EXHIBIT 10.1
STANDSTILL AGREEMENT
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THIS STANDSTILL AGREEMENT (this "Standstill Agreement") dated as of
April 20, 2000, is entered into by and between Brookdale Living Communities,
Inc., a Delaware corporation (including its successors, the "Company"), and
Fortress Registered Investment Trust, a Delaware business trust (the
"Purchaser").
WHEREAS, the Purchaser wishes to acquire all of the common stock,
$0.01 par value, of the Corporation (the "Common Stock") currently owned
(including shares subject to currently outstanding options) by The Prime Group,
Inc. certain of its affiliates and Xx. Xxxxxxx X. Xxxxxxx (collectively, the
"Seller") as set forth in Exhibit A (the "Prime Shares") pursuant to the Stock
Purchase Agreement by and among the Company, the Seller, and the Purchaser (the
"Stock Purchase Agreement");
WHEREAS, the Board of Directors of the Company approved the Purchaser
becoming an interested stockholder for purposes of Section 203 of the General
Corporation Law of the State of Delaware so as to eliminate any restriction
under such Section 203 on a subsequent business combination involving the
Corporation and the Purchaser (the "Section 203 Approval");
WHEREAS, as a condition to the Section 203 Approval, the Board of
Directors of the Company has required the Purchaser to execute this Agreement on
and subject to the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the respective representations and
warranties hereinafter set forth and of the mutual covenants and agreements
contained herein and other good and valuable consideration the receipt and
sufficiency of which are hereby acknowledged, and intending to be legally bound,
the parties hereto agree as follows:
Section 1. Standstill. (a) For a period commencing upon the date of
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this Agreement and ending on May 14, 2002 (the "Expiration Day"), neither the
Purchaser, any persons controlling the Purchaser (the "Controlling Person"), nor
any of their affiliates shall (nor shall the Controlling Person permit the
Purchaser to), without the prior written consent of the Company (without
counting as a director for
such purpose any director designated by the Purchaser or the Controlling
Person), directly or indirectly:
(i) purchase, offer to purchase, agree to acquire or otherwise acquire
Beneficial Ownership (as defined below) of additional Common Stock or any
equivalents to the Common Stock (the "Common Stock Equivalents"), except
pursuant to the Stock Purchase Agreement;
(ii) except as required by law, propose to enter into, or announce or
disclose any intention to propose to enter into, directly or indirectly, any
merger or business combination involving the Company of any of its subsidiaries
or to purchase, directly or indirectly, all or substantially all of the assets
of the Company and its subsidiaries, taken as a whole;
(iii) request the Company (or its directors, officers, employees or
agents), directly or indirectly, to take any action which would require the
Company to make a public announcement regarding the possibility of (A) a
business combination or merger involving the Company or any of its subsidiaries,
on the one hand, or Purchaser or any Controlling Person, or any affiliate, on
the other hand, or (B) the sale to the Purchaser or any Controlling Person, or
any affiliate thereof of all or substantially all of the assets of the Company
and its subsidiaries, taken as a whole;
(iv) make, or in any way participate in, directly or indirectly, any
"solicitation" of "proxies" (as such terms are defined or used in Regulation 14A
of the Securities Exchange Act of 1934, as amended (the "Exchange Act")), to
vote, or seek to advise or influence any person with respect to the voting of,
any Common Stock, or become a "participant" in any "election contest" (as such
terms are used or defined in Regulation 14A of the Exchange Act);
(v) form, join or in any way participate in a "group" (within the meaning
of Section 13(d)(3) of the Exchange Act) or otherwise act in concert with any
person for the purpose of circumventing the provisions of this Agreement;
(vi) nominate a slate of directors or seek to change the size of the Board
of Directors of the Company together or in connection with any other person or
group; or
(vii) challenge the legality of the foregoing restrictions; provided that
after July 5, 2000 the Purchaser or any of its affiliates may commence a cash
tender offer for not less than all shares of Common Stock not owned by it for a
price equal to the
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greater of $15 per share or the price paid to the Seller pursuant to the Stock
Purchase Agreement and may acquire all shares tendered pursuant thereto (it
being understood that the foregoing restrictions shall not prohibit or limit the
Purchaser from taking any appropriate action to disclose its intentions or
seeking the support of the Board of Directors of the Company with respect to
such tender offer), and, if the Purchaser shall thereafter Beneficially Own a
majority (not including for such purposes shares owned by or acquired from Cap Z
(as hereinafter defined)) of the Common Stock, the foregoing restrictions shall
no longer be applicable. Notwithstanding the foregoing, for the purposes of
calculating the number of shares of Common Stock and/or Common Stock Equivalents
Beneficially Owned by the Purchaser, the Controlling Person and their
affiliates, there shall be excluded from such calculation any shares owned by
any institution which is controlled by the Controlling Person as part of such
institution's investment portfolio (and not owned for the purpose of affecting
control of the Company). For purposes of this Agreement, "Beneficially Own" or
"Beneficial Ownership" means beneficial ownership determined in accordance with
Rule 13d-3 promulgated under the Exchange Act, and "Fully Diluted Common Stock"
means all outstanding shares of Common Stock and all shares of Common Stock
issuable upon the conversion or exchange of all then outstanding Common Stock
Equivalents.
(b) The provisions of this Section 1 shall terminate prior to the
Expiration Day, and the Purchaser, the Controlling Person or any of their
affiliates shall be free to acquire Common Stock and/or Common Stock Equivalents
without regard to the Standstill, at and following the earliest time that (A)
any person other than the Purchaser, the Controlling Person, Health Partners,
Capital Z Partners, Ltd. (the ultimate general partner of Health Partners,
hereinafter "Cap Z") or any of their affiliates (and other than a person acting
in concert with any of the foregoing) acquires Beneficial Ownership of Common
Stock and/or Common Stock Equivalents representing, together with any Common
Stock and/or Common Stock Equivalents already Beneficially Owned by such person
and its affiliates, at least 20% of the total Fully-Diluted Common Stock, (B)
any person other than the Purchaser, the Controlling Person or any of their
affiliates notifies in writing the Company or its Board of Directors or publicly
announces that it has acquired or has offered to acquire (including but not
limited to any offer to acquire by means of a tender offer) Beneficial Ownership
of Common Stock and/or Common Stock Equivalents representing, together with any
Common Stock and/or Common Stock Equivalents already Beneficially Owned (as
determined in accordance with Rule l3d-3 promulgated under the Exchange Act) by
such person and its affiliates, at least 20% of the total Fully-Diluted Common
Stock, (C) any person commences (or publicly announces its intention to
commence) a proxy contest pursuant to which such person
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seeks to defeat or otherwise challenge the election of the designees of the
Purchaser as directors of the Company, (D) the restrictions set forth in Article
2 "Health Partners Standstill" of the Stockholder Agreement, dated May 14, 1999,
shall be amended, modified, waived, or otherwise terminated without the prior
written consent of the Purchaser or (E) the Stock Purchase Agreement shall have
terminated without the Purchaser or any assignee thereof having acquired shares
of Common Stock pursuant thereto.
Section 2. Representations and Warranties of the Company. The
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Company hereby represents and warrants to, and agrees with, the Purchaser as
follows:
2.1 Organization and Good Standing. The Company is a
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corporation duly formed, validly existing and in good standing under the laws of
the State of Delaware.
2.2 Authorization; Validity of Agreement. This Agreement has
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been duly authorized, executed and delivered by the Company, and constitutes a
legal, valid and binding obligations enforceable against the Company in
accordance with its terms.
2.3 No Conflict. None of the execution and delivery of this
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Agreement, and the consummation of the transaction contemplated hereby, will
result in a breach, violation or default of, or give rise to an event which with
the giving of notice or after the passage of time, or both, would result in a
breach, violation or default of, or will require any consent, approval or notice
under, any of the terms or provisions of the Company's Certificate of
Incorporation or By-laws, or of any material note, bond, indenture, mortgage,
deed of trust, loan agreement or other material contract, agreement, instrument,
restriction, or arrangement to which the Company is a party or by which the
Company or any of its assets may be bound or affected, or any order, rule or
regulation of any court or governmental agency or body having jurisdiction over
the Company.
2.4 Approval of the Board. The Board of the Directors of the
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Company have approved the Purchaser (or any person controlling, controlled by or
under common control with Purchaser, including any person of which the Purchaser
owns, directly or indirectly, at least 50% of the ownership interest) becoming
an interested stockholder for purposes of Section 203 of the General Corporation
Law of the State of Delaware.
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Section 3. Representations and Warranties of the Purchaser. The
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Purchaser hereby represents and warrants to, and agrees with, the Company as
follows:
3.1 Organization and Good Standing. The Purchaser is a
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business trust duly formed, validly existing and in good standing under the laws
of the State of Delaware.
3.2 Authorization; Validity of Agreement. This Agreement has
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been duly authorized, executed and delivered by the Purchaser, and constitutes a
legal, valid and binding obligation against the Purchaser in accordance with its
terms.
3.3 No Conflict. None of the execution and delivery of this
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Agreement, and the consummation of the transaction contemplated hereby, will
result in a breach, violation or default of, or give rise to an event which with
the giving of notice or after the passage of time, or both, would result in a
breach, violation or default of, or will require any consent, approval or notice
under, any of the terms or provisions of the Declaration of Trust and By-laws of
the Purchaser, or of any note, bond, indenture, mortgage, deed of trust, loan
agreement or other contract, agreement, instrument, restriction, or arrangement
to which the Purchaser is a party or by which the Purchaser or any of its assets
may be bound or affected, or any order, rule or regulation of any court or
governmental agency or body having jurisdiction over the Purchaser.
Section 4. Entire Agreement; Modification. This Agreement (i)
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constitutes the entire agreement and supersedes all prior agreements and
understandings, both written and oral, among the parties with respect to the
subject matter hereof and thereof and (ii) is not intended to confer upon any
person other than the parties hereto any rights or remedies hereunder. This
Agreement may not be modified or amended except by an instrument in writing duly
signed by or on behalf of the parties hereto and dated on or subsequent to the
date hereof.
Section 5. Governing Law. This Agreement shall be governed by and
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construed and enforced in accordance with the laws of the State of New York
applicable to agreements made and to be performed entirely within the State.
Section 6. Binding Effect. This Agreement shall be binding upon the
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parties and inure to the benefits of the successors and assigns of the
respective parties hereto.
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Section 7. Counterparts. This Agreement may be executed
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simultaneously in any number of counterparts, each of which shall be deemed an
original but all of which together shall constitute one and the same instrument.
Section 8. Paragraph Headings. The paragraph headings in this
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Agreement are for convenience of reference only and shall not be deemed to alter
or affect any provision hereof.
Section 9. Transaction Expenses. Notwithstanding anything else in
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this Agreement to the contrary, the parties hereto shall each by responsible for
the payment of any and all of its or his own expenses, including, without
limitation, the fees and expenses of counsel, accountants and other advisers,
arising out of or relating directly or indirectly to the transactions
contemplated by this Agreement, whether or not such transactions are consummated
in whole or in part.
Section 10. Severability. If any provision of this Agreement is
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invalid, illegal, or unenforceable, the balance of this Agreement shall remain
in effect, and if any provision is inapplicable to any person or circumstance,
it shall nevertheless remain applicable to all other persons and circumstances.
Section 11. Waiver. The waiver of one breach or default hereunder
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shall not constitute the waiver of any other or subsequent breach or default.
Section 12. No Agency. This Agreement shall not constitute any party
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the legal representative or agent of the other, nor shall any party have the
right or authority to assume, create, or incur any liability or any obligation
of any kind, express or implied, against or in the name of or on behalf of the
other party.
Section 13. Adjustment upon Changes in Capitalization. In the case
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of any changes affecting the Company's capitalization, including, but not
limited to, stock dividends, cash dividends in excess of normal quarterly cash
dividends consistent with past practice, stock splits, recapitalization and the
like, the number of shares and any other items affected by such change shall be
appropriately adjusted.
Section 14. Interpretation. The words "hereof", "herein" and
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"herewith" and words of similar import shall, unless otherwise stated, be
construed to refer to this Agreement as a whole and not to any particular
provision of this Agreement, and article, section, paragraph, exhibit and
schedule references are to the articles, sections, paragraphs, exhibits and
schedules of this Agreement unless
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otherwise specified. Whenever the words "include", "includes" or "including" are
used in this Agreement they shall be deemed to be followed by the words "without
limitation". The words describing the singular number shall include the plural
and vice versa, and words denoting any gender shall include all genders and
words denoting natural persons shall include corporations and partnerships and
vice versa. As used in this Agreement, the term "affiliate(s)" shall have the
meaning set forth in Rule l2b-2 of the Exchange Act. As used in this Agreement,
the term "person" means any individual, corporation, partnership, limited
liability company, joint venture, association, joint stock company, trust,
unincorporated organization or government or other agency or political
subdivision thereof. The parties have participated jointly in the negotiation
and drafting of this Agreement. In the event an ambiguity or question of intent
or interpretation arises, this Agreement shall be construed as if drafted
jointly by the parties and no presumption or burden of proof shall arise
favoring or disfavoring any party by virtue of the authorship of any provisions
of this Agreement.
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IN WITNESS WHEREOF, the Purchaser and the Company have caused this
Agreement to be signed by their respective officers thereunto duly authorized as
of the date first written above.
FORTRESS REGISTERED
INVESTMENT TRUST
/s/ Xxxxxx Xxxxxxx
By:__________________________
Name: Xxxxxx Xxxxxxx
Title: Chief Operating Officer
BROOKDALE LIVING
COMMUNITIES, INC.
/s/ Xxxx X. Xxxxxxx
By:__________________________
Name: Xxxx X. Xxxxxxx
Title: President and Chief Executive Officer
