<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D/A
UNDER THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. 1)*
Sunrise Assisted Living, Inc.
- --------------------------------------------------------------------------------
(Name of Issuer)
Common Stock
- --------------------------------------------------------------------------------
(Title of Class of Securities)
86768K 10 6
--------------------------------------------------
(CUSIP Number)
Thomas E. Siegler
Donaldson, Lufkin & Jenrette, Inc.
277 Park Avenue
New York, New York 10172
(212) 892-3000
- --------------------------------------------------------------------------------
(Name, Address and Telephone Number of Person Authorized to Receive
Notices and Communications)
October 30, 1996
-------------------------------------------------------
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box [ ].
NOTE: Six copies of this statement, including all exhibits, should be filed
with the Commission. See Rule 13d-1(a) for other parties to whom copies are to
be sent.
* The remainder of this cover page shall be filled out for a reporting
person's initial filing on this form with respect to the subject class of
securities, and for any subsequent amendment containing information which would
alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be
deemed to be "filed" for the purpose of Section 18 of the Securities Exchange
Act of 1934 ("Act") or otherwise subject to the liabilities of that section of
the Act but shall be subject to all other provisions of the Act (however, see
the Notes).
Page 1 of 63 Pages
<PAGE> 2
SCHEDULE 13D/A
<TABLE>
<CAPTION>
CUSIP NO. 86768K 10 6 PAGE 2 OF 63 PAGES
- --------------------- ------------------
<S> <C> <C> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Sprout Growth II, L.P.
- --------------------------------------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (A) [ ]
(B) [X]
- --------------------------------------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
OO
- --------------------------------------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(D) OR 2(E) [ ]
- --------------------------------------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
- --------------------------------------------------------------------------------------------------------------
7 SOLE VOTING POWER
325,999
NUMBER OF --------------------------------------------------------------------------------------
SHARES 8 SHARED VOTING POWER
BENEFICIALLY
OWNED BY --------------------------------------------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER
REPORTING 325,999
PERSON
WITH --------------------------------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
- --------------------------------------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
325,999
- --------------------------------------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [ ]
- --------------------------------------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
1.8% - See Item 5
- --------------------------------------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
PN
- --------------------------------------------------------------------------------------------------------------
</TABLE>
Page 2 of 63 Pages
<PAGE> 3
SCHEDULE 13D/A
<TABLE>
<CAPTION>
CUSIP NO. 86768K 10 6 PAGE 3 OF 63 PAGES
- --------------------- ------------------
<S> <C> <C> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
DLJ Capital Corporation
- --------------------------------------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (A) [ ]
(B) [X]
- --------------------------------------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
WC, OO
- --------------------------------------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(D) OR 2(E) [ ]
- --------------------------------------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
- --------------------------------------------------------------------------------------------------------------
7 SOLE VOTING POWER
358,333
NUMBER OF --------------------------------------------------------------------------------------
SHARES 8 SHARED VOTING POWER
BENEFICIALLY
OWNED BY --------------------------------------------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER
REPORTING 358,333
PERSON
WITH --------------------------------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
- --------------------------------------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
358,333
- --------------------------------------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [ ]
- --------------------------------------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
1.9% - See Item 5
- --------------------------------------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
CO
- --------------------------------------------------------------------------------------------------------------
</TABLE>
Page 3 of 63 Pages
<PAGE> 4
SCHEDULE 13D/A
<TABLE>
<CAPTION>
CUSIP NO. 86768K 10 6 PAGE 4 OF 63 PAGES
- --------------------- ------------------
<S> <C> <C> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Donaldson, Lufkin & Jenrette Securities Corporation
- --------------------------------------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (A) [ ]
(B) [X]
- --------------------------------------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
WC
- --------------------------------------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(D) OR 2(E) [ ]
- --------------------------------------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
- --------------------------------------------------------------------------------------------------------------
7 SOLE VOTING POWER
739,189
NUMBER OF --------------------------------------------------------------------------------------
SHARES 8 SHARED VOTING POWER
BENEFICIALLY
OWNED BY --------------------------------------------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER
REPORTING
PERSON 739,189
WITH --------------------------------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
- --------------------------------------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
739,189
- --------------------------------------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [ ]
- --------------------------------------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
4.0% - See Item 5
- --------------------------------------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
CO, BD
- --------------------------------------------------------------------------------------------------------------
</TABLE>
Page 4 of 63 Pages
<PAGE> 5
SCHEDULE 13D/A
<TABLE>
<CAPTION>
CUSIP NO. 86768K 10 6 PAGE 5 OF 63 PAGES
- --------------------- ------------------
<S> <C> <C> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Donaldson, Lufkin & Jenrette, Inc.
- --------------------------------------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (A) [ ]
(B) [X]
- --------------------------------------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
N/A
- --------------------------------------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(D) OR 2(E) [ ]
- --------------------------------------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
- --------------------------------------------------------------------------------------------------------------
7 SOLE VOTING POWER
1,097,522
NUMBER OF --------------------------------------------------------------------------------------
SHARES 8 SHARED VOTING POWER
BENEFICIALLY
OWNED BY --------------------------------------------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER
REPORTING 1,097,522
PERSON
WITH --------------------------------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
- --------------------------------------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,097,522
- --------------------------------------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [ ]
- --------------------------------------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
5.9% - See Item 5
- --------------------------------------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
CO,HC
- --------------------------------------------------------------------------------------------------------------
</TABLE>
Page 5 of 63 Pages
<PAGE> 6
SCHEDULE 13D/A
<TABLE>
<CAPTION>
CUSIP NO. 86768K 10 6 PAGE 6 OF 63 PAGES
- --------------------- ------------------
<S> <C> <C> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
The Equitable Companies Incorporated
- --------------------------------------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (A) [ ]
(B) [X]
- --------------------------------------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
N/A
- --------------------------------------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(D) OR 2(E) [ ]
- --------------------------------------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
- --------------------------------------------------------------------------------------------------------------
7 SOLE VOTING POWER
1,097,522
NUMBER OF --------------------------------------------------------------------------------------
SHARES 8 SHARED VOTING POWER
BENEFICIALLY
OWNED BY --------------------------------------------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER
REPORTING 1,097,522
PERSON
WITH --------------------------------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
- --------------------------------------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,097,522
- --------------------------------------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [ ]
- --------------------------------------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
5.9% - See Item 5
- --------------------------------------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
CO, HC
- --------------------------------------------------------------------------------------------------------------
</TABLE>
Page 6 of 63 Pages
<PAGE> 7
SCHEDULE 13D/A
<TABLE>
<CAPTION>
CUSIP NO. 86768K 10 6 PAGE 7 OF 63 PAGES
- --------------------- ------------------
<S> <C> <C> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
AXA
- --------------------------------------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (A) [ ]
(B) [ ]
- --------------------------------------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
N/A
- --------------------------------------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(D) OR 2(E) [ ]
- --------------------------------------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
France
- --------------------------------------------------------------------------------------------------------------
7 SOLE VOTING POWER
1,097,522
NUMBER OF --------------------------------------------------------------------------------------
SHARES 8 SHARED VOTING POWER
BENEFICIALLY
OWNED BY --------------------------------------------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER
REPORTING
PERSON 1,097,522
WITH --------------------------------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
- --------------------------------------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,097,522
- --------------------------------------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [ ]
- --------------------------------------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
5.9% - See Item 5
- --------------------------------------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
OO, HC
- --------------------------------------------------------------------------------------------------------------
</TABLE>
Page 7 of 63 Pages
<PAGE> 8
SCHEDULE 13D/A
<TABLE>
<CAPTION>
CUSIP NO. 86768K 10 6 PAGE 8 OF 63 PAGES
- --------------------- ------------------
<S> <C> <C> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Finaxa
- --------------------------------------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (A) [ ]
(B) [ ]
- --------------------------------------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
N/A
- --------------------------------------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(D) OR 2(E) [ ]
- --------------------------------------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
France
- --------------------------------------------------------------------------------------------------------------
7 SOLE VOTING POWER
1,097,522
NUMBER OF --------------------------------------------------------------------------------------
SHARES 8 SHARED VOTING POWER
BENEFICIALLY
OWNED BY --------------------------------------------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER
REPORTING
PERSON 1,097,522
WITH --------------------------------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
- --------------------------------------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,097,522
- --------------------------------------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [ ]
- --------------------------------------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
5.9% - See Item 5
- --------------------------------------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
OO, HC
- --------------------------------------------------------------------------------------------------------------
</TABLE>
Page 8 of 63 Pages
<PAGE> 9
SCHEDULE 13D/A
<TABLE>
<CAPTION>
CUSIP NO. 86768K 10 6 PAGE 9 OF 63 PAGES
- --------------------- ------------------
<S> <C> <C> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
AXA Assurances I.A.R.D. Mutuelle
- --------------------------------------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (A) [ ]
(B) [X]
- --------------------------------------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
N/A
- --------------------------------------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(D) OR 2(E) [ ]
- --------------------------------------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
France
- --------------------------------------------------------------------------------------------------------------
7 SOLE VOTING POWER
1,097,522
NUMBER OF --------------------------------------------------------------------------------------
SHARES 8 SHARED VOTING POWER
BENEFICIALLY
OWNED BY --------------------------------------------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER
REPORTING
PERSON 1,097,522
WITH --------------------------------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
- --------------------------------------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,097,522
- --------------------------------------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [ ]
- --------------------------------------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
5.9% - See Item 5
- --------------------------------------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
IC
- --------------------------------------------------------------------------------------------------------------
</TABLE>
Page 9 of 63 Pages
<PAGE> 10
SCHEDULE 13D/A
<TABLE>
<CAPTION>
CUSIP NO. 86768K 10 6 PAGE 10 OF 63 PAGES
- --------------------- -------------------
<S> <C> <C> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
AXA Assurances Vie Mutuelle
- --------------------------------------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (A) [ ]
(B) [X]
- --------------------------------------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
N/A
- --------------------------------------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(D) OR 2(E) [ ]
- --------------------------------------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
France
- --------------------------------------------------------------------------------------------------------------
7 SOLE VOTING POWER
1,097,522
NUMBER OF --------------------------------------------------------------------------------------
SHARES 8 SHARED VOTING POWER
BENEFICIALLY
OWNED BY --------------------------------------------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER
REPORTING
PERSON 1,097,522
WITH --------------------------------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
- --------------------------------------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,097,522
- --------------------------------------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [ ]
- --------------------------------------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
5.9% - See Item 5
- --------------------------------------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
IC
- --------------------------------------------------------------------------------------------------------------
</TABLE>
Page 10 of 63 Pages
<PAGE> 11
SCHEDULE 13D/A
<TABLE>
<CAPTION>
CUSIP NO. 86768K 10 6 PAGE 11 OF 63 PAGES
- --------------------- -------------------
<S> <C> <C> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Uni Europe Assurance Mutuelle
- --------------------------------------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (A) [ ]
(B) [X]
- --------------------------------------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
N/A
- --------------------------------------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(D) OR 2(E) [ ]
- --------------------------------------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
France
- --------------------------------------------------------------------------------------------------------------
7 SOLE VOTING POWER
1,097,522
NUMBER OF --------------------------------------------------------------------------------------
SHARES 8 SHARED VOTING POWER
BENEFICIALLY
OWNED BY --------------------------------------------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER
REPORTING
PERSON 1,097,522
WITH --------------------------------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
- --------------------------------------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,097,522
- --------------------------------------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [ ]
- --------------------------------------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
5.9% - See Item 5
- --------------------------------------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
IC
- --------------------------------------------------------------------------------------------------------------
</TABLE>
Page 11 of 63 Pages
<PAGE> 12
SCHEDULE 13D/A
<TABLE>
<CAPTION>
CUSIP NO. 86768K 10 6 PAGE 12 OF 63 PAGES
- --------------------- -------------------
<S> <C> <C> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Alpha Assurances Vie Mutuelle
- --------------------------------------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (A) [ ]
(B) [X]
- --------------------------------------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
N/A
- --------------------------------------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(D) OR 2(E) [ ]
- --------------------------------------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
France
- --------------------------------------------------------------------------------------------------------------
7 SOLE VOTING POWER
1,097,522
NUMBER OF --------------------------------------------------------------------------------------
SHARES 8 SHARED VOTING POWER
BENEFICIALLY
OWNED BY --------------------------------------------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER
REPORTING
PERSON 1,097,522
WITH --------------------------------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
- --------------------------------------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,097,522
- --------------------------------------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [ ]
- --------------------------------------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
5.9% - See Item 5
- --------------------------------------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
IC
- --------------------------------------------------------------------------------------------------------------
</TABLE>
Page 12 of 63 Pages
<PAGE> 13
SCHEDULE 13D/A
<TABLE>
<CAPTION>
CUSIP NO. 86768K 10 6 PAGE 13 OF 63 PAGES
- --------------------- -------------------
<S> <C> <C> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Alpha Assurances I.A.R.D. Mutuelle
- --------------------------------------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (A) [ ]
(B) [X]
- --------------------------------------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
N/A
- --------------------------------------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(D) OR 2(E) [ ]
- --------------------------------------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
France
- --------------------------------------------------------------------------------------------------------------
7 SOLE VOTING POWER
1,097,522
NUMBER OF --------------------------------------------------------------------------------------
SHARES 8 SHARED VOTING POWER
BENEFICIALLY
OWNED BY --------------------------------------------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER
REPORTING
PERSON 1,097,522
WITH --------------------------------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
- --------------------------------------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,097,522
- --------------------------------------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [ ]
- --------------------------------------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
5.9% - See Item 5
- --------------------------------------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
IC
- --------------------------------------------------------------------------------------------------------------
</TABLE>
Page 13 of 63 Pages
<PAGE> 14
SCHEDULE 13D/A
<TABLE>
<CAPTION>
CUSIP NO. 86768K 10 6 PAGE 14 OF 63 PAGES
- --------------------- -------------------
<S> <C> <C> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Claude Bebear, AXA Voting Trustee
- --------------------------------------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (A) [ ]
(B) [ ]
- --------------------------------------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
N/A
- --------------------------------------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(D) OR 2(E) [ ]
- --------------------------------------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
France
- --------------------------------------------------------------------------------------------------------------
7 SOLE VOTING POWER
1,097,522
NUMBER OF --------------------------------------------------------------------------------------
SHARES 8 SHARED VOTING POWER
BENEFICIALLY
OWNED BY --------------------------------------------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER
REPORTING
PERSON 1,097,522
WITH --------------------------------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
- --------------------------------------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,097,522
- --------------------------------------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [ ]
- --------------------------------------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
5.9% - See Item 5
- --------------------------------------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
IN
- --------------------------------------------------------------------------------------------------------------
</TABLE>
Page 14 of 63 Pages
<PAGE> 15
SCHEDULE 13D/A
<TABLE>
<CAPTION>
CUSIP NO. 86768K 10 6 PAGE 15 OF 63 PAGES
- --------------------- -------------------
<S> <C> <C> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Patrice Garnier, AXA Voting Trustee
- --------------------------------------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (A) [ ]
(B) [ ]
- --------------------------------------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
N/A
- --------------------------------------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(D) OR 2(E) [ ]
- --------------------------------------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
France
- --------------------------------------------------------------------------------------------------------------
7 SOLE VOTING POWER
1,097,522
NUMBER OF --------------------------------------------------------------------------------------
SHARES 8 SHARED VOTING POWER
BENEFICIALLY
OWNED BY --------------------------------------------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER
REPORTING
PERSON 1,097,522
WITH --------------------------------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
- --------------------------------------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,097,522
- --------------------------------------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [ ]
- --------------------------------------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
5.9% - See Item 5
- --------------------------------------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
IN
- --------------------------------------------------------------------------------------------------------------
</TABLE>
Page 15 of 63 Pages
<PAGE> 16
SCHEDULE 13D/A
<TABLE>
<CAPTION>
CUSIP NO. 86768K 10 6 PAGE 16 OF 63 PAGES
- --------------------- -------------------
<S> <C> <C> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Henry de Clermont-Tonnerre, AXA Voting Trustee
- --------------------------------------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (A) [ ]
(B) [ ]
- --------------------------------------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
N/A
- --------------------------------------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(D) OR 2(E) [ ]
- --------------------------------------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
France
- --------------------------------------------------------------------------------------------------------------
7 SOLE VOTING POWER
1,097,522
NUMBER OF --------------------------------------------------------------------------------------
SHARES 8 SHARED VOTING POWER
BENEFICIALLY
OWNED BY --------------------------------------------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER
REPORTING
PERSON 1,097,522
WITH --------------------------------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
- --------------------------------------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,097,522
- --------------------------------------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [ ]
- --------------------------------------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
5.9% - See Item 5
- --------------------------------------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
IN
- --------------------------------------------------------------------------------------------------------------
</TABLE>
Page 16 of 63 Pages
<PAGE> 17
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION
Growth II and DLJCC purchased the Shares for a purchase price of $9.00 per
share. The funds used by Growth II and DLJCC to purchase the Shares came from
their general investment capital. The funds used by DLJSC to purchase the
Shares came from its working capital. Since May 31, 1996, DLJSC has been a
market-marker and in the ordinary course of market-making activities has
acquired and disposed of Shares. No funds of any of DLJ, Equitable, AXA,
Finaxa, AXA Assurances I.A.R.D. Mutuelle, AXA Assurances Vie Mutuelle, Uni
Europe Assurance Mutuelle, Alpha Assurances vie Mutuelle, Alpha Assurances
I.A.R.D. Mutuelle, Claude Bebear, Patrice Garnier and Henri de Clermont-Tonnerre
were used to purchase Shares.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER
On October 30, 1996, Growth II disposed of 341,162 Shares at a price of
$22.80 per share as part of an underwritten public offering of Shares
undertaken by the Company (the "Follow-On Offering"). After giving effect to
such disposition, Growth II may be deemed to be the beneficial owner of the
325,999 Shares (the "Growth II Shares") directly owned by it, or approximately
1.8% of the Shares outstanding. Growth has the sole power to vote and the sole
power to dispose of the Growth II Shares directly owned by it.
On October 30, 1996, DLJCC disposed of 33,838 Shares at a price of $22.80
per share as part of the Follow-On Offering. After giving effect to such
disposition, DLJCC may be deemed to be the beneficial owner 32,334 Shares
directly owned by it, or approximately 0.2% of the Shares outstanding. DLJCC,
as the managing general partner of Growth II, also may be deemed, for the
purposes of Rule 13d-3 under the Act, to beneficially own indirectly the Growth
II Shares, for a total of 358,333 Shares (collectively, the "DLJCC Shares"), or
approximately 1.9% of the Shares outstanding. DLJCC has the sole power to vote
and the sole power to dispose of the Shares directly owned by it.
DLJSC may be deemed to be the beneficial owner of the 739,189 Shares (the
"DLJSC Shares") directly owned by it as of the close of business on November 1,
1996, or approximately 4.0% of the Shares outstanding. DLJSC has the sole
power to vote and the sole power to dispose of the DLJSC Shares directly owned
by it.
As the sole stockholder of DLJCC, and DLJSC, DLJ may be deemed, for the
purposes of Rule 13d-3 under the Act, to beneficially own indirectly the DLJCC
Shares and the DLJSC Shares. Because of Equitable's ownership of DLJ,
Equitable may be deemed, for the purposes of Rule 13d-3 under the Act, to
beneficially own indirectly the DLJCC Shares and the DLJSC Shares that may be
deemed to be beneficially owned indirectly by DLJ.
After giving effect to the above-mentioned dispositions by Growth II and
DLJCC in the Follow-On Offering, the Reporting Persons, in the aggregate, may
be deemed to beneficially own 1,097,522 Shares or approximately 5.9% of the
Shares outstanding. The percentage of Shares outstanding reported as
beneficially owned be each person herein on the date hereof is based upon
18,463,026 Shares outstanding, which is derived from information disclosed by
the Company in its Prospectus dated October 24, 1996.
DLJSC has been a market-maker in the Shares, and in the ordinary course
of its market-making activities has acquired and disposed of Shares at prices
ranging from $23.00 to $30.00 per Share during the period of September 2, 1996
to November 1, 1996.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO SECURITIES OF THE ISSUER
The Company and DLJSC are parties to an Underwriting Agreement (the "IPO
Underwriting Agreement"), dated May 30, 1996, among the Company, certain
selling stockholders of the Company named therein (the "IPO Selling
Stockholders") and DLJSC, Alex. Brown & Sons Incorporated and NatWest
Securities Limited, as representatives of the several Underwriters named
therein (the "IPO Underwriters"), relating to an initial public offering of
Shares by the Company. Pursuant to the IPO Underwriting Agreement, DLJSC and
the other IPO Underwriters severally agreed to purchase an
Page 17 of 63 Pages
<PAGE> 18
aggregate of 5,700,000 Shares from the Company and were granted an option to
purchase an additional 855,000 Shares from the IPO Selling Stockholders. Such
initial public offering (including the exercise by the IPO Underwriters of such
option) was consummated on June 5, 1996.
In connection with the above-mentioned initial public offering by the
Company, each of Growth II and DLJCC entered into a lock-up agreement
(collectively, the "IPO Lock-Up Agreements"), dated May 3, 1996, pursuant to
which each of Growth II and DLJCC has agreed, subject to certain exceptions,
not to sell or otherwise dispose of any of the Growth Shares or the DLJCC
Shares for a period of 180 days from May 30, 1996 without the prior written
consent of the representatives of the IPO Underwriters other than DLJSC.
In addition, the Company and each of Growth II and DLJCC are parties to a
Registration Agreement (the "Registration Agreement"), dated January 4, 1995,
by and among the Company, the Investors named therein (including, without
limitation, each of Growth II and DLJCC) (collectively, the "Investors") and
Paul J. and Teresa M. Klaassen (collectively, the "Founders"). Pursuant to the
terms of the Registration Agreement, the Founders, as holders of 5,164,475
Shares (the "Founders' Shares"), and each of the Investors, as the holders of
an aggregate of 1,444,444 Shares issued upon conversion of the Company's Series
A Convertible Preferred Stock (the "Investors' Shares"), are entitled to
certain rights with respect to the registration of such shares (the
"Registrable Securities") under the Securities Act of 1933, as amended (the
"Securities Act").
Demand Registration. Pursuant to the terms of the Registration
Agreement, holders of Registrable Securities may request that the Company
offer some or all of such Registrable Securities to the public pursuant to
an effective registration statement under the Securities Act.
Registration on Form S-1 may be demanded by either of the Founders or by
the holders of not less than a majority of the Investors' Shares.
Registration on Form S-2 or Form S-3 may be demanded by either 25% of the
holders of Investors' Shares or by holders of 25% of the then outstanding
Founders' Shares, provided that the aggregate offering value of the
Registrable Securities requested to be included in such registration must
be reasonably expected to equal at least $1 million. The holders have the
right to require the Company to file a registration statement on Form S-1
two times and on Form S-2 or Form S-3 an unlimited number of times.
Incidental (i.e., "Piggyback") Registration. In addition, the
Registration Agreement provides that if the Company at any time
proposes to register any of its securities under the Securities Act,
on a form other than Form S-4 or S-8, the holders of Registrable
Securities are entitled to have their shares included in such
registration statement on a pro rata basis, subject to certain other
terms and conditions.
The Company and DLJSC are also parties to an Underwriting Agreement (the
"Follow-On Underwriting Agreement"), dated October 24, 1996, among the Company,
certain selling stockholders of the Company named in Schedule II thereto (the
"Follow-On Selling Stockholders"), certain additional selling stockholders
named in Schedule III thereto (the "Additional Follow-On Selling Stockholders")
and DLJSC, Alex. Brown & Sons Incorporated, NatWest Securities Limited and J.C.
Bradford & Co. (the "Follow-On Underwriters"), relating to a follow-on public
offering of Shares by the Company. Pursuant to the Follow-On Underwriting
Agreement, DLJSC and the other Follow-On Underwriters severally agreed to
purchase an aggregate of 4,000,000 Shares from the Company and 1,000,000 Shares
from the Follow-On Selling Stockholders and were granted an option to purchase
an additional 203,333 Shares from the Additional Follow-On Selling Stockholders
and an additional 546,667 Shares from the Company. Such follow-on public
offering (including the exercise by the Follow-On Underwriters of their option
to purchase the additional 203,333 Shares from the Additional Follow-On Selling
Stockholders) was consummated on October 30, 1996.
In connection with the above-mentioned follow-on public offering by the
Company, each of Growth II and DLJCC entered into a lock-up agreement
(collectively, the "Follow-On Lock-Up Agreements"),
Page 18 of 63 Pages
<PAGE> 19
dated October 21, 1996, pursuant to which each of Growth II and DLJCC has
agreed, subject to certain exceptions, not to sell or otherwise dispose of any
of the Growth Shares or the DLJCC Shares for a period of 90 days from October
24, 1996 without the prior written consent of DLJSC.
Except as stated in this Item 6, none of the Reporting Persons has any
contracts, arrangements, understandings or relationships (legal or otherwise)
with any other person with respect to the Shares, including, without
limitation, any agreements concerning (i) transfer or voting of any Shares,
(ii) finder's fees, (iii) joint ventures, (iv) loan or option arrangements, (v)
puts or calls, (vi) guarantees of profits, (vii) division of profits or losses
or (viii) the giving or withholding of proxies.
The foregoing response to this Item 6 is qualified in its entirety by
reference to the IPO Underwriting Agreement, the IPO Lock-Up Agreements, the
Registration Agreement, the Follow-On Underwriting Agreement and the Follow-On
Lock-Up Agreements, the full texts of which are filed as Exhibits 2 through 8
hereto and incorporated herein by this reference.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS
*1. Agreement among the Reporting Persons to file a joint statement on
Schedule 13D.
*2. Underwriting Agreement, dated May 30, 1996, among the Company, the IPO
Selling Stockholders and the IPO Underwriters, relating to the
Company's initial public offering of Shares.
*3. Lock-Up Agreement, dated May 3, 1996, between the IPO Underwriters and
Growth II.
*4. Lock-Up Agreement, dated May 3, 1996, between the IPO Underwriters and
DLJCC.
*5. Registration Agreement, dated January 4, 1995, among the Company, the
Investors and the Founders.
6. Underwriting Agreement, dated October 24, 1996, among the Company, the
Follow-On Selling Stockholders, the Additional Follow-On Selling
Stockholders and the Follow-On Underwriters, relating to the Company's
follow-on public offering of Shares.
7. Lock-Up Agreement, dated October 21, 1996, between the Follow-On
Underwriters and Growth II.
8. Lock-Up Agreement, dated October 21, 1996, between the Follow-On
Underwriters and DLJCC.
- ------------------------
* Previously filed
Page 19 of 63 Pages
<PAGE> 20
SIGNATURE*
After reasonable inquiry and to the best knowledge and belief of the
undersigned, the information set forth in this statement is true, complete and
correct.
Dated: November 4, 1996
Donaldson, Lufkin & Jenrette, Inc.
By: /s/ Claire M. Power
-------------------------------------
Claire M. Power
- ------------------------
* Pursuant to the Joint Filing Agreement with respect to Schedule 13D (filed
as Exhibit 1 to the Schedule 13D) among the Reporting Persons, this amendment
to statement on Schedule 13D is filed on behalf of each of them by Donaldson,
Lufkin & Jenrette, Inc.
Page 20 of 63 Pages
<PAGE> 21
EXHIBIT 6
5,000,000 Shares
SUNRISE ASSISTED LIVING, INC.
Common Stock
UNDERWRITING AGREEMENT
October 24, 1996
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
ALEX. BROWN & SONS INCORPORATED
NATWEST SECURITIES LIMITED
J.C. BRADFORD & CO.
c/o Donaldson, Lufkin & Jenrette
Securities Corporation
277 Park Avenue
New York, New York 10172
Dear Sirs:
Sunrise Assisted Living, Inc., a Delaware corporation (the "Company"), and
the stockholders of the Company named in Schedule II hereto (collectively, the
"Selling Stockholders"), severally and not jointly propose to sell an aggregate
of 5,000,000 shares of Company Common Stock, $.01 par value per share ("Common
Stock"), to the several underwriters named in Schedule I hereto (the
"Underwriters"). Such 5,000,000 shares of Common Stock are hereinafter referred
to as the "Firm Shares". In addition, the Company and certain stockholders of
the Company named in Schedule III hereto (collectively, the "Additional Selling
Stockholders"), propose to sell to the several Underwriters not more than
750,000 additional shares of Common Stock (the "Additional Shares") if requested
by the Underwriters as provided in Section 2 hereof. The Firm Shares consist of
4,000,000 authorized and unissued shares to be issued and sold by the Company
and 1,000,000 issued and outstanding shares to be sold by the Selling
Stockholders. The Additional Shares consist of 546,667 authorized and unissued
shares to be issued and sold by the Company and 203,333 issued and outstanding
shares to be sold by the Additional Selling Stockholders. The Firm Shares and
the Additional Shares are herein collectively
<PAGE> 22
called the "Shares". The Company, the Selling Stockholders and the Additional
Selling Stockholders are hereinafter collectively called the "Sellers".
1. Registration Statement and Prospectus. The Company has prepared and
filed with the Securities and Exchange Commission (the "Commission") in
accordance with the provisions of the Securities Act of 1933, as amended, and
the rules and regulations of the Commission thereunder (collectively called the
"Act"), a registration statement on Form S-1 including a prospectus relating to
the Shares, which may be amended. The registration statement as amended at the
time when it becomes effective, including a registration statement (if any)
filed pursuant to Rule 462(b) under the Act increasing the size of the offering
registered under the Act and information (if any) deemed to be part of the
registration statement at the time of effectiveness pursuant to Rule 430A under
the Act, is hereinafter referred to as the "Registration Statement", and the
prospectus in the form first used to confirm sales of Shares is hereinafter
referred as the "Prospectus".
2. Agreements to Sell and Purchase. On the basis of the representations
and warranties contained in this Agreement, and subject to its terms and
conditions, (i) the Company agrees to issue and sell 4,000,000 Firm Shares to
the Underwriters (ii) each Selling Stockholder agrees, severally and not
jointly, to sell the number of Firm Shares set forth opposite such Selling
Stockholder's name in Schedule II hereto and (iii) each Underwriter agrees,
severally and not jointly, to purchase from the Company and each Selling
Stockholder at a price per share of $22.80 (the "Purchase Price") the number of
Firm Shares (subject to adjustments to eliminate fractional shares as you may
determine) which bears the same proportion to the total number of Firm Shares
to be sold by such Underwriter in Schedule I hereto bears to the total number
of Firm Shares.
On the basis of the representations and warranties contained in this
Agreement, and subject to its terms and conditions, (i) the Company agrees to
issue and sell up to 546,667 Additional Shares to the Underwriters, (ii) the
Additional Selling Stockholders agree to sell up to 203,333 Additional Shares
to the Underwriters and (iii) the Underwriters shall have the right to
purchase, severally and not jointly, up to 546,667 Additional Shares from the
Company at the Purchase Price and up to the number of Additional Shares set
forth opposite each Additional Selling Stockholder's name in Schedule III
hereto from such Additional Selling Stockholder at the Purchase Price.
Additional Shares may be purchased solely for the purpose of covering
over-allotments made in connection with the offering of the Firm Shares. The
Underwriters may exercise their right to purchase Additional Shares in whole or
in part from time to time by giving written notice thereof to the Additional
Selling Stockholders, care of the Company, within 30 days after the date of
this Agreement. You shall give any such notice on behalf of the Underwriters
and such notice shall specify the aggregate number of Additional Shares to be
purchased pursuant to such exercise and the date for payment and delivery
thereof. The date specified in any such notice shall be a business day (i) no
earlier than the Closing Date (as hereinafter defined), (ii) no later than ten
business days after such notice has been
- 2 -
<PAGE> 23
given and (iii) no earlier than two business days after such notice has been
given. If any Additional Shares are to be purchased, each Underwriter,
severally and not jointly, agrees to purchase from the Company and/or the
Additional Selling Stockholders, as the case may be, the number of Additional
Shares (subject to such adjustments to eliminate fractional shares as you may
determine) which bears the same proportion to the total number of Additional
Shares to be purchased as the number of Firm Shares set forth opposite the name
of such Underwriter in Schedule I bears to the total number of Firm Shares. In
the event the Underwriters elect to exercise their option to purchase the
Additional Shares in part, the Company and the Additional Selling Stockholders
shall sell to the Underwriters, and the Underwriters shall purchase (i) first,
the Additional Shares to be sold by the Additional Selling Stockholders until
all such Additional Shares have been sold, and (ii) second, the Additional
Shares to be sold by the Company until all such Additional Shares have been
sold. In the event the Underwriters elect to exercise their option to purchase
Additional Shares such that the Underwriters will purchase a portion but not all
of the Additional Shares to be sold by the Additional Selling Stockholders
pursuant to clause (i) of the immediately preceding sentence, the Underwriters
shall purchase from each Additional Selling Stockholder that number of
Additional Shares equal to the total number of Additional Shares remaining to be
purchased by the several Underwriters from the Additional Selling Stockholders
multiplied by a fraction, the numerator of which is the number of Additional
Shares set forth opposite the name of such Additional Selling Stockholder in
Schedule III hereto and the denominator of which is the aggregate number of
Additional Shares offered by all of the Additional Selling Stockholders as set
forth in Schedule III hereto.
The Company agrees that the Company shall, concurrently with the execution
of this Agreement, deliver letter agreements executed by (i) each of the
directors and officers of the Company and (ii) each Selling Stockholder,
pursuant to which each such person agrees, not to offer, sell, contract to
sell, grant any option to purchase, or otherwise dispose of any Common Stock or
any securities convertible into or exercisable or exchangeable for Common Stock
or in any other manner transfer all or a portion of the economic consequences
associated with the ownership of any Common Stock, except to the Underwriters
pursuant to this Agreement, for a period of 90 days after the effective date of
the Registration Statement, other than (i) as a gift or gifts, provided the
donee or donees thereof agree in writing to be bound such letter agreement,
(ii) transfers to a transferor's affiliates, as such term is defined in Rule
405 promulgated under the Act, provided the transferee agrees in writing to be
bound by such letter agreement, or (iii) with the prior written consent of
Donaldson, Lufkin & Jenrette Securities Corporation (except as to shares held
by affiliates of Donaldson, Lufkin & Jenrette Securities Corporation which
require the prior written consent of Alex. Brown & Sons Incorporated, NatWest
Securities Limited and J.C. Bradford & Co.). Notwithstanding the foregoing,
during such period the Company (i) may grant stock options (and may issue
shares of its Common Stock upon exercise thereof) pursuant to the Company's
existing 1995 Stock Option Plan or the Company's existing 1996 Directors' Stock
Option Plan or the Company's existing 1996 Stock Option Plan or a similar
option plan that provides for the
- 3 -
<PAGE> 24
granting of no more than 250,000 options for the benefit of employees of the
Company which plan is approved by the Board of Directors of the Company
(collectively, the "Option Plans"), (ii) may issue shares of Common Stock upon
the exercise of any of the 450,000 stock options granted to David W. Faeder
outside of the Option Plans, (iii) may issue shares of Common Stock upon the
exercise of the 50,000 warrants outstanding on the date hereof, (iv) may issue
shares of Common Stock to William Steele in satisfaction of a $200,000
non-interest bearing loan from Mr. Steele and (v) may issue shares of Common
Stock in connection with the Company's acquisition of assets of, or an
ownership interest in, another business or entity, provided, however, that,
without the prior written consent of Donaldson, Lufkin & Jenrette Securities
Corporation, the Company may not (i) register the shares of Common Stock
referred to in clauses (iv) or (v) above under the Act for a period of 90 days
after the effective date of the Registration Statement or (ii) grant any
registration rights with respect to the shares of Common Stock referred to in
clauses (iv) or (v) above that are exercisable within 90 days after the
effective date of the Registration Statement.
3. Terms of Public Offering. The Sellers are advised by you that the
Underwriters propose (i) to make a public offering of their respective portions
of the Shares as soon after the effective time of the Registration Statement as
in your judgment is advisable and (ii) initially to offer the Shares upon the
terms set forth in the Prospectus.
4. Delivery and Payment. Delivery to the Underwriters of and payment for
the Firm Shares shall be made at 10:00 A.M., New York City time, on the third
or fourth business day (unless otherwise permitted by the Commission pursuant
to Rule 15c6-1 of the Securities Exchange Act of 1934, as amended (the
"Exchange Act")) following the date of this Agreement (the "Closing Date"), at
the offices of Hogan & Hartson L.L.P., 555 Thirteenth Street, NW, Washington,
D.C. 20004, or at such other place outside the State of New York as you shall
designate. The Closing Date and the location of delivery of and the form of
payment for the Firm Shares may be varied by agreement between you, the Company
and the Selling Stockholders.
Delivery to the Underwriters of and payment for any Additional Shares to
be purchased by the Underwriters shall be made at the offices of Hogan &
Hartson L.L.P., 555 Thirteenth Street, NW, Washington, D.C. 20004, or at such
other place as you shall designate, at 10:00 A.M., New York City time, on the
date specified in the applicable exercise notice given by you pursuant to
Section 2 (an "Option Closing Date"). Any such Option Closing Date and the
location of delivery of and the form of payment for such Additional Shares may
be varied by agreement between you, the Company and the Additional Selling
Stockholders.
Certificates for the Shares shall be registered in such names and issued
in such denominations as you shall request in writing not later than two full
business days prior to the Closing Date or an Option Closing Date, as the case
may be. Such certificates shall be made available to you for inspection not
later than 9:30 A.M., New York City time, on the
- 4 -
<PAGE> 25
business day next preceding the Closing Date or an Option Closing Date, as the
case may be. Certificates in definitive form evidencing the Shares shall be
delivered to you on the Closing Date or an Option Closing Date, as the case may
be, with any transfer taxes thereon duly paid by the respective Sellers, for the
respective accounts of the several Underwriters, against payment of the Purchase
Price therefor by wire transfer of immediately available funds to the order of
the applicable Sellers; provided, however, that in the case of the Additional
Selling Stockholders, the amount payable to them shall be net of (i) the
aggregate exercise price of the stock options that are being exercised by them
and (ii) applicable withholding taxes, which amounts shall be paid by wire
transfer of immediately available funds to the Company.
5. Agreements of the Company. The Company agrees with you:
(a) To advise you promptly and, if requested by you, to confirm such
advice in writing, (i) when any post-effective amendment to the
Registration Statement becomes effective, (ii) of any request by the
Commission for amendments to the Registration Statement or amendments or
supplements to the Prospectus or for additional information, (iii) of the
issuance by the Commission of any stop order suspending the effectiveness
of the Registration Statement or of the suspension of qualification of
the Shares for offering or sale in any jurisdiction, or the initiation of
any proceeding for such purposes, and (iv) of the occurrence of any event
during the period referred to in paragraph (e) below which makes any
statement of a material fact made in the Registration Statement or the
Prospectus untrue or which requires the making of any additions to or
changes in the Registration Statement or the Prospectus in order to make
the statements therein not misleading. If at any time the Commission
shall issue any stop order suspending the effectiveness of the
Registration Statement, the Company will make every reasonable effort to
obtain the withdrawal or lifting of such order at the earliest possible
time.
(b) To furnish to you, without charge, four signed copies of the
Registration Statement as first filed with the Commission and of each
amendment to it, including all exhibits, and to furnish to you and each
Underwriter designated by you such number of conformed copies of the
Registration Statement as so filed and of each amendment to it, without
exhibits, as you may reasonably request.
(c) Not to file any amendment or supplement to the Registration
Statement, whether before or after the time when it becomes effective, or
to make any amendment or supplement to the Prospectus of which you shall
not previously have been advised or to which you shall reasonably object;
and to prepare and file with the Commission, promptly upon your
reasonable request, any amendment to the Registration Statement or
supplement to the Prospectus which may be necessary or advisable in
connection with the distribution of the Shares by you, and to use its best
efforts to cause the same to become promptly effective.
- 5 -
<PAGE> 26
(d) Promptly after the Registration Statement becomes effective, and
from time to time thereafter for such period as a prospectus is required
by law to be delivered in connection with sales by an Underwriter or a
dealer, to furnish to each Underwriter and dealer as many copies of the
Prospectus (and of any amendment or supplement to the Prospectus) as such
Underwriter or dealer may reasonably request.
(e) If during the period specified in paragraph (d) any event shall
occur as a result of which, in the judgment of the Company or in the
opinion of counsel for the Underwriters, it becomes necessary to amend or
supplement the Prospectus in order to make the statements therein, in the
light of the circumstances when the Prospectus is delivered to a
purchaser, not misleading, or if it is necessary to amend or supplement
the Prospectus to comply with any law, forthwith to prepare and file with
the Commission an appropriate amendment or supplement to the Prospectus
so that the statements in the Prospectus, as so amended or supplemented,
will not in the light of the circumstances when it is so delivered, be
misleading, or so that the Prospectus will comply with law, and to
furnish to each Underwriter and to such dealers as you shall specify,
such number of copies thereof as such Underwriter or dealers may
reasonably request.
(f) Prior to any public offering of the Shares, to the extent
required by law, to cooperate with you and counsel for the Underwriters
in connection with the registration or qualification of the Shares for
offer and sale by the several Underwriters and by dealers under the state
securities or Blue Sky or real estate syndication laws of such
jurisdictions as you may request, to continue such qualification in
effect so long as required for distribution of the Shares and to file
such consents to service of process or other documents as may be
necessary in order to effect such registration or qualification;
provided, however, that the Company shall not be obligated in connection
therewith or as a condition thereof to (i) file any general consent to
service of process or to qualify as a foreign corporation in any
jurisdiction in which it is not otherwise required to so file a general
consent to service of process or to be so qualified, or (ii) take any
action that would subject it to income taxation in any jurisdiction in
which it is not otherwise subject to income taxation. In addition, to
the extent required by law, the Company agrees to comply in all material
respects with (i) the undertakings set forth in numbered paragraphs 12,
13, 14 and 18 of its "Application for Exemption Under Sections 352-g(2)
and 359-f(2) of the New York General Business Law for a Real Estate
Syndication Offering Registered with the Securities and Exchange
Commission Under the Federal Securities Act of 1933", dated March 21,
1996, as amended to date and as may be amended hereafter, and (ii) any
applicable provisions of Section 352-e of the New York General Business
Law or the rules and regulations promulgated thereunder.
- 6 -
<PAGE> 27
(g) To mail and make generally available to its stockholders as soon
as reasonably practicable, but in any event not later than the 90th day
following the end of the fiscal quarter first occurring after the first
anniversary of the effective date of the Registration Statement, an
earning statement covering a period of at least twelve months after the
effective date of the Registration Statement which shall satisfy the
provisions of Section 11(a) of the Act and Rule 158 thereunder.
(h) For a period of five (5) years from the date of this Agreement,
to furnish to you as soon as available copies of all annual reports and
other documents, reports, financial statements and information (i)
furnished by the Company to its stockholders, (ii) furnished to The
Nasdaq Stock Market, Inc.'s Nasdaq National Market (the "Nasdaq National
Market") or any securities exchange upon which the Common Stock may be
listed or quoted pursuant to the requirements of or agreements with such
market or exchange or (iii) filed with the Commission under or pursuant
to the Act or the Exchange Act.
(i) To pay all costs, expenses, fees and transfer taxes incident to
(i) the preparation, printing, filing and distribution under the Act of
the Registration Statement (including financial statements and exhibits),
each preliminary prospectus and all amendments and supplements to any of
them prior to or during the period specified in paragraph (e), (ii) the
printing and delivery of the Prospectus and all amendments or supplements
to it during the period specified in paragraph (e), (iii) the printing
and delivery of this Agreement, the Preliminary and Supplemental Blue Sky
Memoranda and all other agreements, memoranda, correspondence and other
documents printed and delivered in connection with the offering of the
Shares (including in each case any disbursements of counsel for the
Underwriters relating to such printing and delivery), (iv) the
registration or qualification of the Shares for offer and sale under the
securities or Blue Sky laws of the several states (including in each case
the fees and disbursements of counsel for the Underwriters relating to
such registration or qualification and memoranda relating thereto), (v)
filings and clearance with the National Association of Securities
Dealers, Inc. ("NASD") in connection with the offering, (vi) the listing
of the Shares on the Nasdaq National Market, (vii) furnishing such copies
of the Registration Statement, the Prospectus and all amendments and
supplements thereto as may be reasonably requested for use in connection
with the offering or sale of the Shares by the Underwriters or by dealers
to whom Shares may be sold and (viii) the performance by the Sellers of
their other obligations under this Agreement. Pursuant to a Registration
Agreement dated January 4, 1995, the Selling Stockholders and the Company
have entered into certain agreements regarding the payment of such
expenses.
(j) To use its best efforts to maintain the inclusion of the Common
Stock in the Nasdaq National Market (or on a national securities
exchange) for a period of five years after the effective date of the
Registration Statement.
- 7 -
<PAGE> 28
(k) To use its best efforts to do and perform all things required or
necessary to be done and performed under this Agreement by the Company
prior to the Closing Date or any Option Closing Date, as the case may be,
and to satisfy all conditions precedent on its part to the delivery of
the Shares.
6. Representations and Warranties of the Company. The Company represents
and warrants to each Underwriter that:
(a) The Registration Statement has become effective; no stop order
suspending the effectiveness of the Registration Statement is in effect,
and no proceedings for such purpose are pending before or, to the
Company's knowledge, threatened by the Commission.
(b)(i) The Registration Statement, when it became effective, did not
contain and, as amended or supplemented, if applicable, will not contain
any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein
not misleading, (ii) the Registration Statement and the Prospectus comply
and, as amended or supplemented, if applicable, will comply in all
material respects with the Act and (iii) the Prospectus does not contain
and, as amended or supplemented, if applicable, will not contain any
untrue statement of a material fact or omit to state a material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, except that the
representations and warranties set forth in this paragraph (b) do not
apply to statements or omissions in the Registration Statement or the
Prospectus based upon information relating to any Underwriter furnished
to the Company in writing by or on behalf of such Underwriter through you
expressly for use therein.
(c) Each preliminary prospectus filed as part of the Registration
Statement as originally filed or as part of any amendment thereto, or
filed pursuant to Rule 424 under the Act, and each Registration Statement
filed pursuant to Rule 462(b) under the Act, if any, complied when so
filed in all material respects with the Act; and did not contain an
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made,
not misleading.
(d) The Company has been duly organized, is validly existing as a
corporation in good standing under the laws of the State of Delaware and
has the corporate power and authority to own, lease and operate its
properties and to conduct its business as described in the Prospectus, and
is duly qualified and is in good standing as a foreign corporation
authorized to do business in each jurisdiction in which the nature of its
business or its ownership or leasing of
- 8 -
<PAGE> 29
property requires such qualification, except where the failure to be so
qualified would not have a material adverse effect on the condition
(financial or other), business, prospects, properties, net worth or
results of operations of the Company and the Subsidiaries (hereafter
defined), taken as a whole.
(e) All of the outstanding shares of capital stock of the Company
(including all of the Firm Shares to be sold by the Selling Stockholders
and, as of any Option Closing Date, all Additional Shares to be sold by
the Additional Selling Stockholders on such Option Closing Date) have
been duly authorized and validly issued and are fully paid and
non-assessable, have been issued in compliance with all federal and state
securities laws, and were not issued in violation of or subject to any
preemptive or similar rights. The Shares to be issued and sold by the
Company hereunder have been duly authorized for issuance and sale to the
Underwriters pursuant to this Agreement and, when issued and delivered to
the Underwriters against payment therefor as provided in this Agreement,
will be duly and validly issued and fully paid and non-assessable, and
will be sold free and clear of any pledge, lien, security interest,
encumbrance, claim or equitable interest; and no preemptive right,
co-sale right, tag along right, registration right, right of first
refusal or other similar right of stockholders exists with respect to any
of such Shares or the issuance and sale thereof, other than those that
have been expressly waived prior to the date hereof. No further consent,
approval or authorization of any stockholder, the Board of Directors of
the Company, any court or governmental agency or body, or others is
required for the issuance and sale or transfer of the Shares to be issued
and sold by the Company hereunder except as may be required under the
federal securities laws or under any state or other securities, Blue Sky
or real estate syndication laws and except as may be required to be
obtained by the Underwriters. There are no stockholders agreements or
voting agreements with respect to the Common Stock to which the Company
is a party or, to the knowledge of the Company, between or among any of
the Company's stockholders.
(f) The authorized capital stock of the Company (i) is as set forth
in the Prospectus under the caption "Capitalization" and (ii) conforms to
the description thereof and the statements relating thereto contained in
the Prospectus.
(g) All of the consolidated corporations, partnerships and limited
liability companies in which the Company has a direct or indirect
ownership interest are listed in Exhibit 21 to the Registration Statement
(collectively, the "Subsidiaries"). The Company's ownership interest in
each of the facilities listed in the Prospectus under the caption
"Business--Owned Facilities" is owned by the Company directly or
indirectly through one or more Subsidiaries and the Company's direct or
indirect percentage ownership interests in such facilities are as
described under such caption.
- 9 -
<PAGE> 30
(h) Each Subsidiary that is a corporation (a "Corporate Subsidiary")
has been duly organized, is validly existing as a corporation in good
standing under the laws of the jurisdiction of its incorporation and has
the corporate power and authority to own, lease and operate its
properties and to conduct its business as described in the Prospectus,
and is duly qualified and is in good standing as a foreign corporation
authorized to do business in each jurisdiction in which the nature of its
business or its ownership or leasing of property requires such
qualification, except where the failure to be so qualified would not have
a material adverse effect on the condition (financial or other),
business, prospects, properties, net worth or results of operations of
the Company and the Subsidiaries, taken as a whole. All of the
outstanding shares of capital stock of each Corporate Subsidiary have
been duly authorized and validly issued, are fully paid and
nonassessable, were issued and sold in compliance with all applicable
federal and state securities laws, were not issued in violation of or
subject to any preemptive or similar rights, and are owned by the Company
directly, or indirectly through one of the other Subsidiaries, free and
clear of any security interest, claim, lien, encumbrance or adverse
interest of any nature, except (i) for those encumbrances disclosed in
the Prospectus, (ii) for interests or liens held by others as security
for indebtedness of the Company or any Subsidiary disclosed in the
Prospectus and (iii) for transfer restrictions under applicable federal
and state securities and real estate syndication laws.
(i) Each Subsidiary that is a limited partnership (a "Limited
Partnership Subsidiary") has been duly organized, is validly existing as
a limited partnership in good standing under the laws of its jurisdiction
of organization and has the limited partnership power and authority to
own, lease and operate its properties and to conduct its business as
described in the Prospectus, and is duly qualified and is in good
standing (where applicable) as a foreign limited partnership authorized
to do business in each jurisdiction in which the nature of its business
or its ownership or leasing of property requires such qualification,
except where the failure to be so qualified would not have a material
adverse effect on the condition (financial or other), business,
prospects, properties, net worth or results of operations of the Company
and the Subsidiaries, taken as a whole. All outstanding limited
partnership interests in the Limited Partnership Subsidiaries were issued
and sold in compliance with the applicable limited partnership agreements
of such Limited Partnership Subsidiaries and all applicable federal and
state securities laws, and the limited partnership interests therein held
directly or indirectly by the Company are owned free and clear of any
security interest, claim, lien, encumbrance or adverse interest of any
nature, except (i) for those encumbrances disclosed in the Prospectus,
(ii) for interests or liens held by others as security for indebtedness of
the Company or any Subsidiary disclosed in the Prospectus, (iii) to the
extent provided in the applicable limited partnership agreements of such
Limited Partnership Subsidiaries and (iv) for transfer restrictions under
applicable federal and state securities and real estate syndication laws.
To the knowledge of the
- 10 -
<PAGE> 31
Company, each limited partnership agreement pursuant to which the Company
or a Subsidiary holds a partnership interest in a Limited Partnership
Subsidiary is in full force and effect and constitutes the legal, valid
and binding agreement of the parties thereto, enforceable against such
parties in accordance with the terms thereof, except as enforcement
thereof may be limited by bankruptcy, insolvency or other similar laws
affecting the enforcement of creditors' rights generally or by general
equitable principles. There has been no material breach of or default
under, and no event which with notice or lapse of time would constitute a
material breach of or default under, such limited partnership agreements
by the Company or any Subsidiary or, to the Company's knowledge, any other
party to such agreements.
(j) Each Subsidiary that is a limited liability company (an "LLC
Subsidiary") has been duly organized, is validly existing as a limited
liability company in good standing under the laws of its jurisdiction of
organization and has the limited liability company power and authority to
own, lease and operate its properties and to conduct its business as
described in the Prospectus, and is duly qualified and is in good
standing (where applicable) as a foreign limited liability company
authorized to do business in each jurisdiction in which the nature of its
business or its ownership or leasing of property requires such
qualification, except where the failure to be so qualified would not have
a material adverse effect on the condition (financial or other),
business, prospects, properties, net worth or results of operations of
the Company and the Subsidiaries, taken as a whole. All outstanding
membership interests in the LLC Subsidiaries were issued and sold in
compliance with the applicable operating agreements of such LLC
Subsidiaries and all applicable federal and state securities laws, and
the membership interests therein held directly or indirectly by the
Company are owned free and clear of any security interest, claim, lien,
encumbrance or adverse interest of any nature, except (i) for those
encumbrances disclosed in the Prospectus, (ii) for interests or liens
held by others as security for indebtedness of the Company or any
Subsidiary disclosed in the Prospectus, (iii) to the extent provided in
the applicable operating agreements of such LLC Subsidiaries and (iv) for
transfer restrictions under applicable federal and state securities and
real estate syndication laws. To the knowledge of the Company, each
operating agreement pursuant to which the Company or a Subsidiary holds a
membership interest in an LLC Subsidiary is in full force and effect and
constitutes the legal, valid and binding agreement of the parties
thereto, enforceable against such parties in accordance with the terms
thereof, except as enforcement thereof may be limited by bankruptcy,
insolvency or other similar laws affecting the enforcement of creditors'
rights generally or by general equitable principles. There has been no
material breach of or default under, and no event which with notice or
lapse of time would constitute a material breach of or default under, such
operating agreements by the Company or any Subsidiary or, to the Company's
knowledge, any other party to such agreements.
- 11 -
<PAGE> 32
(k) Neither the Company nor any of the Subsidiaries is in violation
of its respective charter, by-laws, partnership agreement, operating
agreement or other governing document(s). Neither the Company nor any of
the Subsidiaries is in default in the performance of any obligation,
agreement or condition contained in any bond, debenture, note or any
other evidence of indebtedness or in any other agreement, indenture or
instrument material to the conduct of the business of the Company and the
Subsidiaries, taken as a whole, to which the Company or any of the
Subsidiaries is a party or by which it or any of the Subsidiaries or
their respective property is bound, except for any such defaults that
would not have a material adverse effect on the condition (financial or
other), business, prospects, properties, net worth or results of
operations of the Company and the Subsidiaries, taken as a whole.
Neither the Company nor any of the Subsidiaries is in material violation
of any order, writ, injunction, judgment or decree of any court,
government or governmental agency or body, domestic or foreign, having
jurisdiction over the Company or any of the Subsidiaries or over any of
their respective property. Neither the Company nor any of the
Subsidiaries is in violation of any law, ordinance, rule or regulation
applicable to the Company or any of the Subsidiaries, which violation
would have a material adverse effect on the condition (financial or
other), business, prospects, properties, net worth or results of
operations of the Company and the Subsidiaries, taken as a whole.
(l) The Company has, and on the Closing Date and each Option Closing
Date will have, full legal right, power and authority to enter into this
Agreement and to issue, sell and deliver, in the manner provided herein,
the Shares to be issued and sold by the Company hereunder. This
Agreement has been duly authorized, executed and delivered by the Company
and this Agreement is a valid and binding agreement of the Company
enforceable in accordance with its terms, except as rights to indemnity
and contribution hereunder may be limited by applicable law. The
execution, delivery and performance of this Agreement, compliance by the
Company with all the provisions hereof and the consummation by the
Company of the transactions contemplated hereby will not require any
consent, approval, authorization or other order of any court, regulatory
body, administrative agency or other governmental body (except as has
been obtained and except as may be required under the federal securities
laws or the securities, Blue Sky or real estate syndication laws of the
various states) and will not conflict with or constitute a breach of any
of the terms or provisions of, or a default under, the charter, by-laws,
partnership agreement, operating agreement or other governing document(s)
of the Company or any of the Subsidiaries or any agreement, indenture or
other instrument to which the Company or any of the Subsidiaries is a
party or by which the Company or any of the Subsidiaries or their
respective property is bound, or violate or conflict with any laws,
administrative regulations or rulings or court decrees applicable to the
Company, any of the Subsidiaries or their respective property, except as
disclosed in the Prospectus and
- 12 -
<PAGE> 33
except as rights to indemnity and contribution hereunder may be limited by
applicable law.
(m) Except as otherwise set forth in the Prospectus, there are no
material legal or governmental proceedings pending or, to the Company's
knowledge, threatened or contemplated to which the Company or any of the
Subsidiaries is a party or of which any of their respective property is
the subject that (i) are required to be set forth in the Registration
Statement, (ii) could reasonably be expected to result in a material
adverse change in the condition (financial or other), business,
prospects, properties, net worth or results of operations of the Company
and the Subsidiaries, taken as a whole, or (iii) could reasonably be
expected to adversely effect the issuance or validity of the Shares to be
issued and sold by the Company hereunder. No contract or document of a
character required to be described in the Registration Statement or the
Prospectus or to be filed as an exhibit to the Registration Statement is
not so described or filed as required.
(n) Neither the Company nor any of the Subsidiaries has violated any
foreign, federal, state or local law or regulation relating to the
protection of human health and safety, the environment or hazardous or
toxic substances or wastes, pollutants or contaminants ("Environmental
Laws"), nor any federal or state law relating to discrimination in the
hiring, promotion or pay of employees nor any applicable federal or state
wages and hours laws, nor any provisions of the Employee Retirement
Income Security Act or the rules and regulations promulgated thereunder,
which in each case could reasonably be expected to result in any material
adverse change in the condition (financial or other), business,
prospects, properties, net worth or results of operations of the Company
and the Subsidiaries, taken as a whole.
(o) Except as described in the Prospectus, the Company and the
Subsidiaries have operated and currently operate their business in
conformity with all applicable laws, rules and regulations of each
jurisdiction in which it is conducting business, except where the failure
to be so in compliance would not have a material adverse effect on the
condition (financial or other), business, prospects, properties, net
worth or results of operations of the Company and the Subsidiaries, taken
as a whole. The Company and each of the Subsidiaries has such permits,
licenses, franchises and authorizations of governmental or regulatory
authorities ("permits"), including, without limitation, under any
applicable Environmental Laws, as are necessary to own, lease and operate
its respective properties and to conduct its business; the Company and
each of the Subsidiaries has fulfilled and performed all of its material
obligations with respect to such permits and no event has occurred which
allows, or after notice or lapse of time would allow, revocation or
termination thereof or results in any other material impairment of the
rights of the holder of any such permit; and, except as described
- 13 -
<PAGE> 34
in the Prospectus, such permits contain no restrictions that are
materially burdensome to the Company or any of the Subsidiaries. The
Company and the Subsidiaries are not aware of any existing or imminent
matter which could reasonably be expected to materially and adversely
impact their operations or business prospects other than as disclosed in
the Prospectus.
(p) Except as otherwise set forth in the Prospectus or such as are
not material to the business, prospects, financial condition or results
of operation of the Company and the Subsidiaries, taken as a whole, the
Company and each of the Subsidiaries has good and marketable title, free
and clear of all liens, claims, encumbrances and restrictions except
liens for taxes not yet due and payable, to all property and assets
described in the Registration Statement as being owned by it (other than
stock or other ownership interests in Subsidiaries, which are the subject
of the representations in paragraphs (h) through (j) above). The
agreements to which the Company or any of the Subsidiaries is a party
described in the Registration Statement and Prospectus are valid
agreements, enforceable by the Company and the Subsidiaries (as
applicable), except as the enforcement thereof may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other
similar laws relating to or affecting creditors' rights generally or by
general equitable principles and, to the Company's knowledge, the other
contracting party or parties thereto are not in material breach or
material default under any of such agreements. All leases to which the
Company or any of the Subsidiaries is a party are valid and binding and
no default has occurred or is continuing thereunder, which could
reasonably be expected to result in any material adverse change in the
condition (financial or other), business, prospects, properties, net
worth or results of operations of the Company and the Subsidiaries, taken
as a whole, and the Company and the Subsidiaries enjoy peaceful and
undisturbed possession under all such leases to which any of them is a
party as lessee with such exceptions as do not materially interfere with
the use made by the Company or such Subsidiary.
(q) The Company and the Subsidiaries maintain insurance with
insurers of recognized financial responsibility of the types and in the
amounts generally deemed adequate for their respective businesses and
consistent with insurance coverage maintained by similar companies in
similar businesses, including, but not limited to, insurance covering
real and personal property owned or leased by the Company or its
subsidiaries against theft, damage, destruction, acts of vandalism and
all other risks customarily insured against, all of which insurance is in
full force and effect.
(r) Except as disclosed in the Prospectus, there are no outstanding
subscriptions, rights, warrants, options, calls, convertible securities,
commitments of sale or liens related to or entitling any person to
purchase or otherwise to
- 14 -
<PAGE> 35
acquire any shares of the capital stock of, or other ownership interest
in, the Company or any Subsidiary.
(s) There is (i) no material unfair labor practice complaint pending
against the Company or any of the Subsidiaries or, to the knowledge of
the Company, threatened against any of them, before the National Labor
Relations Board or any state or local labor relations board, and no
material grievance or arbitration proceeding arising out of or under any
collective bargaining agreement is so pending against the Company or any
of the Subsidiaries or, to the knowledge of the Company, threatened
against any of them, and (ii) no material strike, labor dispute, slowdown
or stoppage pending against the Company or any of the Subsidiaries or, to
the knowledge of the Company, threatened against it or any of the
Subsidiaries. No collective bargaining agreement exists with any of the
Company's employees and, to the Company's knowledge, no such agreement is
imminent.
(t) All material tax returns required to be filed by the Company and
each of the Subsidiaries in any jurisdiction have been filed, other than
those filings being contested in good faith, and all material taxes,
including withholding taxes, penalties and interest, assessments, fees
and other charges due pursuant to such returns or pursuant to any
assessment received by the Company or any of the Subsidiaries have been
paid, other than those being contested in good faith and for which
adequate reserves have been provided.
(u) Except as described in the Prospectus, the Company owns or
possesses adequate rights to use all material trademarks, service marks,
trade names, trademark registrations, service mark registrations,
copyrights and licenses necessary for the conduct of its business and has
no reason to believe that the conduct of its business as described in the
Prospectus will conflict with any such rights of others.
(v) Neither the Company nor any of the Subsidiaries, nor to the
knowledge of the Company, any agent or other person acting on behalf of
the Company or any Subsidiary has, directly or indirectly, used any
corporate funds for unlawful contributions, gifts, entertainment or other
unlawful expenses related to foreign or domestic political activity; made
any unlawful payment to foreign or domestic government officials or
employees or to foreign or domestic political parties or campaigns from
corporate funds; failed to disclose fully any contribution in violation
of law; violated in any material respect any provision of the Foreign
Corrupt Practices Act of 1977, as amended; or made any unlawful bribe,
rebate, payoff, influence, kick-back or other unlawful payment.
- 15 -
<PAGE> 36
(w) Each of Ernst & Young LLP, Hoffman, Morrison & Fitzgerald P.C.
and KPMG Peat Marwick LLP are independent public accountants with respect
to the Company as required by the Act.
(x) The financial statements, together with related schedules and
notes forming part of the Registration Statement and the Prospectus (and
any amendment or supplement thereto), present fairly the consolidated
financial position, results of operations and changes in financial
position of the Company and the Subsidiaries or the Laing Retirement
Properties, as the case may be, on the basis stated in the Registration
Statement at the respective dates or for the respective periods to which
they apply; such statements and related schedules and notes have been
prepared in accordance with generally accepted accounting principles
consistently applied throughout the periods involved, except as disclosed
therein; and the other financial and statistical information and data set
forth in the Registration Statement and the Prospectus (and any amendment
or supplement thereto) is, in all material respects, accurately presented
and prepared (i) on a basis consistent with such financial statements and
the books and records of the Company and (ii) as to pro forma
information, in good faith on the basis of the assumptions described in
the Registration Statement and such assumptions are reasonable and the
adjustments used therein are appropriate to give effect to the
transactions and circumstances referred to therein.
(y) Neither the Company nor any of the Subsidiaries is, nor will the
Company or any of the Subsidiaries become upon the sale of the Shares and
the application of the proceeds therefrom as described in the Prospectus
under the caption "Use of Proceeds," an "investment company" or a person
"controlled" by an "investment company" within the meaning of the
Investment Company Act of 1940, as amended.
(z) Except as disclosed in the Prospectus, no holder of any security
of the Company has any right to require registration of shares of Common
Stock or any other security of the Company.
(aa) The Company has complied with all provisions of Section
517.075, Florida Statutes (Chapter 92-198, Laws of Florida).
(bb) The Company has filed a notification of listing the Shares on
the Nasdaq National Market.
(cc) Except as disclosed in the Prospectus, there are no business
relationships or related party transactions required to be disclosed
therein by Item 404 of Regulation S-K of the Commission.
- 16 -
<PAGE> 37
(dd) The Company and each of the Subsidiaries maintains a system of
internal accounting controls sufficient to provide reasonable assurance
that (i) transactions are executed in accordance with management's
general or specific authorizations; (ii) transactions are recorded as
necessary to permit preparation of financial statements in conformity
with generally accepted accounting principles and to maintain asset
accountability; (iii) access to assets is permitted only in accordance
with management's general or specific authorization; and (iv) the
recorded accountability for assets is compared with the existing assets
at reasonable intervals and appropriate action is taken with respect to
any differences.
(ee) Subsequent to the respective dates as of which information is
given in the Registration Statement and Prospectus, there has not been
(i) any material adverse change in the condition (financial or
otherwise), earnings, operations, business or business prospects of the
Company and the Subsidiaries, taken as a whole, (ii) any transaction that
is material to the Company and the Subsidiaries, taken as a whole, except
transactions entered into in the ordinary course of business, (iii) any
obligation, direct or contingent, that is material to the Company and the
Subsidiaries, taken as a whole, incurred by the Company or the
Subsidiaries, except obligations incurred in the ordinary course of
business, (iv) any change in the capital stock (other than as expressly
contemplated therein) or outstanding indebtedness of the Company or any
of the Subsidiaries that is material to the Company and the Subsidiaries,
taken as a whole, (v) any dividend or distribution of any kind declared,
paid or made on the capital stock of the Company, or (vi) any loss or
damage (whether or not insured) to the property of the Company or any of
the Subsidiaries which has been sustained or will have been sustained
which has a material adverse effect on the condition (financial or
other), business, prospects, properties, net worth or results of
operations of the Company and the Subsidiaries, taken as a whole.
(ff) The Company has not distributed and will not distribute prior
to the later of (i) the Closing Date, or any date on which Additional
Shares are to be purchased, as the case may be, and (ii) completion of
the distribution of the Shares, any offering material in connection with
the offering and sale of the Shares other than any preliminary
prospectuses filed as part of the Registration Statement, the Prospectus,
the Registration Statement and other materials, if any, permitted by the
Act.
(gg) The Company has not taken and will not take, directly or
indirectly, any action designed to or that might reasonably be expected
to cause or result in stabilization or manipulation of the price of the
Common Stock to facilitate the sale or resale of the Shares.
(hh) Each Additional Selling Stockholder has vested and presently
exercisable options to purchase from the Company a number of shares of
Common
- 17 -
<PAGE> 38
Stock equal to the total number of Additional Shares that you have
the right to purchase from such Additional Selling Stockholder pursuant
to this Agreement.
7. Representations and Warranties of the Selling Stockholders and
Additional Selling Stockholders. Each Selling Stockholder (with respect to
each of the following matters that relate to a Selling Stockholder) and each
Additional Selling Stockholder (with respect to each of the following matters
that relate to an Additional Selling Stockholder) severally and not jointly
represents and warrants to each Underwriter that:
(a) Such Selling Stockholder is the lawful owner of the Shares to be
sold by such Selling Stockholder pursuant to this Agreement and has, and
on the Closing Date will have, good and valid title to such Shares, free
of all restrictions on transfer, pledges, liens, encumbrances, security
interests and claims whatsoever. Such Additional Selling Stockholder has
beneficial ownership of the Shares to be sold by such Additional Selling
Stockholder pursuant to this Agreement and on any Option Closing Date on
which any of such Shares are to be sold hereunder will be the lawful
owner of such Shares and will have good and valid title to such Shares,
free of all restrictions on transfer, pledges, liens, encumbrances,
security interests and claims whatsoever.
(b) Upon delivery of and payment for such Shares pursuant to this
Agreement, good and valid title to such Shares will pass to the
Underwriters, free and clear of all restrictions on transfer, pledges,
liens, encumbrances, security interests and claims whatsoever; and no
co-sale right, tag along right, right of first refusal or other similar
right exists with respect to any of such Shares or the transfer and sale
thereof.
(c) Such Selling Stockholder has, and on the Closing Date will have,
full legal right, power and authority to enter into this Agreement, the
Letter of Transmittal and Custody Agreement between such Selling
Stockholder and First Union National Bank of North Carolina, as Custodian
(the "Custody Agreement"), and the Selling Stockholder's Irrevocable
Power of Attorney between such Selling Stockholder and Paul J. Klaassen
and David W. Faeder (the "Power of Attorney"), and to sell, assign,
transfer and deliver such Shares in the manner provided herein and
therein, and this Agreement, the Custody Agreement and the Power of
Attorney have been duly executed and delivered by such Selling
Stockholder and each of this Agreement, the Custody Agreement and the
Power of Attorney is a valid and binding agreement of such Seller
enforceable in accordance with its terms, except as enforcement thereof
may be limited by bankruptcy, insolvency or other similar laws affecting
the enforcement of creditors' rights generally or by general equitable
principles, and except as rights to indemnity and contribution hereunder
may be limited by applicable law. Such Additional Selling Stockholder
has, and on any applicable Option Closing Date will have, full legal
right, power and authority to enter into this Agreement and to sell,
assign, transfer and deliver
- 18 -
<PAGE> 39
such Shares in the manner provided herein, and this Agreement has
been duly executed and delivered by such Additional Selling Stockholder
and this Agreement is a valid and binding agreement of such Additional
Selling Stockholder enforceable in accordance with its terms, except as
enforcement thereof may be limited by bankruptcy, insolvency or other
similar laws affecting the enforcement of creditors' rights generally or
by general equitable principles, and except as rights to indemnity and
contribution hereunder may be limited by applicable law.
(d) Such Seller has not taken, and will not take, directly or
indirectly, any action designed to, or which might reasonably be expected
to, cause or result in stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of the Shares
pursuant to the distribution contemplated by this Agreement; and other
than as permitted by the Act, such Seller has not distributed and will
not distribute any prospectus or other offering material in connection
with the offering and sale of the Shares.
(e) The execution, delivery and performance of this Agreement by
such Seller, compliance by such Seller with all the provisions hereof and
the consummation by such Seller of the transactions contemplated hereby
will not require any consent, approval, authorization or order of any
court, regulatory body, administrative agency or other governmental body
or of any other governmental or non-governmental person or entity (except
as has been obtained and except as may be required under the federal
securities laws or the state securities, Blue Sky or real estate
syndication laws) and will not conflict with or constitute a breach of
any of the terms or provisions of, or a default under, any agreement,
indenture or other instrument to which such Seller is a party or by which
such Seller or property of such Seller is bound, or violate or conflict
with any laws, administrative regulation or ruling or court decree
applicable to such Seller or property of such Seller, except as rights to
indemnity and contribution hereunder may be limited by applicable law.
(f) Such parts of the Registration Statement under the caption
"Principal and Selling Stockholders" which specifically relate to such
Seller do not, and will not (after amendment, if necessary, for any
change in such information as provided in paragraph 7(g) below) on the
Closing Date or any Option Closing Date, as the case may be, contain any
untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements
therein, in light of circumstances under which they were made, not
misleading.
(g) At any time during the period described in paragraph 5(e)
hereof, if there is any change in the information referred to in
paragraph 7(f) above, such Seller will immediately notify you of such
change.
- 19 -
<PAGE> 40
(h) Such Additional Selling Stockholder has vested and presently
exercisable options to purchase from the Company a number of shares of
Common Stock equal to the total number of Additional Shares that you have
the right to purchase from such Additional Selling Stockholder pursuant
to this Agreement. Such Additional Selling Stockholder has taken all
actions (including, without limitation, the payment of the full exercise
price for and the valid execution and delivery to the Company of any
required notice of exercise of such stock options) necessary to effect
the valid cashless exercise of such stock options and the purchase by
such Additional Selling Stockholder of such Additional Shares from the
Company, subject only to the exercise and closing of your right to
purchase such Additional Shares from such Additional Selling Stockholder
hereunder. Such Additional Selling Stockholder further represents,
warrants, covenants, acknowledges and agrees with you that: (i) the
actions referred to in the immediately preceding sentence are coupled
with an interest and were taken subject to and in consideration of the
interests of the Underwriters and, until the 41st day following the date
of this Agreement, are irrevocable and not subject to termination by such
Additional Selling Stockholder or by operation of law, whether by the
death or incapacity of such Additional Selling Stockholder, the
termination of any trust or estate, the death or incapacity of one or
more trustees, guardians, executors or administrators under such trust or
estate, the dissolution or liquidation of any corporation or partnership
or the occurrence of any other event; and (ii) if such Additional Selling
Stockholder should die or become incapacitated, if any trust or estate
should be terminated, if any corporation or partnership should be
dissolved or liquidated, or if any other such event should occur before
the delivery of the Additional Shares to be sold by such Additional
Selling Stockholder under this Agreement, such Additional Shares shall be
delivered to you on behalf of such Additional Selling Stockholder in
accordance with the terms and conditions of this Agreement as if such
death or incapacity, termination, dissolution, liquidation or other event
had not occurred, regardless of whether or not you shall have received
notice of such death, incapacity, termination, dissolution, liquidation
or other event. Such Additional Selling Stockholder further represents
and warrants that he has executed and delivered to the Company's transfer
agent a stock power or other valid instrument of transfer, duly endorsed
for transfer to the Underwriters of the Additional Shares that may be
sold by such Additional Selling Stockholder hereunder, bearing the
signature of such Additional Selling Stockholder guaranteed by a
commercial bank or trust company having an office or a correspondent in
New York, New York or by a member firm of the New York, American or
Pacific Stock Exchange, subject only to the exercise and closing of your
right to purchase such Additional Shares from such Additional Selling
Stockholder hereunder.
8. Indemnification. (a) The Company, each Selling Stockholder and each
Additional Selling Stockholder, jointly, agree to indemnify and hold harmless
each Underwriter and each person, if any, who controls any Underwriter within
the meaning of
- 20 -
<PAGE> 41
Section 15 of the Act or Section 20 of the Exchange Act, from and against any
and all losses, claims, damages, liabilities and judgments caused by or based
upon any untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement or the Prospectus (as amended or
supplemented if the Company shall have furnished any amendments or supplements
thereto) or any preliminary prospectus, or caused by any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, except insofar as such
losses, claims, damages, liabilities or judgments are caused by any such untrue
statement or omission or alleged untrue statement or omission based upon
information relating to any Underwriter furnished in writing to the Company by
or on behalf of any Underwriter through you expressly for use therein, and
except that the indemnification obligation of each Selling Stockholder and
Additional Selling Stockholder hereunder shall be limited solely to losses,
claims, damages, liabilities and judgments caused by untrue statements or
alleged untrue statements or omissions or alleged omissions made in reliance
upon information relating to such Selling Stockholder or Additional Selling
Stockholder furnished in writing to the Company by or on behalf of such Selling
Stockholder or Additional Selling Stockholder expressly for use therein.
Notwithstanding the foregoing, the aggregate liability of any Selling
Stockholder or Additional Selling Stockholder pursuant to the provisions of this
paragraph, or for any breaches of one or more representations or warranties
contained in this Agreement, shall be limited to an amount equal to the
aggregate purchase price (net of underwriting discounts and commissions)
received by such Selling Stockholder or Additional Selling Stockholder from the
sale of such Selling Stockholder's or Additional Selling Stockholder's Shares
hereunder; provided, however, that the foregoing indemnity agreement with
respect to any preliminary prospectus shall not inure to the benefit of any
Underwriter from whom the person asserting any such losses, claims, damages and
liabilities and judgments purchased Shares, or any person controlling such
Underwriter, if a copy of the Prospectus (as then amended or supplemented if the
Company shall have furnished any amendments or supplements thereto) was not sent
or given by or on behalf of such Underwriter to such person, if required by law
so to have been delivered, at or prior to the written confirmation of the sale
of the Shares to such person, and if the Prospectus (as so amended and
supplemented) would have cured the defect giving rise to such loss, claim,
damage, liability or judgment.
(b) In case any action shall be brought against any Underwriter or any
person controlling such Underwriter, based upon any preliminary prospectus, the
Registration Statement or the Prospectus or any amendment or supplement thereto
and with respect to which indemnity may be sought against the Company or any
Selling Stockholder or Additional Selling Stockholder, such Underwriter shall
promptly notify the Company or such Selling Stockholder or Additional Selling
Stockholder, as the case may be, in writing and the Company or such Selling
Stockholder or Additional Selling Stockholder, as the case may be, shall assume
the defense thereof, including the employment of counsel reasonably satisfactory
to such indemnified party and payment of all reasonable fees and expenses. Any
Underwriter or any such controlling person shall have the right to employ
separate counsel in any such action and participate in the defense
- 21 -
<PAGE> 42
thereof, but the reasonable fees and expenses of such counsel shall be at the
expense of such Underwriter or such controlling person unless (i) the
employment of such counsel has been specifically authorized in writing by the
Company, or such Selling Stockholder or Additional Selling Stockholder, as the
case may be, (ii) the Company or such Selling Stockholder or Additional Selling
Stockholder, as the case may be, shall have failed to assume the defense and
employ counsel or (iii) the named parties to any such action (including any
impleaded parties) include both such Underwriter or such controlling person and
the Company or such Selling Stockholder or Additional Selling Stockholder, as
the case may be, and such Underwriter or such controlling person shall have
been advised by such counsel that there may be one or more legal defenses
available to it which are different from or additional to those available to
the Company or such Selling Stockholder, as the case may be, (in which case the
Company or such Selling Stockholder or Additional Selling Stockholder, as the
case may be, shall not have the right to assume the defense of such action on
behalf of such Underwriter or such controlling person, it being understood,
however, that the Company or such Selling Stockholder shall not, in connection
with any one such action or separate but substantially similar or related
actions in the same jurisdiction arising out of the same general allegations or
circumstances, be liable for the reasonable fees and expenses of more than one
separate firm of attorneys (in addition to any local counsel) for all such
Underwriters and controlling persons, which firm shall be designated in writing
by Donaldson, Lufkin & Jenrette Securities Corporation and that all such fees
and expenses shall be reimbursed as they are incurred). A Seller shall not be
liable for any settlement of any such action effected without the written
consent of such Seller but if settled with the written consent of such Seller,
such Seller agrees to indemnify and hold harmless any Underwriter and any such
controlling person from and against any loss or liability by reason of such
settlement. No indemnifying party shall, without the prior written consent of
the indemnified party, effect any settlement of any pending or threatened
proceeding in respect of which any indemnified party is or could have been a
party and indemnity could have been sought hereunder by such indemnified party,
unless such settlement includes an unconditional release of such indemnified
party from all liability on claims that are the subject matter of such
proceeding.
(c) Each Underwriter agrees, severally and not jointly, to indemnify and
hold harmless the Company, its directors, its officers who sign the
Registration Statement, any person controlling the Company within the meaning
of Section 15 of the Act or Section 20 of the Exchange Act, each Selling
Stockholder, each Additional Selling Stockholder and each person, if any,
controlling such Selling Stockholder or Additional Selling Stockholder within
the meaning of Section 15 of the Act or Section 20 of the Exchange Act to the
same extent as the foregoing indemnity from the Sellers to each Underwriter but
only with reference to information relating to such Underwriter furnished in
writing by or on behalf of such Underwriter through you expressly for use in the
Registration Statement, the Prospectus or any preliminary prospectus. In case
any action shall be brought against the Company, any of its directors, any such
officer or any person controlling the Company, or any Selling Stockholder or
Additional Selling Stockholder or
- 22 -
<PAGE> 43
any person controlling such Selling Stockholder or Additional Selling
Stockholder, based on the Registration Statement, the Prospectus or any
preliminary prospectus and in respect of which indemnity may be sought against
any Underwriter, the Underwriter shall have the rights and duties given to the
Sellers (except that if any Seller shall have assumed the defense thereof such
Underwriter shall not be required to do so, but may employ separate counsel
therein and participate in the defense thereof but the fees and expenses of such
counsel shall be at the expense of such Underwriter), and the Company, its
directors, any such officers and any person controlling the Company, and the
Selling Stockholders, the Additional Selling Stockholders and any person
controlling such Selling Stockholders or Additional Selling Stockholders, shall
have the rights and duties given to the Underwriters, by Section 8(b) hereof.
(d) If the indemnification provided for in this Section 8 is unavailable
to an indemnified party in respect of any losses, claims, damages, liabilities
or judgments referred to therein, then each indemnifying party, in lieu of
indemnifying such indemnified party, shall contribute to the amount paid or
payable by such indemnified party as a result of such losses, claims, damages,
liabilities and judgments (i) in such proportion as is appropriate to reflect
the relative benefits received by the Sellers on the one hand and the
Underwriters on the other hand from the offering of the Shares or (ii) if the
allocation provided by clause (i) above is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Sellers and
the Underwriters in connection with the statements or omissions which resulted
in such losses, claims, damages, liabilities or judgments, as well as any other
relevant equitable considerations. The relative benefits received by the
Sellers and the Underwriters shall be deemed to be in the same proportion as
the total net proceeds from the offering (before deducting expenses) received
by the Sellers, and the total underwriting discounts and commissions received
by the Underwriters, bear to the total price to the public of the Shares, in
each case as set forth in the table on the cover page of the Prospectus. The
relative fault of the Sellers and the Underwriters shall be determined by
reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission to state a material fact relates
to information supplied by the Company, the Selling Stockholders, the
Additional Selling Stockholders or the Underwriters and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission.
The Sellers and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this Section 8(d) were determined by pro
rata allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to in the immediately preceding paragraph. The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages, liabilities or judgments referred to in the immediately
preceding paragraph shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any such action or claim.
- 23 -
<PAGE> 44
Notwithstanding the provisions of this Section 8, no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the Shares underwritten by it and distributed to the public were
offered to the public exceeds the amount of any damages which such Underwriter
has otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission and no Selling Stockholder or
Additional Selling Stockholder shall be required to contribute any amount in
excess of the aggregate purchase price (net of underwriting discounts and
commissions) received by such Selling Stockholder or Additional Selling
Stockholder from the sale of Shares hereunder. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations to contribute pursuant to this
Section 8(d) are several in proportion to the respective number of Shares
purchased by each of the Underwriters hereunder and not joint.
(e) You, on behalf of the Underwriters, represent and warrant that the
information set forth (i) in the last paragraph on the front cover page, (ii)
on the inside front cover page concerning United Kingdom purchasers,
stabilization and over-allotment, and passive market making, and (iii) under
the caption "Underwriting" in the Registration Statement, any preliminary
prospectus and the Prospectus relating to the Shares (insofar as such
information relates to the Underwriters) constitutes the only information
furnished by the Underwriters for inclusion in the Registration Statement, any
preliminary prospectus and the Prospectus.
(f) The Company and the Selling Stockholders have entered into a
Registration Agreement dated January 4, 1995, pursuant to which the Company has
agreed to indemnify the Selling Stockholders against certain liabilities (and
vice versa). The Additional Selling Stockholders agree to indemnify the
Company on the same basis as the indemnification of the Company by the Selling
Stockholders under such Registration Agreement, subject to the same limitation
on the aggregate liability of each Additional Selling Stockholder contained in
Section 8(a) above.
(g) NatWest Securities Limited hereby agrees that, as part of the
distribution of the Common Stock offered by the Prospectus and subject to
certain exceptions, it will not offer any Common Stock within the United
States, its territories or possessions, or to persons who are citizens thereof
or residents therein. NatWest Securities Limited further represents and agrees
that: (i) it has not offered or sold and will not offer or sell any shares of
Common Stock to persons in the United Kingdom except to persons whose ordinary
activities involve them in acquiring, holding, managing or disposing of
investments (whether as principal or agent) for the purposes of their businesses
or otherwise in circumstances that have not resulted and will not result in an
offer to the public in the United Kingdom within the meaning of the Public
Offers of Securities Regulations 1995 or the Financial Services Act 1986 (the
"Act"); (ii) it has complied and will comply with all applicable provisions of
the Act with respect to anything
- 24 -
<PAGE> 45
done by it in relation to the shares of Common Stock in, from, or otherwise
involving the United Kingdom; and (iii) it has only issued or passed on and will
only issue or pass on, in the United Kingdom, any document that consists of or
any part of listing particulars, supplementary listing particulars, or any other
document required or permitted to be published by listing rules under Part IV of
the Act, to a person who is of a kind described in Article 11(3) of the
Financial Services Act 1986 (Investment Advertisements) (Exemptions) Order 1995
or is a person to whom the document may otherwise lawfully be issued or passed
on.
9. Conditions of Underwriters' Obligations. The several obligations of
the Underwriters to purchase the Firm Shares under this Agreement are subject
to the satisfaction of each of the following conditions:
(a) All the representations and warranties of the Company and the
Subsidiaries contained in this Agreement shall be true and correct on the
Closing Date with the same force and effect as if made on and as of the
Closing Date.
(b) The Registration Statement shall have become effective not later
than 5:00 P.M.(and in the case of a Registration Statement filed under
Rule 462(b) of the Act, not later than 10:00 p.m.), New York City time,
on the date of this Agreement or at such later date and time as you may
approve in writing, and at the Closing Date no stop order suspending the
effectiveness of the Registration Statement shall have been issued and no
proceedings for that purpose shall have been commenced or shall be
pending before or, to the knowledge of the Company or any Underwriter,
contemplated by the Commission.
(c)(i) Since the date of the latest balance sheet included in the
Registration Statement and the Prospectus, there shall not have been any
material adverse change, or any development involving a prospective
material adverse change, in the condition (financial or other), business,
prospects, properties, net worth or results of operations, whether or not
arising in the ordinary course of business, of the Company, (ii) since
the date of the latest balance sheet included in the Registration
Statement and the Prospectus there shall not have been any material
adverse change, or any development involving a prospective material
adverse change, in the capital stock or in the long-term debt of the
Company from that set forth in or contemplated by the Registration
Statement and Prospectus, (iii) the Company and the Subsidiaries shall
have no liability or obligation (other than long-term debt, which is the
subject of the immediately preceding clause (ii) of this paragraph 9(c)),
direct or contingent, which is material to the Company and the
Subsidiaries, taken as a whole, other than those reflected in the
Registration Statement and the Prospectus and (iv) on the Closing Date you
shall have received a certificate dated the Closing Date, signed by Paul
J. Klaassen and David W. Faeder, in their capacities as the Chief
Executive Officer and Chief Financial Officer of the Company,
respectively, confirming the matters set forth in
- 25 -
<PAGE> 46
paragraphs (a), (b), and (c) of this Section 9 and addressing such other
matters as may be reasonably requested by you or your counsel.
(d) All the representations and warranties of the Selling
Stockholders and Additional Selling Stockholders contained in this
Agreement shall be true and correct on the Closing Date with the same
force and effect as if made on and as of the Closing Date and you shall
have received a certificate to such effect, dated the Closing Date, from
the Selling Stockholders and Additional Selling Stockholders.
(e) You shall have received on the Closing Date an opinion
(reasonably satisfactory to you and counsel for the Underwriters), dated
the Closing Date, of Hogan & Hartson L.L.P., counsel for the Company, to
the effect that:
(i) The Company was duly incorporated, and is validly
existing and in good standing under the laws of the State of
Delaware as of the date specified in such opinion letter, and has
the corporate power and corporate authority to own, lease and
operate its properties and to conduct its business as described in
the Prospectus. The Company is authorized to transact business as
a foreign corporation in each jurisdiction identified on a
Schedule to such opinion letter, as of the respective dates of the
certificates specified therein.
(ii) The authorized, issued and outstanding capital stock of
the Company, as of June 30, 1996, was set forth under the caption
"Capitalization" in the Prospectus. All shares of Common Stock
shown as issued and outstanding under said caption (including the
Shares to be sold by the Selling Stockholders and, as of any
Option Closing Date, all Additional Shares to be sold by the
Additional Selling Stockholders on such Option Closing Date
pursuant to Section 2 of this Agreement) have been duly authorized
and are validly issued, fully paid and non-assessable, and were
not issued in violation of (A) any preemptive rights under the
Company's Restated Certificate of Incorporation or Delaware
corporate law or (B) to such counsel's knowledge, similar
contractual rights.
(iii) The Company has the corporate power and corporate
authority to enter into this Agreement and to consummate the
transactions contemplated hereby and this Agreement has been duly
authorized, executed and delivered by the Company. The Shares to
be issued and sold by the Company pursuant to this Agreement, when
issued and delivered to the Underwriters against payment therefor
as provided in this Agreement, will be duly authorized, validly
issued, fully paid and non-assessable, and will not have been
issued in violation of (A) any preemptive rights under the
Company's Restated Certificate of Incorporation or Delaware
corporate law or (B) to such counsel's knowledge, similar
contractual rights.
- 26 -
<PAGE> 47
(iv) Each of the Corporate Subsidiaries incorporated in
Virginia was incorporated, and is validly existing and in good
standing under the laws of its jurisdiction of incorporation as of
the respective dates specified in such opinion letter and has the
corporate power and corporate authority to own, lease and operate
its properties and to conduct its business as described in the
Prospectus. Each such Corporate Subsidiary is authorized to
transact business as a foreign corporation in each jurisdiction
identified on a Schedule to such opinion letter, as of the
respective dates of the certificates specified therein.
(v) All of the outstanding shares of capital stock of each
such Corporate Subsidiary (a) have been duly authorized and are
validly issued, fully paid and nonassessable, and (b) to such
counsel's knowledge, were not issued in violation of any
preemptive rights under such Corporate Subsidiary's charter or
under the laws of the jurisdiction of its incorporation or in
violation of any similar contractual rights.
(vi) Each Limited Partnership Subsidiary formed in Virginia
or Maryland was formed, and is validly existing and in good
standing under the laws of its jurisdiction of organization as of
the respective dates specified in such opinion letter, and has the
limited partnership power and limited partnership authority to
own, lease and operate its properties and to conduct its business
as described in the Prospectus. Each Limited Partnership
Subsidiary is authorized to transact business as a foreign limited
partnership in each jurisdiction identified on a Schedule to such
opinion letter, as of the respective dates of the certificates
specified therein.
(vii) Each LLC Subsidiary formed in Maryland was formed, and
is validly existing and in good standing under the laws of its
jurisdiction of organization as of the respective dates specified
in such opinion letter, and has the limited liability company
power and limited liability company authority to own, lease and
operate its properties and to conduct its business as described in
the Prospectus.
(viii) The authorized capital stock of the Company conforms
in all material respects to the description thereof contained in
the Prospectus under the caption "Description of Capital Stock".
The form of certificate evidencing the Firm Shares has been duly
authorized and complies with the requirements of the Delaware
General Corporation Law and the Restated Certificate of
Incorporation and Amended and Restated Bylaws of the Company.
- 27 -
<PAGE> 48
(ix) The Registration Statement has become effective under
the Act and, to such counsel's knowledge, no stop order suspending
the effectiveness of the Registration Statement has been issued
and no proceedings for that purpose have been instituted or
threatened by the Commission.
(x) The execution, delivery and performance as of the Closing
Date by the Company of this Agreement do not (i) violate the
Restated Certificate of Incorporation or Amended and Restated
Bylaws of the Company, the charter, bylaws, partnership agreements
or operating agreements of any of the Subsidiaries or the General
Corporation Law of the State of Delaware or (ii) breach or
constitute a default under any contract or agreement listed on a
Schedule to such opinion letter. No approval or consent of any
Delaware, Virginia or Maryland governmental agency is required to
be obtained by the Company in connection with the execution,
delivery and performance as of the Closing Date by the Company of
this Agreement.
(xi) Each of the Company's owned assisted living facilities
in Maryland and Virginia currently holds (or has pending a renewal
application for) a license authorizing such facility to furnish
assisted living services as described under the heading "Services"
on pages 34-35 of the Prospectus.
(xii) To such counsel's knowledge, except as set forth in the
Prospectus, no holders of Common Stock or other securities of the
Company have registration rights with respect to securities of the
Company and, except as set forth in the Prospectus, all holders of
securities of the Company having rights to registration of shares
of Common Stock or other securities because of the filing of the
Registration Statement by the Company have, solely with respect to
the offering contemplated thereby, either waived such rights or
included in the Registration Statement the shares of Common Stock
they wish to have registered.
(xiii) Neither the Company nor any of the Subsidiaries is
required to be registered as an "investment company" under the
1940 Act.
(xiv) The Registration Statement (including any Registration
Statement filed under 462(b) of the Act, if any) and the
Prospectus and any supplement or amendment thereto (except for
financial statements and supporting schedules and other financial
and statistical information and data included therein, as to which
no opinion need be expressed) comply as to form in all material
respects with the Act.
- 28 -
<PAGE> 49
(xv) To such counsel's knowledge, the Company owns directly
or indirectly the ownership interests in the Subsidiaries set
forth on Exhibit 21 to the Registration Statement.
In addition to the matters set forth above, such opinion letter
shall also include a statement to the effect that no facts have come to
the attention of such counsel which cause them to believe that (i) the
Registration Statement, at the time it became effective, contained an
untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements therein
not misleading, or that the Prospectus, as of its date and as of the
Closing Date, contained or contains an untrue statement of a material
fact or omitted or omits to state a material fact necessary in order to
make the statements therein, in the light of the circumstances under
which they were made, not misleading, (ii) there are any legal or
governmental proceedings pending or threatened against the Company that
are required to be disclosed in the Registration Statement or the
Prospectus, other that those disclosed therein, or (iii) there are any
contracts or documents of a character required to be described in the
Registration Statement or the Prospectus or to be filed as exhibits to
the Registration Statement that are not described or referred to therein
or so filed; provided that in making the foregoing statements (which
shall not constitute an opinion), such counsel need not express any views
as to the financial statements and supporting schedules and other
financial and statistical information and data included in or omitted
from the Registration Statement or the Prospectus.
In giving its opinion required by this paragraph (e) above, such
counsel may rely, (A) as to all matters of fact, upon certificates and
written statements of officers and employees of the Company and its
Subsidiaries, and (B) as to the qualification and good standing of the
Company and its Subsidiaries to do business in any jurisdiction, upon
certificates of appropriate government officials in such jurisdictions.
Further, such counsel may state that their opinion is based as to matters
of law solely upon (i) the federal securities laws, (ii) the General
Corporation Law, as amended, of each of the States of Delaware and
Virginia, (iii) the limited partnership acts of Virginia and Maryland,
(iv) the limited liability company act of Maryland, (v) Hospitals and
Related Institutions, Md. Health-Gen. Code Ann. Section Section 19-301 to
19-374, (vi) Domiciliary Care Homes, Md. Regs. Code Section Section
10.07.03.01 to 10.07.03.27, (vii) Licensing of Homes for Aged, Infirm or
Disabled Adults, Va. Code Ann. Section Section 63.1-172 to 182.1, and
(viii) Standards and Regulations for Licensed Adult Care Residences, 22
Va. Admin. Code Section Section 40-70-10 to 40-745-110; and that such
counsel expresses no opinion as to any other laws, statutes, ordinances,
rules or regulations.
The opinion of Hogan & Hartson L.L.P. described in this paragraph
(e) shall be rendered to you at the request of the Company and shall so
state therein.
- 29 -
<PAGE> 50
(f) You shall have received on the Closing Date an opinion
(reasonably satisfactory to you and counsel for the Underwriters), dated
the Closing Date, from each of (i) the Vice President and Associate
General Counsel of Allstate Insurance Company, as counsel to each of
Allstate Insurance Company, Allstate Life Insurance Company, Allstate
Retirement Plan and Agents Pension Plan, (ii) Hopkins & Sutter, counsel
to Frontenac VI Limited Partnership, (iii) the Office of the General
Counsel of Donaldson, Lufkin & Jenrette, Inc., as counsel to each of DLJ
Capital Corporation and Sprout Growth II, L.P. and (iv) Watt, Tieder &
Hoffar, counsel to each of the Additional Selling Stockholders, to the
effect that:
(i) Each Selling Stockholder and each Additional Selling
Stockholder has full right, power and authority to enter into and
to perform his, her or its obligations under this Agreement and to
sell, transfer, assign and deliver the Shares to be sold by such
Selling Stockholder or Additional Selling Stockholder hereunder.
(ii) This Agreement has been duly executed and delivered by
or on behalf of each Selling Stockholder and each Additional
Selling Stockholder.
(iii) The execution, delivery and performance of this
Agreement by each Selling Stockholder and each Additional Selling
Stockholder, compliance by each Selling Stockholder and each
Additional Selling Stockholder with all the provisions hereof and
the consummation of the transactions of each Selling Stockholder
and each Additional Selling Stockholder contemplated hereby do not
(a) require any consent, approval, authorization, order or other
action of any court, regulatory body, administrative agency or
other governmental agency or body (except as may be required under
state securities or Blue Sky laws, as to which such counsel need
express no opinion), (b) constitute a breach of, or a default
under, any agreement, promissory note, mortgage or other
instrument to which such Selling Stockholder or Additional Selling
Stockholder is a party or by which such Selling Stockholder or
Additional Selling Stockholder is bound and of which such counsel
has knowledge, or (c) violate or conflict with any applicable law,
rule or regulation (except state securities or Blue Sky laws, as to
which such counsel need express no opinion) or any order, writ or
decree of any court or governmental agency or body having
jurisdiction over such Selling Stockholder or Additional Selling
Stockholder.
(iv) Each Selling Stockholder has full right, power and
authority to enter into and perform his, her or its obligations
under the Custody Agreement and the Power of Attorney to be
executed and delivered by such Selling Stockholder in connection
with the transactions contemplated
- 30 -
<PAGE> 51
by this Agreement; each of such Custody Agreement and such Power of
Attorney has been duly executed and delivered by such Selling
Stockholder; and each of such Custody Agreement and such Power of
Attorney constitutes a valid and binding agreement of such Selling
Stockholder, enforceable in accordance with its terms, except as
enforcement thereof may be limited by bankruptcy, insolvency or
other similar laws affecting the enforcement of creditors' rights
generally or by general equitable principles.
The opinions of counsel to the Selling Stockholders described in
this paragraph (f) shall be rendered to you at the request of the Selling
Stockholders and Additional Selling Stockholders (and shall so state
therein) and shall be limited to matters of federal law and the laws of
the respective states of residence of each Selling Stockholder and
Additional Selling Stockholder (other than the securities or Blue Sky
laws of such states, as to which such counsel need express no opinion).
(g) You shall have received on the Closing Date an opinion, dated
the Closing Date, of Alston & Bird, counsel for the Underwriters, in form
and substance reasonably satisfactory to you, with respect to the
sufficiency of all such corporate proceedings and other legal matters
relating to this Agreement and the transactions contemplated hereby as
you may reasonably require, and the Company shall have furnished to such
counsel such documents as they may have requested for the purpose of
enabling them to pass upon such matters.
(h) You shall have received a letter on and as of the Closing Date,
in form and substance satisfactory to you, from Ernst & Young LLP,
independent public accountants, with respect to the financial statements
and certain financial information contained in the Registration Statement
and the Prospectus and substantially in the form and substance of the
letter delivered to you by Ernst & Young LLP on the date of this
Agreement. You shall have also received a letter on and as of the Closing
Date, in form and substance satisfactory to you, from KPMG Peat Marwick
LLP, independent public accountants, with respect to their review of the
unaudited financial statements of the Laing Retirement Properties as of
and for the six-month period ended June 30, 1996 contained in the
Registration Statement and the Prospectus and substantially in the form
and substance of the letter delivered to you by KPMG Peat Marwick LLP on
the date of this Agreement.
(i) The Company, the Selling Stockholders and the Additional Selling
Stockholders shall not have failed at or prior to the Closing Date to
perform or comply with any of the agreements herein contained and
required to be performed
- 31 -
<PAGE> 52
or complied with by the Company, the Selling Stockholders or the
Additional Selling Stockholders at or prior to the Closing Date.
(j) The Company, the Selling Stockholders and the Additional Selling
Stockholders shall have furnished to you such further certificates and
documents as you or your counsel shall reasonably request, including,
without limitation, certificates of officers of the Company and
certificates of the Selling Stockholders and the Additional Selling
Stockholders as to the accuracy of the respective representations and
warranties of the Company, the Selling Stockholders and the Additional
Selling Stockholders herein, as to the performance by the Company, the
Selling Stockholders and the Additional Selling Stockholders of their
respective obligations hereunder and as to the other conditions
concurrent and precedent to the obligations of the Underwriters
hereunder.
All such opinions, certificates, letters and documents will be in
compliance with the provisions hereof only if they are reasonably satisfactory
to counsel to the Underwriters. The Company, the Selling Stockholders and the
Additional Selling Stockholders will furnish you with such number of conformed
copies of such opinions, certificates, letters and documents as you shall
reasonably request.
The several obligations of the Underwriters to purchase any Additional
Shares hereunder are subject to the delivery to you on the applicable Option
Closing Date of such documents as you may reasonably request with respect to
the good standing of the Company, title to the Additional Shares, the
Registration Statement and Prospectus and other matters related to the Company
or the purchase of such Additional Shares, including, without limitation, (i)
an opinion dated the Option Closing Date of Watt, Tieder & Hoffar, counsel for
the Additional Selling Stockholders, with respect to the matters set forth in
paragraph 9(f) above and to the effect that, upon the delivery of and payment
for the Additional Shares to be sold by the Additional Selling Stockholders as
contemplated in this Agreement, each of the Underwriters (assuming they are
bona fide purchasers within the meaning of the Uniform Commercial Code) will
have acquired title to such Additional Shares purchased by it, free and clear
of any adverse claims, (ii) an opinion dated the Option Closing Date of Hogan &
Hartson L.L.P., counsel for the Company, with respect to the matters set forth
in paragraph 9(e) above (other than opinions relating solely to the Firm
Shares), (iii) an opinion dated the Option Closing Date of Alston & Bird,
counsel for the Underwriters, with respect to the sufficiency of all such
corporate proceedings and other legal matters relating to this Agreement and the
transactions contemplated hereby as you may reasonably require, (iv) a letter
dated the Option Closing Date from Ernst & Young LLP with respect to the matters
set forth in the first sentence of paragraph 9(h) above and a letter dated the
Option Closing Date from KPMG Peat Marwick LLP with respect to the matters set
forth in the second sentence of paragraph 9(h) above, and (v) certificates dated
the Option Closing Date as to the matters referred to in paragraph 9(j) above.
- 32 -
<PAGE> 53
10. Effective Date of Agreement and Termination. This Agreement shall
become effective upon the later of (i) execution of this Agreement and (ii) the
effectiveness of the Registration Statement.
This Agreement may be terminated at any time prior to the Closing Date
by you by written notice to the Sellers if any of the following has occurred:
(i) since the respective dates as of which information is given in the
Registration Statement and the Prospectus, any material adverse change or
development involving a prospective material adverse change in the condition
(financial or other) of the Company and the Subsidiaries, taken as a whole, or
the business, prospects, properties, net worth or results of operations of the
Company and the Subsidiaries, taken as a whole, whether or not arising in the
ordinary course of business, which would, in your judgment, make it
impracticable to market the Shares on the terms and in the manner contemplated
in the Prospectus, (ii) any outbreak or escalation of hostilities or other
national or international calamity or crisis or change in economic conditions
or in the financial markets of the United States or elsewhere that, in your
judgment, is material and adverse and would, in your judgment, make it
impracticable to market the Shares on the terms and in the manner contemplated
in the Prospectus, (iii) the suspension or material limitation of trading in
securities on the New York Stock Exchange, the American Stock Exchange or the
Nasdaq National Market or limitation on prices for securities on any such
exchange or Nasdaq National Market, (iv) the enactment, publication, decree or
other promulgation of any federal or state statute, regulation, rule or order
of any court or other governmental authority which in your opinion materially
and adversely affects, or will materially and adversely affect, the business or
operations of the Company and the Subsidiaries, taken as a whole, (v) the
declaration of a banking moratorium by either federal or New York State
authorities or (vi) the taking of any action by any federal, state or local
government or agency in respect of its monetary or fiscal affairs which in your
opinion has a material adverse effect on the financial markets in the United
States.
If on the Closing Date or on an Option Closing Date, as the case may
be, any one or more of the Underwriters shall fail or refuse to purchase the
Firm Shares or Additional Shares, as the case may be, which it or they have
agreed to purchase hereunder on such date and the aggregate number of Firm
Shares or Additional Shares, as the case may be, which such defaulting
Underwriter or Underwriters, as the case may be, agreed but failed or refused
to purchase is not more than one-tenth of the total number of Shares to be
purchased on such date by all Underwriters, each non-defaulting Underwriter
shall be obligated severally, in the proportion which the number of Firm Shares
set forth opposite its name in Schedule I bears to the total number of Firm
Shares which all the non-defaulting Underwriters, as the case may be, have
agreed to purchase, or in such other proportion as you may specify, to purchase
the Firm Shares or Additional Shares, as the case may be, which such defaulting
Underwriter or Underwriters, as the case may be, agreed but failed or refused
to purchase on such date; provided that in no event shall the number of Firm
Shares or Additional Shares, as the case may be, which any Underwriter has
agreed to purchase pursuant to Section 2 hereof be increased pursuant to this
Section
- 33 -
<PAGE> 54
10 by an amount in excess of one-ninth of such number of Firm Shares or
Additional Shares, as the case may be, without the written consent of such
Underwriter. If on the Closing Date or on an Option Closing Date, as the case
may be, any Underwriter or Underwriters shall fail or refuse to purchase Firm
Shares, or Additional Shares, as the case may be, and the aggregate number of
Firm Shares or Additional Shares, as the case may be, with respect to which such
default occurs is more than one-tenth of the aggregate number of Shares to be
purchased on such date by all Underwriters and arrangements satisfactory to you
and the applicable Sellers for purchase of such Shares are not made within 48
hours after such default, this Agreement will terminate without liability on the
part of any non-defaulting Underwriter and the applicable Sellers. In any such
case which does not result in termination of this Agreement, either you or the
Sellers shall have the right to postpone the Closing Date or the applicable
Option Closing Date, as the case may be, but in no event for longer than seven
days, in order that the required changes, if any, in the Registration Statement
and the Prospectus or any other documents or arrangements may be effected. Any
action taken under this paragraph shall not relieve any defaulting Underwriter
from liability in respect of any default of any such Underwriter under this
Agreement.
11. Agreements of the Selling Stockholders and Additional Selling
Stockholders. Each Selling Stockholder and Additional Selling Stockholder
severally agrees with you and the Company:
(a) To pay or to cause to be paid all transfer taxes with
respect to the Shares to be sold by such Selling Stockholder or
Additional Selling Stockholder; and
(b) To take all reasonable actions in cooperation with the
Company and the Underwriters to cause the Registration Statement
to become effective at the earliest possible time, to do and
perform all things to be done and performed by such Selling
Stockholder or Additional Selling Stockholder under this Agreement
prior to the Closing Date or the Option Closing Date, as the case
may be, and to satisfy all conditions precedent to the delivery by
such Selling Stockholder or Additional Selling Stockholder of the
Shares to be sold by such Selling Stockholder or Additional Selling
Stockholder pursuant to this Agreement.
12. Miscellaneous. Notices given pursuant to any provision of this
Agreement shall be addressed as follows: (a) if to the Company, to Paul J.
Klaassen, Chief Executive Officer, Sunrise Assisted Living, Inc., 9401 Lee
Highway, Suite 300, Fairfax, Virginia 22031, (b) if to any Selling Stockholder
or Additional Selling Stockholder, to such Selling Stockholder or Additional
Selling Stockholder c/o Sunrise Assisted Living, Inc., 9401 Lee Highway, Suite
300, Fairfax, Virginia 22031 and (c) if to any Underwriter or to you, to you
c/o Donaldson, Lufkin & Jenrette Securities Corporation, 277 Park Avenue, New
- 34 -
<PAGE> 55
York, New York 10172, Attention: Syndicate Department, or in any case to such
other address as the person to be notified may have requested in writing.
The respective indemnities, contribution agreements, representations,
warranties and other statements of the Selling Stockholders, the Additional
Selling Stockholders, the Company, its officers and directors and of the
several Underwriters set forth in or made pursuant to this Agreement shall
remain operative and in full force and effect, and will survive delivery of and
payment for the Shares, regardless of (i) any investigation, or statement as to
the results thereof, made by or on behalf of any Underwriter or by or on behalf
of the Sellers, the officers or directors of the Company or any controlling
person of the Sellers, (ii) acceptance of the Shares and payment for them
hereunder and (iii) termination of this Agreement.
If this Agreement shall be terminated by the Underwriters because of any
failure or refusal on the part of the Company or the Selling Stockholders or
Additional Selling Stockholder to comply with the terms or to fulfill any of
the conditions of this Agreement, the Company, the Selling Stockholders or the
Additional Selling Stockholders, as the case may be, agree to reimburse the
several Underwriters for all out-of-pocket expenses (including the reasonable
fees and disbursements of counsel) reasonably incurred by them.
Except as otherwise provided, this Agreement has been and is made solely
for the benefit of and shall be binding upon the Sellers, the Underwriters, any
controlling persons referred to herein and their respective successors and
assigns, all as and to the extent provided in this Agreement, and no other
person shall acquire or have any right under or by virtue of this Agreement.
The term "successors and assigns" shall not include a purchaser of any of the
Shares from any of the several Underwriters merely because of such purchase.
This Agreement shall be governed and construed in accordance with the laws
of the State of New York.
This Agreement may be signed in various counterparts which together shall
constitute one and the same instrument.
- 35 -
<PAGE> 56
Please confirm that the foregoing correctly sets forth the agreement by
and among the Company, the Selling Stockholders, the Additional Selling
Stockholders and the several Underwriters.
Very truly yours,
SUNRISE ASSISTED LIVING, INC.
By: /s/ Paul J. Klaassen
-----------------------------------------
Paul J. Klaassen, President and CEO
THE SELLING STOCKHOLDERS
NAMED IN SCHEDULE II HERETO
By: /s/ Paul J. Klaassen
-----------------------------------------
Paul J. Klaassen, Attorney-in-Fact
/s/ David W. Faeder
--------------------------------------------
DAVID W. FAEDER
/s/ Timothy S. Smick
--------------------------------------------
TIMOTHY S. SMICK
/s/ Thomas B. Newell
--------------------------------------------
THOMAS B. NEWELL
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
ALEX. BROWN & SONS INCORPORATED
NATWEST SECURITIES LIMITED
J.C. BRADFORD & CO.
Acting severally on behalf of themselves and the
several Underwriters named in Schedule I hereto
By: DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
By: /s/
------------------------------------------
Authorized Signatory
- 36 -
<PAGE> 57
SCHEDULE I
<TABLE>
<CAPTION>
Number of Firm Shares
Underwriters to be Purchased
------------ ---------------------
<S> <C> <C>
Donaldson, Lufkin & Jenrette 1,250,000,
Securities Corporation
Alex. Brown & Sons Incorporated 1,250,000
NatWest Securities Limited 1,250,000
J.C. Bradford & Co. 1,250,000
---------
Total 5,000,000
</TABLE>
<PAGE> 58
SCHEDULE II
Selling Stockholders
<TABLE>
<CAPTION>
Number of Firm
Name Shares Being Sold
---- -----------------
<S> <C> <C>
Allstate Insurance Company 140,000
Allstate Life Insurance Company 87,500
CTC Illinois Trust Company, as trustee for 12,500
the benefit of Allstate Retirement Plan
CTC Illinois Trust Company, as trustee for 10,000
the benefit of Agents Pension Plan
Frontenac VI Limited Partnership 375,000
DLJ Capital Corporation 33,838
Sprout Growth II, L.P. 341,162
--------
Total 1,000,000
</TABLE>
<PAGE> 59
SCHEDULE III
Additional Selling Stockholders
<TABLE>
<CAPTION>
Number of Additional
Name Shares Being Sold*
----- -----------------
<S> <C> <C>
David W. Faeder 150,000
Timothy S. Smick 33,333
Thomas B. Newell 20,000
-------
Total 203,333
</TABLE>
_______________
* Represents shares subject to presently exercisable stock options that
will be exercised immediately prior to the Option Closing, if the
Underwriters' over-allotment option is exercised.
<PAGE> 60
EXHIBIT 7
October 21, 1996
Donaldson, Lufkin & Jenrette Securities Corporation
Alex Brown & Sons Incorporated
Natwest Securities Limited
J.C. Bradford & Co.
c/o Donaldson, Lufkin & Jenrette Securities Corporation
277 Park Avenue
New York, New York 10172
RE: SUNRISE ASSISTED LIVING, INC.
PROPOSED PUBLIC OFFERING OF COMMON STOCK
Dear Sirs:
The undersigned understands that Donaldson, Lufkin & Jenrette Securities
Corporation, Alex Brown & Sons Incorporated, Natwest Securities Limited and
J.C. Bradford & Co., as Representatives (the "Representatives") of the several
underwriters (the "Underwriters"), propose to enter into an Underwriting
Agreement with Sunrise Assisted Living, Inc. (the "Company"), providing for the
public offering by the Underwriters, including the Representatives, of common
stock, par value $0.01 per share ("the Common Stock") of the Company (the
"Public Offering").
In consideration of the Underwriters' agreement to purchase, and undertake
the Public Offering of, the Company's Common Stock and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the undersigned agrees not to, directly or indirectly, offer,
sell, contract to sell, grant any option to purchase or otherwise dispose of
any Common Stock (including, without limitation, shares of Common Stock which
may be deemed to be beneficially owned by the undersigned in accordance with
the rules and regulations of the Securities and Exchange Commission and shares
of Common Stock which may be issued upon exercise of a stock option or warrant)
or any securities convertible into or exercisable or exchangeable for such
Common Stock or, in any manner, transfer all or a portion of the economic
consequences associated with the ownership of the Common Stock, for a period of
90 days after the effective date of the Company's Registration Statement on
Form S-1 relating to the Public Offering (the "Registration Statement"), other
than (i) sales to the Underwriters pursuant to the Underwriting Agreement, (ii)
as a gift or gifts, provided the donee or donees thereof agree in writing to be
bound by this letter agreement, (iii) transfers to a transferor's affiliates,
as such term is defined in Rule 405 promulgated under the Securities Act of
1933, provided the transferee agrees in writing to be bound by this letter
agreement, or (iv) with the prior written consent of Donaldson, Lufkin &
Jenrette Securities Corporation. The undersigned further agrees that for a
period of 90 days after the effective date of the
<PAGE> 61
Registration Statement, the undersigned will not exercise any rights that the
undersigned may have to cause the Company to register (under the Securities Act
of 1933 or otherwise) any shares of Common Stock or any securities convertible
into or exercisable or exchangeable for shares of Common Stock, without the
prior written consent of Donaldson, Lufkin & Jenrette Securities Corporation.
In addition, the undersigned agrees that the Company may, with respect to
any shares of Common Stock for which the undersigned is the record holder,
cause the transfer agent for the Company to note stop transfer instructions
with respect to such shares of Common Stock on the transfer books and records
of the Company. The undersigned further agrees that the undersigned will, if
requested by the Company, with respect to any shares of Common Stock for which
the undersigned is the beneficial holder but not the record holder, cause the
record holder of such shares of Common Stock to cause the transfer agent for
the Company to note stop transfer instructions with respect to such shares of
Common Stock on the transfer books and records of the Company.
The undersigned hereby represents and warrants that the undersigned has
full power and authority to enter into this letter agreement. All authority
herein conferred or agreed to be conferred shall survive the death or
incapacity of the undersigned and any obligations of the undersigned shall be
binding upon the heirs, personal representatives, successors, and assigns of
the undersigned.
Very truly yours
SPROUT GROWTH II, LP
By: DLJ Capital Corporation
its managing general partner
/S/ 10/21/96
--------------------------------
By:
Title:
277 Park Avenue
New York, NY 10172
- -------------------------------------------------
(Address)
287 46 7829
- -------------------------------------------------
(Social Security or Taxpayer Identification No.)
- 2 -
<PAGE> 62
EXHIBIT 8
October 21, 1996
Donaldson, Lufkin & Jenrette Securities Corporation
Alex. Brown & Sons Incorporated
Natwest Securities Limited
J.C. Bradford & Co.
c/o Donaldson, Lufkin & Jenrette Securities Corporation
277 Park Avenue
New York, New York 10172
RE: SUNRISE ASSISTED LIVING, INC.
PROPOSED PUBLIC OFFERING OF COMMON STOCK
Dear Sirs:
The undersigned understands that Donaldson, Lufkin & Jenrette
Securities Corporation, Alex. Brown & Sons Incorporated, Natwest Securities
Limited and J.C. Bradford & Co., as Representatives (the "Representatives") of
the several underwriters (the "Underwriters"), propose to enter into an
Underwriting Agreement with Sunrise Assisted Living, Inc. (the "Company"),
providing for the public offering by the Underwriters, including the
Representatives, of common stock, par value $0.01 per share ("the Common
Stock") of the Company (the "Public Offering").
In consideration of the Underwriters' agreement to purchase, and
undertake the Public Offering of, the Company's Common Stock and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the undersigned agrees not to, directly or indirectly, offer,
sell, contract to sell, grant any option to purchase or otherwise dispose of
any Common Stock (including, without limitation, shares of Common Stock which
may be deemed to be beneficially owned by the undersigned in accordance with
the rules and regulations of the Securities and Exchange Commission and shares
of Common Stock which may be issued upon exercise of a stock option or warrant)
or any securities convertible into or exercisable or exchangeable for such
Common Stock or, in any manner, transfer all or a portion of the economic
consequences associated with the ownership of the Common Stock, for a period of
90 days after the effective date of the Company's Registration Statement on
Form S-1 relating to the Public Offering (the "Registration Statement"), other
than (i) sales to the Underwriters pursuant to the Underwriting Agreement, (ii)
as a gift or gifts, provided the donee or donees thereof agree in writing to be
bound by this letter agreement, (iii) transfers to a transferor's affiliates,
as such term is defined in Rule 405 promulgated under the Securities Act of
1933, provided the transferee agrees in writing to be bound by this letter
agreement, or (iv) with the prior written consent of Donaldson, Lufkin &
Jenrette Securities Corporation. The undersigned further agrees that for a
period of 90 days after the effective date of the
<PAGE> 63
Registration Statement, the undersigned will not exercise any rights that the
undersigned may have to cause the Company to register (under the Securities Act
of 1933 or otherwise) any shares of Common Stock or any securities convertible
into or exercisable or exchangeable for shares of Common Stock, without the
prior written consent of Donaldson, Lufkin & Jenrette Securities Corporation.
In addition, the undersigned agrees that the Company may, with respect
to any shares of Common Stock for which the undersigned is the record holder,
cause the transfer agent for the Company to note stop transfer instructions
with respect to such shares of Common Stock on the transfer books and records
of the Company. The undersigned further agrees that the undersigned will, if
requested by the Company, with respect to any shares of Common Stock for which
the undersigned is the beneficial holder but not the record holder, cause the
record holder of such shares of Common Stock to cause the transfer agent for
the Company to note stop transfer instructions with respect to such shares of
Common Stock on the transfer books and records of the Company.
The undersigned hereby represents and warrants that the undersigned
has full power and authority to enter into this letter agreement. All
authority herein conferred or agreed to be conferred shall survive the death or
incapacity of the undersigned and any obligations of the undersigned shall be
binding upon the heirs, personal representatives, successors, and assigns of
the undersigned.
Very truly yours,
DLJ CAPITAL CORPORATION
/s/ 10/21/96
-------------------------
By:
Title
277 Park Avenue
New York, NY 10172
- ----------------------------
(Address)
###-##-####
- ----------------------------
(Social Security or Taxpayer
Identification No.)
- 2 -
