1
EXHIBIT 1
AMERICAN RETIREMENT CORPORATION
[__________ SHARES OF ____ STOCK*]
[_____________ $ AGGREGATE PRINCIPAL AMOUNT OF
_____ % ____ DUE _______*]
UNDERWRITING AGREEMENT
Dear Ladies and Gentlemen:
American Retirement Corporation, a Tennessee 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 __________, 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 $0.01 per
share (the "Common Stock").] The Company hereby confirms its agreement with the
several Underwriters, as set forth below. If you are the only Underwriter[s],
all references herein to the Representative[s] shall be deemed to be the
Underwriters.
1. Agreements to Sell and Purchase.
(a) The Company agrees to issue and sell to each of the
Underwriters, and each of the Underwriters, severally and not jointly, agrees to
purchase from the Company, upon
2
* Plus an option to purchase from the Company up to [____ shares] [$______
aggregate principal amount of ____% _______ Due ____] to cover over-allotments.
the basis of the representations, warranties, agreements and covenants herein
contained and subject to the terms and conditions herein set forth, and at a
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 __________, located at ___________,
at 10:00 A.M. New York City 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 Section 9 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 Section 1. 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,
2
3
subject to the terms and conditions herein set forth, each of the 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, no 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 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.
3
4
(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 of 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 Tennessee corporation in good standing
under the laws of the State of Tennessee. 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.
(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
4
5
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 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, reorganization 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)
5
6
Annual Report on Form 10-K for the fiscal year ended December 31, 1997 and (ii)
Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 1998,
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 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
6
7
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 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 New York Stock
Exchange that the Securities and the shares of Common Stock issuable upon
conversion of the Securities will be listed for trading on the New York 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
7
8
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 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.
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 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
8
9
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
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 New York 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
9
10
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 New York 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 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 Representatives' 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
10
11
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 ___________ [and/or] _________, 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 Tennessee. 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 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
11
12
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 New York
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 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;
12
13
(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 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 off
act, 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
13
14
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 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 _________ law upon the opinion of ____________ 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
14
15
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
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 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
15
16
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, 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 New York
Stock Exchange and the Common Stock issuable upon conversion of the Securities
shall have been accepted for listing on the New York 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,
16
17
damages or liabilities to which such Underwriter or such 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 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
17
18
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 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
18
19
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 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
19
20
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 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.
20
21
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 New York Stock Exchange shall have been suspended or minimum or maximum
prices shall have been established for the Common Stock on such exchange;
(ii) a banking moratorium shall have been declared by New York
or United States authorities; or
(iii) there shall have been (A) an outbreak or escalation of
hostilities between the United States or any foreign power, (B) an outbreak or
escalation of any other insurrection or armed conflict involving the United
States 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 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.
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 115 Westwood
Place, Suite 402, Brentwood, Tennessee 37027; Attn.: 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
21
22
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.
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,
AMERICAN RETIREMENT CORPORATION
By:
------------------------------
Name:
Title:
The foregoing Agreement is hereby confirmed and accepted as of the date first
above written.
REPRESENTATIVE[s]
as Representative[s] of the several Underwriters
By:
-------------------------------
Name:
Title:
22
23
SCHEDULE 1
UNDERWRITER ' S COMMITMENTS
Number Aggregate Principle Amount of
Firm Securities to be Purchased from the
Underwriter's Company
Total:
---------------
===============
23