EXHIBIT 1.1
ASSISTED LIVING CONCEPTS, INC.
[__________ SHARES OF __________ STOCK*]
[$_____ AGGREGATE PRINCIPAL AMOUNT OF
___% __________ DUE _______ *]
UNDERWRITING AGREEMENT
----------------------
_______________, ____
________________________
________________________
________________________
________________________
________________________
Dear Sirs:
Assisted Living Concepts, Inc., a Nevada corporation (the "Company"),
proposes to issue and sell to the several Underwriters named in Schedule 1
hereto (the "Underwriters"), for whom you have been duly authorized to act as
representative[s] (in such capacit[y] [ies], the "Representative[s]"), [an
aggregate of _______ shares of the Company's _________ Stock, par value $_____
per share (the "_____ Stock")] [$_______ aggregate principal amount of ___%
__________ Due _______ (the "Debentures/Notes")] (the "Firm Securities"). The
Company has also agreed to issue and sell pursuant to an option, subject to the
terms and conditions hereof, up to [_____ additional shares of _____ Stock]
[$_____ aggregate principal amount of Debenture/Notes]. Any and all [shares of
_____ Stock] [Debentures/Notes] to be issued and sold pursuant to such option
are referred to herein as the "Option Securities," and the Firm Securities and
any Option Securities are collectively referred to herein as the "Securities."
[The Securities are to be issued pursuant to an indenture dated __________, ____
(the "Indenture") between the Company and Xxxxxx Trust and Savings Bank, as
Trustee (the "Trustee").] [The Securities will be convertible at the option of
the holder thereof at any time prior to the close of business on any date fixed
for redemption, unless earlier redeemed, into shares of the Company's Common
Stock, par value $0.01 per share (the "Common Stock").] The Company hereby
confirms its agreement with the several Underwriters, as set forth below. If you
are the only Underwriter[s], all references herein to the Representative[s]
shall be deemed to be the Underwriters.
1. Agreements to Sell and Purchase.
(a) The Company agrees to issue and sell to each of the Underwriters,
and each of the Underwriters, severally and not jointly, agrees to purchase from
the Company, upon the basis of the representations, warranties, agreements and
covenants herein contained and subject to the terms and conditions herein set
forth, and at a
_____________________________
/*/ Plus an option to purchase from the Company up to [____ shares] [$_____
aggregate principal amount of __% Due ____] to cover over-allotments.
purchase price [of $___ per share,] [equal to ___% of the principal amount
thereof, together with accrued interest, if any, from __________, ____ to the
Firm Closing Date (as hereinafter defined),] the [number] [aggregate principal
amount] of Firm Securities set forth opposite the name of such Underwriter in
Schedule1 hereto. The Company shall deliver, or cause to be delivered, to the
Representative[s] for the respective accounts of the Underwriters, one or more
certificates in definitive form for the Firm Securities that the several
Underwriters have agreed to purchase hereunder, and in such denomination or
denominations and registered in such name or names as the Representative[s]
request upon notice to the Company at least 48 hours prior to the Firm Closing
Date (as hereinafter defined), against payment by or on behalf of the
Underwriters of the purchase price therefor by certified or official bank check
or checks drawn upon or by a New York Clearing House bank and payable in next-
day funds to the order of the Company. Such delivery of and payment for the Firm
Securities shall be made at the offices of Xxxxxx & Xxxxxxx, 000 Xxxx Xxxxx
Xxxxxx, Xxxxx 0000, Xxx Xxxxxxx, Xxxxxxxxxx 00000 at 6:30 A.M., Los Angeles
time, on ___________, ____, or at such other place, time or date as the
Representative[s] and the Company may agree upon or as the Representative[s] may
determine pursuant to Section9 hereof, such time and date of delivery against
payment being herein referred to as the "Firm Closing Date." The Company will
make such certificate or certificates for the Firm Securities available for
checking and packaging by the Representative[s] at the offices in New York, New
York of the Company's transfer agent or registrar at least 24 hours prior to the
Firm Closing Date.
(b) Solely for the purpose of covering any over-allotments in
connection with the distribution and sale of the Firm Securities as contemplated
by the Prospectus (as hereinafter defined), the Company hereby grants to the
several Underwriters an option to purchase, severally and not jointly, the
Option Securities. The purchase price to be paid for any Option Securities shall
be the same [price per share as the price per share for the Firm Securities sold
by the Company] [percentage of the principal amount thereof as] set forth above
in paragraph (a) of this Section1. The option granted hereby may be exercised
as to all or any part of the Option Securities from time to time within thirty
days after the date of the Prospectus. The Underwriters shall not be under any
obligation to purchase any of the Option Securities prior to any exercise of
such option. The Representative[s] may from time to time exercise the option
granted hereby by giving notice in writing or by telephone (confirmed in
writing) to the Company setting forth the aggregate amount of Option Securities
as to which the several Underwriters are then exercising the option and the date
and time for delivery of and payment for such Option Securities. Any such date
of delivery shall be determined by the Representative[s] but shall not be
earlier than two business days or later than seven business days after such
exercise of the option and, in any event, shall not be earlier than the Firm
Closing Date. The time and date set forth in such notice, or such other time on
such other date as the Representative[s] and the Company may agree upon or as
the Representative[s] may determine pursuant to Section 8 hereof, is herein
called the "Option Closing Date" with respect to such Option Securities. Upon
exercise of the option as provided herein, the Company shall become obligated to
sell to each of the several Underwriters, and, subject to the terms and
conditions herein set forth, each of the
2
Underwriters (severally and not jointly) shall become obligated to purchase from
the Company the same percentage of the total [number] [principal amount] of the
Option Securities as to which the several Underwriters are then exercising the
option, as such Underwriter is obligated to purchase of the aggregate [number]
[principal amount] of Firm Securities[.] [, as adjusted by the Representative[s]
in such manner as they deem advisable to avoid fractional Shares]. If the option
is exercised as to all or any portion of the Option Securities, one or more
certificates in definitive form for such Option Securities, and payment
therefor, shall be delivered on the related Option Closing Date in the manner,
and upon the terms and conditions, set forth in paragraph (a) of this Section 1,
except that reference therein to the Firm Securities an the Firm Closing Date
shall be deemed, for purposes of this paragraph (b), to refer to such Option
Securities and Option Closing Date, respectively.
(c) It is understood that [any] [either] [of] you, individually and
not as one of the Representative[s], may (but shall not be obligated to) make
payment on behalf of any Underwriter or Underwriters for any of the Securities
to be purchased by such Underwriter or Underwriters. No such payment shall
relieve such Underwriter or Underwriters from any of its or their obligations
hereunder.
2. Representations and Warranties. The Company represents and warrants
------------------------------
to, and agrees with, each of the several Underwriters that:
(i) The Company has filed with the Securities and Exchange
Commission (the "Commission") a "shelf" registration statement on Form S-3
(File No. 333-_______), which has become effective, relating to shares of
Common Stock, certain debt securities and shares of the Company's Preferred
Stock, $0.01 par value per share. The Company will promptly file with the
Commission a supplement to the form of prospectus included in such
registration statement specifically relating to the Securities pursuant to
Rule 424 under the Securities Act of 1933, as amended (the "Act"). Such
registration statement, as amended at the date hereof, meets the
requirements of Rule 415 under the Act. As used in this Agreement, the term
"Registration Statement" means such registration statement as amended at
the date hereof, including exhibits, financial statements, schedules and
documents incorporated by reference therein. The term "Basic Prospectus"
means the prospectus included in the Registration Statement. The term
"Prospectus" means the Basic Prospectus together with the prospectus
supplement specifically relating to the Securities as filed with the
Commission pursuant to such Rule 424. Any reference herein to the
Registration Statement or the Prospectus shall be deemed to refer to and
include the documents incorporated by reference therein as of the date
hereof or the date of the Prospectus, as the case may be, and any reference
herein to any amendment or supplement to the Registration Statement or the
Prospectus shall be deemed to refer to and include any documents filed
after such date and through the date of such amendment or supplement under
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and
so incorporated by reference. For purposes of the
3
preceding sentence, any reference to the "effective date" of an amendment
to a registration statement shall, if such amendment is effected by means
of the filing with the Commission under the Exchange Act of a document
incorporated by reference in such registration statement, be deemed to
refer to the date on which such document was so filed with the Commission.
(ii) When the Registration Statement or any amendment thereto was
declared effective, as of the date hereof, and at the time any amendment to
the Registration Statement filed after the date hereof becomes effective
(including the filing of any document incorporated by reference in the
Registration Statement), the Registration Statement (i) met, meets and will
meet, as the case may be, the requirements set forth in Rule 415(a)(1)
under the Act and complied, complies and will comply as the case may be, in
all material respects with said Rule, (ii) contained, contains and will
contain, as the case may be, all statements required to be stated therein
in accordance with, and complied, complies and will comply in all material
respects with the requirements of, the Act, the Exchange Act and the
respective rules and regulations of the Commission thereunder and (iii) did
not, does not and will not, as the case may be, include any untrue
statement o f a material fact or omit to state any material fact necessary
to make the statements therein not misleading. As of the date hereof, and
when the Prospectus is filed with the Commission pursuant to Rule 424(b),
on the date when the Prospectus is otherwise supplemented and on the Firm
Closing Date and any Option Closing Date, the Prospectus (as supplemented
as of any such time), (i) contains and will contain, as the case may be,
all statements required to be stated therein in accordance with, and
complies and will comply in all material respects with the requirements of,
the Act, the Exchange Act and the respective rules and regulations of the
Commission thereunder and (ii) does not and will not, as the case may be,
include any untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading. The
foregoing provisions of this paragraph(b) do not apply to statements or
omissions made in the Prospectus or the Registration Statement or any
amendment or supplement thereto in reliance upon and in conformity with
written information furnished to the Company by any Underwriter through the
Representative[s] specifically for use therein.
(iii) The Company is a Nevada corporation in good standing under the
laws of the State of Nevada. Each of the subsidiaries of the Company (the
"Subsidiaries") has been duly organized and is validly existing in good
standing under the laws of its jurisdiction of organization; and each of
the Company and its Subsidiaries is duly qualified to transact business as
a foreign organization and is in good standing under the laws of all other
jurisdictions where the ownership or leasing of its properties or the
conduct of its business requires such qualification, except where the
failure to be so qualified would not result in a material liability or
disability to the Company and its Subsidiaries, taken as a whole.
4
(iv) The Company and each of its Subsidiaries have full power
(corporate and other) to own or lease their respective properties and
conduct their respective businesses as described in the Registration
Statement and the Prospectus; and the Company has full power (corporate and
other) to enter into this Agreement and to carry out all the terms and
provisions hereof to be carried out by it.
(v) The shares of capital stock owned by the Company which have
been issued by the Company's corporate Subsidiaries have been duly
authorized and validly issued, are fully paid and nonassessable and are
owned beneficially by the Company free and clear of any security interests,
liens, encumbrances, equities or claims, except for pledges of such shares
in connection with indebtedness included on the balance sheets of the
Company and its consolidated subsidiaries incorporated by reference into
the Registration Statement and the Prospectus.
(vi) The Company has an authorized capitalization as set forth in
the Prospectus. All of the issued shares of capital stock of the Company
have been duly authorized and validly issued and are fully paid and
nonassessable. [The Firm Securities have been duly authorized and at the
Firm Closing Date, after payment therefor in accordance herewith, will be
validly issued, fully paid and nonassessable.] [The Firm Securities have
been duly authorized and the Common Stock initially issuable upon
conversion of the Firm Securities has been duly authorized and reserved for
issuance, and when the Indenture has been duly executed and delivered by
the Company and the Trustee (assuming the due authorization, execution and
delivery of the Indenture by the Trustee) and the Firm Securities have been
duly executed by the Company, authenticated by the Trustee, and issued and
delivered in accordance with their terms, the Firm Securities will
constitute valid and legally binding obligations of the Company enforceable
against the Company in accordance with their terms, subject, as to
enforcement, to bankruptcy, insolvency, reorganization and other laws of
general applicability relating to or affecting creditors' rights and to
general principles of equity, the Firm Securities will be convertible into
Common Stock in accordance with the terms of the Indenture, and the Common
Stock initially issuable upon such conversion of the Firm Securities, when
issued and delivered in accordance with the provisions of the Indenture,
will be validly issued, fully paid and nonassessable; and the Firm
Securities will conform to the description of the Firm Securities contained
in the Prospectus.) No holders of outstanding shares of capital stock of
the Company are entitled as such to any preemptive or other rights to
subscribe for any of the Securities , and no holders of securities of the
Company are entitled to have such securities registered under the
Registration Statement, except where such rights have been waived.
[(vii) The Indenture has been duly authorized and has been duly
qualified under the Trust Indenture Act of 1939, as amended (the "Trust
Indenture Act"), and when the Indenture has been duly executed and
delivered by the
5
Company and the Trustee (assuming the due authorization, execution and
delivery of the Indenture by the Trustee), the Indenture will constitute a
valid and legally binding instrument of the Company, enforceable against
the Company in accordance with its terms, subject, as to enforcement, to
bankruptcy, insolvency, freorganization and other laws of general
applicability relating to or affecting creditors' rights and to general
principles of equity.]
(viii) The shares of capital stock of the Company conform to the
description thereof incorporated by reference in the Prospectus.
(ix) The consolidated financial statements and schedules of the
Company and its consolidated subsidiaries incorporated by reference into
the Registration Statement and the Prospectus fairly present the financial
condition, results of operations, stockholders' equity and cash flows of
the Company and its consolidated subsidiaries as of the dates and periods
therein specified. Such financial statements and schedules have been
prepared in accordance with generally accepted accounting principles
consistently applied throughout the periods involved (except as otherwise
noted therein). The selected financial data set forth in the Company's
(i) Annual Report on Form 10-K for the fiscal year ended December 31, 1996
and (ii) Quarterly Reports on Form 10-Q for the fiscal quarters ended
March 31, 1997 and June 30, 1997, fairly present, on the basis stated in
such Annual Report, the information included therein.
(x) KPMG Peat Marwick LLP, who have audited certain financial
statements of the Company and its consolidated subsidiaries and delivered
their report with respect to the audited consolidated financial statements
and schedules incorporated in the Registration Statement and the
Prospectus, are independent public accountants as required by the Act, the
Exchange Act and the related published rules and regulations thereunder.
(xi) The execution and delivery of this Agreement has been duly
authorized by the Company and this Agreement has been duly executed and
delivered by the Company and is the valid and binding agreement of the
Company enforceable against the Company in accordance with its terms,
subject, as to enforcement, to bankruptcy, insolvency, reorganization and
other laws of general applicability relating to or affecting creditors'
rights, to general principles of equity and, with respect to
indemnification, public policy.
(xii) No legal or governmental proceedings are pending to which the
Company or any of its Subsidiaries is a party or to which the property of
the Company or any of its Subsidiaries is subject that are required to be
described in the Registration Statement or the Prospectus and are not
described therein and no such proceedings have been threatened against the
Company or any of its Subsidiaries or with respect to any of their
respective properties; and no contract or other document is required to be
described in the Registration Statement or the
6
Prospectus or to be filed as an exhibit to the Registration Statement that
is not described therein or filed as required.
(xiii) Since the respective dates as of which information is given in
the Registration Statement and the Prospectus, except as otherwise stated
therein, (A) there has been no material adverse change in the condition,
financial or otherwise, or in the earnings, business affairs or business
prospects of the Company and its Subsidiaries considered as one enterprise,
whether or not arising in the ordinary course of business, (B) there have
been no transactions entered into by the Company or any of its
Subsidiaries, other than those in the ordinary course of business, which
are material with respect to the Company and its Subsidiaries considered as
one enterprise, and (C) there has been no dividend or distribution of any
kind declared, paid or made by the Company on any of its shares of Common
Stock.
(xiv) The issuance, offering and sale of the Securities to the
Underwriters by the Company pursuant to this Agreement, [the issuance of
the Common Stock issuable upon conversion of the Securities,] the
compliance by the Company with the other provisions of this Agreement and
the Indenture and the consummation of the other transactions herein
contemplated do not (i) require the consent, approval, authorization,
registration or qualification of or with any governmental authority, except
such as have been obtained and such as may be required under state
securities or blue sky laws or (ii) conflict with or result in a breach or
violation of any of the terms and provisions of, or constitute a default
under, any indenture, mortgage, deed of trust, lease or other agreement or
instrument to which the Company or any of its Subsidiaries is a party or by
which the Company or any of its Subsidiaries or any of their respective
properties are bound, or the charter documents or by-laws of the Company or
any of its Subsidiaries, or any statute or any judgment, decree, order,
rule or regulation of any court or other governmental authority or any
arbitrator applicable to the Company or any of its Subsidiaries.
(xv) The Company is not required to be registered under the
Investment Company Act of 1940, as amended.
(xvi) The Company and each of its Subsidiaries have good and
marketable title to all real properties, and interests in real property,
described in the Prospectus (including the documents incorporated by
reference therein) as owned by each of them, in each case free and clear of
all liens, charges, encumbrances and restrictions except such as are
described in the Registration Statement or such as do not materially
adversely affect the value of such property or interests or interfere with
the use made or proposed to be made of such property or interests by the
Company and each of its Subsidiaries; the Company has obtained satisfactory
confirmations, except as is otherwise described in the Registration
Statement, that the Company and each of its Subsidiaries has the
7
foregoing title to such real property and interests in real property; and
any real property and buildings held under lease by the Company or any of
its Subsidiaries, as the case may be, under valid, binding and enforceable
leases conforming to any applicable description thereof set forth in or the
documents incorporated by reference into the Registration Statement and the
Prospectus, with such exceptions as do not interfere with the use made and
proposed to be made of such property and buildings by the Company, its
Subsidiaries or any third party.
(xvii) No statement, representation, warranty or covenant made by the
Company in this Agreement or made in any certificate or document required
by this Agreement to be delivered to the Representative[s] was or will be,
when made, inaccurate, untrue or incorrect in any material respect.
(xviii) Neither the Company nor any of its directors, officers or
controlling persons has taken, directly or indirectly, any action intended,
or which might reasonably be expected, to cause or result, under the Act or
otherwise, in, or which has constituted, stabilization or manipulation of
the price of any security of the Company to facilitate the sale or resale
of the Securities.
[(xix) The Company has been advised by the American Stock Exchange
that the Securities [and the shares of Common Stock issuable upon
conversion of the Securities] will be listed for trading on the American
Stock Exchange upon official notice of issuance.]
(xx) Neither the Company nor any of its Subsidiaries is involved in
any material labor dispute nor, to the best knowledge of the Company, is
any such dispute threatened.
(xxi) Neither the Company nor any of its Subsidiaries nor, to the
Company's best knowledge, any employee or agent of the Company or any
Subsidiary has made any payment of funds of the Company or any Subsidiary
of the Company or received or retained any funds in violation of any law,
rule or regulation or of a character required to be disclosed in the
Prospectus.
(xxii) Any certificate signed by any officer of the Company and
delivered to the Representative[s] or to counsel for the Underwriters in
connection with the transactions contemplated by this Agreement shall be
deemed a representation and warranty by the Company to each Underwriter as
to the matters covered thereby.
(xxiii) No default exists, and no event has occurred which, with
notice or lapse of time or both, would constitute a default in the due
performance and observance of any term, covenant or condition of any
indenture, mortgage, deed of trust, lease or other agreement or instrument
to which the Company or any of its subsidiaries is a party or by which the
Company or any of its subsidiaries or any of their respective properties is
bound or may be affected in any material adverse respect with regard to
property, business or operations of the Company
8
and its subsidiaries which would require disclosure in the Registration
Statement and the Prospectus.
3. Representations and Warranties of the Underwriters. Upon your
--------------------------------------------------
authorization of the release of the Firm Securities, the several Underwriters
propose to offer the Firm Securities for sale to the public upon the terms set
forth in the Prospectus. [Each of] [t]he Representative[s] represent[s] and
agree[s] that (i) it has not offered or sold and will not offer or sell in the
United Kingdom, by means of any document, any Securities other than to persons
whose ordinary business it is to buy or sell shares or debentures (whether as
principal or agent) or in circumstances which do not constitute an offer to the
public within the meaning of the Companies Xxx 0000; (ii) it has complied and
will comply with all applicable provisions of the Financial Services Xxx 0000
with respect to anything done by it in relation to the Securities in, from or
otherwise involving the United Kingdom; and (iii) it has issued or passed on and
will issue or pass on to any person in the United Kingdom any document received
by it in connection with the issue of the Securities only if that person is of a
kind described in Article 9(3) of the Financial Services Xxx 0000 (Investment
Advertisements) (Exemption 3) Order 1988, as amended.
4. Agreements. (a) The Company covenants and agrees with each of the
----------
Underwriters that:
(i) Subject to the next sentence, the Company will file the
Prospectus with the Commission pursuant to Rule 424 under the Act. During
any time when a prospectus relating to the Securities is required to be
delivered under the Act, the Company (i) will comply with all requirements
imposed upon it by the Act[,] [and] the Exchange Act [and the Trust
Indenture Act] and the respective rules and regulations of the Commission
thereunder to the extent necessary to permit the continuance of sales of or
dealings in the Securities in accordance with the provisions hereof and of
the Prospectus, as then amended or supplemented, and (ii) will not file
with the Commission the Prospectus, any amendment or supplement to the
Prospectus, or any amendment to the Registration Statement, of which the
Representative[s] shall not previously have been advised and furnished with
a copy a reasonable period of time prior to the proposed filing and as to
which filing the Representative[s] shall not have given their consent. The
Company will advise the Representative[s], promptly after receiving notice
thereof, of the time when (i) the Prospectus has been filed with the
Commission and (ii) any amendment to the Registration Statement has been
filed or declared effective or any amendment or supplement to the
Prospectus has been filed and will provide evidence satisfactory to the
Representative[s] of each such filing or effectiveness.
(ii) The Company will advise the Representative[s], promptly after
receiving notice or obtaining knowledge thereof, of (i) the issuance by the
Commission of any stop order suspending the effectiveness of the
Registration Statement or any post-effective amendment thereto or any order
directed at any
9
document incorporated by reference in the Registration Statement or the
Prospectus or any amendment or supplement thereto or any order preventing
or suspending the use of the Prospectus, (ii) the suspension of the
qualification of the Securities for offering or sale in any jurisdiction,
(iii) the institution, threatening or contemplation of any proceeding for
any such purpose or (iv) any request made by the Commission for amending or
supplementing the Registration Statement, for amending the Prospectus or
for additional information. The Company will use its best efforts to
prevent the issuance of any such stop order and, if any such stop order is
issued, to obtain the withdrawal thereof as promptly as possible.
(iii) The Company will arrange for the qualification of the
Securities for offering and sale under the securities or blue sky laws of
such jurisdictions as the Representative[s] may designate and will continue
such qualifications in effect for as long as may be necessary to complete
the distribution of the Securities; provided, however, that in connection
-------- -------
therewith the Company shall not be required to qualify as a foreign
corporation or to execute a general consent to service of process in any
jurisdiction.
(iv) If, at any time when a prospectus relating to the Securities
is required to be delivered under the Act, any event occurs as a result of
which the Prospectus, as then amended or supplemented, would include any
untrue statement of a material fact or omit 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, or if for any
other reason it is necessary at any time to amend or supplement the
Prospectus to comply with the Act, the Exchange Act or the respective rules
or regulations of the Commission thereunder, the Company will promptly
notify the Representative[s] thereof and, subject to Section 4(a) hereof,
will prepare and file with the Commission, at the Company's expense, an
amendment to the Registration Statement or an amendment to the Basic
Prospectus or the Prospectus that corrects such statement or omission or
effects such compliance.
(v) The Company will, without charge, provide (i) to the
Representative[s] and to counsel for the Underwriters, upon request, a
signed copy of the registration statement originally filed with respect to
the Securities and each amendment thereto (in each case including exhibits
thereto), (ii) to each Underwriter, a conformed copy of such registration
statement and each amendment thereto (in each case without exhibits
thereto) and (iii) so long as a prospectus relating to the Securities is
required to be delivered under the Act, as many copies of the Prospectus or
any amendment or supplement thereto as the Representative[s] may reasonably
request.
(vi) The Company, as soon as practicable, will make generally
available to its security holders and to the Representative[s] a
consolidated earnings statement of the Company and its Subsidiaries (which
need not be
10
audited) that satisfies the provisions of Section 11(a) of the Act and
Rule 158 thereunder.
(vii) The Securities [and the shares of Common Stock issuable upon
conversion of the Securities] will be listed on the American Stock
Exchange, subject to notice of issuance].
(viii) The Company and its executive officers will not, directly or
indirectly, offer, sell or otherwise dispose of any shares of Common Stock
or any securities convertible into or exercisable or exchangeable for, or
any rights to purchase or acquire, Common Stock for a period of 90 days
after the date hereof without the prior written consent of the
Representative[s].
(ix) The Company intends to use, the net proceeds from the sale of
the Securities sold by it hereunder as set forth under the "Use of
Proceeds" in the Prospectus.
5. Expenses. The Company will pay all costs and expenses incident to the
--------
performance of its obligations under this Agreement, whether or not the
transactions contemplated herein are consummated or this Agreement is terminated
pursuant to Section 10 hereof, including all costs and expenses incident to
(i) the printing or other production of all documents with respect to the
transactions, including any costs of printing the registration statement
originally filed with respect to the Securities and any amendment thereto and
the Prospectus and any amendment or supplement thereto, this Agreement and any
blue sky memoranda, (ii) all arrangements relating to the delivery to the
Underwriters of copies of the foregoing documents, (iii) the fees and
disbursements of the counsel, accountants and any other experts or advisors
retained by the Company, (iv) preparation, issuance and delivery to the
Underwriters of any certificates evidencing the Securities [and the Common Stock
issuable upon conversion of the Securities], including transfer agent's and
registrar's fees [and the fees of the Trustee], (v) the qualification of the
Securities [and the Common Stock issuable upon conversion of the Securities]
under state securities and blue sky laws, including filing fees and fees and
disbursements of counsel for the Underwriters relating thereto, (vi) the filing
fees of the Commission relating to the Securities [and the Common Stock issuable
upon conversion of the Securities], [(vii) the listing of the Securities [and
the Common Stock issuable upon conversion of the Securities] on the American
Stock Exchange] and (viii) expenses of Company personnel in connection with
their attendance at meetings with prospective investors in the Securities. If
the sale of the Securities provided for herein is not consummated because any
condition to the obligations of the Underwriters set forth in Section6 hereof
is not satisfied, because this Agreement is terminated pursuant to Section10
hereof or because of any failure, refusal or inability on the part of the
Company to perform all obligations and satisfy all conditions on its part to be
performed or satisfied hereunder other than by reason of a default by any of the
Underwriters, the Company will reimburse the Underwriters upon demand for all
out-of-pocket expenses (including reasonable fees and disbursements of counsel)
that shall have been incurred by
11
them in connection with the proposed purchase and sale of the Securities. The
Company shall not in any event be liable to any of the Underwriters for the loss
of anticipated profits from the transactions covered by this Agreement.
6. Conditions to the Underwriters' Obligations. The obligations of the
-------------------------------------------
several Underwriters to purchase and pay for the Firm Securities shall be
subject, in the Representative[s]' sole discretion, to the accuracy in all
material respects of the representations and warranties of the Company contained
herein as of the date hereof and as of the Firm Closing Date as if made on and
as of the Firm Closing Date, to the accuracy in all material respects of the
statements of the Company's officers made pursuant to the provisions hereof, to
the performance by the Company of its covenants and agreements hereunder and to
the following additional conditions:
(a) The Prospectus shall have been filed with the Commission in
the manner and within the time period required by Rule 424(b) under the Act; no
stop order suspending the effectiveness of the Registration Statement or any
post-effective amendment thereto and no order directed at any document
incorporated by reference in the Registration Statement or the Prospectus or any
amendment or supplement thereto shall have been issued and no proceedings for
that purpose shall have been instituted or threatened or, to the knowledge of
the Company or the Representative[s], shall be contemplated by the Commission;
and the Company shall have complied with any request of the Commission for
additional information (to be included in the Registration Statement or the
Prospectus or otherwise).
(b) The Representative[s] shall have received opinions, dated the
Firm Closing Date, of Xxxxxx & Xxxxxxx and/or Xxxxxxx Xxxxxx, to the effect
that:
(i) the Company is a corporation duly organized and validly
existing in good standing under the laws of the State of Nevada. All of its
subsidiaries listed on Exhibit A to such counsel's opinion (the
"Subsidiaries") have been duly organized; and the Company and each of its
Subsidiaries are validly existing as organizations in good standing under
the laws of their respective jurisdictions of organization and are duly
qualified to transact business as foreign corporations and are in good
standing under the laws of the jurisdictions listed on Exhibit B to such
counsel's opinion;
(ii) the Company and each of the Subsidiaries have corporate power
to own or lease their respective properties and conduct their respective
businesses as described in the Registration Statement and the Prospectus,
and the Company has corporate power to enter into this Agreement and to
carry out all the terms and provisions hereof to be carried out by it;
(iii) the issued shares of capital stock owned by the Company which
have been issued by each of the corporate Subsidiaries have been duly
authorized and validly issued, are fully paid and nonassessable and are
owned beneficially by the Company free and clear, to the best knowledge of
such counsel, of any
12
security interests, liens, encumbrances, equities or claims, except for
pledges of such shares in connection with indebtedness included on the
balance sheets of the Company and its consolidated Subsidiaries
incorporated by reference into the Registration Statement and the
Prospectus;
(iv) the Company has an authorized capitalization as set forth in
the Prospectus; all of the issued shares of Common Stock have been duly
authorized and validly issued and are fully paid and nonassessable; [the
Firm Securities sold by the Company hereunder have been duly authorized by
all necessary corporate action of the Company and, when issued and
delivered to and paid for by the Underwriters pursuant to this Agreement,
will be validly issued, fully paid and nonassessable;] [the Firm Securities
sold by the Company hereunder have been duly authorized and the Common
Stock initially issuable upon conversion of the Firm Securities has been
duly and validly authorized and reserved for issuance, and when the
indenture has been duly executed and delivered by the Company and the
Trustee and the Firm Securities have been duly executed by the Company,
authenticated by the Trustee, and issued and delivered in accordance with
their terms, the Firm Securities will then constitute valid and legally
binding obligations of the Company, enforceable against the Company in
accordance with their terms, subject, as to enforcement, to bankruptcy,
insolvency, reorganization and other laws of general applicability relating
to or affecting creditors' rights and to general principles of equity, the
Firm Securities will be convertible into Common Stock in accordance with
the terms of the Indenture, and the Common Stock initially issuable upon
such conversion, when issued and delivered in accordance with the
provisions of the Indenture, will be validly issued, fully paid and
nonassessable;] [the Securities [and the Common Stock issuable upon
conversion of the Securities] have been duly authorized for listing,
subject to official notice of issuance, on the American Stock Exchange;] to
such counsel's best knowledge, no holders of outstanding shares of capital
stock of the Company are entitled as such to any preemptive or other rights
to subscribe for any of the Securities [or the Common Stock issuable upon
conversion of the Securities]; and to such counsel's best knowledge, no
holders of securities of the Company are entitled to have such securities
registered under the Registration Statement;
[(v) the Indenture has been duly authorized and has been duly
qualified under the Trust Indenture Act, and when the Indenture has been
executed and delivered by the Company and the Trustee (and assuming the due
authorization, execution and delivery of the Indenture by the Trustee) the
Indenture will constitute a valid and legally binding instrument,
enforceable against the Company in accordance with its terms, subject, as
to enforcement, to bankruptcy, insolvency, reorganization and other laws of
general applicability relating to or affecting creditors' rights and to
general principles of equity;]
(vi) the description of the Common Stock incorporated by reference
into the Prospectus, insofar as such statements purport to summarize
certain
13
provisions of the Common Stock, provides a fair summary of such
provisions[, and the description of the Securities in the Prospectus,
insofar as such statements purport to summarize certain provisions of the
Securities, provides a fair summary of such provisions];
(vii) the execution and delivery of this Agreement have been duly
authorized by all necessary corporate action of the Company and this
Agreement has been duly executed and delivered by the Company, and is the
valid and binding agreement of the Company enforceable against the Company
in accordance with its terms, subject, as to enforcement, to bankruptcy,
insolvency, reorganization and other laws of general applicability relating
to or affecting creditors' rights and to general principles of equity and
except as right to indemnity and contribution may be limited by federal or
state securities laws or the public policy underlying such laws;
(viii) to such counsel's knowledge, no legal or governmental
proceedings are pending to which the Company or any of the Subsidiaries is
a party or to which the property of the Company or any of the Subsidiaries
is subject that are required to be described in the Registration Statement
or the Prospectus and are not described therein, and, to the best knowledge
of such counsel, no such proceedings have been threatened against the
Company or any of the Subsidiaries or with respect to any of their
respective properties; and to such counsel's best knowledge, no contract or
other document is required to be described in the Registration Statement or
the Prospectus or to be filed as an exhibit to the Registration Statement
that is not described therein or filed as required;
(ix) the issuance, offering and sale of the Securities to the
Underwriters by the Company pursuant to this Agreement, [the issuance of
the Common Stock issuable upon conversion of the Securities,] the
compliance by the Company with the other provisions of this Agreement and
the Indenture and the consummation of the other transactions herein
contemplated do not (A) require the consent, approval, authorization,
registration or qualification of or with any governmental authority, except
such as have been obtained and such as may be required under state
securities or blue sky laws, or (B) conflict with or result in a breach or
violation of any of the terms and provisions of, or constitute a default
under, any material contract filed as an exhibit to the Registration
Statement or the charter documents or by-laws of the Company or any of the
Subsidiaries, or any statute or any judgment, decree, order, rule or
regulation of any court or other governmental authority or any arbitrator
known to such counsel and applicable to the Company or any of the
Subsidiaries.
(x) the Registration Statement is effective under the Act; any
required filing of the Prospectus pursuant to Rule 424(b) has been made in
the manner and within the time period required by Rule 424(b); and no stop
order suspending the
14
effectiveness of the Registration Statement or any post-effective amendment
thereto and no order directed at any document incorporated by reference in
the Registration Statement or the Prospectus or any amendment or supplement
thereto has been issued, and no proceedings for that purpose have been
instituted or threatened or, to the best knowledge of such counsel, are
contemplated by the Commission.
(xi) the Company is not required to be registered under the
Investment Company Act of 1940, as amended; and
(xii) the registration statement originally filed with respect to
the Securities and each amendment thereto and the Basic Prospectus and the
Prospectus (in each case, including the documents incorporated by reference
therein but not including the financial statements and other financial and
statistical information contained therein, as to which such counsel need
express no opinion) comply as to form in all material respects with the
applicable requirements of the Act, the Exchange Act and the respective
rules and regulations of the Commission thereunder.
In rendering any such opinion, such counsel may rely, as to matters of
fact, to the extent such counsel deem proper, on certificates of responsible
officers of the Company and public officials and, as to matters involving the
laws of jurisdictions in which such counsel are not admitted to practice, to the
extent satisfactory to counsel for the Underwriters, upon the opinion of local
counsel in such jurisdictions and in the case of the opinion described in
paragraph (i) above upon certificates of public officials. The foregoing
opinion shall also state that the Underwriters are justified in relying upon any
such opinion of such local counsel, and copies of the opinion of such local
counsel shall be delivered to the Representative[s] and counsel for the
Underwriters.
In addition to the matters set forth above, such counsel shall also
state that in the course of the preparation of the Registration Statement and
the Prospectus, such counsel has participated in conferences with officers and
representatives of the Company and with the Company's independent auditors, your
representatives and your counsel, at which conferences the contents of the
Registration Statement and the Prospectus and related matters were discussed and
although they are not passing upon, and do not assume any responsibility for the
accuracy, completeness or fairness of the statements contained in the
Registration Statement and the Prospectus (except as set forth therein) and have
not made any independent check or verification thereof, during the course of
such participation (relying as to the factual matters underlying the
determination of materiality to a large extent upon the statements of officers
or other representatives of the Company), no facts came to their attention that
caused them to believe that the Registration Statement, as of the Effective Date
and as of the date of such opinion, contained or contains any untrue statement
of a material fact or omitted or omits to state any 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 the date of such opinion, included or
includes any untrue statement of a material fact required to be stated therein
or necessary in order to make the
15
statements therein, in the light of the circumstances under which they were
made, not misleading. It is understood that such counsel will express no belief
with respect to the financial statements, the notes thereto and related
schedules and other financial, numerical, statistical and accounting data
included or omitted from the Registration Statement or the Prospectus and will
express no belief with respect to the Statement of Eligibility and Qualification
of the Trustee on Form T-1.
References to the Registration Statement and the Prospectus in this
paragraph (b) shall include any amendment thereto at the date of such opinion.
(c) The Representative[s] shall have received an opinion, dated
the Firm Closing Date, of ________________, counsel for the Underwriters, with
respect to the issuance and sale of the Firm Securities, the Registration
Statement, the Prospectus, and such other related matters as the
Representative[s] may reasonably require, and the Company shall have furnished
to such counsel such documents as they may reasonably request for the purpose of
enabling them to pass upon such matters. In rendering such opinion, such counsel
may rely as to all matters of Maryland law upon the opinion of Xxxxxxx Xxxxxx
referred to in paragraph (b) above.
(d) The Representative[s] shall have received from KPMG Peat
Marwick LLP a letter or letters dated, respectively, the date hereof and the
Firm Closing Date, in form and substance satisfactory to the Representative[s],
to the effect that:
(i) they are independent accountants with respect to the Company
and its consolidated subsidiaries within the meaning of the Act, the
Exchange Act and the applicable rules and regulations thereunder;
(ii) in their opinion, the audited consolidated financial
statements and schedules examined by them and included in the Registration
Statement and the Prospectus comply in form and in all material respects
with the applicable accounting requirements of the Act, the Exchange Act
and the related published rules and regulations thereunder;
(iii) on the basis of a reading of the latest available interim
unaudited consolidated financial statements of the Company and its
consolidated subsidiaries, carrying out certain specified procedures (which
do not constitute an audit made in accordance with generally accepted
auditing standards) that would not necessarily reveal matters of
significance with respect to the comments set forth in this paragraph
(iii), a reading of the minute books of the shareholders, the board of
directors and any committees thereof of the Company and each of its
consolidated subsidiaries, and inquiries of certain officials of the
Company and its consolidated subsidiaries who have responsibility for
financial and accounting matters, nothing came to their attention that
caused them to believe that at a specific date not more than five business
days prior to the date of such letter, there were any changes in the shares
of capital stock or indebtedness of the Company and its consolidated
subsidiaries or any decreases in total assets, current assets or
shareholders' equity of the Company and its consolidated subsidiaries, in
each
16
case compared with amounts shown on the ___________________ consolidated
balance sheet included by incorporation by reference to the Company's
Report on Form 10-Q for the fiscal quarter ended __________________ in the
Registration Statement and the Prospectus, or for the period from
___________________ to such specified date there were any decreases, as
compared with the corresponding period of the preceding fiscal year, in net
revenues, net income before income taxes or total or per share amounts of
net income of the Company and its consolidated subsidiaries, except in all
instances for changes, decreases or increases set forth in such letter or
as set forth in or contemplated in the Prospectus; and
(iv) they have carried out certain specified procedures, not
constituting an audit, with respect to certain amounts, percentages and
financial information that are derived from the general accounting records
of the Company and its consolidated subsidiaries and are included in its
Quarterly Report on Form 10-Q for the fiscal quarter ended __________,
incorporated by reference in the Registration Statement and the Prospectus,
and have compared such amounts, percentages and financial information with
such records of the Company and its consolidated subsidiaries and with
information derived from such records and have found them to be in
agreement, excluding any questions of legal interpretation.
In the event that the letters referred to above set forth any such
changes, decreases or increases, it shall be a further condition to the
obligations of the Underwriters that (A) such letters shall be accompanied by a
written explanation of the Company as to the significance thereof, unless the
Representative[s] deem such explanation unnecessary, and (B) such changes,
decreases or increases do not, in the sole judgment of the Representative[s],
make it impractical or inadvisable to proceed with the purchase and delivery of
the Securities as contemplated by the Registration Statement, as amended as of
the date hereof.
References to the Registration Statement and the Prospectus in this
paragraph (d) with respect to either letter referred to above shall include any
amendment thereto at the date of such letter.
(e) The Representative[s] shall have received a certificate,
dated the Firm Closing Date, of the Chief Executive Officer and the Chief
Financial Officer of the Company to the effect that:
(i) the representations and warranties of the Company in this
Agreement are true and correct as if made on and as of the Firm Closing
Date; the Registration Statement, as amended as of the Firm Closing Date,
does not include any untrue statement of a material fact or omit to state
any material fact necessary to make the statements therein not misleading,
and the Prospectus, as amended or supplemented as of the Firm Closing Date,
does not include any untrue statement of a material fact or omit to state
any material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made,
17
not misleading; and the Company has performed all covenants and agreements
and satisfied all conditions on its part to be performed or satisfied at or
prior to the Firm Closing Date;
(ii) no stop order suspending the effectiveness of the
Registration Statement or any post-effective amendment thereto and no order
directed at any document incorporated by reference in the Registration
Statement or any amendment thereto or the Prospectus has been issued, and
no proceedings for that purpose have been instituted or threatened or, to
the best of the Company's knowledge, are contemplated by the Commission;
and
(iii) subsequent to the respective dates as of which information
is given in the Registration Statement an the Prospectus, there has not
been any material adverse change, or any development involving a
prospective material adverse change (including without limitation a change
in management or control of the Company), in the condition (financial or
otherwise), business prospects, net worth or results of operations of the
Company and the Subsidiaries, except in each case as described in or
contemplated by the Prospectus (exclusive of any amendment or supplement
thereto after the date hereof).
(f) On or before the Firm Closing Date, the Representative[s]
and counsel for the Underwriters shall have received such further certificates,
documents or other information as they may have reasonably requested from the
Company.
(g) Prior to the commencement of the offering of the Securities,
the Securities shall have been accepted for listing on the American Stock
Exchange [and the Common Stock issuable upon conversion of the Securities shall
have been accepted for listing on the American Stock Exchange, subject to notice
of issuance].
All opinions, certificates, letters and documents delivered pursuant
to this Agreement will comply with the provisions hereof only if they are
reasonably satisfactory in all material respects to the Representative[s] and
counsel for the Underwriters. The Company shall furnish to the
Representative[s] such conformed copies of such opinions, certificates, letters
and documents in such quantities as the Representative[s] and counsel for the
Underwriters shall reasonably request.
The respective obligations of the several Underwriters to purchase and
pay for any Option Securities shall be subject, in their discretion, to each of
the foregoing conditions to purchase the Firm Securities, except that all
references to the Firm Securities and the Firm Closing Date shall be deemed to
refer to such Option Securities and the related Option Closing Date,
respectively.
7 Indemnification and Contribution. (a) The Company agrees to indemnify
--------------------------------
and hold harmless each Underwriter and each person, if any, who controls any
Underwriter within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act against any losses, claims, damages or liabilities to which such
Underwriter or such
18
controlling person may become subject under the Act, the Exchange Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon:
(i) any untrue statement or alleged untrue statement made by the
Company in Section 2 of this Agreement,
(ii) any untrue statement or alleged untrue statement of any
material fact contained in (A) the registration statement originally filed
with respect to the Securities or any amendment thereto, the Prospectus or
any amendment thereto or (B) any application or other document, or any
amendment or supplement thereto, executed by the Company or based upon
written information furnished by or on behalf of the Company filed in any
jurisdiction in order to qualify the Securities [or the Common Stock
issuable upon conversion of the Securities] under the securities or blue
sky laws thereof or filed with the Commission or any securities association
or securities exchange (each an "Application") or
(iii) the omission or alleged omission to state in such
registration statement or any amendment thereto, the Prospectus or any
amendment or supplement thereto, or any Application as material fact
required to be stated therein or necessary to make the statements therein
not misleading,
and will reimburse, as incurred, each Underwriter and each such controlling
person for any legal or other expenses reasonably incurred by such Underwriter
or such controlling person in connection with investigating, defending against
or appearing as a third-party witness in connection with any such loss, claim,
damage, liability or action; provided, however, that the Company will not be
-------- -------
liable in any such case to the extent that any such loss, claim, damage or
liability arises out of or is based upon any untrue statement or alleged untrue
statement or omission or alleged omission made in such registration statement or
any amendment thereto, the Prospectus or any amendment or supplement thereto, or
any Application in reliance upon and in conformity with written information
furnished to the Company by any Underwriter through the Representative[s]
specifically for use therein and provided, further, that the Company will not be
liable to any underwriter or any person controlling such underwriter with
respect to any such untrue statement or omission made in any preliminary
supplemental Prospectus that is corrected in the supplemental Prospectus (or any
amendment or supplement thereto) if the person asserting any such loss, claim,
damage or liability purchased Securities from such Underwriter but was not sent
or given a copy of the supplemental Prospectus (as amended or supplemented),
other than the document incorporated by reference therein, at or prior to the
written confirmation of the sale of such Securities to such person in any case
where such delivery of the supplemental Prospectus (as amended or supplemented)
as required by the Act, unless such failure to deliver the supplemental
Prospectus (as amended or supplemented) was the result of noncompliance by the
Company with Section 4(a)(v). This indemnity agreement will be in addition to
any liability which the Company may otherwise have. The Company will not,
without the prior written consent of each Underwriter, settle or compromise or
consent to the entry of any judgment in any pending or threatened claim, action,
suit or proceeding in respect of which indemnification may
19
be sought hereunder (whether or not such Underwriter or any person who controls
such Underwriter within the meaning of Section 15 of the Act or Section 20 of
the Exchange Act is a party to such claim, action, suit or proceeding), unless
such settlement, compromise or consent includes an unconditional release of such
Underwriter and each such controlling person from all liability arising out of
such claim, action, suit or proceeding.
(a) Each Underwriter will indemnify and hold harmless the
Company, each of its directors, each of its officers who signed the Registration
Statement and each person, if any, who controls the Company within the meaning
of Section 15 of the Act or Section 20 of the Exchange Act against any losses,
claims, damages or liabilities to which the Company and any such director,
officer or controlling person may become subject under the Act, the Exchange Act
or otherwise, insofar as such losses, claims, damages or liabilities (or actions
in respect thereof) arise out of or are based upon (i) any untrue statement or
alleged untrue statement of any material fact contained in the Registration
Statement or any amendment thereto, the Prospectus or any amendment or
supplement thereto, or any Application or (ii) the omission or the alleged
omission to state therein a material fact required to be stated in the
Registration Statement or any amendment thereto, the Prospectus or any amendment
or supplement thereto, or any Application or necessary to make the statements
therein not misleading, in each case to the extent, but only to the extent, that
such untrue statement or alleged untrue statement or omission or alleged
omission was made in reliance upon and in conformity with written information
furnished to the Company by such Underwriter through the Representative[s]
specifically for use therein; and, subject to the limitation set forth
immediately preceding this clause, will reimburse, as incurred, any legal or
other expenses reasonably incurred by the Company and any such director, officer
or controlling person in connection with investigating or defending any such
loss, claim, damage, liability or any action in respect thereof. This indemnity
agreement will be in addition to any liability which such Underwriter may
otherwise have.
(b) Promptly after receipt by an indemnified party under this
Section 7 of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against the indemnifying party
under this Section 7, notify the indemnifying party of the commencement thereof;
but the omission so to notify the indemnifying party will not relieve it from
any liability which it may have to any indemnified party otherwise than under
this Section 7. In case any such action is brought against any indemnified
party, and it notifies the indemnifying party of the commencement thereof, the
indemnifying party will be entitled to participate therein and, to the extent
that it may wish, jointly with any other indemnifying party similarly notified,
to assume the defense thereof, with counsel reasonably satisfactory to such
indemnified party; provided, however, that if the defendants in any such action
include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded that there may be one or more
legal defenses available to it and/or other indemnified parties which are
different from or additional to those available to the indemnifying party, the
indemnifying party shall not have the right to direct the defense of such action
on behalf of such indemnified party or parties and such
20
indemnified party or parties shall have the right to select separate counsel to
defend such action on behalf of such indemnified party or parties. After notice
from the indemnifying party to such indemnified party of its election so to
assume the defense thereof and approval by such indemnified party of counsel
appointed to defend such action, the indemnifying party will not be liable to
such indemnified party under this Section 7 for any legal or other expenses,
other than reasonable costs of investigation, subsequently incurred by such
indemnified party in connection with the defense thereof, unless (i) the
indemnified party shall have employed separate counsel in accordance with the
proviso to the next preceding sentence (it being understood, however, that in
connection with such action the indemnifying party shall not be liable for the
expenses of more than one separate counsel (in addition to local counsel) in any
one action or separate but substantially similar actions in the same
jurisdiction arising out of the same general allegations or circumstances,
designated by the Representative[s] in the case of paragraph (a) of this
Section 7, representing the indemnified parties under such paragraph (a) who are
parties to such action or actions) or (ii) the indemnifying party has authorized
the employment of counsel for the indemnified party at the expense of the
indemnifying party. After such notice from the indemnifying party to such
indemnified party, the indemnifying party will not be liable for the costs and
expenses of any settlement of such action effected by such indemnified party
without the consent of the indemnifying party, unless such indemnified party
waived its rights under this Section 7 in which case the indemnified party may
effect such a settlement without such consent.
In circumstances in which the indemnity agreement provided for in the
preceding paragraphs of this Section 7 is unavailable or insufficient to hold
harmless an indemnified party in respect of any losses, claims, damages or
liabilities (or actions in respect thereof), each indemnifying party, in order
to provide for just and equitable contribution, shall contribute to the amount
paid or payable by such indemnified party as a result of such losses, claims,
damages or liabilities (or actions in respect thereof) in such proportion as is
appropriate to reflect (i) the relative benefits received by the indemnifying
party or parties on the one hand and the indemnified party on the other from the
offering of the Securities or (ii) if the allocation provided by the foregoing
clause (i) is not permitted by applicable law, not only such relative benefits
but also the relative fault of the indemnifying party or parties on the one hand
and the indemnified party on the other in connection with the statements or
omissions or alleged statements or omissions that resulted in such losses,
claims, damages or liabilities (or actions in respect thereof). The relative
benefits received by the Company on the one hand and the Underwriters on the
other shall be deemed to be in the same proportion as the total proceeds from
the offering (before deducting expenses) received by the Company bear to the
total underwriting discounts and commissions received by the Underwriters. The
relative fault of the parties shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company or the Underwriters, the parties' relative intents,
knowledge, access to information and opportunity to correct or prevent such
statement or omission, and any other equitable considerations appropriate in the
circumstances. The Company and the Underwriters agree that it would not be
equitable if the amount of such contribution were determined by pro rata or per
capita allocation (even if the Underwriters were
21
treated as one entity for such purpose) or by any other method of allocation
that does not take into account the equitable considerations referred to in the
first sentence of this paragraph (d). Notwithstanding any other provision of
this paragraph (d), no Underwriter shall be obligated to make contributions
hereunder that in the aggregate exceed the total underwriting discounts received
by it with respect to the Securities purchased by such Underwriter under this
Agreement, less the aggregate amount of any damages that such Underwriter has
otherwise been required to pay in respect of the same or any substantially
similar claim, and 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 hereunder are several in proportion to
their respective underwriting obligations and not joint, and contributions among
Underwriters shall be governed by the provisions of the Agreement Among
Underwriters. For purposes of this paragraph (d), each person, if any, who
controls an Underwriter within the meaning of Section 15 of the Act or Section
20 of the Exchange Act shall have the same rights to contribution as such
Underwriter, and each director of the Company, each officer of the Company who
signed the Registration Statement, each person, if any, who controls the Company
within the meaning of Section 15 of the Act or Section 20 of the Exchange Act,
shall have the same rights to contribution as the Company.
8. Default of Underwriters. If one or more Underwriters default in their
-----------------------
obligations to purchase Firm Securities or Option Securities hereunder and the
aggregate [number] [principal amount] of such Securities that such defaulting
Underwriter or Underwriters agreed but failed to purchase is ten percent or less
of the aggregate [number] [principal amount] of Firm Securities or Option
Securities to be purchased by all of the Underwriters at such time hereunder,
the other Underwriters may make arrangements satisfactory to the
Representatives[s] for the purchase of such Securities by other persons (who may
include one or more of the non-defaulting Underwriters, including the
Representative[s]), but if no such arrangements are made by the Firm Closing
Date or the related Option Closing Date, as the case may be, the other
Underwriters shall be obligated severally in proportion to their respective
commitments hereunder to purchase the Firm Securities or Option Securities that
such defaulting Underwriter or Underwriters agreed but failed to purchase. If
one or more Underwriters so default with respect to an aggregate [number]
[principal amount] of Securities that is more than ten percent of the aggregate
[number] [principal amount] of Firm Securities or Option Securities, as the case
may be, to be purchased by all of the Underwriters at such time hereunder, and
if arrangements satisfactory to the Representative[s] are not made within 36
hours after such default for the purchase by other persons who may include one
or more of the non-defaulting Underwriters, including the Representative[s]) of
the Securities with respect to which such default occurs, this Agreement will
terminate without liability on the part of any non-defaulting Underwriter or the
Company other than as provided in Section 10 hereof. In the event of any
default by one or more Underwriters as described in this Section 8, the
Representative[s] shall have the right to postpone the Firm Closing Date or the
Option Closing Date, as the case may be, established as provided in Section 1
hereof for not more than seven business days in order that any necessary changes
may be made in the arrangements or documents for the
22
purchase and delivery of the Firm Securities or Option Securities, as the case
may be. As used in this Agreement, the term "Underwriter" includes any person
substituted for an Underwriter under this Section 8. Nothing herein shall
relieve any defaulting Underwriter from liability for its default.
9. Survival. The respective representations, warranties, agreements,
--------
covenants, indemnities and other statements of the Company, its officers and the
several Underwriters set forth in this Agreement or made by or on behalf of
them, respectively, pursuant to this Agreement shall remain in full force and
effect, regardless of (i) any investigation made by or on behalf of the Company,
any of its officers or directors, any Underwriter or any controlling person
referred to in Section 7 hereof and (ii) delivery of and payment for the
Securities. The respective agreements, covenants, indemnities and other
statements set forth in Sections 5 and 7 hereof shall remain in full force and
effect, regardless of any termination or cancellation of this Agreement.
10. Termination. This Agreement may be terminated with respect to the Firm
-----------
Securities or any Option Securities in the sole discretion of the
Representative[s] by notice to the Company given prior to the Firm Closing Date
or the related Option Closing Date, respectively, in the event that the Company
obligations and satisfy all conditions on its part to be performed or satisfied
hereunder at or prior thereto or, if at or prior to the Firm closing Date or
such Option Closing Date, respectively, the Representative[s] determine in their
sole discretion that:
(i) trading in the Securities or trading in the Common Stock
shall have been suspended by the Commission or trading in securities
generally on the American Stock Exchange or the International Stock
Exchange of the United Kingdom shall have been suspended or minimum or
maximum prices shall have been established for the Common Stock on either
such exchange;
(ii) a banking moratorium shall have been declared by New York,
United Kingdom or United States authorities; or
(iii) there shall have been (A) an outbreak or escalation of
hostilities between the United States or the United Kingdom and any foreign
power, (B) an outbreak or escalation of any other insurrection or armed
conflict involving the United States or the United Kingdom or (C) any other
calamity or crisis having an effect on the financial markets that makes it
impracticable or inadvisable to proceed with the public offering or the
delivery of the securities as contemplated by the Registration Statement.
11. Information Supplied by Underwriters. The statements set forth in the
------------------------------------
last paragraph on the front cover page and under the heading "Underwriting" in
the Prospectus (to the extent such statements relate to the Underwriters)
constitute the only information furnished by any Underwriter through the
Representative[s] to the Company for the purposes of Sections 2 and 7(b) hereof.
The Underwriters confirm that such statements (to such extent) are correct.
23
12. Notices. All communications hereunder shall be in writing and, if sent
-------
to any of the Underwriters, shall be mailed or delivered or telegraphed and
confirmed in writing to
______________________________________________________________, if sent to the
Company, shall be mailed, delivered or telegraphed and confirmed in writing to
the Company at 0000 X.X. Xxxxxxxxxx, Xxxxx 000, Xxxxxxxx, Xxxxxx 00000,
Attention: President.
13. Successors. This Agreement shall inure to the benefit of and shall be
----------
binding upon the several Underwriters, the Company and its respective successors
and legal representatives, and nothing expressed or mentioned in this Agreement
is intended or shall be construed to give any other person any legal or
equitable right, remedy or claim under or in respect of this Agreement, or any
provisions herein contained, this Agreement and all conditions and provisions
hereof being intended to be and being for the sole and exclusive benefit of such
persons and for the benefit of no other person except that (i) the indemnities
of the Company contained in Section 7 of this Agreement shall also be for the
benefit of any person or persons who control any Underwriter within the meaning
of Section 15 of the Act or Section 20 of the Exchange Act and (ii) the
indemnities of the Underwriters contained in Section 7 of this Agreement shall
also be for the benefit of the directors of the Company, the officers of the
Company who have signed the Registration Statement and any person or persons who
control the Company within the meaning of Section 15 of the Act or Section 20 of
the Exchange Act. No purchaser of Securities from any Underwriter shall be
deemed a successor because of such purchase.
14. APPLICABLE LAW. THE VALIDITY AND INTERPRETATION OF THIS AGREEMENT, AND
--------------
THE TERMS AND CONDITIONS SET FORTH HEREIN, SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO ANY
PROVISIONS RELATING TO CONFLICTS OF LAWS.
15. Counterparts. This Agreement may be executed in two or more
------------
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
24
If the foregoing correctly sets forth our understanding, please
indicate your acceptance thereof in the space provided below for that purpose,
whereupon this letter shall constitute an agreement binding the Company and each
of the several Underwriters.
Very truly yours,
ASSISTED LIVING CONCEPTS, INC.
By:______________________________
Name:
Title:
The foregoing Agreement is hereby confirmed
and accepted as of the date first above written.
_____________________________
as Representative[s] of the several Underwriters
By: _____________________________
By:_______________________________
Name:
Title:
25
SCHEDULE 1
UNDERWRITER[S'] COMMITMENTS
[Number] [Aggregate Principle Amount] of
Firm Securities to be Purchased from the
Underwriter Company
----------- ------------------------------------------
_________________________
TOTAL......... ______________
26
