 30% of the
funds required by the Purchaser.
Pursuant to a commitment letter dated June 3, 1997 (the "Commitment
Letter") between the Parent and GS Group, the Parent has received a commitment
from GS Group to make available a secured term loan facility (the "Facility") of
up to $20.0 million to finance the purchase of the Shares pursuant to the Offer
and the Merger, pay holders of stock options, refinance any indebtedness of the
Company, if required, and pay related fees and expenses and other transaction
expenses. Consummation of the Facility is subject to, among other things, the
negotiation, execution and delivery of definitive documentation consistent with
the Commitment Letter. In addition, consummation of the Facility is further
subject to the condition that the Offer shall have been consummated in
accordance with its terms without any waiver or amendment of any material
condition thereto by the Parent or the Purchaser (other than with the consent of
GS Group). Set forth below is a summary of the terms of the Facility.
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The Facility will bear interest at the one month London Interbank Offered
Rate, plus 2.5%. The Facility matures on November 28, 1997. The Facility will be
secured by a first priority lien on all rights of the Parent to require and
collect capital contributions from its limited partners pursuant to its
partnership agreement. The Parent will not be required to pay a financing fee in
connection with its borrowings under the Facility. The definitive documents
relating to the Facility will contain customary representations, warranties and
events of default, various covenants restricting, among other things, additional
debt, mergers, acquisitions and dispositions of assets, modification of the
Parent's partnership agreement and sale and leaseback transactions.
It is anticipated that borrowings under the Facility will be repaid from
funds generated internally by the Company and its subsidiaries or other sources,
which may include the proceeds of debt or equity financings of the Company. No
decisions have been made concerning these matters and such decisions will be
made based on the Parents' review of the Company's business and the advisability
of particular transactions, as well as on prevailing interest rates and other
financial and market conditions.
A copy of the Commitment Letter has been filed as an exhibit to the
Schedule 14D-1 filed by the Purchaser and the Parent with the Commission in
connection with Offer. References are made to such exhibit for a more complete
description of the terms and conditions of such document.
11. BACKGROUND OF THE OFFER, CONTACTS WITH THE COMPANY.
In March, 1997, senior management of Senior Lifestyle Corporation ("Senior
Lifestyle"), a developer, operator and owner of seniors housing facilities for
over twelve years, became aware that the Company was exploring the possible sale
of the Company. Senior Lifestyle and the Parent have in the past jointly pursued
the acquisition and development of assisted living, congregate care, Alzheimer
and other senior housing facilities nationwide. Subsequently, senior management
of Senior Lifestyle informed the Parent that the Company might be interested in
a business combination. On April 1, 1997, the Parent contacted representatives
of ▇▇▇▇▇ ▇▇▇▇▇▇ regarding its potential interest in a possible transaction with
the Company. On April 3, 1997, the Parent executed a confidentiality agreement
with the Company and subsequently received certain information about the Company
and its subsidiaries.
On April 8, 1997, representatives of the Company informed the Parent that
in light of the interest in the Company by other potential purchasers, the
Parent would have to submit a definitive proposal for the acquisition of the
Company so that the Company's Board of Directors could evaluate and consider all
offers presented by potential purchasers in order to determine which offer best
satisfied the Company's objectives. The request for a proposal included a form
of transaction agreement on which the potential acquirors were invited to
comment.
The Parent submitted a proposal on April 21, 1997 (which proposal included
the Parent's comments to the proposed form of transaction agreement). Pursuant
to its initial proposal, subject to certain conditions and confirmatory due
diligence, the Parent indicated its willingness to pursue a transaction in which
it would acquire the Company in a two-step tender offer and merger at a price of
$10.50 per Share in cash. The Parent noted in its initial proposal that its
offer would not be subject to any financing contingencies, but was subject to
the Parent's favorable due diligence review of the operations and assets of the
Company.
On April 23, 1997, at the direction of the Company's Board of Directors,
representatives of ▇▇▇▇▇ ▇▇▇▇▇▇ contacted the Parent to inform the Parent of the
Company's Board of Directors' response to the Parent's initial proposal. The
Parent was informed that the Company's Board of Directors had concluded that in
order to eliminate the condition of confirmatory due diligence contained in the
most favorable proposals it had received (including the Parent's), the Parent,
along with certain other bidders, were asked to resubmit a proposal by May 23,
1997, before which confirmatory due diligence could be conducted and the form of
a transaction agreement could be further negotiated. Subsequently,
representatives of the Parent and Senior Lifestyle and their
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respective advisors were invited to the Company's principal office in Bonita
Springs, Florida to review certain documents made available by the Company and
to receive presentations from the Company's management.
Between April 23, 1997 and May 23, 1997, the Parent and Senior Lifestyle
conducted their due diligence review of the Company. During this period, the
parties and their respective outside counsel proceeded to negotiate and resolve
issues regarding the form of the proposed transaction agreement.
On May 23, 1997, the Parent submitted a revised proposal (including the
Parent's comments to the proposed form of transaction agreement). The Parent's
revised proposal, subject to certain closing conditions set forth in the form of
the proposed transaction agreement negotiated by counsel to the parties and the
review by the Parent of certain schedules to the proposed transaction agreement,
was to acquire the Company in a two-step tender offer and merger at a price per
Share of $11.00 in cash. The Parent noted in its revised proposal that its offer
would not be subject to any financing contingencies.
On May 28, 1997, representatives of the Company contacted the Parent to
inform the Parent that its proposal would be disadvantaged if it did not raise
the per Share consideration if had offered from $11.00 to $11.50. Later that
day, the Parent contacted representatives of ▇▇▇▇▇ ▇▇▇▇▇▇ to inform it that the
Parent would agree to pay $11.50 in cash for each Share.
Later that same day, ▇▇▇▇▇ ▇▇▇▇▇▇, at the direction of the Company's Board
of Directors, informed the Parent that the Company's Board of Directors had
voted to approve the Merger Agreement, including the Offer and the Merger.
Following the conclusion of the meeting of the Company's Board of
Directors, the Stock Option and the Voting and Tender Agreement were finalized.
On May 30, 1997, the Company issued a press release announcing the
execution of the Merger Agreement.
On June 5, 1997, the Purchaser commenced the Offer.
12. PURPOSE OF THE OFFER, MERGER, PLANS FOR THE COMPANY.
Purpose. The purpose of the Offer and the Merger is for the Parent to
acquire control of, and the entire equity interest in, the Company. The Offer is
intended to increase the likelihood that the Merger will be effected as promptly
as practicable. As soon as practicable following the purchase of Shares pursuant
to the Offer, the Purchaser intends, pursuant to the Merger Agreement, to
consummate the Merger. The Merger, if so consummated, would involve the
conversion of each of the then outstanding Shares, other than Shares held by
Holders who properly exercise their dissenters' rights, into the right to
receive cash in an amount equal to the price per Share paid in the Offer.
If for any reason the Merger is not consummated, the Parent and the
Purchaser reserve the right to acquire additional Shares following the
expiration of the Offer through private purchases, market transactions, tender
or exchange offers or otherwise on terms and at prices that may be more or less
favorable than those of the Offer or, subject to any applicable legal
restrictions, to dispose of any or all Shares acquired by the Parent and the
Purchaser.
Set forth below is a summary of the material provisions of the Merger
Agreement, a copy of which is filed as Exhibit (c)(1) to the Schedule 14D-1.
Such Exhibit should be available for inspection and copies should be obtainable,
in the manner set forth in Section 8 (except that it will not be available at
the regional offices of the Commission). The following summary is qualified in
its entirety by reference to the Merger Agreement.
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The Offer. In the Merger Agreement, the Purchaser has agreed, subject to
certain conditions, to commence a cash tender offer to purchase all of the
Shares for $11.50 per Share. The Merger Agreement provides that, without the
consent of the Company, the Purchaser will not (a) decrease the purchase price
so that it is less than $11.50 per Share, (b) change the form of consideration
payable in the Offer, (c) decrease the number of Shares sought in the Offer, (d)
change or impose additional conditions to the Offer set forth in Section 14
hereof, or (e) otherwise amend the Offer in any manner adverse to the holders of
Shares. The Offer shall initially expire 20 business days after the date of its
commencement; provided, however, that, unless the Merger Agreement is terminated
in accordance with Article VIII thereof (other than due to the failure to
satisfy the Minimum Condition or the failure to occur of the expiration or
termination of any applicable waiting period under the HSR Act, in which case
the Offer (whether or not previously extended in accordance with the terms of
the Merger Agreement) shall expire on such date of termination), the Parent and
the Purchaser will be obligated to extend the Expiration Date of the Offer from
time to time to the earlier of (i) the date on which the Purchaser purchases or
becomes obligated to purchase, pursuant to the Offer, that number of Shares that
would represent at least a majority of the outstanding Shares of the Company on
a fully diluted basis and (ii) the date 35 business days after the date of its
commencement. In addition, the Purchaser may, without the consent of the
Company, extend the Offer (i) if at the then scheduled expiration date of the
Offer any of the conditions to the Purchaser's obligations to accept for payment
and pay for Shares shall not be satisfied or waived, until up to such time as
such conditions are satisfied or waived and (ii) for any period required by any
rule, regulation, interpretation or position of the Commission or its staff
applicable to the Offer.
The Merger. The Merger Agreement provides that, following the satisfaction
or waiver of the conditions set forth therein, the Purchaser will be merged with
and into the Company, with the Company continuing as the surviving corporation,
and each then outstanding Share (other than Shares held in the treasury of the
Company, Shares owned by the Parent, the Purchaser or any other subsidiary of
the Parent or of the Company, or Shares held by Holders who properly exercise
their dissenters' rights under the DGCL) will be converted into the right to the
Offer Price in cash, without interest. If at any time during the period between
the date of the Merger Agreement and the date the Shares are accepted for
payment pursuant to the Offer or the Effective Time any change in the Shares
shall occur, including by reason of any reclassification, recapitalization,
stock dividend, stock split or combination, exchange or readjustment of Shares
or any stock dividend thereon with the record date during such period, the Offer
Price will be appropriately adjusted. Except in the case of a "short-form"
merger as described below, under the DGCL the affirmative vote of holders of a
majority of the outstanding Shares (including any Shares owned by the Purchaser)
will be required to approve the Merger.
Notwithstanding the foregoing, the Parent may elect at any time prior to
the consummation of the Merger, instead of merging the Purchaser with and into
the Company, to merge the Company with and into the Purchaser; in which case the
Company shall not be deemed to have breached any of its representations,
warranties, covenants or agreements set forth in the Merger Agreement solely by
reason of such action. In such event, the Merger Agreement will be deemed
modified to reflect the merger of the Purchaser with and into the Company, and
if requested by the Parent, the Company has agreed to execute an appropriate
amendment to the Merger Agreement to reflect such occurrence. In addition, the
Parent may elect to substitute a wholly owned subsidiary for the Purchaser as a
constituent corporation of the Merger, and in such event, the Merger Agreement
will be deemed modified to reflect such occurrence, and if requested by the
Parent, the Company has agreed to execute an appropriate amendment to the Merger
Agreement to reflect such occurrence.
The Merger Agreement provides that the Company will, if required by
applicable law in order to consummate the Merger, take all action necessary in
accordance with the DGCL and its Certificate of Incorporation and Bylaws to
convene a meeting of its stockholders as soon as practicable following the
consummation of the Offer for the purpose of approving the Merger contemplated
thereby. The Company, if required by applicable law, shall prepare and file with
the Commission
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under the Exchange Act a proxy statement with respect to the meeting of
stockholders described above (the "Proxy Statement"). The Parent, the Purchaser
and the Company have agreed to cooperate with each other in the preparation of
the Proxy Statement, and the Company has agreed to notify the Parent of the
receipt of any comments of the Commission, or requests for additional
information or amendments, with respect to the Proxy Statement. Each of the
Parent, the Purchaser and the Company has agreed to use its reasonable best
efforts to respond promptly to all such comments or requests by the Commission.
As promptly as practicable after the Proxy Statement has been approved by the
Commission, the Company shall cause the Proxy Statement to be mailed to the
Company's stockholders. At such meeting, all of the Shares then owned by the
Parent, the Purchaser or any other subsidiary of the Parent will be voted to
approve the Merger. In addition, the Company has agreed that its Board of
Directors shall recommend the Company's stockholders vote to approve the Merger
and shall use its best efforts to solicit from stockholders of the Company
proxies in favor of the Merger.
The DGCL also provides that if a parent company owns at least 90% of each
class of stock of a subsidiary, the parent company can effect a "short-form"
merger with that subsidiary without a stockholder vote. Accordingly, if, as a
result of the Offer, the exercise of the Stock Option or otherwise, the
Purchaser acquires or controls the voting power of at least 90% of the
outstanding Shares, the Purchaser will be able, and intends, to effect the
Merger without a stockholder vote.
Representations and Warranties. The Merger Agreement contains
representations and warranties by the Company with respect to, among other
things, its organization and the organization and ownership of its subsidiaries,
its capitalization, its corporate power and governmental authorization to enter
into the Merger Agreement, its filings with the Commission, its financial
statements, and the absence of certain changes in its business. The Company has
also represented and warranted that consummation of the transactions
contemplated by the Merger Agreement do not contravene the Certificate of
Incorporation and By-Laws of the Company, any applicable laws or any agreements
or instruments binding on the Company, and will not give rise to any lien on the
assets of the Company or its subsidiaries (except as expressly provided in the
Merger Agreement). Other representations and warranties in the Merger Agreement
pertain to the information supplied by the Company in connection with the Offer,
the Company's employee benefit plans and other compensation arrangements, the
absence of certain litigation with respect to the Company, compliance by the
Company with applicable law, including environmental laws, tax matters, the
inapplicability of state anti-takeover statutes, including Section 203 of the
DGCL, insurance matters and real estate matters, and the vote required to
approve the Merger. The Merger Agreement also contains representations and
warranties with respect to the extent of its equity interests in other entities,
any brokerage fees payable as a result of the consummation of the Offer and the
Merger and the opinion of its financial advisors with respect to the fairness of
the consideration to be received pursuant to the Offer and Merger Agreement, and
the absence of any Company (including its subsidiaries) "anti-takeover" plan
which would impede execution of the contemplated transactions.
The Merger Agreement also contains representations and warranties by the
Parent with respect to, among other things, the organization of the Purchaser
and the Parent, their authority to enter into the Merger Agreement, the
information supplied by them in connection with the Offer and their financial
ability to purchase the Shares. The Merger Agreement also contains
representations and warranties by the Purchaser and the Parent which address any
required consents under any applicable provisions of the HSR Act, the Exchange
Act, the Securities Act of 1933, as amended, and the regulations thereunder and
applicable state securities laws. Other representations and warranties by the
Purchaser and the Parent state that execution of the Merger Agreement by the
Parent and the Purchaser will not contravene the limited partnership agreement
of the Parent or any bylaws of the Purchaser, violate any applicable law, rule,
regulation or order that is binding upon either the Parent or any of its
subsidiaries, give rise to any rights to termination or loss of benefit to which
the Parent and its subsidiaries is entitled, or result in a lien on any material
asset of the Parent or its subsidiaries (except as expressly provided in the
Merger Agreement).
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Covenants of the Company. In the Merger Agreement, the Company has agreed,
until the Effective Time of the Merger, that, among other things, without the
prior written consent of the Parent and subject to certain other limited
exceptions set forth in the Merger Agreement, it will not, or permit any of its
subsidiaries to, (i) adopt or propose any change in its Certificate of
Incorporation, Bylaws or comparable charter or other organization documents,
(ii) acquire, agree to acquire, lease or manage (x) by merging or consolidating
with, or by purchasing a substantial portion of the assets of, or by any other
manner, any business or any corporation, partnership, joint venture, association
or other business organization or division thereof or (y) any material assets or
(z) any long term care or assisted living facility, (iii) sell, lease, license,
mortgage or otherwise encumber or subject to any lien or otherwise dispose of
any of its properties or assets or stock or other ownership interest in any of
its properties, subject to certain exceptions set forth in the Merger Agreement,
(iv) declare, set aside for payment or pay any dividend or make any distribution
of money or property in respect of its capital stock, (v) (x) issue or deliver
or sell, or authorize or propose the issuance, delivery or sale of, any capital
stock of the Company or any of its subsidiaries or any security convertible into
or exercisable into such capital stock (other than the issuance of shares of
common stock upon the exercise of certain options described in the Merger
Agreement, (y) split, combine or reclassify any capital stock of the Company or
any of its subsidiaries or issue or authorize the issuance of any other
securities in respect of, in lieu of or in substitution for shares of capital
stock and (z) except as required or permitted by the Merger Agreement,
repurchase, redeem or otherwise acquire an shares of capital stock of the
Company or any of its subsidiaries or any security thereof or any rights,
warrants or options to acquire any such shares or other securities, (vi) except
as permitted by the Merger Agreement, amend, modify or terminate any material
contract or agreement, (vii) (x) except as contemplated by the Merger Agreement,
incur any indebtedness for borrowed money or guarantee any such indebtedness of
another person, issue or sell any debt securities or warrants or other rights to
acquire any debt securities, guarantee the debt securities of another person,
enter into any "keep well" or other agreement to maintain any financial
statement condition of another person or (y) make any loans, advances or capital
contributions to, or investments in, any other person, other than the Company or
any direct or indirect wholly owned subsidiary of the Company, (viii), except as
contemplated by the Merger Agreement, increase the compensation payable to its
officers, directors or key employees, grant any termination or severance pay to
such persons, or enter into an employment, severance or consulting agreement
with any current or former director, officer or other employee of the Company or
any of the Company's subsidiaries enter into, establish, adopt or amend any
collective bargaining, bonus, profit sharing, thrift, compensation stock option,
restricted stock, pension, retirement, deferred compensation, employment
termination, severance or other plan, agreement, trust, fund, policy or
arrangement for the benefit of any current or former director, officer or
employee, (ix) except as disclosed in any filings made with the Commission or as
may be required as a result in a change in law or in generally accepted
accounting principles or a change in order to comply with Commission
requirements, change any of its accounting procedures or policies, and (x),
except as contemplated by the Merger Agreement, make any payments or
distributions to, or enter into any contracts or agreements with, IHS and its
officers, directors and affiliates. In addition, the Company has agreed to use
its reasonable best efforts to ensure that it and each of its subsidiaries will,
use its reasonable best efforts to keep or cause to be kept its insurance
policies (or substantial equivalents) in such amounts duly in force until the
Effective Time and will give the Parent notice of any material change in such
insurance policies, and the Company has agreed, except as permitted by the
Merger Agreement, (a) not to permit its subsidiaries to make any individual or
series of related expenditures (whether capital or otherwise) of over $250,000
or enter into any contract that is not terminable by the Company without penalty
upon 30 days' notice; (b) not to permit any of its subsidiaries to agree to
commit to any of the foregoing; and (c) not to permit any of its subsidiaries to
take or agree to commit to take any action that would make any representation or
warranty of the Company under the Merger Agreement inaccurate in any material
respect at, or as of any time prior to the Effective Time or which is reasonably
likely to result in a delay in consummation of the Offer or
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the Merger, including delaying the effectiveness of the Proxy Statement, if any,
and the mailing thereof.
Notwithstanding the foregoing, the Company and its subsidiaries are
permitted to take commercially reasonable actions after consultation with the
Parent in connection with certain agreed upon acquisition and development
projects, including but not limited to, entering into agreements related to the
purchase and development of properties or facilities and entering into financing
arrangements related to these projects (provided that prior to entering into
such financing arrangements, the Parent shall have an opportunity to provide
financing for such arrangements on terms which are comparable to Company's
proposed financing), and entering into guarantees in connection with such
projects, and performing their obligations under any agreements relating to the
foregoing.
Prohibition on Solicitation. Pursuant to the Merger Agreement, the Company
has agreed that the Company and its subsidiaries will not, and will use their
reasonable best efforts to cause their officers, directors, employees or other
agents not to, directly or indirectly, (i) take any action to solicit or
initiate any Company Acquisition Proposal (as defined below) or (ii) unless
otherwise required in accordance with the fiduciary duties of the Board of
Directors under applicable law as advised by independent legal counsel to the
Company, engage in negotiations with, or disclose any nonpublic information
relating to the Company or its subsidiaries or afford access to the properties,
books or records of the Company or any of its subsidiaries to, any person that
may be considering making, or has made, a Company Acquisition Proposal or has
agreed to endorse any Company Acquisition Proposal (other than the Merger). The
Company has agreed that it will promptly as reasonably practicable notify the
Parent after receipt of any Company Acquisition Proposal or any indication that
any person is considering making a Company Acquisition Proposal or any request
for nonpublic information relating to the Company or any of its subsidiaries or
for access to the properties, books or records of the Company or any of its
subsidiaries by any person that may be considering making, or has made, a
Company Acquisition Proposal or that the Company intends to engage in
negotiations with, or provide information to, any such person. In addition, the
Company has agreed that it will promptly as reasonably practicable provide the
Parent with the identity of such person and a reasonable description of such
Company Acquisition Proposal.
The term "Company Acquisition Proposal" means any offer, proposal for, or
any indication of interest in, (i) a merger, share exchange or business
combination or similar transaction, (ii) any sale, lease, exchange, transfer or
other disposition of 25% of more of the assets of the Company and its
subsidiaries, taken as a whole, in a single transaction or series of
transactions (whether or not related) or (iii) any tender offer or exchange
offer for 25% or more of the outstanding shares of capital stock of the Company
involving the Company or any of its Subsidiaries or the acquisition of a
substantial portion of the assets of, the Company or any of its subsidiaries,
other than the transactions contemplated in the Merger Agreement.
The Company has agreed to immediately cease and cause to be terminated, its
existing solicitation, activity, discussions or negotiations with any parties
conducted by prior to the date of the Merger Agreement by the Company or any of
its representatives with respect to a Company Acquisition Proposal.
Access to Information. Pursuant to the Merger Agreement, from the date of
the Merger Agreement to the Effective Time, the Company will provide to the
Parent and its authorized agents access to the offices, properties, books and
records of the Company and its Subsidiaries and will furnish to the Parent and
its authorized agents such financial and operating data and other information
reasonably requested on behalf of the Parent and will instruct the Company's
employees, counsel and financial advisors to cooperate with the Parent in its
investigation of the business of the Company and its subsidiaries; provided that
no investigation pursuant to the these provisions shall affect any
representation or warranty given by the Company to the Parent under the Merger
Agreement. Notwithstanding the foregoing, the Company shall not be required to
provide any information which it reasonably believes it may not provide to the
Parent by reason of applicable
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law, rules or regulations, which constitutes information protected by
attorney/client privilege, or which the Company or any subsidiary is required to
keep confidential by reason of contract, agreement or understanding with third
parties; provided that the Company gives the Parent notice that it is
withholding such information.
Reasonable Best Efforts. Subject to the terms and conditions of the Merger
Agreement, each party has agreed to use its reasonable best efforts to take, or
cause to be taken, all actions and to do, or cause to be done, all things
necessary, proper and advisable under applicable laws and regulations to
consummate the transactions contemplated by the Merger Agreement.
Board of Directors. The Merger Agreement provides that, upon the purchase
of Shares pursuant to the Offer, the Purchaser will be entitled to designate
such number of directors on the Company's Board of Directors as is equal to the
product of (rounded to the next whole number) of (a) the total number of
directors on the Company's Board of Directors and (b) the percentage that the
aggregate number of Shares purchased in the Offer bears to the number of Shares
outstanding. The Company will promptly, at the request of the Purchaser,
increase the size of the Board of Directors and/or exercise its reasonable best
efforts to obtain the resignations of such number of its current directors as is
necessary to enable the Purchaser's designees to be elected to the Board of
Directors, and will cause the Purchaser's designees to be so elected.
Treatment of Stock Options. Pursuant to the Merger Agreement, the Company
has agreed to (a) terminate the Company's 1996 Stock Incentive Plan and 1996
Stock Option Plan (collectively, the "Company Option Plans") immediately prior
to the Effective Time without prejudice to the rights of the holders of options
(the "Options") awarded pursuant thereto and (b) grant no additional Options
under the Company Option Plans. The Company has also agreed to obtain the
consent of each holder of an Option (whether or not then exercisable) under the
Company Option Plans at the Effective Time to the cancellation of such holder's
Options (without regard to the exercise price of such Option), to take effect
immediately prior to the Effective Time. Each such consent shall require the
Company to pay, as soon as practicable following the Effective Time, in respect
of each Option, an amount equal to the excess, if any, of the price per Share
paid in the Offer over the exercise price of such Option, multiplied by the
number of shares of Company Common Stock subject to such Option. Notwithstanding
the foregoing, payment may be withheld in respect of any Option until the
consent of the holder thereof to its cancellation as contemplated hereby is
obtained.
Employee Benefit Plans. Pursuant to the Merger Agreement, from and after
the Effective Time, the Parent has agreed that it will, and will cause the
surviving corporation of the Merger, to honor in accordance with their terms,
the employment, severance, indemnification or similar agreements and the
Company's employee benefits plan; provided, however, that nothing set forth in
the Merger Agreement shall preclude the Parent or any of its affiliates from
having the right to terminate the employment of any employee of the Company
employed by the Company immediately prior to the Effective Time, with or without
cause, or to amend or to terminate any employee benefit plans of the Parent
("Parent Benefit Plans") established, maintained or contributed to by the Parent
or any of its affiliates after the Effective Time. The Parent has acknowledged
that the consummation of the Merger will result in a "change of control" under
the Company's employment agreements, the Company Option Plans and the Company's
Supplemental Employee Retirement Plan. Following the Effective Time, the Parent
and its subsidiaries will provide benefits to employees employed by the Company
immediately prior to the Effective Time (i) no less favorable than those
provided by the Parent and its affiliates to similarly situated employees
employed by companies in substantially similar businesses to that engaged by the
Company and (ii) no less commercially favorable than those generally provided to
similarly situated employees in the industry. With respect to the Parent Benefit
Plans, the Parent and the Surviving Corporation shall provide to all Company
Employees, from and after the Effective Time, credit for all service with and
compensation by the Company and its affiliates and predecessors prior to the
effective time of the Merger for all purposes for which such service was
recognized by the Company prior to the Effective Time, but without duplication
of benefits. To the extent Parent Benefit Plans provide medical, dental or other
welfare benefits, the
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Parent shall use its best efforts to cause such plan to waive any pre-existing
conditions and actively-at-work exclusions with respect to employees of the
Company prior to the Effective Time and to provide that any expenses incurred on
or before the Effective Time by or on behalf of any employees of the Company
prior to the Effective Time shall be taken into account under the Parent Benefit
Plans for purposes of satisfying applicable deductible, coinsurance and maximum
out-of-pocket provisions. If any employee is terminated following the purchase
of shares pursuant to the Offer, the employee shall be paid for his accrued but
unused vacation time for periods prior to the Effective Time.
Indemnification and Insurance. Pursuant to the Merger Agreement, from and
after the Effective Time, (a) the Parent has agreed to indemnify, defend and
hold harmless the present and former officers and directors of the Company and
its subsidiaries against all losses, claims, damages and liability in respect of
acts or omissions occurring at or prior to the Effective Time, (b) the surviving
corporation of the Merger will defend and hold harmless the present and former
officers and directors of the Company and its subsidiaries, to the fullest
extent provided by law, against all losses, claims, damages and liability in
respect of acts or omissions occurring at or prior to the Effective Time. The
Parent has agreed to also cause the surviving corporation of the Merger (and its
successors) to establish and maintain provisions in its Certificate of
Incorporation and Bylaws concerning indemnification and exoneration of the
Company's former and present officers, directors and employees and agents that
are no less favorable to those persons that the provisions of the Company's
Certificate of Incorporation and Bylaws in effect as of the date of the Merger
Agreement. In addition, the Parent has agreed to cause the Company for a period
of six years from the Effective Time to maintain in effect the Company's current
directors' liability insurance (provided the Company may substitute policies of
at least the same coverage containing terms and conditions no less favorable
than those of the Company's current policy) covering those persons who are
currently covered by the Company's directors' liability insurance policies (and
provided that the Parent shall only be obligated to maintain such insurance to
the extent available at annual premiums during such period not in excess of 150%
of the per annum rate of the aggregate annual premiums paid by the Company for
such insurance as of the date of the Merger Agreement).
Conditions to Merger. The respective obligation of each party to the Merger
Agreement to effect the Merger shall be subject to the satisfaction, prior to
the closing of the transactions contemplated by the Merger Agreement, of the
following conditions: (a) if necessary under applicable law, the Merger shall
have been adopted by the requisite vote of the stockholders of the Company in
accordance with the DGCL, (b) no provision of any applicable domestic law or
regulation and no judgment, injunction, order or decree of a court or
governmental agency or authority of competent jurisdiction which has the effect
of making the Merger illegal or shall otherwise restrain or prohibit the
consummation of the Merger (each party agreeing to use its best efforts,
including appeals to higher courts, to have any judgment, injunction, order or
decree lifted); and (c) all consents, authorizations, orders and approvals of
(or filings or registrations with) any governmental commission, board or other
regulatory body required in connection with the execution, delivery and
performance of the Merger Agreement shall have been obtained or made, except for
filings in connection with the Merger an any other documents required to be
filed after the Effective Time and except where the failure to have obtained or
made any such consent, authorization, order, approval, filing or registration
would not make the Merger illegal or have a Company Material Adverse Effect or
Parent Material Adverse Effect (as that term is defined below), as the case may
be.
Termination. The Merger Agreement may be terminated at any time prior to
the effective time of the Merger (i) by mutual consent of the Parent and the
Company; (ii) by either the Company or the Parent if the Merger has not been
consummated on or before the earlier of (A) the forty-sixth business day after
the first public announcement of the execution of the Merger Agreement and (B)
August 15, 1997 (provided that such right shall not be available to any party
whose failure to fulfill any of its obligations under the Merger Agreement has
been the cause of or resulted in the
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failure to consummate the Merger by such date), (iii) by either the Company or
the Parent, if there exists any applicable domestic law, rule or regulation that
makes consummation of the Merger illegal or if any final and nonappealable
judgment, injunction, order or decrees of a court or governmental agency or
authority restrains or prohibits the consummation of the Merger, (iv) by either
the Company or the Parent, if the stockholder approval contemplated by the
Merger Agreement has not been obtained by reason of the failure to obtain the
requisite vote upon a vote at a duly held meeting of stockholders or at any
adjournment thereof, (v) by either the Company or the Parent, if (x) there has
been a breach by the other party of any representation or warranty in the Merger
Agreement that would have a Parent Material Adverse Effect or a Company Material
Adverse Effect, as the case may be; or (y) there has been a material breach of
any of the covenants or agreements set forth in the Merger Agreement on the part
of the other party, which breach is not curable, or if curable is not so cured
within 30 days after written notice of such breach is given by the terminating
party to the other party, (vi) by either the Company or the Parent, if the
Company shall have received a Company Acquisition Proposal and the Company's
Board of Directors has determined in good faith that such proposal represents a
more attractive financial alternative that provides greater immediate value for
the Company's stockholders than the Offer and the Merger; (vii) by the Company,
if the Offer has not been timely commenced (except as a result of actions or
omissions of the Company in accordance with the Merger Agreement) provided that
such right must be exercised prior to the commencement of the Offer; (viii) by
the Parent, if the Board of Directors of the Company has failed to recommend, or
has withdrawn, modified or amended in any material respects its approval or
recommendation of the Offer or the Merger or has resolved to do any of the
foregoing; or (ix) by the Parent or the Company, if as a result of the failure
of any of the conditions of the Offer (set forth in Section 14 below), the Offer
shall have terminated or expired without the Purchaser having purchased any
Shares pursuant to the Offer (provided that such right is not available to any
party whose failure to fulfill any of its obligation under the Merger Agreement
results in the failure of any such condition).
The term "Company Material Adverse Effect" means any change or effect that
is or is reasonably likely to be materially adverse to the condition (financial
or otherwise), business, assets or results of operations, of the Company and its
subsidiaries taken as a whole or adversely affects the ability of the Company to
consummate the transactions contemplated by the Merger Agreement in any material
respect or materially impairs or delays the Company's ability to perform its
obligations under the Merger Agreement. The term "Parent Material Adverse
Effect" means any change or effect that is or is reasonably likely to be
materially adverse to the condition (financial or otherwise), business, assets
or results of operations, of the Parent and its subsidiaries taken as a whole or
adversely effects the ability of the Parent to consummate the transactions
contemplated by the Merger Agreement in any material respect or materially
impairs or delays the Parent's ability to perform its obligations under the
Merger Agreement.
In the event of the termination of the Merger Agreement, the Merger
Agreement shall forthwith become void and of no effect and there shall be no
liability on the part of any party thereto except as described under "Fees and
Expenses" below; provided, however, that nothing in the Merger Agreement will
relieve any party from liability for any willful breach thereof before
termination.
Fees and Expenses. The Merger Agreement provides that, except as provided
in the following paragraph, all fees and expenses incurred in connection with
the Offer, the Merger, the Merger Agreement and the transactions contemplated
thereby will be paid by the party incurring such fees or expenses, whether or
not the Offer or the Merger is consummated.
Under the Merger Agreement the Company will pay, or cause to be paid, in
same day funds, to the Parent the sum of (a) all of Parent's out-of-pocket fees
and expenses incurred or paid by or on behalf of the Parent in connection with
the Merger or the consummation of any of the transactions contemplated by the
Merger Agreement, including all HSR Act filing fees, fees and expenses of
counsel, commercial banks, investment banking firms, accountants, experts,
environmental consultants and other consultants to the Parent (the "Expenses")
in an amount not to exceed $1,000,000
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and (b) $2,000,000 (the "Termination Fee") upon demand if (i) the Merger
Agreement is terminated in accordance with the provisions described in clause
(vi) or clause (viii) under the heading "Termination" above or (ii) the Merger
Agreement is terminated in accordance with the provisions described in clause
(ix) under the heading "Termination" above and at the time of such termination
(x) the Minimum Condition has not been satisfied and (y) a Company Acquisition
Proposal existed.
Any amounts payable as Expenses and Termination Fees pursuant to the Merger
Agreement shall be payable as promptly as practicable following termination of
the Merger Agreement, and, if the Company is the party seeking to terminate the
Merger Agreement, as a condition thereto.
Amendment. Any provision of the Merger Agreement may be amended or waived
prior to the Effective Time (as set forth in the Merger Agreement) if, and only
if, such amendment is in writing and signed, in the case of an amendment, by the
Company, the Parent and the Purchaser or, in the case of a waiver, by the party
against whom the waiver is to be effective; provided that (i) any waiver or
amendment shall be effective against a party only if the board of directors of
such party approves such waiver or amendment and (ii) after the adoption of the
Merger Agreement by the stockholders of the company, no such amendment or waiver
shall, without the further approval of such stockholders and each party's board
of directors alter or change (x) the amount or kind of consideration to be
received in exchange for any shares of capital stock of the Company, (y) any
term of the certificate of incorporation of the Surviving Corporation or (z) any
of the terms or conditions of the Merger Agreement if such alteration or change
would adversely affect the holders of any shares of capital stock of the
Company. Notwithstanding any provision included under this heading "Amendment"
to the contrary, no provision of the Merger Agreement may be waived by the
Company or amended following the purchase by the Parent or the Purchaser of
Shares pursuant to the Offer unless such amendment or waiver is approved by the
affirmative vote of a majority of the directors of the Company other than the
directors designated by the Purchaser (as contemplated in the Merger Agreement).
No failure or delay by any party in exercising any right, power or
privilege under the Merger Agreement shall operate as a waiver thereof and nor
shall any single or partial exercise thereof preclude any other or further
exercise thereof or the exercise of any other right, power or privilege. The
rights and remedies provided under the Merger Agreement shall be cumulative and
not exclusive of any rights or remedies provided by law.
Assignment. Subject to certain exceptions, the Merger Agreement shall be
binding upon and inure to the benefit of the parties thereto and their
respective successors and assigns, provided that no party may assign, delegate
or otherwise transfer any of its rights or obligations under the Merger
Agreement without the consent of the other parties thereto.
Related Agreements. In connection with the Offer, the Merger and the other
transactions contemplated by the Merger Agreement (i) the Parent, the Purchaser
and the Company entered into a Stock Option Agreement dated as of May 29, 1997
(previously described as the "Stock Option") and (ii) the Parent, the Purchaser
and IHS entered into a Voting and Tender Agreement dated as of May 29, 1997
(previously described as the "Voting and Tender Agreement").
Pursuant to the Stock Option, the Company granted the Purchaser the option
to purchase up to 32,000,000 Shares provided that the Purchaser may only
exercise the Stock Option in respect of at least that number of authorized but
unissued Shares which, when added to the number of Shares owned by the Purchaser
immediately prior to its exercise of the Stock Option, would result in the
Purchaser owning 90% of the Shares outstanding immediately after its exercise of
the Stock Option. The Purchaser may exercise the Stock Option at any time within
six business days after the acceptance for payment by the Purchaser of Shares
pursuant to the Offer. The Stock Option terminates upon the termination of the
Merger Agreement. If the Stock Option is exercised, the Purchaser will be able
to effect the Merger as a "short-form" merger without the vote of Holders,
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regardless of whether Holders of 90% of the Shares tender in the Offer.
Purchaser intends to exercise the Stock Option if Holders of less than 90% of
the Shares tender in the Offer.
Pursuant to the Voting and Tender Agreement, IHS has agreed (i) to tender
for sale to the Purchaser, pursuant to the terms of the Offer, IHS's Shares then
owned of record or beneficially by IHS and (ii) that during the time that the
Voting and Tender Agreement is in effect, IHS shall not give, sell, assign,
hypothecate, pledge, encumber, grant a security in or otherwise dispose of, any
Shares, or any right, title or interest therein or thereto, except to the
Purchaser pursuant to the Voting and Tender Agreement. In addition, IHS has
agreed that during the time that the Voting and Tender Agreement is in effect,
at any meeting of the stockholders of the Company, however called, and in any
action by consent of the stockholders of the Company, IHS shall vote the Shares
(i) in favor of the Merger, the Merger Agreement (as amended from time to time)
and the transactions contemplated by the Merger Agreement and (ii) against any
proposal for any recapitalization, merger, sale of assets or other business
combination between the Company and any person or entity (other than the Merger)
or any other action or agreement that would result in a breach of any covenant,
representation or warranty or any other obligation or agreement of the Company
under the Merger Agreement or which could result in any of the conditions to the
Company's obligations under the Merger Agreement not being fulfilled. The Voting
and Tender Agreement also contains covenants of IHS relating to, among other
things, certain properties which are leased by the Company from IHS and certain
obligations of IHS to which certain of the Company's properties are subject. The
Voting and Tender Agreement will terminate upon the termination of the Merger
Agreement.
Appraisal Rights. Holders of Shares do not have appraisal rights as a
result of the Offer. However, if the Merger is consummated, holders of Shares at
the Effective Time will have certain rights pursuant to the provisions of
Section 262 of the DGCL ("Section 262") to dissent and demand appraisal of their
Shares. Under Section 262, dissenting stockholders who comply with the
applicable statutory procedures will be entitled to receive a judicial
determination of the fair value of their Shares (exclusive of any element of
value arising from the accomplishment or expectation of the proposed Merger) and
to receive payment of such fair value in cash, together with a fair rate of
interest, if any. Any such judicial determination of the fair value of Shares
could be based upon factors other than, or in addition to, the price per Share
to be paid in the Merger or the market value of the Shares. The value so
determined could be more or less than the price per Share to be paid in the
Merger. The foregoing summary of Section 262 does not purport to be complete and
is qualified in its entirety by reference to Section 262.
Going Private Transactions. The Commission has adopted Rule 13e-3 under the
Exchange Act which is applicable to certain "going private" transactions and
which may under certain circumstances be applicable to the Merger. However, Rule
13e-3 would be inapplicable if (a) the Shares are deregistered under the
Exchange Act prior to the Merger or (b) such Merger is consummated within one
year after the purchase of the Shares pursuant to the Offer and such Merger
provided for Holders to receive cash for their Shares in an amount at least
equal to the Offer Price. If applicable, Rule 13e-3 requires, among other
things, that certain financial information concerning the fairness of the
proposed transaction and the consideration offered to minority stockholders in
such transaction be filed with the Commission and disclosed to stockholders
prior to the consummation of the Merger. The Parent does not believe Rule 13e-3
would apply.
Plans for the Company after the Offer. Upon completion of the Offer, the
Parent intends to conduct a detailed review of the Company and its assets,
corporate structure, dividend policy, capitalization, operations, properties,
policies, management and personnel and consider, subject to the terms of the
Merger Agreement, what, if any, changes would be desirable in light of the
circumstances which then exist. Such changes could include changes in the
Company's business, corporate structure, certificate of incorporation, bylaws,
capitalization, Board of Directors, management or dividend policy.
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Upon completion of the Offer, the Parent presently intends to enter into a
management arrangement with an affiliate of Senior Lifestyle pursuant to which
such affiliate would manage the day-to-day operations of the Company's
facilities. The Parent may acquire an equity interest in such affiliate of
Senior Lifestyle. In addition, the Parent and Senior Lifestyle are presently in
discussion regarding the possible sale of an equity interest in the Company to
Senior Lifestyle following consummation of the Merger for the same price per
Share paid by the Purchaser in the Offer.
Further, the Parent is presently in discussions with Bridge Street Real
Estate Fund 1997, L.P. ("Bridge Street") and Stone Street Real Estate Fund 1997,
L.P. ("Stone Street"), funds affiliated with the Parent established to make
investments for the benefit of certain employees, limited partners and managing
directors and their spouses of ▇▇▇▇▇▇▇, ▇▇▇▇▇ and other operating companies of
GS Group, to sell, at or following the completion of the Offer, up to an
aggregate of up to $3 million of equity in the Company to Bridge Street and
Stone Street for the same price per Share paid by the Purchaser in the Offer.
In the future, the Parent may seek to refinance any outstanding
indebtedness of the Company, enter into new financing arrangements and incur new
debt, sell equity in the Company, purchase new assets or sell some or all of the
Company's existing assets.
Except as described in this Offer to Purchase, neither the Parent nor the
Purchaser has any present plans or proposals that would result in an
extraordinary corporate transaction, such as a merger, reorganization,
liquidation, relocation of operations, or sale or transfer of assets, involving
the Company or any of its subsidiaries, or any material changes in the Company's
corporate structure, business or composition of its management or personnel.
13. DIVIDENDS AND DISTRIBUTIONS.
If at any time during the period between the date of the Merger Agreement
and the date Shares are accepted for payment pursuant to the Offer or the
Effective Time of the Merger, any change in the Shares shall occur, including by
reason of any reclassification, recapitalization, stock split or combination,
exchange or readjustment of shares, or any stock dividend thereon with the
record date during such period, then, without prejudice to the Purchaser's
rights under Sections 1 and 14 hereof, the price per share to be paid to the
Holders of the Shares in the Offer and the Merger, as the case may be, shall be
appropriately adjusted.
In the Merger Agreement, the Company has agreed not to take the actions set
forth in this Section 13 without the consent of Parent.
14. CERTAIN CONDITIONS OF THE OFFER.
Notwithstanding any other term of the Offer or the Merger Agreement, the
Purchaser shall not be required to accept for payment or pay for, subject to any
applicable rules and regulations of the Commission, including Rule 14e-1(c) of
the Exchange Act, any Shares not theretofore accepted for payment or paid for
and may terminate or amend the Offer as to such Shares unless (i) the Minimum
Condition shall have been satisfied and (ii) any waiting period under the HSR
Act applicable to the purchase of Shares pursuant to the Offer shall have
expired or been terminated. Furthermore, notwithstanding any other term of the
Offer or the Merger Agreement, the Purchaser shall not be required to accept for
payment or, subject as aforesaid, to pay for any Shares not theretofore accepted
for payment or paid for, and may terminate or amend the Offer if at any time on
or after the date of the Merger Agreement and before the acceptance of such
Shares for payment or the payment therefor, any of the following conditions
exist or shall occur and remain in effect:
(a) there shall have been instituted or pending any action or
proceeding by any court, governmental, regulatory or administrative agency
or authority that (i) seeks to challenge the acquisition by the Purchaser
of Shares pursuant to the Offer, restrain, prohibit or delay the making or
consummation of the Offer or the Merger, or obtain any material damages in
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connection therewith, (ii) seeks to make the purchase of or payment for
some or all of the Shares pursuant to the Offer or the Merger illegal,
(iii) seeks to impose material limitations on the ability of the Parent and
the Purchaser (or any of their affiliates) effectively to acquire or hold,
or to require the Parent and the Purchaser or the Company or any of their
respective affiliates or subsidiaries to dispose of or hold separate, any
material portion of the assets or the business of the Parent and its
subsidiaries taken as a whole or the Company and its subsidiaries taken as
a whole, or (iv) seeks to impose material limitations on the ability of the
Purchaser (or its affiliates) to exercise full rights of ownership of the
Shares purchased by it, including, without limitations, the right to vote
the shares purchased by it on all matters properly presented to the
stockholders of the Company; or
(b) there shall have been promulgated, enacted, entered, enforced or
deemed applicable to the Offer or the Merger, by any state, federal or
foreign government or governmental authority or by any court, domestic or
foreign, any statute (other than the HSR Act), rule, regulation, judgment,
decree, order or injunction, that, in the reasonable judgment of the Parent
and the Purchaser, might, directly or indirectly, result in any of the
consequences referred to in clauses (i) through (iv) of subsection (a)
above; or
(c) there shall have occurred (i) any general suspension of trading
in, or limitation on prices for, securities on any national securities
exchange or in the over-the-counter market in the United States, (ii) the
declaration of a banking moratorium or any suspension of payments in
respect of banks in the United States, or (iii) the commencement of a war,
armed hostilities or other international or national calamity directly or
indirectly involving the United States; or
(d) the Company and the Parent shall have reached an agreement or
understanding that the Offer or the Merger Agreement be terminated or the
Merger Agreement shall have been terminated in accordance with its terms;
or
(e) (i) any of the representations and warranties made by the Company
in the Agreement shall not have been true and correct in all material
respects when made, or shall thereafter have ceased to be true and correct
in all material respects as of such later date (other than representations
and warranties made as of a specified date) or (ii) any of the
representations and warranties made by the Company in the Merger Agreement
shall not have been true and correct when made, or shall thereafter have
ceased to be true and correct as if made as of such later date (other than
representations and warranties made as of a specified date), in each case,
without giving effect to any materiality standard contained in such
representation or warranty (including "Company Material Adverse Effect" as
previously defined), except to the extent that any such failure to be true
and correct, individually and in the aggregate with all such other
failures, would not have a Company Material Adverse Effect, or the Company
shall not in all material respects have performed each obligation and
agreement and complied with each covenant to be performed and complied with
by it under the Merger Agreement; or
(f) the Company's Board of Directors shall have modified or amended
its recommendation of the Offer in any manner adverse to the Parent and the
Purchaser or shall have withdrawn its recommendation of the Offer, or shall
have recommended acceptance of any Company Acquisition Proposal or shall
have resolved to do any of the foregoing; or
(g) (i) any corporation, entity or "group" (as defined in Section
13(d)(3) of the Exchange Act) ("person"), other than the Parent, shall have
acquired beneficial ownership of 50% or more of Shares, or shall have been
granted any options or rights, conditional or otherwise, to acquire a total
of 50% or more of Shares; (ii) any new group shall have been formed that
beneficially owns 50% or more of Shares; or (iii) any person (other than
the Parent or one or more of its affiliates) shall have entered into an
agreement in principle or definitive agreement with the Company with
respect to a tender or exchange offer for any Shares or a merger,
consolidation or other business combination with or involving the Company;
or
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(h) the Parent shall have received the consent of Health Care Property
Investors ("HCPI") on behalf of itself and its affiliates to the
consummation (the "Consummation") of the Offer, the Merger and the other
transactions contemplated by the Merger Agreement and the waiver of any
rights ("Rights") HCPI might have under agreements with the Company to
terminate or exercise any rights to terminate such agreements or any other
rights that would be triggered as a result of a change of control of the
Company; provided that no consent shall be required from HCPI if such
consent is not required under such agreements for the Consummation and no
such Rights exist.
The foregoing conditions are for the sole benefit of the Parent and may be
asserted by the Parent, in whole or in part, at any time and from time to time,
in the reasonable judgment of the Parent regardless of the circumstances giving
rise to any such condition (other than a breach by the Parent or the Purchaser).
The failure by the Parent at any time to exercise any of the foregoing rights
will not be deemed a waiver of any right, the waiver of such right with respect
to any particular facts or circumstances shall not be deemed a waiver with
respect to any other facts or circumstances, and each right will be deemed an
ongoing right that may be asserted at any time and from time to time. Should the
Offer be terminated pursuant to the foregoing provisions, all tendered Shares
not theretofore accepted for payment shall be returned forthwith by the
Depositary to the tendering Holders.
15. CERTAIN LEGAL MATTERS.
General. Except as set forth in this Section 15, based on the examination
of publicly available filings by the Company with the Commission, other publicly
available information concerning the Company and materials which have been
provided to the Parent or the Purchaser by the Company, the Purchaser is not
aware of any license or regulatory permit that appears to be material to the
business of the Company that is likely to be adversely affected by the
Purchaser's acquisition of Shares pursuant to the Offer or, except as set forth
below, of any approval or any other action by any domestic or foreign
governmental or administrative authority that would be required prior to the
acquisition of Shares by the Purchaser pursuant to the Offer. However, should
any such approval or other action be required, it is currently contemplated that
such approval or action would be sought. Except as permitted by the condition
described in Section 14, there is no current intent to delay the purchase of
Shares tendered pursuant to the Offer pending the outcome of any such matter.
There can be no assurance that any such approval or other action, if needed,
would be obtained without substantial conditions or that adverse consequences
might not result to the Company's business or that certain parts of the
Company's business might not have to be disposed of in the event that such
approvals were not obtained or such other actions were not taken. The
Purchaser's obligation under the Offer to purchase Shares is subject to certain
conditions. See Section 14.
State Takeover Laws. A number of states throughout the United States have
enacted takeover statutes that purport, in varying degrees, to be applicable to
attempts to acquire securities of corporations that are incorporated or have
assets, stockholders, executive offices or places of business in such states. In
▇▇▇▇▇ ▇. MITE Corp., the Supreme Court of the United States held that the
Illinois Business Takeover Act, which involved state securities laws that made
the takeover of certain corporations more difficult, imposed a substantial
burden on interstate commerce and therefore was unconstitutional. In CTS Corp.
v. Dynamics Corp. of America, however, the Supreme Court of the United States
held that a state may, as a matter of corporate law and, in particular, those
laws concerning corporate governance, constitutionally disqualify a potential
acquiror from voting on the affairs of a target corporation without prior
approval of the remaining stockholders, provided that such laws were applicable
only under certain conditions.
Section 203 of the DGCL prohibits a Delaware corporation such as the
Company from engaging in a "Business Combination" (defined as a variety of
transactions, including mergers, as set forth below) with an "Interested
Stockholder" (defined generally as a person that is the beneficial owner of 15%
or more of a corporation's outstanding voting stock) for a period of three years
following the
29
32
date that such person became an Interested Stockholder unless (a) prior to the
date such person became an Interested Stockholder, the board of directors of the
corporation approved either the Business Combination or the transaction that
resulted in the stockholder becoming an Interested Stockholder, (b) upon
consummation of the transaction that resulted in the stockholder becoming an
Interested Stockholder, the Interested Stockholder owned at least 85% of the
voting stock of the corporation outstanding at the time the transaction
commenced, excluding stock hold by directors who are also officers of the
corporation and employee stock ownership plans that do not provide employees
with the right to determine confidentially whether shares held subject to the
plan will be tendered in a tender or exchange offer or (c) on or subsequent to
the date such person became an Interested Stockholder, the Business Combination
is approved by the board of directors of the corporation and authorized at a
meeting of Holders, and not by written consent, by the affirmative vote of the
holders of at least 66 2/3% of the outstanding voting stock of the corporation
not owned by the Interested Stockholder. Under the Merger Agreement, the Board
of Directors of the Company has taken such action sufficient to exempt the
Merger from Section 203 of the DGCL pursuant to (a) above.
Except as described in this Offer to Purchase, the Parent and the Purchaser
have not complied with any state takeover laws. Should any government official
or third party seek to apply any state takeover law to the Offer other than
those described in this Offer to Purchase, the Parent and the Purchaser will
take such action as then appears desirable and currently anticipate that they
will contest the validity or applicability of such statute in appropriate court
proceedings.
If it is asserted that one or more state takeover laws other than those
described in this Offer to Purchase apply to the Offer and it is not determined
by all appropriate courts that such act or acts do not apply or are invalid as
applied to the Offer, the Parent and the Purchaser might be required to file
certain information with, or receive approvals from, the relevant state
authorities. In addition, if enjoined, the Purchaser might be unable to accept
for payment any Shares tendered pursuant to the Offer, or be delayed in
consummating the Offer. In such case, the Purchaser may not be obligated to
accept for payment any Shares tendered. See Section 14.
Antitrust Laws. Under the provisions of the HSR Act applicable to the
Offer, the acquisition of Shares under the Offer may not be consummated until
the expiration of a 15-calendar day waiting period following the filing by the
Parent of a Notification and Report Form with respect to the Offer, unless the
Parent receives a request for additional information or documentary material
from the Antitrust Division of the Department of Justice (the "Antitrust
Division") or the Federal Trade Commission (the "FTC") or unless early
termination of the waiting period is granted. If, within the initial 15-calendar
day waiting period, either the Antitrust Division or the FTC requests additional
information or material from the Parent concerning the Offer, the waiting period
will be extended and would expire at 11:59 p.m., New York City time, on the
tenth calendar day after the date of substantial compliance by the Parent with
such request. Only one extension of the waiting period pursuant to a request for
additional information is authorized by the HSR Act. Thereafter, such waiting
period may be extended only by court order or with the consent of the Parent. In
practice, complying with a request for additional information or material can
take a significant amount of time. Pursuant to the HSR Act, the Parent will
file, as promptly as practicable on or following the date hereof with the
Antitrust Division and the FTC, a Notification and Report Form with respect to
the proposed purchase of Shares pursuant to the Offer.
The Antitrust Division and the FTC frequently scrutinize the legality under
the antitrust laws of transactions such as the proposed acquisition of the
Company by the Purchaser. At any time before or after the Purchaser's
acquisition of Shares pursuant to the Offer, the Antitrust Division or the FTC
could take such action under the antitrust laws as it deems necessary or
desirable in the public interest, including seeking to enjoin the purchase of
Shares pursuant to the Offer or the consummation of the proposed Merger or
seeking the divestiture of Shares acquired by the Purchaser or the divestiture
of substantial assets of the Company or its subsidiaries or the Parent or its
subsidiaries. Private parties may also bring legal action under the antitrust
laws under certain circumstances.
30
33
Based upon an examination of publicly available information relating to the
business in which the Parent and the Company are engaged, the Parent and the
Purchaser believe that the acquisition of Shares by the Purchaser will not
violate the antitrust laws. There can be no assurance that a challenge to the
Offer on antitrust grounds will not be made or, if such a challenge is made, of
the result thereof.
Federal Reserve Board Regulations. The margin regulations promulgated by
the Federal Reserve Board place restrictions on the amount of credit that may be
extended for the purpose of purchasing margin stock (including the Shares) if
such credit is secured by directly or indirectly by margin stock. The Purchaser
and the Parent believe that the financing of the acquisition of the Shares will
not be subject to the margin regulations.
16. FEES AND EXPENSES.
▇▇▇▇▇▇▇, ▇▇▇▇▇ are acting as Dealer Managers in connection with the Offer
and have provided certain financial advisory services in connection with the
acquisition of the Shares. The Purchaser has agreed to compensate ▇▇▇▇▇▇▇, ▇▇▇▇▇
for its financial advisory services and to reimburse ▇▇▇▇▇▇▇, ▇▇▇▇▇ for
out-of-pocket expenses including those incurred in connection with ▇▇▇▇▇▇▇,
▇▇▇▇▇' activities as Dealer Managers and including the fees and disbursements of
its legal counsel, and to indemnify ▇▇▇▇▇▇▇, ▇▇▇▇▇ against certain liabilities
and expenses in connection with its financial advisory services and its
activities as Dealer Managers, including certain liabilities under federal
securities laws.
The Purchaser has retained ChaseMellon Shareholder Services, L.L.C. to act
as Depositary and MacKenzie Partners, Inc. to serve as Information Agent in
connection with the Offer. The Purchaser has agreed to pay each of the
Depositary and the Information Agent reasonable and customary compensation for
their services in connection with the Offer, plus reimbursement for
out-of-pocket expenses, and has agreed to indemnify each of them against certain
liabilities and expenses in connection therewith, including certain liabilities
under the federal securities laws. ▇▇▇▇▇▇▇, ▇▇▇▇▇ has agreed to act as Dealer
Managers without additional compensation, except as set forth in the preceding
paragraph.
Neither the Purchaser nor the Parent will pay any fees or commissions to
any broker or dealer or other person (other than the Information Agent) in
connection with the solicitation of tenders of Shares pursuant to the Offer.
Brokers, dealers, commercial banks and trust companies will be reimbursed by the
Purchaser for customary mailing and handling expenses incurred by them in
forwarding material to their customers.
17. MISCELLANEOUS.
The Offer is not being made to (nor will tenders be accepted from or on
behalf of) holders of Shares in any jurisdiction in which the making of the
Offer or the acceptance thereof would not be in compliance with the laws of such
jurisdiction. However, the Purchaser may, in its sole discretion, take such
action as it may deem necessary to make the Offer in any such jurisdiction and
extend the Offer to holders of Shares in such jurisdiction.
Neither the Purchaser nor the Parent is aware of any jurisdiction in which
the making of the Offer or the acceptance of Shares in connection therewith
would not be in compliance with the laws of such jurisdiction. Consequently, the
Offer is currently being made to all holders of Shares. To the extent the
Purchaser or the Parent becomes aware of any law that would limit the class of
offers in the Offer, the Purchaser will amend the Offer and, depending on the
timing of such amendment, if any, will extend the Offer to provide adequate
dissemination of such information to holders of Shares prior to the expiration
of the Offer.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR MAKE ANY
REPRESENTATION ON BEHALF OF THE PURCHASER OR THE PARENT NOT CONTAINED IN THIS
OFFER TO PURCHASE OR IN THE LETTER OF
31
34
TRANSMITTAL AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT
BE RELIED UPON AS HAVING BEEN AUTHORIZED.
The Purchaser has filed with the Commission the Schedule 14D-1 (including
exhibits) pursuant to Rule 14d-3 under the Exchange Act, furnishing certain
additional information with respect to the Offer, and may file amendments
thereto. Such Schedule 14D-1 and any amendments thereto, including exhibits, may
be examined and copies may be obtained from the principal office of the
Commission in Washington, D.C. in the manner set forth in Section 8. No person
has been authorized to give any information or make any representation on behalf
of the Purchaser not contained in this Offer to Purchase or in the Letter of
Transmittal and, if given or made, such information or representation must not
be relied upon as having been authorized.
SLC ACQUISITION CORP.
June 5, 1997
32
35
SCHEDULE I
(1) The name of each director and each executive officer of WH Advisors,
Inc. is set forth below. The business address of each person listed below is ▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ except ▇. ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇ and ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇. The business address of ▇. ▇▇▇▇▇▇▇ ▇▇▇▇ and ▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇ is ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ and the business address of
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ is ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇. Each person is
a citizen of the United States of America. The present principal occupation or
employment of each person listed below and such person's five-year employment
history is set forth next to his or her name.
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT;
NAME MATERIAL POSITIONS HELD DURING THE PAST FIVE YEARS
----------------------------- --------------------------------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ is the co-head of the Real Estate Principal
President Investment Area at ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co. and Chairman of the
Whitehall Investment Committee. He has been a Managing
Director at ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co. since November 1996. ▇▇.
▇▇▇▇▇▇▇ was a general partner of ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co. from
prior to 1992 until November 1996.
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ is the co-head of the Real Estate Principal
Vice President, Investment Area at ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co. He has been a Managing
Assistant Treasurer Director at ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co. since November 1996. ▇▇.
▇▇▇▇▇▇▇▇ was a general partner of ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co. from
November 1994 until November 1996. ▇▇. ▇▇▇▇▇▇▇▇ was a Vice
President of ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co. from prior to 1992 until
November 1996.
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ has been a Managing Director at Goldman,
Vice President, Director Sachs & Co. since November 1996. ▇▇. ▇▇▇▇▇▇▇▇▇▇ was a Vice
President in the Real Estate Principal Investment Area at
▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co. from prior to 1992 until November 1996.
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇ has been an Executive Director in the
Vice President Real Estate Principal Investment Area at ▇▇▇▇▇▇▇, ▇▇▇▇▇
International since June 1996. ▇▇. ▇▇▇▇▇▇ was an Associate at
▇▇▇▇▇▇▇, ▇▇▇▇▇ International and ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co. from
prior to 1992 until 1996.
▇. ▇▇▇▇▇▇▇ ▇▇▇▇, ▇. ▇▇▇▇▇▇▇ ▇▇▇▇ has been a Vice President in the Real Estate
Vice President Principal Investment Area at ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co. since June
1995. From 1993 until June 1995, ▇▇. ▇▇▇▇ was a Portfolio
Manager at ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co. Prior to 1993, ▇▇. ▇▇▇▇ was a
Vice President at Rosewood Property Co., ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇.
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ is a Vice President in the Real Estate
Vice President Principal Investment Area at ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co. He has been
a Vice President at ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co. since prior to 1992.
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ is a Vice President in the Real Estate
Vice President, Principal Investment Area at ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co. He has been
Secretary, a Vice President at ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co. since June 1993. Mr.
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ was an Associate at ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co. from prior
to 1992 until June 1993.
▇▇▇▇▇▇▇▇▇ ▇. ▇'▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇. ▇'▇▇▇▇▇ is a Vice President in the Real Estate
Vice President, Principal Investment Area at ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co. She has been
Assistant Secretary a Vice President at ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co. since June 1995. ▇▇.
▇'▇▇▇▇▇ was an associate at ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co. from
September 1993 until June 1995. From prior to 1992 until 1993,
▇▇. ▇'▇▇▇▇▇ was an Associate of ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, at ▇▇▇ ▇▇▇▇▇
▇▇▇., ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇.
S-1
36
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT;
NAME MATERIAL POSITIONS HELD DURING THE PAST FIVE YEARS
----------------------------- --------------------------------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ has been a Vice President in the Real
Vice President, Estate Principal Investment Area at ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co. since
Assistant Secretary June 1994. ▇▇. ▇▇▇▇▇▇▇▇▇ was an Associate at ▇▇▇▇▇▇▇, ▇▇▇▇▇ &
Co. from prior to 1992 until June 1994.
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ has been a Vice President in the Real Estate
Vice President, Principal Investment Area at ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co. since June
Assistant Treasurer 1995. ▇▇. ▇▇▇▇▇▇▇ was an associate at ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co.
from prior to 1992 until June 1995.
▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇ is a Vice President in the Real Estate Principal
Vice President Investment Area at ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co. He has been a Vice
President at ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co. since June 1994. ▇▇. ▇▇▇▇
was an Associate at ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co., from October 1993
until June 1994. From prior to 1992 until 1993, ▇▇. ▇▇▇▇ was
an associate at ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇.▇., ▇▇▇▇▇▇▇▇▇▇, ▇.▇.
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ is a Vice President in the Real Estate
Vice President, Principal Investment Area at ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co. He has been
Assistant Secretary a Vice President at ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co. since June 1993. He
was an Associate at ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co. since prior to 1992.
(2) The name of each director and each executive officer of SLC Acquisition
Corp. is set forth below. Unless otherwise indicated, the business address of
each person listed below is ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇. Unless
otherwise indicated, each person is a citizen of the United States of America.
The present principal occupation or employment of each person listed below and
such person's five-year employment history is set forth next to his or her name.
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT;
MATERIAL POSITIONS HELD DURING THE PAST FIVE
NAME YEARS
--------------------------------------------- ---------------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, See paragraph 1 above
President, Assistant Secretary,
Assistant Treasurer, Director
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, See paragraph 1 above
Vice-President, Assistant Secretary,
Assistant Treasurer, Director
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, See paragraph 1 above
Vice-President, Assistant Secretary,
Assistant Treasurer, Director
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, See paragraph 1 above
Vice-President, Assistant Secretary,
Assistant Treasurer, Director
▇▇▇▇▇▇▇▇▇ ▇. ▇'▇▇▇▇▇, See paragraph 1 above
Vice-President, Secretary,
Assistant Treasurer, Director
▇▇▇▇▇ ▇. ▇▇▇▇, See paragraph 1 above
Vice-President, Treasurer,
Assistant Secretary, Director
S-2
37
SCHEDULE II
The name of each director and each member of the executive committee of the
▇▇▇▇▇▇▇ ▇▇▇▇▇ Corporation and of each member of the executive committee of the
▇▇▇▇▇▇▇ ▇▇▇▇▇ Group, L.P. is set forth below.
The business address of each person listed below except ▇▇▇▇ ▇. ▇▇▇▇▇ and
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ is ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇. The business
address of ▇▇▇▇ ▇. ▇▇▇▇▇ is ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇. The
business address of ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ is ▇ ▇▇▇▇▇▇ ▇▇., ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇. Each
person is a citizen of the United States of America. The present principal
occupation or employment of each of the listed persons is a managing director of
▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co. or another ▇▇▇▇▇▇▇ ▇▇▇▇▇ operating entity and as a member
of the executive committee.
▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇., ▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇
▇. ▇▇▇▇▇, ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
S-3
38
Facsimile copies of the Letter of Transmittal will be accepted. The Letter
of Transmittal, Share Certificates and any other required documents should be
sent by each stockholder of the Company or his or her broker, dealer, commercial
bank, trust company or other nominee to the Depositary as follows:
The Depositary for the Offer is:
CHASEMELLON SHAREHOLDER SERVICES, L.L.C.
By Mail: By Hand By Overnight Delivery:
Reorganization Department Reorganization Department Reorganization Department
P.O. Box ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ 13th Floor Mail Drop-Reorg.
New York, NY ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
By Facsimile Confirm Facsimile by Telephone:
(for Eligible Institutions): (▇▇▇) ▇▇▇-▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇
DELIVERY OF THE LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET FORTH
ABOVE OR TRANSMISSION OF INSTRUCTIONS VIA A FACSIMILE TO A NUMBER OTHER THAN AS
SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY TO THE DEPOSITARY.
Questions or requests for assistance may be directed to the Information
Agent at the address and telephone number set forth below. Additional copies of
this Offer to Purchase, the Letter of Transmittal and other tender offer
materials may be obtained from the Information Agent as set forth below, and
will be furnished promptly at the Purchaser's expense. Holders may also contact
their brokers, dealers, commercial banks or trust companies or other nominees
for assistance concerning the Offer.
THE INFORMATION AGENT FOR THE OFFER IS:
[MACKENZIE PARTERS, INC. LOGO]
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇ (Call Collect)
CALL TOLL-FREE (▇▇▇) ▇▇▇-▇▇▇▇
