<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 29, 1998
REGISTRATION STATEMENT NO. 333-
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- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
----------------
BROOKDALE LIVING COMMUNITIES, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 36-4103821
(STATE OR OTHER JURISDICTION (I.R.S. EMPLOYER
OF INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
77 WEST WACKER DRIVE
CHICAGO, ILLINOIS 60601
(312) 977-3700
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
----------------
ROBERT J. RUDNIK, ESQ.
EXECUTIVE VICE PRESIDENT, GENERAL COUNSEL AND SECRETARY
77 WEST WACKER DRIVE
CHICAGO, ILLINOIS 60601
(312) 977-3700
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
COPY TO:
BRIAN T. BLACK, ESQ.
WINSTON & STRAWN
35 WEST WACKER DRIVE
CHICAGO, ILLINOIS 60601
(312) 558-5600
----------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time after the effective date of this Registration Statement as the
Registrant shall determine.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the
following box. [_]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]
<PAGE>
CALCULATION OF REGISTRATION FEE
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<TABLE>
<CAPTION>
PROPOSED
PROPOSED MAXIMUM
TITLE OF EACH CLASS OF AMOUNT MAXIMUM AGGREGATE AMOUNT OF
SECURITIES TO BE OFFERING PRICE OFFERING REGISTRATION
TO BE REGISTERED REGISTERED(1) PER UNIT(2) PRICE(1),(3) FEE
- -----------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock............ (4)
Preferred Stock......... (4), (5)
Debt Securities......... (4), (6)
Warrants................ (4), (7)
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Totals.................. $200,000,000 $200,000,000 $59,000.00
(4), (5), (6),
(7)
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</TABLE>
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(1) In U.S. dollars or the equivalent thereof in one or more foreign
currencies or currency units or composite currencies, including the
European Currency Unit.
(2) The Proposed Maximum Offering Price Per Unit will be determined from time
to time by the Registrant in connection with the issuance of the
Securities.
(3) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(o) of the Securities Act of 1933, as amended (the
"Securities Act").
(4) This Registration Statement covers Common Stock issued other than on
conversion of Debt Securities, conversion of Preferred Stock, exercise of
Warrants and, subject to notes 5, 6, or 7, the number of other Securities
listed above as may from time to time be issued at indeterminate prices,
but with an aggregate initial offering price for all such Common Stock and
other Securities not to exceed $200,000,000. Also includes such presently
indeterminate number of additional shares of Common Stock ("Additional
Common Stock") as may be issued on (i) conversion of any Debt Securities
as may be issued, if and to the extent convertible into Common Stock, (ii)
conversion of any Preferred Stock as may be issued separately on
conversion of Debt Securities, if and to the extent such Preferred Stock
is convertible into Common Stock, or (iii) exercise of any Warrants as may
be issued, if and to the extent exercisable for Common Stock. The amount
to be registered, proposed maximum offering price per unit, proposed
maximum aggregate offering price and amount of registration fee with
respect to such Debt Securities, Preferred Stock and Warrants include such
Additional Common Stock.
(5) Includes Preferred Stock issued other than on conversion of Debt
Securities. Also includes such presently indeterminate number of
additional shares of Preferred Stock ("Additional Preferred Stock") as may
be issued on conversion of any Debt Securities as may be issued, if and to
the extent convertible into Preferred Stock. The amount to be registered,
proposed maximum offering price per unit, proposed maximum aggregate
offering price and amount of registration fee with respect to such Debt
Securities, include such Additional Preferred Stock.
(6) Includes the principal amount of Debt Securities and, as to Debt
Securities offered at an original issue discount, the offering price
thereof. The Registration Statement also includes such presently
indeterminable amount of Debt Securities ("Additional Debt Securities") as
may be issued in exchange for Preferred Stock, if and to the extent
exercisable for Debt Securities. The amount to be registered, proposed
maximum offering price per unit, proposed maximum offering price and
amount of registration fee with respect to such Preferred Stock include
such Additional Debt Securities.
(7) Includes Warrants which may be issued other than as part of Units of
Warrants and other Securities, and Warrants ("Additional Warrants") which
may be offered as part of Units of Warrants and other Securities. The
amount to be registered, proposed maximum offering price per unit,
proposed maximum aggregate offering price and amount of registration fee
with respect to such Units of Warrants and other Securities include such
Additional Warrants.
----------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS
REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH
SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION
STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE UNITED STATES SECURITIES
AND EXCHANGE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
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<PAGE>
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A +
+REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE +
+SECURITIES AND EXCHANGE COMMISSION. THIS PROSPECTUS SHALL NOT CONSTITUTE AN +
+OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY, NOR SHALL THERE BE ANY +
+SALE OF THESE SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR +
+SALE WOULD BE UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE +
+SECURITIES LAWS OF ANY SUCH STATE. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
SUBJECT TO COMPLETION, DATED MAY 29, 1998
$200,000,000
[LOGO]
BROOKDALE LIVING COMMUNITIES, INC.
COMMON STOCK, PREFERRED STOCK, DEBT SECURITIES
AND WARRANTS TO PURCHASE COMMON STOCK
-----------
Brookdale Living Communities, Inc., a Delaware corporation (the "Company"),
may from time to time offer (i) shares of Common Stock, $0.01 par value per
share ("Common Stock"), (ii) shares of Preferred Stock, $0.01 par value per
share ("Preferred Stock"), which may be convertible or nonconvertible, (iii)
debt securities ("Debt Securities"), which may be convertible or nonconvertible
senior debt securities ("Senior Debt Securities") or subordinated (including
junior subordinated) debt securities ("Subordinated Debt Securities"), and
which may be secured or unsecured, and (iv) warrants to purchase Common Stock
("Warrants"), with an aggregate public offering price of up to $200,000,000, on
terms to be determined at the time or times of offering. The Common Stock,
Preferred Stock, Debt Securities and Warrants (collectively referred to herein
as the "Securities") may be offered, separately or together, in separate
classes or series, in amounts, at prices and on terms to be set forth in one or
more supplements to this Prospectus (each, a "Prospectus Supplement").
Information contained herein is subject to completion or amendment. A
registration statement relating to these Securities has been filed with the
Securities and Exchange Commission. These Securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these Securities
in any State in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such State.
All specific terms of the offering and sale of the Securities in respect of
which this Prospectus is being delivered will be set forth in the applicable
Prospectus Supplement and will include, when applicable: (i) in the case of
Common Stock, the maximum aggregate number of shares offered and any public
offering price; (ii) in the case of Preferred Stock, the specific class,
series, title and stated value, any dividend, liquidation, redemption,
conversion, voting and other rights, any dividend payment dates, any sinking
fund provisions, the maximum aggregate number of shares offered and any public
offering price; (iii) in the case of Debt Securities, the specific title,
aggregate principal amount, denomination, form, maturity, interest rate and
time of payment, currency, ranking as Senior Debt Securities or Subordinated
Debt Securities, redemption, repayment or sinking fund provisions, terms for
conversion into Common Stock or Preferred Stock and any public offering price;
and (iv) in the case of Warrants, the duration, offering price, exercise price
and detachability features. If any Securities are offered together in the form
of units ("Units"), the specific terms of any such Units will be set forth in
the applicable Prospectus Supplement.
The applicable Prospectus Supplement will also contain information, when
applicable, about certain United States federal income tax considerations
relating to, and any listing on a securities exchange of, the Securities
covered by that Prospectus Supplement.
The Securities may be offered directly, through agents designated from time
to time by the Company, or to or through underwriters or dealers. If any agents
or underwriters are involved in the sale of any of the Securities, their names
and any applicable purchase price, fee, commission or discount arrangement
between or among them will be set forth in or will be calculable from the
information set forth in the applicable Prospectus Supplement. No Securities
may be sold without delivery of the applicable Prospectus Supplement describing
the method and terms of the offering of those Securities. See "Plan of
Distribution" for possible indemnification arrangements with underwriters,
dealers and agents.
The Common Stock is traded on the Nasdaq National Market under the symbol
"BLCI."
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
This Prospectus may not be used to consummate sales of the Securities
unless accompanied by a Prospectus Supplement.
The date of this Prospectus is May , 1998.
<PAGE>
AVAILABLE INFORMATION
The Company has filed a Registration Statement on Form S-3 under the
Securities Act of 1933, as amended (the "Securities Act"), with the Securities
and Exchange Commission (the "Commission") with respect to the Securities.
This Prospectus which constitutes part of the Registration Statement does not
contain all of the information set forth in the Registration Statement,
certain parts of which are omitted in accordance with the rules and
regulations of the Commission. Statements contained herein concerning the
provisions of any documents are not necessarily complete and, in each
instance, reference is made to the copy of such documents filed as an exhibit
to the Registration Statement, and each such statement shall be deemed
qualified in its entirety by such reference.
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy statements and other information with the
Commission. Such reports, proxy statements and other information filed by the
Company with the Commission may be inspected and copied at the public
reference facilities maintained by the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549, and at the following Regional Offices of the
Commission: Northeast Regional Office, 7 World Trade Center, Suite 1300, New
York, New York 10048; and Midwest Regional Office, Citicorp Center, 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of such material
can also be obtained from the Public Reference Section of the Commission, at
450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates. The
Company is subject to the electronic filing requirements of the Commission.
Accordingly, pursuant to the rules and regulations of the Commission, certain
documents, including annual and quarterly reports and proxy statements, filed
by the Company with the Commission have been or will be filed electronically.
The Commission maintains a World Wide Web site that contains reports, proxy
and information statements and other information regarding registrants that
file electronically with the Commission at http://www.sec.gov. The Company's
Common Stock is listed on the Nasdaq National Market under the symbol BLCI,
and such reports, proxy statements and other information can also be inspected
at the offices of the Nasdaq National Market, 1735 K Street, N.W., Washington,
D.C. 20006. This Prospectus does not contain all the information set forth in
the Registration Statement and exhibits thereto which the Company has filed
with the Commission under the Securities Act.
INFORMATION INCORPORATED BY REFERENCE
The following documents, each of which has been filed with the Commission by
the Company, are incorporated, as of their respective dates, into this
Prospectus by reference:
(a) The Company's Annual Report on Form 10-K (File No. 0-22253) for the
fiscal year ended December 31, 1997, as filed with the Commission on March
31, 1998 under the Exchange Act;
(b) The Company's Quarterly Report on Form 10-Q (File No. 0-22253) for
the quarter ended March 31, 1998, as filed with the Commission on May 15,
1998;
(c) The Company's Current Reports on Form 8-K (File No. 0-22253) dated
December 17, 1997, March 6, 1998 and March 31, 1998, as filed with the
Commission on February 18, 1998, April 14, 1998 and April 15, 1998,
respectively; and
(d) The description of the Company's Common Stock, par value $0.01 per
share, contained in Amendment No. 1 to the Company's Registration Statement
on Form 8-A, as filed with the Commission on April 17, 1997 under the
Exchange Act.
All documents subsequently filed with the Commission by the Company pursuant
to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act prior to the
termination of the offering of the Securities registered hereby shall be
deemed to be incorporated by reference into this Prospectus and to be a part
hereof from the respective dates of filing of such documents. Any statement
contained in a document incorporated or deemed to be incorporated by reference
herein shall be deemed to be modified or superseded for purposes of this
Prospectus to the extent
2
<PAGE>
that a statement contained herein or in any other subsequently filed document
which is or is deemed to be incorporated by reference herein modifies or
supersedes such statement. Any such statement so modified or superseded shall
not be deemed, except as so modified or superseded, to constitute a part of
this Prospectus.
The Company will provide without charge to each person to whom this
Prospectus is delivered, upon written or oral request of such person, a copy
of any and all of the information that has been incorporated by reference in
this Prospectus, excluding exhibits. Such requests should be directed to
Brookdale Living Communities, Inc., 77 West Wacker Drive, Suite 4400, Chicago,
Illinois 60601, Telephone: (312) 977-3700.
SPECIAL NOTE ON FORWARD-LOOKING STATEMENTS
This Prospectus contains, any Prospectus Supplement will contain, and the
documents incorporated by reference herein contain or will contain certain
statements which constitute "forward-looking statements" within the meaning of
the Private Securities Litigation Reform Act of 1995. When used in this
Prospectus or any Prospectus Supplement, the words "believes," "expects,"
"anticipates," "estimates" and similar words and expressions are generally
intended to identify forward-looking statements. Statements that describe the
Company's future strategic plans, goals or objectives are also forward-looking
statements. Readers of this Prospectus or any Prospectus Supplement are
cautioned (a) that any forward-looking statements, including those regarding
the intent, belief, or current expectations of the Company or management, are
not guarantees of future performance, results or events and involve risks and
uncertainties, such as quarterly fluctuations in operating results and
occupancy levels in markets in which the Company competes, the successful
integration of newly acquired and leased facilities with the operations of the
Company's other facilities, achievement of development timetables and/or
unanticipated changes in expenses or capital expenditures, and (b) that actual
results and events may differ materially from those in the forward-looking
statements as a result of various factors including, but not limited to (i)
general economic conditions in the markets in which the Company operates, (ii)
competitive pressures within the industry and/or the markets in which the
Company operates, (iii) the effect of future legislation or regulatory changes
on the Company's operations and (iv) other factors described in "Risk Factors"
contained in any Prospectus Supplement. The forward-looking statements
included in this Prospectus are made only as of the date of this Prospectus.
The Company undertakes no obligation to update such forward-looking statements
to reflect subsequent events or circumstances.
THE COMPANY
The Company provides senior independent and assisted living services to the
elderly through its facilities located in urban and suburban areas of major
metropolitan markets. The Company was incorporated in Delaware in September
1996 to continue and expand the business and operations of the senior
independent and assisted living division of The Prime Group, Inc. and certain
of its affiliates (collectively, "PGI"), which, since 1985, had been involved
in the development, construction, marketing and operation of senior
independent and assisted living facilities for the elderly. The Company's
principal executive offices are located at 77 West Wacker Drive, Suite 4400,
Chicago, Illinois 60601, and its telephone number is (312) 977-3700.
USE OF PROCEEDS
Unless otherwise indicated in an accompanying Prospectus Supplement, the net
proceeds to be received by the Company from the sale of the Securities will be
used for general corporate purposes, which may include funding capital
expenditures, acquisitions, developments, lease security deposits, reducing
short-term borrowings, and general working capital needs. Pending such uses,
the Company may temporarily invest the net proceeds in interest-bearing
securities.
3
<PAGE>
RATIO OF EARNINGS TO COMBINED FIXED CHARGES
The following table sets forth the ratio of earnings to combined fixed
charges of the Company and its consolidated subsidiaries for the periods
indicated.
<TABLE>
<CAPTION>
THE PREDECESSOR PROPERTIES (1) THE COMPANY
- --------------------------------------------------- --------------------------------
YEAR ENDED DECEMBER
31, JANUARY 1, 1997 THREE MONTHS MAY 7, 1997 THREE MONTHS
- -------------------- TO ENDED TO ENDED
1993 1994 1995 1996 MAY 6, 1997 MARCH 31, 1997 DECEMBER 31, 1997 MARCH 31, 1998
- ---- ---- ---- ---- --------------- -------------- ----------------- --------------
<S> <C> <C> <C> <C> <C> <C> <C>
-- -- -- 1.44 -- -- -- 1.34
</TABLE>
- --------
(1) As used herein, the Predecessor Properties refers to the former senior
independent and assisted living division of The Prime Group, Inc. and
certain of its affiliates, collectively the predecessor in interest to the
Company.
For purposes of calculating the ratio of earnings to fixed charges,
"earnings" include income before income taxes, extraordinary items and the
cumulative effects of changes in accounting principles and combined fixed
charges. "Combined fixed charges" consist of interest on all indebtedness and
that portion of rental expense that management believes to be representative
of interest. The Predecessor Properties' historical earnings were insufficient
to cover fixed charges by approximately $2.1 million, $3.4 million, $1.4
million, $0.3 million and $0.2 million for the years ended December 31, 1993,
1994, 1995, the period from January 1, 1997 to May 6, 1997 and the three
months ended March 31, 1997, respectively. The Company's historical earnings
were insufficient to cover fixed charges by approximately $0.1 million for the
period from May 7, 1997 to December 31, 1997.
DESCRIPTION OF CAPITAL STOCK
The Company's Restated Certificate of Incorporation (the "Certificate")
provides that the authorized capital stock of the Company consists of
75,000,000 shares of Common Stock and 20,000,000 shares of Preferred Stock,
par value $0.01 per share (the "Preferred Stock"). As of December 31, 1997,
9,475,000 shares of Common Stock were issued and outstanding, and no shares of
Preferred Stock were issued or outstanding.
COMMON STOCK
Each holder of Common Stock is entitled to one vote for each share on all
matters submitted to a vote of stockholders. The Certificate does not provide
for cumulative voting, and accordingly, the holders of a majority of the
shares of Common Stock entitled to vote in any election of directors may elect
all of the directors standing for election. The Certificate provides that
whenever there is paid, or declared and set aside for payment, to the holders
of the outstanding shares of any class of stock having preference over the
Common Stock as to the payment of dividends, the full amount of dividends and
of sinking fund or retirement fund or other retirement payments, if any, to
which such holders are entitled, then dividends may be paid on the Common
Stock out of any assets legally available therefor, but only when and as
declared by the Board of Directors. The Certificate also provides that in the
event of any liquidation, dissolution or winding up of the Company, after
there is paid to or set aside for the holders of any class of stock having
preference over the Common Stock the full amount to which such holders are
entitled and after payment or provision for payment of all debts and
liabilities of the Company, the holders of the Common Stock shall be entitled
to receive the remaining assets of the Company available for distribution, in
cash or in kind. The holders of Common Stock have no preemptive, subscription,
redemption or conversion rights. The rights, preferences and privileges of
holders of Common Stock will be subject to the rights of the holders of any
shares of any series of Preferred Stock that the Company may issue in the
future having preference over the Common Stock with respect to such matters.
PREFERRED STOCK
The following summary of the Preferred Stock does not purport to be complete
and is qualified in its entirety by reference to the Certificate or the
applicable Certificate of Designations of Preferred Stock, the form of which
will be filed as, or will be incorporated by reference as, an exhibit to the
Registration Statement of which this Prospectus is a part in connection with
the issuance of such series of Preferred Stock. The particular terms of any
series of Preferred Stock, whether convertible or nonconvertible, will be
described in the applicable Prospectus Supplement.
4
<PAGE>
The Certificate provides that the Board of Directors of the Company is
authorized to issue Preferred Stock in series and to fix and state the voting
powers, and such designations, preferences and relative participating,
optional or other special rights of the shares of each such series and the
qualifications, limitations and restrictions thereof. Such action may be taken
by the Board without stockholder approval. Under the Certificate, each share
of each series of Preferred Stock is to have the same relative rights as, and
be identical in all respects with, all other shares of the same series. While
providing flexibility in connection with possible financings, acquisitions and
other corporate purposes, the issuance of Preferred Stock, among other things,
could adversely affect the voting power of the holders of Common Stock and,
under certain circumstances, be used as a means of discouraging, delaying or
preventing a change in control of the Company.
REGISTRATION RIGHTS AGREEMENT
The Company has granted demand and incidental registration rights to The
Prime Group, Inc. and certain of its affiliates (collectively, "PGI") for the
registration of shares of Common Stock owned by PGI under the Securities Act.
Three demand registrations are permitted during the first five years following
the initial public offering of the Common Stock and one registration per year
each year thereafter until PGI owns less than 10% of the outstanding Common
Stock. The Company will pay the fees and expenses of the demand registrations
and the incidental registrations, while PGI will pay all underwriting
discounts and commissions. These registration rights are subject to certain
conditions and limitations, including the right of underwriters to limit the
number of shares owned by PGI included in such registration.
TRANSFER AGENT AND REGISTRAR
The transfer agent and registrar for the Common Stock is LaSalle National
Bank, and the transfer agent and registrar for the Preferred Stock will be set
forth in the applicable Prospectus Supplement.
CERTAIN ANTI-TAKEOVER PROVISIONS
The Certificate and the Amended and Restated By-laws of the Company (the
"By-laws") contain, among other things, certain provisions described below
that may reduce the likelihood of a change in the Board of Directors or voting
control of the Company without the consent of the Board of Directors. These
provisions could have the effect of discouraging, delaying or preventing
tender offers or takeover attempts that some or a majority of the stockholders
might consider to be in the stockholders' best interest, including offers or
attempts that might result in payment of a premium over the market price for
the Common Stock.
Classification of Board of Directors. The Certificate and the By-laws divide
the Board of Directors into three classes, designated Class I, Class II and
Class III, respectively, each class to be as nearly equal in number as
possible. The terms of Class I, Class II and Class III directors will expire
at the 2001, 1999 and 2000 annual meetings of stockholders, respectively, and
in all cases directors elected will serve until their respective successors
are elected and qualified. At each annual meeting of stockholders, directors
will be elected to succeed those in the class whose terms then expire, each
elected director to serve for a term expiring at the third succeeding annual
meeting of stockholders after such director's election, and until the
director's successor is elected and qualified. Thus, only one class of the
directors stand for re-election each year, requiring at least two
stockholders' meetings at which director are elected to replace a majority of
the Board.
Filling of Board Vacancies; Removal. Any vacancy occurring in the Board of
Directors, including any vacancy created by an increase in the number of
directors, shall be filled for the unexpired term by the concurring vote of a
majority of the directors then in office, whether or not a quorum, and any
director so chosen shall hold office for the remainder of the full term of the
class in which the new directorship was created or the vacancy occurred and
until such director's successor shall have been elected and qualified.
Directors may only be removed with cause by the affirmative vote of the
holders of at least a majority of the outstanding shares of capital stock then
entitled to vote at an election of directors.
5
<PAGE>
Stockholder Action by Unanimous Written Consent. Any action required or
permitted to be taken by the stockholders must be effected at a duly called
annual or special meeting of the stockholders and may not be effected by any
consent in writing by the stockholders, unless such consent is unanimous.
Call of Special Meetings. Special meetings of stockholders may be called at
any time but only by the Board of Directors, the Chairman of the Board, the
Chief Executive Officer, the President or stockholders possessing at least 25%
of the voting power of the issued and outstanding stock entitled to vote
generally in the election of directors.
By-laws Amendments. The stockholders may amend the By-laws by the
affirmative vote of the holders of at least two-thirds of the outstanding
shares of stock of the Company entitled to vote thereon. Directors may also
amend the By-laws by a two-thirds vote of the directors then in office.
Certificate Amendments. Except as set forth in the Certificate or as
otherwise specifically required by law, no amendment of any provision of the
Certificate shall be made unless such amendment has been first proposed by the
Board of Directors upon the affirmative vote of at least two-thirds of the
directors then in office and thereafter approved by the affirmative vote of
the holders of at least a majority of the outstanding shares of stock of the
Company entitled to vote thereon; provided, however, if such amendment is to
the provisions in the Certificate relating to (i) amendments to the
Certificate, (ii) a decrease in the authorized number of shares of Preferred
Stock, (iii) the authority of the Board of Directors to issue Preferred Stock,
(iv) the number and classification of the Board of Directors of the Company,
(v) the limitation on directors' liability, (vi) amendments to the By-laws, or
(vii) stockholder meetings, such amendment must be approved by the affirmative
vote of the holders of at least two-thirds of the outstanding shares of stock
entitled to vote thereon.
Stockholder Nominations and Proposals. With certain exceptions, the By-laws
require that stockholders intending to present nominations for directors or
other business for consideration at a meeting of stockholders notify the
Company's Secretary by the later of 60 days before the date of the meeting and
15 days after the date notice of the meeting is mailed or public notice of the
meeting is given.
Certain Statutory Provisions. Section 203 of the Delaware General
Corporation Law, as amended (the "DGCL") provides, in general, that a
stockholder acquiring more than 15% of the outstanding voting shares of a
corporation subject to the statute (an "Interested Stockholder"), but less
than 85% of such shares, may not engage in certain "Business Combinations"
with the corporation for a period of three years subsequent to the date on
which the stockholder became an Interested Stockholder unless (i) before such
person became an Interested Stockholder, the corporation's board of directors
approved either the Business Combination or the transaction in which the
stockholder became an Interested Stockholder or (ii) the Business Combination
is approved by the corporation's board of directors and authorized by a vote
of at least two-thirds of the outstanding voting stock of the corporation not
owned by the Interested Stockholder.
Section 203 defines the term "Business Combination" to encompass a wide
variety of transactions with or caused by an Interested Stockholder in which
the Interested Stockholder receives or could receive a benefit on other than a
pro rata basis with other stockholders, including mergers, certain asset
sales, certain issuances of additional shares to the Interested Stockholder,
transactions with the corporation which increase the proportionate interest of
the Interested Stockholder or a transaction in which the Interested
Stockholder receives certain other benefits.
Pursuant to a Board resolution adopted at the time of formation of the
Company, the Section 203 limits do not apply to any "Business Combination"
between the Company and PGI.
DESCRIPTION OF DEBT SECURITIES
The following description of the Debt Securities sets forth certain general
terms and provisions of the Debt Securities to which any Prospectus Supplement
may relate ("Offered Debt Securities"). The particular terms of the Offered
Debt Securities and the extent to which such general provisions may apply will
be described in a Prospectus Supplement relating to such Offered Debt
Securities.
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Unless otherwise specified in the applicable Prospectus Supplement, the Debt
Securities will constitute senior, senior subordinated or subordinated
(including, if applicable, junior subordinated) debt of the Company and will
be issued under a Senior Debt Indenture (the "Senior Debt Indenture") or a
Subordinated Debt Indenture (the "Subordinated Debt Indenture"), in each case
between the Company and a trustee to be named in the applicable Prospectus
Supplement (the "Trustee"). The Senior Debt Indenture and the Subordinated
Debt Indenture are sometimes referred to below individually as an "Indenture"
and collectively as the "Indentures." If and to the extent set forth in the
applicable Prospectus Supplement, the Debt Securities may be convertible into
Preferred or Common Stock of the Company or issued as part of Units of Debt
Securities and other Securities. If Debt Securities are to be issued as part
of Units of Debt Securities and other Securities or are to be issued in
exchange for Preferred Stock, the Prospectus Supplement will describe any
applicable material federal income tax consequences thereof.
The following summaries of certain provisions of the Indentures and the Debt
Securities do not purport to be complete. Except to the extent set forth in
the Prospectus Supplement with respect to a particular issue of Debt
Securities, the Indentures will be substantially identical, except for the
provisions relating to subordination, including the fact that Senior Debt
Securities will rank senior to the Subordinated Debt Securities.
GENERAL
The Indentures for the Debt Securities will not limit the amount of
additional indebtedness the Company or any of its subsidiaries may incur,
except as may be provided in the applicable Prospectus Supplement. The Debt
Securities will be senior or subordinated obligations of the Company, as set
forth in the accompanying Prospectus Supplement.
The applicable Prospectus Supplement will contain the following terms of and
information relating to any Debt Securities (to the extent such terms are
applicable to such Debt Securities and have not been otherwise disclosed): (a)
the specific title, aggregate principal amount, denomination and form; (b) the
date of maturity; (c) the interest rate or rates (or the method by which such
rate will be determined), if any; (d) the date from which interest will
accrue, the dates on which any such interest will be payable and the record
date for any interest payable on the interest payment date; (e) whether the
Debt Securities are convertible into Common Stock or Preferred Stock and the
terms of the security into which they are convertible (see "Description of
Capital Stock"), the conversion price, other terms related to conversion and
any anti-dilution protections; (f) if other than the corporate trust office of
the trustee for such Debt Securities, the place or places where the principal
of, premium, if any, and interest, if any, on the Debt Securities will be
payable; (g) the portion of the principal amount of Debt Securities of the
series payable upon certain declarations of acceleration or the method by
which such portion shall be determined; (h) the currency, currencies or
currency unit in which payments will be made, if other than U.S. dollars; (i)
whether the Debt Securities are senior or subordinated Debt Securities; (j)
any redemption, repayment or sinking fund provisions, including the period or
periods within which, the currency, currencies or currency units in which, and
the other terms and conditions upon which, Debt Securities may be redeemed;
(k) whether the Debt Securities will be sold as part of Units consisting of
Debt Securities and other Securities; (l) if the amount of payments of
principal of or any premium or interest on any Debt Securities of the series
may be determined with reference to an index, formula or other method, the
index, formula or other method by which such amounts shall be determined; (m)
whether and by what method the Debt Securities of the series (or certain
covenants under the related Indenture) may be defeased and discharged by the
Company; (n) whether the Debt Securities of the series shall be issued in
whole or in part as book-entry securities; (o) any applicable material federal
income tax consequences; and (p) any other material specific terms of the Debt
Securities, including any material additional events of default or covenants
provided for with respect to the Debt Securities and any material terms that
may be required by or advisable under applicable laws or regulations.
Debt Securities may bear interest at a fixed rate or a floating rate. Debt
Securities bearing no interest or interest at a rate that at the time of
issuance is below the prevailing market rate or as part of Units consisting of
Debt Securities and other Securities may be sold or deemed to be sold at a
discount below their stated principal
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amount. With respect to any Debt Securities as to which the Company has the
right to defer interest, the holders of such Debt Securities may be allocated
interest income for federal and state income tax purposes without receiving
equivalent, or any, interest payments. Any material federal income tax
considerations applicable to any such discounted Debt Securities or to certain
Debt Securities issued at par that are treated as having been issued at a
discount for federal income tax purposes will be described in the applicable
Prospectus Supplement.
SUBORDINATION OF SUBORDINATED DEBT SECURITIES
Except as otherwise set forth in the applicable Prospectus Supplement, any
Subordinated Debt Securities will be subordinate and junior in right of
payment, to the extent and in the manner to be set forth in the Indenture, to
all "Senior Debt" of the Company. "Senior Debt" means, without duplication,
the principal, premium (if any) and unpaid interest on all present and future
(i) indebtedness of the Company for borrowed money, (ii) obligations of the
Company evidenced by bonds, debentures, notes or similar instruments, (iii)
indebtedness incurred, assumed or guaranteed by the Company in connection with
the acquisition by it or a subsidiary of any business, properties or assets
(except purchase-money indebtedness classified as accounts payable under
generally accepted accounting principles), (iv) obligations of the Company as
lessee under leases required to be capitalized on the balance sheet of the
lessee under generally accepted accounting principles, (v) reimbursement
obligations of the Company in respect of letters of credit relating to
indebtedness or other obligations of the Company that qualify as indebtedness
or obligations of the kind referred to in clauses (i) through (iv) above, and
(vi) obligations of the Company under direct or indirect guarantees in respect
of, and obligations (contingent or otherwise) to purchase or otherwise
acquire, or otherwise to assure a creditor against loss in respect of,
indebtedness or obligations of others of the kinds referred to in clauses (i)
through (v) above, in each case unless, in the instrument creating or
evidencing the indebtedness or obligation or pursuant to which the same is
outstanding, it is provided that such indebtedness or obligation is not
superior in right of payment to Senior Debt Securities.
CERTAIN COVENANTS OF THE COMPANY
The Prospectus Supplement will describe certain covenants of the Company
that will be set forth in the Indentures.
REDEMPTION
If and to the extent set forth in the applicable Prospectus Supplement, the
Company will have the right to redeem the Debt Securities, in whole or from
time to time in part, after the date and at the redemption prices set forth in
the applicable Prospectus Supplement.
EVENTS OF DEFAULT
An Event of Default with respect to the Debt Securities of any series will
be defined in the Indentures and set forth in the applicable Prospectus
Supplement.
DEFEASANCE OF DEBT SECURITIES
The Prospectus Supplement will state whether any defeasance provision will
apply to Debt Securities offered in connection therewith.
MODIFICATION OF THE INDENTURE AND WAIVER OF COVENANTS
Except as otherwise set forth in the applicable Prospectus Supplement, the
Indentures will contain provisions permitting the Company and the Trustee,
with the consent of the Holders of not less than a majority in principal
amount of outstanding Debt Securities of each series affected thereby, to
execute supplemental indentures adding any provisions to or changing or
eliminating any of the provisions of the Indentures or modifying the rights of
the Holders of outstanding Debt Securities of such series, except that no such
supplemental indenture may, without the consent of the Holder of each
outstanding Debt Security affected thereby, (a) change the Stated Maturity, or
reduce the principal amount, the premium, if any, thereon or the rate
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of payment of interest thereon, of any Debt Security of any series or (b)
effect certain other changes as set forth in the Indentures and described in
the applicable Prospectus Supplement. The Indentures will also permit the
Company to omit compliance with certain covenants in the Indentures with
respect to Debt Securities of any series upon waiver by the Holders of a
majority in principal amount of outstanding Debt Securities of such series.
CONSOLIDATION, MERGER AND SALE OF ASSETS
Except as otherwise set forth in the applicable Prospectus Supplement, the
Indentures will contain a provision permitting the Company, without the
consent of the Holders of any of the outstanding Debt Securities under the
Indenture, to consolidate with or merge into any other corporation or transfer
or lease its assets substantially as an entirety to any person provided that:
(i) the successor is a corporation organized under the laws of any domestic
jurisdiction; (ii) the successor corporation assumes the Company's obligations
on the Debt Securities and under the Indentures; (iii) after giving effect to
the transaction no Event of Default, and no event which, after notice or lapse
of time, would become an Event of Default, shall have happened and be
continuing; and (iv) certain other conditions are met.
CONCERNING THE TRUSTEE
The Trustee will be named in the Indentures and disclosed in the applicable
Prospectus Supplement.
GOVERNING LAW
Unless otherwise specified in the applicable Prospectus Supplement, the
Indenture for the Debt Securities and the Debt Securities will be governed by
New York law.
DESCRIPTION OF WARRANTS
Except as otherwise set forth in the applicable Prospectus Supplement, the
Warrants will be issued in fully registered form under a Warrant Agreement
between the Company and the Warrant Agent named in the applicable Prospectus
Supplement (the "Warrant Agent"). The statements in this Prospectus relating
to the Warrants and the Warrant Agreement are summaries and do not purport to
be complete.
Each Warrant will entitle the registered owner (the "Warrantholder") to
purchase one share of Common Stock, as set forth in the applicable Prospectus
Supplement, subject to the call provisions referred to below, from the time
the Warrants are separately transferable until the date set forth in the
accompanying Prospectus Supplement. The initial exercise price of the Warrants
and the date on which the Warrants become separately transferable will be set
forth in the applicable Prospectus Supplement.
The Warrants can be exercised by surrendering to the Warrant Agent a Warrant
certificate signed by the Warrantholder or his, her or its duly authorized
agent indicating the Warrantholder's election to exercise all or a portion of
the Warrants evidenced by the certificate. Surrendered Warrant certificates
must be accompanied by a written election to purchase such Warrants and
payment of the aggregate exercise price of the Warrants to be exercised (the
"Warrant Price"), which payment may be made in the form of wire transfer or a
cashier's check equal to the exercise price or, if and to the extent set forth
in the applicable Prospectus Supplement, the surrender of Debt Securities in
denominations at least equal to the aggregate Warrant Prices or, if
applicable, any combination of cash and such denominations of Debt Securities.
Certificates evidencing duly exercised Warrants shall be delivered by the
Warrant Agent to the transfer agent or trustee for the applicable Securities.
Upon receipt thereof, the Company will be obligated to deliver or cause to be
delivered, to or upon the written order of the exercising Warrantholders,
certificates representing the number of shares of Common Stock so purchased.
If fewer than all of the Warrants evidenced by any certificate are exercised,
the Warrant Agent will be obligated to deliver to the exercising Warrantholder
a new Warrant certificate representing the unexercised Warrants.
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To the extent set forth in the applicable Prospectus Supplement, the Warrant
Price and the number of shares of Common Stock purchasable upon the exercise
of each Warrant are subject to adjustment in certain events, including: (i)
the issuance of a stock dividend to holders of Common Stock or a combination
or subdivision of the Common Stock; (ii) the issuance of rights, warrants or
options or securities convertible into, or exchangeable for, the Common Stock,
that are distributed to all holders of the Company's outstanding Common Stock
entitling them to subscribe for or purchase such Common Stock; and (iii) any
distribution by the Company to the holders of its Common Stock of evidences of
indebtedness of the Company or of assets (excluding, if and to the extent set
forth in the applicable Prospectus Supplement, certain cash dividends or
distributions). To the extent set forth in the applicable Prospectus
Supplement, no adjustment in the number of shares of Common Stock purchasable
upon exercise of the Warrants or in the Warrant Price will be required until
cumulative adjustments require an adjustment of at least one percent thereof.
Notwithstanding the foregoing, unless the applicable Prospectus Supplement
states to the contrary, in case of any merger or consolidation or sale,
transfer, lease or conveyance of all or substantially all of the assets of the
Company and its subsidiaries, including a consolidation or merger in which the
Company is not the continuing corporation, the successor or assuming entity
shall succeed to and be substituted for the Company, with the same effect as
if it had been named in the Warrant Agreement and in the Warrant Certificates
as the Company. If the Company is the continuing corporation following any
consolidation or merger, the obligations of the Company under the Warrant
Agreement and in the Warrant Certificates shall continue and such Warrant
Agreement and Warrant Certificates shall remain in full force and effect.
Adjustments to the Warrant Price (and, possibly, adjustment to the number of
shares of Common Stock purchasable upon the exercise of each Warrant), or the
failure to make such adjustments, may in certain circumstances result in
distributions that could be taxable as dividends under the Internal Revenue
Code of 1986, as amended, to holders of the Warrants or to holders of shares
of Common Stock issued upon exercise thereof. The Company will reserve the
right (but will not be obligated) to make such adjustments to the Warrant
Price or in the number of shares of Common Stock purchasable upon the exercise
of each Warrant, in addition to those required in the foregoing provisions, as
it shall determine to be advisable in order that certain stock-related
distributions which may hereafter be made by the Company to its stockholders
after the date of the applicable Prospectus Supplement shall not be taxable to
them.
If all or any portion of the Warrants are callable at the option of the
Company, the call provisions, including the call price and the date through
which the Warrants may be exercised, will be set forth in the applicable
Prospectus Supplement. The applicable Prospectus Supplement will set forth
whether, upon expiration of the call option, the unexercised Warrants will
convert into shares of Common Stock, and, if such Warrants convert into shares
of Common Stock, the manner and rate of such conversion.
Holders of Warrants are not entitled, by virtue of being holders, to receive
dividends or to consent or to receive notice as stockholders in respect of any
meeting of stockholders for the election of directors of the Company or any
other matter, to vote at any such meeting or to exercise any rights whatsoever
as stockholders of the Company. The Warrant Agreement and the Warrant
certificates will provide that no director, officer, employee or shareholder
of the Company, as such, will have any liability under the Warrants or the
Warrant Agreement. The Warrant Agreement and the Warrant certificates will
also provide that each holder of the Warrants, by accepting the Warrants,
waives and releases all such liability.
Unless otherwise specified in the applicable Prospectus Supplement, the
Warrant Agreement and the Warrants will be governed by New York law.
DESCRIPTION OF GLOBAL SECURITIES
Unless otherwise specified in the applicable Prospectus Supplement,
Securities other than Common Stock will be issued in the form of one or more
book-entry certificates (collectively, with respect to each series or
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issue of Securities, the "Global Securities") registered in the name of a
depositary or a nominee of a depositary. Unless otherwise specified in the
applicable Prospectus Supplement, the Company expects the depositary will be
The Depository Trust Company ("DTC"). If Cede & Co. ("Cede") will act as DTC's
nominee, Cede is expected to be the initial registered holder of all
Securities that are issued in book-entry form. No person that acquires a
beneficial interest in such Securities will be entitled to receive a
certificate representing such person's interest in the Securities except as
set forth herein or in the applicable Prospectus Supplement. Unless and until
definitive Securities are issued under the limited circumstances described
below, all references to actions by holders of Securities issued in book-entry
form shall refer to actions taken by DTC upon instruction from its
Participants (as defined below), and all references herein to payments and
notices to holders shall refer to payments and notices to DTC or Cede, as the
registered holder of such Securities.
The Company expects that DTC will represent that it is a limited purpose
trust company organized under the New York Banking Law, a "banking
organization" within the meaning of the New York Banking Law, a member of the
Federal Reserve System, a "clearing company" within the meaning of the New
York Uniform Commercial Code and a "clearing agency" registered pursuant to
Section 17A of the Securities Exchange Act of 1934, as amended, and that it
was created to hold securities for its participating organizations
("Participants") and to facilitate the clearance and settlement of securities
transactions among Participants through electronic book-entry, thereby
eliminating the need for physical movement of certificates. Participants
include securities brokers and dealers, banks, trust companies and clearing
corporations, and may include certain other organizations. Indirect access to
the DTC system also is available to others such as banks, brokers, dealers and
trust companies that clear through or maintain a custodial relationship with a
Participant, either directly or indirectly ("Indirect Participants").
Persons that are not Participants or Indirect Participants ("Holders") but
desire to purchase, sell or otherwise transfer ownership of, or other
interests in, Securities may do so only through Participants and Indirect
Participants. Under a book-entry format, Holders may experience some delay in
their receipt of payments, as such payments will be forwarded by the agent
designated by the Company to Cede, as nominee for DTC. DTC will forward such
payments to its Participants, which thereafter will forward them to Indirect
Participants or Holders. Holders will not be recognized by the applicable
registrar, transfer agent, Trustee or Warrant Agent as registered holders of
the Securities entitled to the benefits of the Certificate or the applicable
Indenture or Warrant Agreement. Beneficial owners that are not Participants
will be permitted to exercise their rights as such only indirectly through and
subject to the procedures of Participants and, if applicable, Indirect
Participants.
Under the rules, regulations and procedures creating and affecting DTC and
its operations as currently in effect (the "Rules"), DTC will be required to
make book-entry transfers of Securities among Participants and to receive and
transmit payments to Participants. Participants and Indirect Participants with
which beneficial owners of Securities have accounts with respect to the
Securities similarly are required by the Rules to make book-entry transfers
and receive and transmit such payments on behalf of their respective account
holders.
Because DTC can act only on behalf of Participants, who in turn act only on
behalf of other Participants or Indirect Participants, and on behalf of
certain banks, trust companies and other persons approved by it, the ability
of a beneficial owner of Securities issued in book-entry form to pledge such
Securities to persons or entities that do not participate in the DTC system,
or to otherwise act with respect to such Securities, may be limited due to the
unavailability of physical certificates for such Securities.
The Company expects DTC will take any action permitted to be taken by a
registered holder of any Securities under the Certificate or the applicable
Indenture or Warrant Agreement only at the direction of one or more
Participants to whose accounts with DTC such Securities are credited.
Unless otherwise specified in the applicable Prospectus Supplement, a Global
Security will be exchangeable for the relevant definitive Securities
registered in the names of persons other than DTC or its nominee only if (i)
DTC notifies the Company that it is unwilling or unable to continue as
depository for such Global Security or if
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at any time DTC ceases to be a clearing agency registered under the Exchange
Act at a time when DTC is required to be so registered in order to act as such
depository and the Company does not appoint a successor within 90 days, (ii)
the Company executes and delivers to the applicable registrar, transfer agent,
Trustee and/or Warrant Agent an order complying with the requirements of the
Certificate or the applicable Indenture and/or Warrant Agreement that such
Global Security shall be so exchangeable or (iii) there has occurred and is
continuing a default in the payment of any amount due in respect of the
Securities or, in the case of Debt Securities, an Event of Default or an event
that, with the giving of notice or lapse of time, or both, would constitute an
Event of Default with respect to such Debt Securities. Any Global Security
that is exchangeable pursuant to the preceding sentence will be exchangeable
for Securities registered in such names as DTC directs.
Upon the occurrence of any event described in the immediately preceding
paragraph, DTC will be generally required to notify all Participants of the
availability through DTC of definitive Securities. Upon surrender by DTC of
the Global Security representing the Securities and delivery of instructions
for re-registration, the registrar, transfer agent, Trustee or Warrant Agent,
as the case may be, will reissue the Securities as definitive Securities, and
thereafter such persons will recognize the holders of such definitive
Securities as registered holders of Securities entitled to the benefits of the
Certificate or the applicable Indenture and/or Warrant Agreement.
Except as described above, a Global Security may not be transferred except
as a whole by DTC to a nominee of DTC or by a nominee of DTC to DTC or another
nominee of DTC or to a successor depositary appointed by the Company. Except
as described above, DTC may not sell, assign, transfer or otherwise convey any
beneficial interest in a Global Security evidencing all or part of any
Securities unless such beneficial interest is in an amount equal to an
authorized denomination for such Securities.
None of the Company, the Trustees, any registrar and transfer agent or any
Warrant Agent, or any agent of any of them, will have any responsibility or
liability for any aspect of DTC's or any Participant's records relating to, or
for payments made on account of, beneficial interests in a Global Security, or
for maintaining, supervising or reviewing any records relating to such
beneficial interests.
PLAN OF DISTRIBUTION
The Company may sell the Securities to or through one or more underwriters
or dealers or may sell the Securities to investors directly or through agents.
Any such underwriter or agent involved in the offer and sale of the Securities
will be named in the applicable Prospectus Supplement. The Company may sell
Securities directly to investors on its own behalf in those jurisdictions
where it is authorized to do so.
Underwriters may offer and sell the Securities at a fixed price or prices,
which may be changed, at market prices prevailing at the time of sale, at
prices related to such prevailing market prices or at negotiated prices. The
Company also may, from time to time, authorize dealers or agents to offer and
sell the Securities upon such terms and conditions as may be set forth in the
applicable Prospectus Supplement. In connection with the sale of the
Securities, underwriters may receive compensation from the Company in the form
of underwriting discounts or commissions and may also receive commissions from
purchasers of the Securities for whom they may act as agent. Underwriters may
sell the Securities to or through dealers, and such dealers may receive
compensation in the form of discounts, concessions or commissions from the
underwriters or commissions from the purchasers for which they may act as
agents.
Any underwriting compensation paid by the Company to underwriters or agents
in connection with the offering of the Securities, and any discounts or
concessions or commissions allowed by underwriters to participating dealers,
will be set forth in the applicable Prospectus Supplement. Dealers and agents
participating in the distribution of the Securities may be deemed to be
underwriters, and any discounts and commissions received by them and any
profit realized by them on resale of the Securities may be deemed to be
underwriting discounts and commissions. Underwriters, dealers and agents may
be entitled, under agreements entered into with the Company, to
indemnification against and contribution toward certain civil liabilities,
including liabilities under the Securities Act.
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The Common Stock is listed on the Nasdaq National Market under the symbol
"BLCI." The Debt Securities, the Preferred Stock and the Warrants will be new
issues of securities with no established trading market. Any underwriters or
agents to or through which Securities are sold by the Company may make a
market in such Securities, but such underwriters or agents will not be
obligated to do so and any of them may discontinue any market making at any
time without notice. No assurance can be given as to the liquidity of or
trading market for any Debt Securities, Preferred Stock or Warrants.
CERTAIN TRANSACTIONS
FORMATION AGREEMENT
Upon the completion of the Company's initial public offering of Common Stock
in May 1997 (the "IPO"), the Company and PGI entered into the Formation
Agreement, pursuant to which PGI transferred to the Company all of the capital
stock of BLC Property, Inc., its interest in the Heritage and the Devonshire
facilities and the operations relating to its senior and assisted living
division. In return for such contribution, the Company issued 1,703,043 shares
of its Common Stock to PGI and assumed certain indebtedness in the aggregate
amount of $65.0 million. In addition, the Company paid PGI approximately $8.4
million to reimburse PGI for earnest monies previously paid by PGI in
connection with the acquisition of the Edina Park Plaza and Hawthorn Lakes
facilities, the Park Place facility, a third party's interests in the Heritage
and the Devonshire facilities and the proposed acquisitions of the development
sites located in Glen Ellyn, Illinois, Southfield, Michigan and Austin, Texas,
for certain costs and fees previously paid by PGI relating to the replacement
credit enhancement on the $65.0 of tax-exempt bonds relating to the Heritage
and the Devonshire facilities and for certain costs and expenses previously
paid by PGI relating to the issuance and distribution of Common Stock pursuant
to the IPO. In accordance with the Formation Agreement, Mark J. Schulte,
President and Chief Executive Officer of the Company, transferred all of his
interests in PGI's senior and assisted living division to the Company in
exchange for 296,957 shares of Common Stock from the Company. Except as
expressly set forth in the Formation Agreement with regard to title, liens,
claims and certain other items and PGI's representations that the Heritage,
Devonshire and Hallmark facilities had been operated in the ordinary course
since December 31, 1996, no party made any representation or warranty as to
the assets, businesses or liabilities transferred or assumed pursuant to such
agreement, as to any consents or approvals required in connection therewith,
as to the value thereof or as to freedom from counterclaim with respect to any
claim of any party. Except as expressly set forth in the Formation Agreement,
all assets were transferred on an "as is, where is" basis. In the Formation
Agreement, PGI covenanted that the partnerships owning the Heritage and the
Devonshire facilities had no less than $800,000 in the aggregate in
unrestricted cash, plus any cash balances in real estate tax and capital
reserve accounts, upon the completion of the IPO; however, any unrestricted
cash in excess of $800,000 then held by such partnerships was distributed to
PGI.
REGISTRATION RIGHTS AGREEMENT
Upon completion of the IPO, the Company granted demand and incidental
registration rights to PGI for the registration of shares of Common Stock
owned by PGI under the Securities Act. Three demand registrations are
permitted during the first five years following the initial public offering of
the Common Stock and one registration per year each year thereafter until PGI
owns less than 10% of the outstanding Common Stock. The Company will pay the
fees and expenses of the demand registrations and the incidental
registrations, while PGI will pay all underwriting discounts and commissions.
These registration rights are subject to certain conditions and limitations,
including the right of underwriters to limit the number of shares owned by PGI
included in such registration.
VOTING AGREEMENT
Upon completion of the IPO, PGI entered into a Voting Agreement pursuant to
which it agreed to vote all of its shares of Common Stock at any meeting at
which directors are elected in favor of the election of independent directors
so that after such election, if such persons are elected, there will be at
least four independent directors. The Voting Agreement will continue in effect
until the earlier of three years from the closing date of the IPO and the date
PGI first owns less than 10% of the outstanding Common Stock.
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NON-COMPETE AGREEMENT
Upon completion of the IPO, the Company, PGI and Michael W. Reschke entered
into a Non-Compete Agreement that will prevent PGI and Mr. Reschke from
developing, acquiring, owning, managing or operating senior and assisted
living facilities and semi-acute care facilities in the United States for a
period expiring on the earlier of (i) four years from the closing date of the
IPO and (ii) one year from the date of a merger of the Company or the sale of
all or substantially all of the stock or assets of the Company; however, PGI
is permitted to maintain its ownership interest in the Island on Lake Travis
facility. In addition, to the extent PGI or Mr. Reschke were to acquire a
group of properties that included facilities similar to those operated by the
Company, then the Company would have the right and opportunity to purchase
such similar facilities at a price equal to their fair market value. PGI and
Mr. Reschke will be allowed to provide debt or lease financing for properties
that are similar to the facilities owned or managed by the Company.
MANAGEMENT AGREEMENT
Upon completion of the IPO, the Company and PGI entered into a management
agreement for a term of two years with respect to the Island on Lake Travis
facility. The Company is paid a monthly fee of 5.0% of the gross revenues of
such facility for each month and reimbursement of expenses. The management
agreement may be terminated by PGI only for cause as set forth in the
management agreement during its initial term and upon 60 days' prior written
notice at any time after the expiration of the initial term. The Company may
terminate the management agreement at any time upon 60 days' advance notice.
OFFICE LEASE
On September 25, 1997, the Company entered into a five year lease (the
"Office Lease"), commencing October 1, 1997, for its corporate office with 77
West Wacker Limited Partnership (the "Landlord"), a partnership which is now
owned by Prime Group Realty Trust, the publicly-traded successor to PGI's
office and industrial divisions. The office space was approximately 13,500
square feet, located on the 48th floor of 77 West Wacker Drive in Chicago,
Illinois, 60601, with base rent of $18.50 per square foot escalating at $0.75
per square foot each anniversary of the commencement date. On October 2, 1997,
in connection with the signing of the lease, the Company received a $404,000
cash payment from the Landlord.
On March 17, 1998, the Company and the Landlord amended the Office Lease,
pursuant to which the Company and the Landlord agreed (i) to relocate the
Company's corporate office from the 48th floor to the 44th floor effective
April 24, 1998, (ii) to increase the space leased by the Company to
approximately 22,600 square feet and (iii) to extend the term of the Office
Lease until April 30, 2005. The base rent under the amended Office Lease
continues to be $18.50 per square foot, escalating $0.75 per square foot on
each May 1 of the term commencing May 1, 1999. In consideration for executing
the amendment of the Office Lease, the Company received a $452,000 cash
payment from the Landlord.
STOCK OPTION AND PURCHASE AGREEMENTS
Upon completion of the IPO, The Prime Group, Inc. entered into a stock
option agreement with Darryl W. Copeland, Jr. pursuant to which Mr. Copeland
received an option, subject to a one year vesting period, to purchase 100,000
shares of Common Stock from The Prime Group, Inc. at a purchase price of $0.01
per share. In the event the employment of Mr. Copeland is terminated by the
Company for any reason or in the event Mr. Copeland voluntarily terminates his
employment with the Company due to a "change of control" of the Company and a
material diminution of his duties and responsibilities or compensation prior
to the expiration of the vesting period, the option will immediately vest.
Upon completion of the IPO, Mr. Copeland also entered into an agreement with
PGI to purchase an additional 25,000 shares of Common Stock.
EXCHANGEABLE NOTE TRANSACTION
PGI has issued an exchangeable note having a principal amount of $20 million
and a five year term (the "Exchangeable Note") to an unaffiliated third party
(the "Noteholder"), the repayment of which is secured by
14
<PAGE>
the pledge by PGI of 1,370,00 shares of its Common Stock. Pursuant to the
terms of the Exchangeable Note, the Noteholder will have the right, commencing
on November 15, 1998 (the "Initial Exchange Date"), to exchange a portion of
the outstanding principal amount of the Exchangeable Note, plus the accrued
interest thereon, for shares of Common Stock of the Company held by PGI, at
the exchange rate specified therein. On and after the Initial Exchange Date,
the Noteholder will be entitled to exchange up to $5 million of the
outstanding principal under the Exchangeable Note, plus accrued interest
thereon, for shares of Common Stock of the Company held by PGI. Thereafter,
the Noteholder will be entitled to exchange up to a further $5 million of the
outstanding principal amount under the Exchangeable Note, plus accrued
interest thereon, on each of January 15, 1999, March 15, 1999 and May 15,
1999. Subject to certain exceptions, the number of shares of Common Stock
subject to exchange for a given amount of principal and accrued interest to be
exchanged pursuant to the terms of the Exchangeable Note will be equal to (x)
such amount of principal and accrued interest divided by (y) the product of
(A) 88% multiplied by (B) the average of the closing bid prices for the Common
Stock on the Nasdaq National Market on the seven trading days immediately
preceding the date of exchange.
OTHER TRANSACTIONS
Wayne D. Boberg, a director of the Company, is a partner of the law firm of
Winston & Strawn, which has provided, and continues to provide, legal services
to the Company. As of the date of this Registration Statement, Mr. Boberg
beneficially owns 2,500 shares of Common Stock and has options to acquire an
additional 5,000 shares of Common Stock.
Transactions between the Company and its officers, directors, principal
stockholders and their affiliates require the approval of a majority of the
disinterested members of the Board of Directors.
READINESS FOR YEAR 2000
The Company is in the process of planning the nature and extent of the work
required to make its systems and infrastructure Year 2000 compliant. Based on
a recent assessment, the Company will have to modify or replace significant
portions of its hardware and software so that its systems will function
properly with respect to the Year 2000 and beyond. The Company believes that
with modifications to existing software and conversions to new software
applications, in addition to hardware upgrades on certain mechanical systems,
the Year 2000 issue will not pose significant operational problems. However,
if such modifications and conversions are not made, or are not completed in a
timely manner, the Year 2000 issue could have a material impact on the
operations of the Company.
The Company continues to evaluate the Year 2000 issue and will utilize both
internal and external resources in order to reprogram, or replace, systems
that are not in compliance with the Year 2000. The Company anticipates
completing the project no later than March 31, 1999. The cost to complete the
project has not yet been determined.
The projected completion date is based on management's best estimates of the
time necessary to complete its evaluation and make any necessary modifications
and conversions, which estimates were derived utilizing numerous assumptions
of future events, including the ability of third parties to modify the
Company's systems on a timely basis. There can be no guarantee that the
project will be completed in a timely manner. Specific factors that might
delay completion of the project include, but are not limited to, the
availability of qualified personnel, the ability to locate and correct all
relevant computer codes, and similar uncertainties.
LEGAL MATTERS
The validity of the Common Stock, Preferred Stock, Debt Securities and
Warrants covered by this Prospectus will be passed upon for the Company by
Winston & Strawn, Chicago, Illinois. The validity of the Securities offered by
this Prospectus may be passed on for any underwriters or agents by counsel
named in the applicable Prospectus Supplement.
15
<PAGE>
EXPERTS
The consolidated financial statements of Brookdale Living Communities, Inc.
as of December 31, 1997 and for the period from May 7, 1997 through December
31, 1997, and the combined financial statements of the Predecessor Properties
as of December 31, 1996 and for the period from January 1, 1997 through May 6,
1997 and for each of the two years in the period ended December 31, 1996,
appearing in the Company's Annual Report (Form 10-K), have been audited by
Ernst & Young LLP, independent auditors, as set forth in their report thereon
included herein and incorporated herein by reference. Such financial
statements are incorporated herein by reference in reliance upon such report
given upon the authority of such firm as experts in accounting and auditing.
16
<PAGE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
----------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Available Information...................................................... 2
Information Incorporated By Reference...................................... 2
Special Note on Forward Looking Statements................................. 3
The Company................................................................ 3
Use of Proceeds............................................................ 3
Ratio of Earnings to Combined Fixed Charges................................ 4
Description of Capital Stock............................................... 4
Description of Debt Securities............................................. 6
Description of Warrants.................................................... 9
Description of Global Securities........................................... 10
Plan of Distribution....................................................... 12
Certain Transactions....................................................... 13
Readiness for Year 2000.................................................... 15
Legal Matters.............................................................. 15
Experts.................................................................... 16
</TABLE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
$200,000,000
BROOKDALE LIVING COMMUNITIES, INC.
COMMON STOCK, PREFERRED STOCK, DEBT SECURITIES AND WARRANTS TO PURCHASE COMMON
STOCK
----------------
PROSPECTUS
----------------
MAY , 1998
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the costs and expenses payable by the
Company, except any underwriters' fees and expenses, in connection with the
sale of the Securities being registered hereby. All of the amounts shown are
estimated, except the SEC registration fee and the NASD filing fee.
<TABLE>
<S> <C>
SEC registration fee............................................. $59,000
NASD filing fee..................................................
Printing expenses................................................
Trustee's fees and expenses......................................
Legal fees and expenses..........................................
Accounting fees and expenses.....................................
Miscellaneous expenses (including listing, rating agency,
depositary and warranty agent fees).............................
-------
Total........................................................ $
=======
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Under Section 145 of the General Corporation Law of the State of Delaware
("Section 145"), a corporation may indemnify its directors, officers,
employees and agents and its former directors, officers, employees and agents
and those who serve, at the corporation's request, in such capacities with
another enterprise, against expenses (including attorneys' fees), as well as
judgments, fines and settlements in nonderivative lawsuits, actually and
reasonably incurred in connection with the defense of any action, suit or
proceeding in which they or any of them were or are made parties or are
threatened to be made parties by reason of their serving or having served in
such capacity. Section 145 provides, however, that such person must have acted
in good faith and in a manner he or she reasonably believed to be in (or not
opposed to) the best interests of the corporation, and, in the case of a
criminal action, such person must have had no reasonable cause to believe his
or her conduct was unlawful. In addition, Section 145 does not permit
indemnification in an action or suit by or in the right of the corporation,
where such person has been adjudged liable to the corporation, unless, and
only to the extent that, a court determines that such person fairly and
reasonably is entitled to indemnity for expenses the court deems proper in
light of liability adjudication. Indemnity is mandatory to the extent a claim,
issue or matter has been successfully defended.
The Company's Amended and Restated By-laws (the "By-laws") provide for
mandatory indemnification of directors and officers generally to the same
extent authorized by Section 145. Under the By-laws, the Company shall advance
expenses incurred by an officer or director in defending any such action if
the director or officer undertakes to repay such amount if it is determined
that he or she is not entitled to indemnification.
The Company has also entered into indemnification agreements with each of
the Company's directors and certain of its officers. The indemnification
agreements require, among other things, that the Company indemnify such
directors and officers to the fullest extent permitted by law and advance to
such directors and officers all related expenses, subject to reimbursement if
it is subsequently determined that indemnification is not permitted. The
Company also must indemnify and advance all expenses incurred by such
directors and officers seeking to enforce their rights under the
indemnification agreements and cover such directors and officers under the
Company's directors' and officers' liability insurance.
The Company's Restated Certificate of Incorporation provides that the
Company's directors will not be personally liable to the Company or its
stockholders for monetary damages resulting from breaches of their fiduciary
duty as directors, except (a) for any breach of the directors' duty of loyalty
to the Company or its
II-1
<PAGE>
stockholders, (b) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (c) for unlawful
payments of dividends or unlawful stock repurchases or redemptions as provided
in Section 174 of the General Corporation Law of the State of Delaware or (d)
for transactions from which directors derive improper personal benefit.
ITEM 16. EXHIBITS.
The following documents are filed herewith or incorporated herein by
reference.
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <S>
1.1+ Form of Underwriting Agreement
3.1* Restated Certificate of Incorporation of the Company, as filed
with the Securities and Exchange Commission on June 16, 1997 as
Exhibit 3.1 to the Company's Form 10-Q for the period ended March
31, 1997 (File No. 0-22253) and incorporated herein by reference
3.2* Amended and Restated By-laws of the Company, as filed with the
Securities and Exchange Commission on June 16, 1997 as Exhibit 3.2
to the Company's Form 10-Q for the period ended March 31, 1997
(File No. 0-22253) and incorporated herein by reference
4.1* Form of certificate representing Common Stock of the Company, as
filed with the Securities and Exchange Commission on March 17,
1997 as Exhibit 10.14 to the Company's Registration Statement on
Form S-1 (Registration No. 333-12259) and incorporated herein by
reference
4.2+ Form of certificate representing [Convertible] Preferred Stock of
the Company, $0.01 par value per share
4.3+ Form of Indenture providing for issuance of [Convertible] Senior
Debt Securities in Series
4.4+ Form of Indenture providing for issuance of [Convertible]
Subordinated Debt Securities in Series
4.5+ Form of Certificate of Designations of [ ]% Series [ ]
[Convertible] Preferred Stock ($0.01 par value per share) of the
Company
4.6+ Form of Warrant Agreement
5.1* Opinion of Winston & Strawn regarding legality of securities being
registered
12.1* Computation of Ratio of Earnings to Fixed Charges
23.1* Consent of Ernst & Young LLP
23.2* Consent of Winston & Strawn (included in opinion filed as Exhibit
5.1)
Powers of attorney (included on signature page included in Part II
24.1* of this filing)
25.1+ Statement of Eligibility of Trustee
27.1* Financial Data Schedule, as filed with the Securities and Exchange
Commission on May 15, 1998 as Exhibit 27.1 to the Company's Form
10-Q for the period ended March 31, 1998 (File No. 0-22253) and
incorporated herein by reference
</TABLE>
- --------
*Filed herewith
+To be filed by amendment
ITEM 17. UNDERTAKINGS.
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made of
the securities registered hereby, a post-effective amendment to this
registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act;
II-2
<PAGE>
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement; and
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or
any material change to such information in the registration statement;
provided, however, that the undertakings set forth in paragraphs (i) and (ii)
above do not apply if the information required to be included in a post-
effective amendment by those paragraphs is contained in periodic reports filed
with or furnished to the Commission by the Company pursuant to Section 13 or
15(d) of the Exchange Act that are incorporated by reference in the
registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(4) That, for purposes of determining any liability under the Securities
Act, each filing of the Company's annual report pursuant to Section 13(a)
or 15(d) of the Exchange Act (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Exchange Act) that is incorporated by reference in the registration
statement shall be deemed to be a new registration statement relating to
the securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
(5) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling
persons of the Company pursuant to the provisions described in Item 15
(other than the provisions relating to insurance), or otherwise, the
Company has been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the Securities Act
and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Company of expenses incurred or paid by a director, officer or controlling
person of the Company in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Company will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question
whether such indemnification by it is against public policy as expressed in
the Securities Act and will be governed by the final adjudication of such
issue.
(6) That, for purposes of determining any liability under the Securities
Act, the information omitted from the form of prospectus filed as part of
this registration statement in reliance upon Rule 430A and contained in a
form of prospectus filed by the registrant pursuant to Rules 424(b)(l) or
(4) or 497(h) under the Securities Act shall be deemed to be part of this
registration statement as of the time it was declared effective.
(7) That, for the purpose of determining any liability under the
Securities Act, each post-effective amendment that contains a form of
prospectus shall be deemed to be a new registration statement relating to
the securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
(8) The undersigned Company hereby undertakes to file an application, if
necessary, for the purpose of determining the eligibility of any trustee to
act under subsection (a) of Section 310 of the Trust Indenture Act (the
"Act") in accordance with the rules and regulations prescribed by the
Commission under Section 305(b)(2) of the Act.
II-3
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT
CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS ALL OF THE
REQUIREMENTS FOR FILING THIS REGISTRATION STATEMENT ON FORM S-3 AND HAS DULY
CAUSED THIS REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF BY THE
UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN THE CITY OF CHICAGO, STATE OF
ILLINOIS, ON MAY 29, 1998.
Brookdale Living Communities, Inc.
/s/ Mark J. Schulte
_____________________________________
Mark J. Schulte
President and Chief Executive
Officer
KNOW ALL PERSONS BY THESE PRESENTS, THAT EACH PERSON WHOSE SIGNATURE APPEARS
BELOW CONSTITUTES AND APPOINTS MARK J. SCHULTE AND ROBERT J. RUDNIK, AND EACH
OF THEM, HIS TRUE AND LAWFUL ATTORNEYS-IN-FACT AND AGENTS, WITH FULL POWER OF
SUBSTITUTION, FOR HIM AND IN HIS NAME, PLACE AND STEAD, IN ANY AND ALL
CAPACITIES, TO SIGN ANY AND ALL AMENDMENTS (INCLUDING POST-EFFECTIVE
AMENDMENTS) TO THIS REGISTRATION STATEMENT, AND TO FILE THE SAME, WITH ALL
EXHIBITS THERETO AND ALL DOCUMENTS IN CONNECTION THEREWITH, WITH THE
SECURITIES AND EXCHANGE COMMISSION, GRANTING UNTO SAID ATTORNEYS-IN-FACT AND
AGENTS FULL POWER AND AUTHORITY TO DO AND PERFORM EACH AND EVERY ACT AND THING
REQUISITE AND NECESSARY TO BE DONE IN AND ABOUT THE PREMISES, AS FULLY TO ALL
INTENTS AND PURPOSES AS HE MIGHT OR COULD DO IN PERSON, HEREBY RATIFYING AND
CONFIRMING ALL THAT EACH SAID ATTORNEYS-IN-FACT AND AGENTS, OR HIS OR THEIR
SUBSTITUTE OR SUBSTITUTES, MAY LAWFULLY DO OR CAUSE TO BE DONE BY VIRTUE
HEREOF.
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS
REGISTRATION STATEMENT HAS BEEN SIGNED BELOW ON MAY 29, 1998 BY THE FOLLOWING
PERSONS IN THE CAPACITIES INDICATED.
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<S> <C>
/s/ Michael W. Reschke Chairman of the Board, Director
___________________________________________
Michael W. Reschke
/s/ Mark J. Schulte President and Chief Executive Officer
___________________________________________ (principal executive officer), Director
Mark J. Schulte
/s/ Darryl W. Copeland, Jr. Executive Vice President and Chief
___________________________________________ Financial Officer (principal financial
Darryl W. Copeland, Jr. officer), Director
/s/ Sheryl A. Wolf Controller (principal accounting officer)
___________________________________________
Sheryl A. Wolf
/s/ Wayne D. Boberg Director
___________________________________________
Wayne D. Boberg
/s/ Bruce L. Gewertz Director
___________________________________________
Bruce L. Gewertz
/s/ Darryl W. Hartley-Leonard Director
___________________________________________
Darryl W. Hartley-Leonard
/s/ Daniel J. Hennessy Director
___________________________________________
Daniel J. Hennessy
</TABLE>
II-4
<PAGE>
EXHIBIT INDEX
The following documents are filed herewith or incorporated herein by
reference.
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <S> <C>
1.1+ Form of Underwriting Agreement
3.1* Restated Certificate of Incorporation of the Company, as filed
with the Securities and Exchange Commission on June 16, 1997 as
Exhibit 3.1 to the Company's Form 10-Q for the period ended
March 31, 1997 (File No. 0-22253) and incorporated herein by
reference
3.2* Amended and Restated By-laws of the Company, as filed with the
Securities and Exchange Commission on June 16, 1997 as Exhibit
3.2 to the Company's Form 10-Q for the period ended March 31,
1997 (File No. 0-22253) and incorporated herein by reference
4.1* Form of certificate representing Common Stock of the Company, as
filed with the Securities and Exchange Commission on March 17,
1997 as Exhibit 10.14 to the Company's Registration Statement on
Form S-1 (Registration No. 333-12259) and incorporated herein by
reference
4.2+ Form of certificate representing [Convertible] Preferred Stock
of the Company, $0.01 par value per share
4.3+ Form of Indenture providing for issuance of [Convertible] Senior
Debt Securities in Series
4.4+ Form of Indenture providing for issuance of [Convertible]
Subordinated Debt Securities in Series
4.5+ Form of Certificate of Designations of [ ]% Series [ ]
[Convertible] Preferred Stock ($0.01 par value per share) of the
Company
4.6+ Form of Warrant Agreement
5.1* Opinion of Winston & Strawn regarding legality of securities
being registered
12.1* Computation of Ratio of Earnings to Fixed Charges
23.1* Consent of Ernst & Young LLP
23.2* Consent of Winston & Strawn (included in opinion filed as
Exhibit 5.1)
24.1* Powers of attorney (included on signature page included in Part
II of this filing)
25.1+ Statement of Eligibility of Trustee
27.1* Financial Data Schedule, as filed with the Securities and Exchange
Commission on May 15, 1998 as Exhibit 27.1 to the Company's Form 10-Q
for the period ended March 31, 1998 (File No. 0-22253) and incorporated
herein by reference
</TABLE>
- --------
*Filed herewith
+To be filed by amendment
<PAGE>
Exhibit 5.1
WINSTON & STRAWN
35 West Wacker Drive
Chicago, Illinois 60601
May 29, 1998
Board of Directors
Brookdale Living Communities, Inc.
77 West Wacker Drive
Suite 4400
Chicago, Illinois 60601
Re: Registration Statement on Form S-3
----------------------------------
Gentlemen:
We have acted as special counsel to Brookdale Living Communities, Inc., a
Delaware corporation (the "Company"), and are rendering this opinion in
connection with the Registration Statement on Form S-3 (the "Registration
Statement") being filed by the Company with the Securities and Exchange
Commission under the Securities Act of 1933, as amended (the "Securities Act"),
with respect to the Company's (i) common stock, $0.01 par value per share, (the
"Common Stock"); (ii) preferred stock, $0.01 par value per share (the "Preferred
Stock"); (iii) senior debt securities (the "Senior Debt Securities"); (iv)
subordinated debt securities (the "Subordinated Debt Securities"); and (v)
warrants to purchase Common Stock (the "Warrants"), all of which may be issued
from time to time on a delayed or continuous basis pursuant to Rule 415 under
the Securities Act at an aggregate public offering price not to exceed
$200,000,000.
We have examined the Registration Statement, including the exhibits
thereto, and such other documents, corporate records, and instruments and have
examined such laws and regulations as we have deemed necessary for the purposes
of this opinion. Based upon such examination, we are of the following opinion:
1. The Company has been duly incorporated and is a validly existing
corporation under the laws of the State of Delaware.
2. With respect to the Common Stock, when (i) the issuance of the Common
Stock has been duly authorized by the Company's Board of Directors, (ii) the
Registration Statement has become effective under the Securities Act, (iii) the
terms of the sale of the Common Stock have been duly established in conformity
with the Company's Restated Certificate of Incorporation and Amended and
Restated By-laws and do not violate any applicable law or result in a default
under or breach of
<PAGE>
Board of Directors
May 29, 1998
Page 2
any agreement or instrument binding on the Company and comply with any
requirement or restriction imposed by any court or governmental body having
jurisdiction over the Company, and (iv) the Common Stock has been issued and
sold as contemplated by the Registration Statement, the Common Stock will be
validly issued, fully paid, and nonassessable.
3. With respect to the Preferred Stock, when (i) the issuance of the
Preferred Stock has been duly authorized by the Company's Board of Directors,
(ii) the Registration Statement has become effective under the Securities Act,
(iii) appropriate Certificate or Certificates of Designations relating to a
class or series of the Preferred Stock to be sold under the Registration
Statement have been duly authorized and adopted and filed with the Secretary of
State of the State of Delaware, (iv) the terms of issuance and sale of shares of
such class or series of Preferred Stock have been duly established in conformity
with the Company's Restated Certificate of Incorporation and Amended and
Restated By-laws and do not violate any applicable law or result in a default
under or breach of any agreement or instrument binding upon the Company and
comply with any requirement or restriction imposed by any court or governmental
body having jurisdiction over the Company, and (v) shares of such class or
series of Preferred Stock have been duly issued and sold as contemplated by the
Registration Statement, such Preferred Stock will be validly issued, fully paid,
and nonassessable.
4. With respect to the Senior Debt Securities and the Subordinated Debt
Securities, when (i) the Indenture relating to the applicable series of Debt
Securities has been duly authorized, executed, and delivered, (ii) the
Registration Statement has become effective under the Securities Act, (iii) the
terms of such Senior Debt Securities or Subordinated Debt Securities and of
their issue and sale have been duly established in conformity with resolutions
of the Board of Directors of the Company and in conformity with the applicable
Indenture, do not violate any applicable law or result in a default under or
breach of any agreement or instrument binding upon the Company and comply with
any requirement or restriction imposed by any court or governmental body having
jurisdiction over the Company, and (iv) such Debt Securities have been duly
executed and authenticated in accordance with the applicable Indenture and
issued and sold as contemplated in the Registration Statement, such Debt
Securities will constitute valid and legally binding obligations of the Company,
subject to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating to or affecting
creditors' rights and to general equity principles.
5. With respect to the Warrants, when (i) the Warrant Agreement relating
to the Warrants has been duly authorized, executed, and delivered, (ii) the
Registration Statement has become effective under the Securities Act, (iii) the
terms of the Warrants and of their issuance and sale have been duly established
in conformity with the Warrant Agreement, and do not violate any applicable law
or result in a default under or breach of any agreement or instrument binding
upon the Company and comply with any requirement or restriction imposed by any
court or governmental body having jurisdiction over the Company, and (iv) the
Warrants have been duly executed and countersigned in accordance with the
Warrant Agreement and issued and sold as contemplated by the Registration
<PAGE>
Board of Directors
May 29, 1998
Page 3
Statement, the Warrants will constitute valid and legally binding obligations of
the Company, subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability relating to
or affecting creditors' rights and to general equity principles.
We express no opinion with respect to the laws of, or the effect or
applicability of the laws of, any jurisdiction other than the laws of the State
of Illinois, United States federal laws, and the corporate law of the State of
Delaware. To the extent that any applicable document is stated to be governed by
the laws of another jurisdiction, we have assumed for purposes of this opinion
that the laws of such jurisdiction are identical to the laws of the State of
Illinois.
We have relied as to certain matters on information obtained from public
officials, officers of the Company, and other sources believed by us to be
responsible, and we have assumed that the Indentures will be duly authorized,
executed, and delivered by the respective Trustees thereunder and the Warrant
Agreement will be duly authorized, executed, and delivered by the Warrant Agent
thereunder, assumptions which we have not independently verified.
We hereby consent to the use of our name under the heading "Legal Matters"
in the Prospectus forming a part of the Registration Statement and to the use of
this opinion for filing with the Registration Statement as Exhibit 5.1 thereto.
Very truly yours,
/s/ Winston & Strawn
<PAGE>
EXHIBIT 12.1
BROOKDALE LIVING COMMUNITIES, INC. (THE COMPANY)
AND PREDECESSOR PROPERTIES (THE PREDECESSOR TO THE COMPANY)
STATEMENTS REGARDING COMPUTATION OF RATIOS
(IN 000'S)
<TABLE>
<CAPTION>
BROOKDALE LIVING
PREDECESSOR HISTORICAL COMMUNITIES, INC.
--------------------------------------------------------------------------- ------------------------
YEARS ENDED DECEMBER 31, JANUARY 1, THREE MAY 7, THREE
------------------------------------------------ 1997 MONTHS 1997 MONTHS
to ENDED to ENDED
MAY 6, MARCH 31, DECEMBER 31, MARCH 31,
1993 1994 1995 1996 1997 1997 1997 1998
--------------------------------------------------------------------------- ------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
EARNINGS
- --------
Income (loss) before
preferred share dividends
per consolidated/combined
financial statements...... $(2,059) $(3,404) $(1,424) $2,365 $ (290) $ (215) $ (77) $1,725
Interest cost............. 1,394 3,465 5,626 4,740 3,872 2,712 10,065 4,907
Interest cost (capitalized) - - - - - - (103) (203)
Amortization of debt
expense................. 453 743 878 581 287 225 760 303
Preferred share
dividends............... - - - - - - - -
--------------------------------------------------------------------------- ----------------------
Earnings.................. $ (212) $ 804 $ 5,080 $7,686 $3,869 $2,722 $10,645 $6,732
=========================================================================== ======================
FIXED CHARGES
- -------------
Interest cost............. $ 1,394 $ 3,465 $ 5,626 $4,740 $3,872 $2,712 $10,065 $4,907
Capitalized interest
cost.............. - - - - - - (103) (203)
Amortization of debt
expense................. 453 743 878 581 287 225 760 303
Preferred share
dividends............... - - - - - - - -
--------------------------------------------------------------------------- ----------------------
Total fixed charges....... $ 1,847 $ 4,208 $ 6,504 $5,321 $4,159 $2,937 $10,722 $5,007
=========================================================================== ======================
RATIO OF EARNINGS TO
COMBINED FIXED CHARGES
AND PREFERRED SHARE
DIVIDENDS............... - - - 1.44 - - - 1.34
=========================================================================== ======================
EXCESS (DEFICIT) OF
EARNINGS TO COMBINED
FIXED CHARGES AND
PREFERRED SHARE
DIVIDENDS............... $(2,059) $(3,404) $(1,424) $2,365 $ (290) $ (215) $ (77) $1,725
=========================================================================== ======================
</TABLE>
<PAGE>
Exhibit 23.1
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement (Form S-3) and related prospectus of Brookdale Living
Communities, Inc. for the registration of $200,000,000 of Common Stock,
Preferred Stock, Debt Securities and Warrants, and to the incorporation by
reference therein of our report dated March 26, 1998, with respect to the
consolidated financial statements of Brookdale Living Communities, Inc.,
included in its Annual Report (Form 10-K) for the period from May 7, 1997 to
December 31, 1997, filed with the Securities and Exchange Commission.
ERNST & YOUNG LLP
Chicago, Illinois
May 29, 1998
