Exhibit 10.2
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FORM OF OPTION AGREEMENT
STOCK OPTION AGREEMENT
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This STOCK OPTION AGREEMENT (this "Agreement"), is entered into this th
day of , 2006 (the "Date of Grant") between Brookdale Senior Living Inc., a
Delaware corporation (the "Company") and RIC Co-Investment Fund LP, a Delaware
limited partnership (the "Investor").
This Agreement is a one-time stock option (an "Option") to repurchase
shares of the Company's common stock. This Option is granted for the purpose of
permitting the Company to repurchase a portion of the shares of the Company's
common stock, par value $0.01 per share (the "Common Stock") issued to the
Investor pursuant to an Investment Agreement, dated May 12, 2006, between the
Company and the Investor.
Terms and Conditions of the Option
1. Number of Shares and Option Price. The Option entitles the Company
to purchase from the Investor an aggregate of shares (the "Option Shares") of
the Company's Common Stock, at an exercise price of $38.07 per share (the
"Option Price") subject to adjustment as set forth herein.
2. Period of Option. This Option may be exercised as provided herein
at any time from and after the Date of Grant until 5:00 p.m., New York City
time, on the date that is six months and one day after the Date of Grant or if
such date is not a business day on the next succeeding business day (the
"Expiration Date"). Upon the occurrence of the Expiration Date, all rights of
the Company hereunder, with respect to the Option, shall cease.
3. Conditions of Exercise. Subject to the provisions of this
Agreement, the Option shall be fully vested and immediately exercisable in
accordance with Section 4 below.
4. Exercise of Option. The Option may be exercised one-time, as
provided herein, in whole or in part, at any time until the Expiration Date in
the manner described in this Section 4. In the case of exercise, the Company
shall deliver to the Investor written notice specifying the number of Option
Shares to be acquired pursuant to such exercise, together with cash in an amount
equal to the aggregate Option Price. The Company shall also deliver to the
Investor a certificate from a duly authorized officer of the Company to the
effect that the covenants, representations and warrants set forth in Section
6(b) hereof are true and correct in all material respects with the same force
and effect as though expressly made at the time of this Agreement. Upon the
Investor's receipt of the Company's written notice of exercise and the cash, the
Investor shall promptly deliver to the Company the number of Option Shares set
forth in such notice.
5. Nontransferability of Option. Except as permitted by the Investor
in writing or a corporate successor of the Investor by merger, consolidation or
otherwise, the Company shall not be permitted to sell, transfer, pledge or
assign the Option. The Option shall be exercisable only by the Company or any
subsequent party or parties having the right to exercise the Option pursuant to
the foregoing sentence. Any attempted assignment, transfer, pledge or other
disposition of the Option contrary to the provisions hereof shall be null and
void and without effect.
6. Covenants, Representations and Warranties.
(a) Covenants, Representations and Warranties of Investor. The
Investor hereby covenants, represents and warrants to the Company as follows:
(i) The Investor has full power and authority to execute,
deliver and perform its obligations under this Agreement and this Agreement is a
valid and binding obligation of the Investor, enforceable in accordance with its
terms.
(ii) The execution, delivery and performance by the Investor of
this Agreement requires no action by or in respect of, or filing with, any
governmental body, agency or official and do not and will not (i) violate the
certificate of incorporation or bylaws of the Investor, (ii) violate any law,
rule, regulation, judgment, injunction, order or decree applicable to the
Investor or (iii) require any consent or other action by any person, constitute
a default, or give rise to termination, cancellation or acceleration of any
right or obligation of the Investor under any provision of any agreement or
other instrument binding upon the Investor.
(iii) The Investor has or will have available for delivery upon
exercise or exchange of this Option the total number of shares of Common Stock
issuable upon exercise of this Option. All shares of Common Stock deliverable
upon exercise will be delivered free and clear of all liens and encumbrances.
(b) Covenants, Representations and Warranties of the Company. The
Company hereby covenants, represents and warrants to the Investor as follows:
(i) The Company has full power and authority to execute, deliver and perform its
obligations under this Agreement and this Agreement is a valid and binding
obligation of the Company, enforceable in accordance with its terms. (ii) The
execution, delivery and performance by the Company of this Agreement requires no
action by or in respect of, or filing with, any governmental body, agency or
official and do not and will not (i) violate the certificate of incorporation or
bylaws of the Company, (ii) violate any law, rule, regulation, judgment,
injunction, order or decree applicable to the Company or (iii) require any
consent or other action by any person, constitute a default, or give rise to
termination, cancellation or acceleration of any right or obligation of the
Company under any provision of any agreement or other instrument binding upon
the Company.
7. Notices. Any notice required or permitted under this Agreement
shall be deemed given when delivered personally, or when deposited in a United
States Post Office, postage prepaid, addressed, as appropriate, to the Investor
either at its address set forth below or such other address as it may designate
in writing to the Company, or to the Company: 330 North Wabash Avenue, Suite
1400, Chicago, Illinois 60611, Attention: Mark J. Schulte, Chief Executive
Officer (or his designee), at the Company's address or such other address as the
Company may designate in writing to the Investor.
8. Failure to Enforce Not a Waiver. The failure of the Company or
the Investor to enforce at any time any provision of this Agreement shall in no
way be construed to be a waiver of such provision or of any other provision
hereof.
9. Governing Law. This Agreement shall be governed by and construed
according to the laws of the State of New York without regard to its principles
of conflict of laws.
10. Adjustments.
(a) In the event of any change in the share of Common Stock by
reason of stock dividends, splits, mergers, recapitalizations, combinations,
subdivisions, conversions, exchanges of shares or other similar transactions,
then that which is then transferable upon exercise of the Option shall be
appropriately adjusted so that the Company shall receive, upon exercise of the
Option and payment of the Option Price, the number and class of shares of Common
Stock or other securities or property (including cash) that the Company would
have owned or been entitled to receive after the happening of any of the events
described above if the Option had been exercised immediately prior to such
event.
(b) Whenever the number of Option Shares are adjusted pursuant to
Section 10(a) herein, the Option Price shall be appropriately adjusted, if
applicable, by multiplying the Option Price by a fraction, the numerator of
which shall be equal to the aggregate number of Option Shares transferred under
the Option prior to the adjustment and the denominator of which shall be equal
to the aggregate number of Option Shares transferred under the Option
immediately after the adjustment.
11. Amendments. This Agreement may be amended or modified at any time
by an instrument in writing signed by the parties hereto.
12. Securities Laws Requirements. The Option shall not be exercisable
to any extent, and the Investor shall not be obligated to transfer any Option
Shares to the Company upon exercise of such Option, if such exercise, in the
opinion of counsel for the Investor, would violate the Securities Act (or any
other Federal or state securities laws as may be in effect at that time).
13. Protections Against Violations of Agreement. No purported sale,
assignment, mortgage, hypothecation, transfer, pledge, encumbrance, gift,
transfer in trust (voting or other) or other disposition of, or creation of a
security interest in or lien on, any of the Option or any interest therein by
any holder thereof in violation of the provisions of this Agreement will be
valid unless and until there has been full compliance with said provisions to
the satisfaction of the Investor. The foregoing restrictions are in addition to
and not in lieu of any other remedies, legal or equitable, available to enforce
said provisions.
Signatures on Following Page
IN WITNESS WHEREOF, the parties have executed this Agreement on this
day of , 2006.
RIC COINVESTMENT FUND LP
By: RIC Coinvestment GP LLC, its general partner
By:_________________________________
Name:
Title:
Address for Notices:
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1345 Avenue of the Americas, 46th Floor
New York, NY 10105
Facsimile: (212) 798-6120
Attention: Randal A. Nardone
With a Copy to:
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1345 Avenue of the Americas, 46th Floor
New York, NY 10105
Facsimile: (212) 798-6060
Attention: Alan Chesick, Esq.
The undersigned hereby accepts and agrees
to all the terms and provisions of the
foregoing Agreement
BROOKDALE SENIOR LIVING INC.
____________________________________
Name:
Title: