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___% Convertible Subordinated Debentures Due 2002
UNDERWRITING AGREEMENT
New York, New York
September __, 1997
XXXXXXXX & CO. INC.
As Underwriter
Equitable Center
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Ladies and Gentlemen:
AMERICAN RETIREMENT CORPORATION, a Tennessee corporation (the
"Company"), proposes, subject to the terms and conditions stated herein, to
issue and sell to you, as underwriter (the "Underwriter"), $100,000,000
aggregate principal amount of its ___% Convertible Subordinated Debentures Due
2002 (the "Firm Securities"). In addition, the Company proposes to grant to you
an option to purchase up to an additional $15,000,000 principal amount of such
debentures (the "Option Securities"), on the terms and for the purposes set
forth in Section 2 hereof. The Firm Securities and the Option Securities are
herein collectively referred to as the "Securities."
1. The Company represents and warrants to, and agrees with,
you that:
(a) A registration statement on Form S-1
(Registration No. 333-34339) relating to the Securities, including a
preliminary prospectus relating to the Securities and such amendments
to such registration statement as may have been required to the date of
this Agreement, has been prepared by the Company under the provisions
of the Securities Act of 1933, as amended (the "Act"), and the rules
and regulations (collectively referred to as the "Rules and
Regulations") of the Securities and Exchange Commission (the
"Commission") thereunder, and has been filed with the Commission. The
Commission has not issued any order preventing or suspending the use of
the Prospectus (as defined below) or any Preliminary Prospectus (as
defined below). The term "Preliminary Prospectus" as used herein means
a preliminary prospectus relating to the Securities, as contemplated by
Rule 430 or Rule 430A ("Rule 430A") of the Rules and Regulations,
included at any time as part of the foregoing registration statement or
any amendment thereto before it became effective under the Act and any
prospectus filed with the Commission by the Company pursuant to Rule
424(a) of the Rules and Regulations. Copies of such registration
statement and amendments and of each related Preliminary Prospectus
have been delivered to the Underwriter. If such registration statement
has not become effective, a further amendment to such registration
statement, including a form of
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final prospectus, necessary to permit such registration statement to
become effective will be filed promptly by the Company with the
Commission. If such registration statement has become effective, a
final prospectus relating to the Securities containing information
permitted to be omitted at the time of effectiveness by Rule 430A will
be filed by the Company with the Commission in accordance with Rule
424(b) of the Rules and Regulations promptly after execution and
delivery of this Agreement. The term "Registration Statement" means
the registration statement as amended at the time it becomes or became
effective (the "Effective Date"), including all financial statements
and schedules and all exhibits, and all information contained in any
final prospectus filed with the Commission pursuant to Rule 424(b) of
the Rules and Regulations or in a term sheet described in Rule 434 of
the Rules and Regulations in accordance with Section 5 hereof and
deemed to be included therein as of the Effective Date by Rule 430A of
the Rules and Regulations. The term "Prospectus" means the prospectus
relating to the Securities as first filed with the Commission pursuant
to Rule 424(b) of the Rules and Regulations or, if no such filing is
required, the form of final prospectus relating to the Securities
included in the Registration Statement at the Effective Date.
(b) On the date that any Preliminary Prospectus was
filed with the Commission, the date the Prospectus is first filed with
the Commission pursuant to Rule 424(b) (if required), on the Closing
Date and any Option Closing Date and when any post-effective amendment
to the Registration Statement becomes effective or any amendment or
supplement to the Prospectus is filed with the Commission, the
Registration Statement, each Preliminary Prospectus and the Prospectus
(as amended or as supplemented if the Company shall have filed with the
Commission any amendment or supplement thereto), including the
financial statements included in the Prospectus, did or will comply in
all material respects with all applicable provisions of the Act, the
Rules and Regulations, and the Trust Indenture Act of 1939, as amended
(the "Trust Indenture Act"), and the rules and regulations of the
Commission thereunder, including containing all statements required to
be stated therein in accordance with the Act and the Rules and
Regulations. On the Effective Date and when any post-effective
amendment to the Registration Statement becomes effective, no part of
the Registration Statement or any such amendment did or will contain
any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary in order to make the
statements therein not misleading. At the Effective Date, the date the
Prospectus or any amendment or supplement to the Prospectus is filed
with the Commission and at the Closing Date and, if later, the Option
Closing Date, the Prospectus did not or will not contain any untrue
statement of a material fact or omit to state a material fact necessary
to make the statements therein, in the light of the circumstances under
which they were made, not misleading. The foregoing representations and
warranties in this Section 3(b) do not apply to any statements or
omissions made in reliance on and in conformity with information
relating to the Underwriter furnished in writing to the Company by the
Underwriter specifically for inclusion in the Registration Statement or
Prospectus or any amendment or supplement thereto, it being understood
that such information includes the
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last paragraph on the cover page, the paragraph at the bottom of the
inside cover page, and the information in the third and eighth
paragraphs under the caption "Underwriting" in the Prospectus. The
Company has not distributed, and, prior to the later to occur of (i)
the Closing Date or, if later, the Option Closing Date and (ii)
completion of the distribution of the Securities, will not distribute,
any offering material in connection with the offering or sale of the
Securities other than the Registration Statement, the Preliminary
Prospectus, the Prospectus or any other materials, if any, permitted
by the Act.
(c) The indenture, including any amendments and
supplements thereto, pursuant to which the Securities will be issued
(the "Indenture"), will conform in all material respects with the
requirements of the Trust Indenture Act and the rules and regulations
of the Commission thereunder.
(d) Set forth on Exhibit A attached hereto is a list
of each entity that is directly or indirectly wholly-owned by the
Company (collectively, the "Subsidiaries"). Each of the Company and the
Subsidiaries is, and at the Closing Date and any Option Closing Date
will be, duly organized, validly existing and in good standing under
the laws of its state of organization. Each of the Company and the
Subsidiaries has, and at the Closing Date and the Option Closing Date
will have, full corporate, partnership or other power and authority to
conduct all the activities conducted by it, to own or lease all the
assets owned or leased by it and to conduct its business as described
in the Registration Statement and the Prospectus (or, if the Prospectus
is not in existence, in the most recent Preliminary Prospectus). Each
of the Company and the Subsidiaries is, and at the Closing Date and the
Option Closing Date will be, duly licensed or qualified to do business
and in good standing as a foreign organization in all jurisdictions in
which the nature of the activities conducted by it or the character of
the assets owned or leased by it makes such licensing or qualification
necessary except for jurisdictions in which the failure to be so
licensed or qualified would not have a material adverse effect on the
business, properties, condition (financial or otherwise), net worth, or
results of operations of the Company and the Subsidiaries, taken as a
whole. The Company, directly or indirectly, beneficially owns all of
the outstanding equity interests in each of the Subsidiaries, free and
clear of all liens, security interests, restriction, pledges,
encumbrances, charges, equities, claims, easements, assessments and
tenancies (collectively, "Encumbrances"), except as set forth in the
Prospectus (or, if the Prospectus is not in existence, in the most
recent Preliminary Prospectus). Except with respect to the Subsidiaries
and except as described in the Registration Statement and Prospectus
(or, if the Prospectus is not in existence, in the most recent
Preliminary Prospectus), the Company does not own, and at the Closing
Date and any Option Closing Date will not own, directly or indirectly,
any shares of stock or any other equity or long-term debt securities of
any corporation or have any equity interest in any firm, partnership,
limited liability company, joint venture, association or other entity.
Complete and correct copies of the charter and the bylaws or
partnership agreement or operating agreement of the
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Company and each Subsidiary and all amendments thereto have been
delivered to the Underwriter, and no changes therein will be made
subsequent to the date hereof and prior to the Closing Date or, if
later, the Option Closing Date.
(e) The outstanding shares of capital stock of the
Company have been duly authorized and validly issued and are fully paid
and nonassessable and are not subject to any preemptive or similar
rights. The Company has, and, upon completion of the sale of the
Securities, will have, an authorized, issued and outstanding
capitalization as set forth in the Registration Statement and the
Prospectus (or, if the Prospectus is not in existence, in the most
recent Preliminary Prospectus). The description of the securities of
the Company in the Registration Statement and the Prospectus (or, if
the Prospectus is not in existence, in the most recent Preliminary
Prospectus) is, and at the Closing Date and, if later, the Option
Closing Date will be, complete and accurate in all material respects.
Except as set forth in the Registration Statement and the Prospectus
(or, if the Prospectus is not in existence, in the most recent
Preliminary Prospectus), the Company does not have outstanding, and at
the Closing Date and, if later, the Option Closing Date will not have
outstanding, any options to purchase, or any rights or warrants to
subscribe for, or any securities or obligations convertible into, or
any contracts or commitments to issue or sell, any shares of its
capital stock or any such warrants, convertible securities or
obligations.
(f) The combined and consolidated financial
statements and the related notes and schedules of the Company, the
Predecessor (as defined in the Registration Statement) and the
Predecessor Entities (as defined in the Registration Statement) set
forth in the Registration Statement and the Prospectus (or, if the
Prospectus is not in existence, in the most recent Preliminary
Prospectus) present fairly, in all material respects, the financial
condition of the Company, the Predecessor and the Predecessor Entities
as of the dates indicated and the combined and consolidated results of
operations, changes in partners' and shareholders' equity and cash
flows of the Company, the Predecessor and the Predecessor Entities for
the periods covered thereby, all in conformity with generally accepted
accounting principles ("GAAP") applied on a consistent basis throughout
the entire period involved, except as otherwise disclosed therein. The
combined financial statements and the related notes and schedules of
Carriage Club of Charlotte Limited Partnership and Carriage Club of
Jacksonville Limited Partnership (the "Carriage Clubs") set forth in
the Registration Statement and Prospectus (or, if the Prospectus is not
in existence, the most recent Preliminary Prospectus) present fairly,
in all material respects, the financial condition of the Carriage Clubs
as of the dates indicated and the combined results of operations,
partners' equity and cash flows of the Carriage Clubs for the periods
covered thereby, all in conformity with GAAP applied on a consistent
basis throughout the entire period involved, except as otherwise
disclosed therein. The selected financial data of the Company, the
Predecessor and the Predecessor Entities set forth under the captions
"Prospectus Summary--Summary Combined and Consolidated Financial and
Other Data" and "Selected
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Combined and Consolidated Financial Data" in the Registration
Statement and Prospectus (or, if the Prospectus is not in existence,
in the most recent Preliminary Prospectus) have been prepared on a
basis consistent with the financial statements of the Company, the
Predecessor and the Predecessor Entities. The pro forma financial
statements included in the Registration Statement and the Prospectus
comply in all material respects with the applicable requirements of
Rule 11-02 of Regulation S-X of the Commission and the pro forma
adjustments have been properly applied to the historical amounts in
the compilation of such statements. No other financial statements or
schedules of the Company, the Predecessor, the Predecessor Entities,
any Subsidiary, the Carriage Clubs or any other entity are required by
the Act or the Rules and Regulations to be included in the
Registration Statement or the Prospectus. KMPG Peat Marwick, LLP (the
"Accountants"), who have reported on those of such financial
statements and schedules which are audited, are independent
accountants with respect to the Company, the Predecessor, the
Predecessor Entities, the Subsidiaries and the Carriage Clubs as
required by the Act and the Rules and Regulations.
(g) Each of the Company and the Subsidiaries
maintains a system of internal accounting control sufficient to provide
reasonable assurance that (i) transactions are executed in accordance
with management's general or specific authorization, (ii) transactions
are recorded as necessary to permit preparation of financial statements
in conformity with GAAP and to maintain accountability for assets,
(iii) access to assets is permitted only in accordance with
management's general or specific authorization, and (iv) the recorded
accountability for assets is compared with existing assets at
reasonable intervals and appropriate action is taken with respect to
any differences.
(h) Except as set forth in the Registration Statement
and the Prospectus (or, if the Prospectus is not in existence, the most
recent Preliminary Prospectus), subsequent to the respective dates as
of which information is given in the Registration Statement and the
Prospectus and prior to the Closing Date and, if later, the Option
Closing Date, (i) there has not been, and will not have been any change
in the capitalization of the Company or any material adverse change in
the business, properties, condition (financial or otherwise), net worth
or results of operations of the Company and the Subsidiaries, taken as
a whole, arising for any reason whatsoever, (ii) none of the Company or
any Subsidiary has incurred, nor will any of them have incurred any
material liabilities or obligations, direct or contingent, (iii) none
of the Company or any Subsidiary has entered into, nor will any of them
have entered into any material transactions, other than pursuant to
this Agreement, and (iv) none of the Company or any of the Subsidiaries
has paid or declared any dividends or other distributions of any kind
on any class of its capital stock, partnership interests or other
equity securities.
(i) Each of the Company and the Subsidiaries has
good, marketable and indefeasible title to the respective properties
described in the Registration Statement and the Prospectus (or, if the
Prospectus is not in existence, the most recent Preliminary
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Prospectus) as owned by them or by the Company (collectively, the
"Owned Properties"), in each case free and clear of all Encumbrances,
except as set forth in the Prospectus (or, if the Prospectus is not in
existence, the most recent Preliminary Prospectus), and except such
Encumbrances that do not materially interfere with the use made of
such properties. Each of the Company and the Subsidiaries has valid,
subsisting and enforceable leases for the respective properties
described in the Registration Statement and the Prospectus (or, if the
Prospectus is not in existence, the most recent Preliminary
Prospectus) as leased by them or by the Company (collectively, the
"Leased Properties"), in each case free and clear of all Encumbrances,
except as set forth in the Prospectus (or, if the Prospectus is not in
existence, the most recent Preliminary Prospectus). All Encumbrances
on or affecting the Owned Properties which are required to be
disclosed in the Registration Statement and Prospectus are disclosed
therein. The use and occupancy of each of the Owned Properties and
Leased Properties complies with all applicable codes and zoning laws
and regulations and there is no pending or, to the knowledge of the
Company, threatened condemnation, zoning change, environmental or
other proceeding or action that will in any material respect adversely
affect the business, properties, condition (financial or otherwise),
net worth or results of operations of the Company and the
Subsidiaries, taken as a whole.
(j) Except as set forth in the Prospectus (or, if the
Prospectus is not in existence, the most recent Preliminary Prospectus)
the mortgages and deeds of trust encumbering the Owned Properties are
not convertible into equity interests in the Owned Properties. Such
mortgages and deeds of trust are not cross-defaulted or
cross-collateralized to any property not to be owned directly or
indirectly by the Company or a Subsidiary.
(k) The Company is not an "investment company" or an
"affiliated person" of, or "promoter" or "principal underwriter" for,
an "investment company," as such terms are defined in the Investment
Company Act of 1940, as amended (the "Investment Company Act").
(l) Except as set forth in the Registration Statement
and the Prospectus (or, if the Prospectus is not in existence, in the
most recent Preliminary Prospectus), there are no actions, suits or
proceedings pending or threatened against or affecting the Company, any
Subsidiary, or any directors, officers, partners or shareholders of any
of the foregoing in their capacity as such, or any of the Owned
Properties or Leased Properties, before or by any Federal or state
court, commission, regulatory body, administrative agency or other
governmental body, domestic or foreign (collectively, a "Governmental
Body"), wherein an unfavorable ruling, decision or finding could be
reasonably expected to adversely affect the business, properties,
condition (financial or otherwise), net worth or results of operations
of the Company and the Subsidiaries, taken as a whole.
(m) Except as set forth in the Registration Statement
and the Prospectus (or, if the Prospectus is not in existence, in the
most recent Preliminary Prospectus), each of the Company and the
Subsidiaries has, and at the Closing Date and the Option Closing Date
(if any) will have, all governmental licenses, permits, consents,
orders, approvals, franchises, certificates and other authorizations
(collectively, "Licenses") necessary to carry on its business and to
own or lease and operate its properties as contemplated in the
Prospectus (or, if the Prospectus is not in existence, in the most
recent Preliminary Prospectus), except where the failure to have any
such License would not have a material adverse effect on the business,
properties, condition (financial or otherwise), net worth or
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results of operations of the Company and the Subsidiaries, taken as a
whole. Each of the Company and the Subsidiaries has complied, and at
the Closing Date and the Option Closing Date (if any) will have
complied, in all material respects with all laws, regulations,
Licenses and orders applicable to it or its business and properties.
None of the Company or any Subsidiary is, and, at the Closing Date and
the Option Closing Date (if any), none of them will be, in default
(nor has any event occurred which, with notice or lapse of time or
both, would constitute a default) in the due performance and
observation of any term, covenant or condition of any indenture,
mortgage, deed of trust, voting trust agreement, loan agreement, bond,
debenture, note agreement or other evidence of indebtedness, lease,
contract or other agreement or instrument (collectively, a "contract
or other agreement") to which any of them is a party or by which any
of their respective properties is bound or affected, which default
would individually or in the aggregate have a material adverse effect
on the business, properties, condition (financial or otherwise), net
worth or results of operations of the Company and the Subsidiaries,
taken as a whole. To the best knowledge of the Company, no other party
under any such contract or other agreement is, or, at the Closing Date
or the Option Closing Date (if any), will be, in default in any
material respect thereunder. There are no governmental proceedings or
actions pending or threatened for the purpose of suspending, modifying
or revoking any License held by the Company or any Subsidiary
(including, without limitation, any proceeding or action to decertify
any of the Owned Properties or Leased Properties from participation in
any Medicaid or Medicare program). None of the Company or any
Subsidiary is in violation of any provision of its charter or bylaws
or partnership agreement or other governing instrument.
(n) No consent, approval, authorization or order of,
or any filing or declaration with, any Governmental Body is required
for the consummation of the transactions contemplated by this Agreement
or in connection with the issuance and sale of the Securities by the
Company in the Offering, except such as have been obtained under the
Act or the Rules and Regulations and such as may be required under
state securities or Blue Sky laws or the bylaws and rules of the
National Association of Securities Dealers, Inc. (the "NASD") in
connection with the purchase and distribution by the Underwriter of the
Securities to be sold by the Company.
(o) The Company has full corporate power and
authority to enter into this Agreement and to carry out all the terms
and provisions hereof to be carried out by it. This Agreement has been
duly authorized, executed and delivered by the Company and constitutes
a valid and binding agreement of the Company and is enforceable against
the Company in accordance with the terms hereof. Except as disclosed in
the Registration Statement and the Prospectus (or, if the Prospectus is
not in existence, the most recent Preliminary Prospectus), the
execution, delivery and the performance of this Agreement and the
consummation of the transactions contemplated hereby will not result in
the creation or imposition of any Encumbrance upon any of the Owned
Properties or Leased Properties or any of the other assets of the
Company or any Subsidiary pursuant to the
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terms or provisions of, or result in a breach or violation of or
conflict with any of the terms or provisions of, or constitute a
default under, or give any other party a right to terminate any of its
obligations under, or result in the acceleration of any obligation
under, (i) the charter or bylaws or the partnership agreement or other
organizational document of the Company or any Subsidiary, or (ii) any
material contract or other material agreement to which any of them is
a party or by which they, any of the Owned Properties or Leased
Properties, or any of their assets or properties are bound or
affected, or (iii) any judgment, ruling, decree, order, law, statute,
rule or regulation of any Governmental Body applicable to the Owned
Properties or Leased Properties or the business or other assets of the
Company or any Subsidiary. The Company has full corporate power and
authority to authorize, issue, offer and sell the Securities, as
contemplated by this Agreement, free of any preemptive rights. The
offer, issuance and sale by the Company of all shares of its common
stock, par value $0.01 per share (the "Common Stock"), prior to the
date hereof complied with or was exempt from the registration
requirements of the Act and applicable state securities laws.
(p) There is no document or contract of a character
required to be described in the Registration Statement or the
Prospectus or to be filed as an exhibit to the Registration Statement
which is not described or filed as required. All contracts to which the
Company is a party that are material to the operation of the business
of the Company, have been duly authorized, executed and delivered by
the Company, constitute valid and binding agreements of the Company and
are enforceable against the Company in accordance with the terms
thereof.
(q) Neither the Company nor any of its directors,
officers or affiliates (within the meaning of the Rules and
Regulations) has taken, nor will he, she or it take, directly or
indirectly, any action designed, or which might reasonably be expected
in the future, to cause or result in, under the Act or otherwise, 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 or otherwise.
(r) No holder of securities of the Company has rights
to the registration of any securities of the Company as a result of the
filing of the Registration Statement.
(s) The Securities have been approved for listing on
the New York Stock Exchange (the "NYSE"), subject only to notice of
issuance.
(t) No material labor dispute with the employees of
the Company or with the employees of any Subsidiary exists or is
threatened or imminent.
(u) Except as set forth in the Registration Statement
and the Prospectus (or, if the Prospectus is not in existence, the most
recent Preliminary Prospectus), the Company or a Subsidiary owns, or is
licensed or otherwise has the full exclusive right to
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use, all material trademarks and trade names which are used in or
necessary for the conduct of its business as described in the
Registration Statement and Prospectus (or, if the Prospectus is not in
existence, in the most recent Preliminary Prospectus). To the
Company's best knowledge, no claims have been asserted by any person
to the use of any such trademarks or trade names or challenging or
questioning the validity or effectiveness of any such trademark or
trade name. The use, in connection with the business and operations of
the Company, of such trademarks and trade names does not, to the
Company's knowledge, infringe on the rights of any person.
(v) None of the Company or any Subsidiary, 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 or received or retained any funds of the Company or any
Subsidiary in violation of any law, rule or regulation or of a
character required to be disclosed in the Registration Statement and
Prospectus (or, if the Prospectus is not in existence, in the most
recent Preliminary Prospectus).
(w) The Company is insured by insurers of recognized
financial responsibility against such losses and risks and in such
amounts as are prudent and customary in the business in which the
Company is engaged; none of the Company or any Subsidiary has been
refused any insurance coverage sought or applied for; and the Company
has no reason to believe that it will not be able to renew its existing
insurance coverage as and when such coverage expires.
(x) The business, operations and facilities of the
Company and each Subsidiary have been and are being conducted in
compliance in all material respects with all applicable laws,
ordinances, rules, regulations, Licenses, permits, approvals, plans,
authorizations or requirements relating to occupational safety and
health, or pollution, or protection of health or the environment
(including, without limitation, those relating to emissions,
discharges, releases or threatened releases of pollutants, contaminants
or hazardous or toxic substances, materials or wastes into ambient air,
surface water, groundwater or land, or relating to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport
or handling of chemical substances, pollutants, contaminants or
hazardous or toxic substances, materials or wastes, whether solid,
gaseous or liquid in nature) of any governmental department,
commission, board, bureau, agency or instrumentality of the United
States, any state or political subdivision thereof, or any foreign
jurisdiction, and all applicable judicial or administrative agency or
regulatory decrees, awards, judgments and orders relating thereto; and
none of the Company or any Subsidiary has received any notice from
governmental instrumentality or any third party alleging any violation
thereof or liability thereunder (including, without limitation,
liability for costs of investigating or remediating sites containing
hazardous substances and/or damages to natural resources), except for
such noncompliances, violations or liabilities that would not have a
material adverse effect upon the business,
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properties, condition (financial or otherwise), net worth or results
of operations of the Company and the Subsidiaries, taken as a whole.
(y) Each of the Company and the Subsidiaries has
filed all foreign, federal, state and local tax returns that are
required to be filed or has requested extensions thereof and has paid
all taxes required to be paid by it and any other assessment, fine or
penalty levied against it, to the extent that any of the foregoing is
due and payable.
(z) The Company and each of its executive officers
and directors has delivered to the Underwriter an agreement in the form
set forth as Exhibit B hereto to the effect that it, he or she will
not, for a period of 90 days after the date hereof, without the prior
written consent of the Underwriter, offer to sell, sell, contract to
sell, grant any option to purchase or otherwise dispose (or announce
any offer, sale, grant of any option to purchase or other disposition)
of any shares of Common Stock or securities convertible into, or
exchangeable or exercisable for, shares of Common Stock. (except that
the Company may grant options to purchase or award shares of Common
Stock under the Stock Incentive Plan and the Stock Purchase Plan and
issue privately placed shares in connection with any acquisitions).
(aa) Each certificate signed by any officer of the
Company and delivered to the Underwriter or counsel for the Underwriter
shall be deemed to be a representation and warranty by the Company to
the Underwriter as to the matters covered thereby.
(bb) The Securities have been duly and validly
authorized and the Securities, 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 when the Securities have been authenticated by the Trustee and
issued, executed, delivered and sold by the Company in accordance with
this Agreement and the Indenture, will have been duly and validly
executed, authenticated, issued and delivered and will (i) constitute
valid and legally binding obligations of the Company enforceable
against the Company in accordance with their terms and entitled to the
benefits provided in the Indenture, 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 (ii) be convertible into shares of Common
Stock (the "Conversion Shares") in accordance with the terms of the
Indenture. The Conversion Shares have been duly and validly authorized
and reserved for issuance upon conversion of the Securities and, when
issued and delivered upon such conversion, will be duly and validly
issued and outstanding, fully paid and nonassessable and will not have
been issued in violation of or subject to any preemptive or other
similar rights. The Securities and the Conversion Shares, when issued,
will conform to the respective descriptions thereof set forth in the
Prospectus.
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(cc) The Indenture has been duly and validly
authorized by the Company and, when duly executed and delivered by the
Company and the Trustee (assuming the due authorization, execution and
delivery of the Indenture by the Trustee), 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. The Indenture will conform to the description
thereof set forth in the Prospectus.
2. Subject to the terms and conditions herein set forth, the
Company agrees to sell to you, and you agree to purchase, $100,000,000 aggregate
principal amount of Firm Securities at a purchase price equal to 97.5% of the
principal amount thereof, plus accrued interest, if any, from September __, 1997
to the Firm Securities Delivery Date (as defined herein).
In addition, subject to the terms and conditions herein set
forth, the Company agrees to sell to you, as required (for the sole purpose of
covering over-allotments in the sale of the Firm Securities), up to $15,000,000
principal amount of Option Securities at a purchase price equal to 97.5% of the
principal amount thereof, plus accrued interest, if any, from September __, 1997
to the Option Securities Delivery Date (as defined herein). The right to
purchase the Option Securities may be exercised by your giving 48 hours' prior
written or telephonic notice (subsequently confirmed in writing) to the Company
of your determination to purchase all or a portion of the Option Securities.
Such notice may be given at any time within a period of 30 days following the
date of this Agreement. No Option Securities shall be delivered to or for the
accounts of the Underwriter unless the Firm Securities shall be simultaneously
delivered or shall theretofore have been delivered as herein provided.
3. The Underwriter proposes to offer the Securities for sale
to the public at the "Price to Public" set forth on the cover page of the
Prospectus and upon the other terms and conditions set forth in the Prospectus.
4. The Firm Securities, in definitive form, to be purchased by
the Underwriter hereunder shall be delivered by or on behalf of the Company to
you for your account, against payment by you of the purchase price therefor by
wire transfer of immediately available funds to an account designated by the
Company, at the office of Stroock & Stroock & Xxxxx LLP, New York, New York, at
9:30 A.M., New York City time, on September __, 1997, or at such other time,
date and place as you and the Company may agree upon in writing, such time and
date being herein called the "Firm Securities Delivery Date."
The Option Securities, in definitive form, to be purchased by
the Underwriter hereunder shall be delivered by or on behalf of the Company to
you for your account against payment by you of the purchase price thereof by
wire transfer of immediately available funds to an account designated by the
Company, in New York, New York, at such time and on such date (not earlier than
the Firm Securities Delivery Date nor later than ten business days after giving
of
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the notice delivered by you to the Company with reference thereto) and in
such denominations and registered in such names as shall be specified in the
notice delivered by you to the Company with respect to the purchase of such
Option Securities. The date and time of such delivery and payment are herein
sometimes referred to as the "Option Securities Delivery Date" (and either of
the Option Securities Delivery Date or the Firm Securities Delivery Date may be
referred to herein as a "Delivery Date").
The Firm Securities and the Option Securities so to be
delivered will be in good delivery form, and in such denominations and
registered in such names as you may request not less than 48 hours prior to the
applicable Delivery Date, respectively. Such Securities will be made available
for checking and packaging in New York, New York, at least 24 hours prior to the
applicable Delivery Date.
5. The Company covenants and agrees with the Underwriter:
(a) The Company will not, either prior to the
Effective Date or thereafter during such period as the Prospectus is
required by law to be delivered in connection with sales of the
Debentures by an Underwriter or dealer, file any amendment or
supplement to the Registration Statement or the Prospectus, unless a
copy thereof shall first have been submitted to the Underwriter within
a reasonable period of time prior to the filing thereof and the
Underwriter shall not have objected thereto in good faith.
(b) If the Registration Statement is not yet
effective, the Company will use its best efforts to cause the
Registration Statement to become effective not later than the time
indicated in Section 7(a) hereof. The Company will notify the
Underwriter promptly, and will confirm such advice in writing, (i) when
the Registration Statement has become effective and when any
post-effective amendment thereto becomes effective, (ii) of any request
by the Commission for amendments or supplements to the Registration
Statement or the Prospectus or for additional information, (iii) of the
issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or the initiation of any
proceedings for that purpose or the threat thereof, (iv) of the
happening of any event during the period mentioned in the second
sentence of Section 5(b) that in the judgment of the Company makes any
statement made in the Registration Statement or the Prospectus untrue
or that requires the making of any changes in the Registration
Statement or the Prospectus in order to make the statements therein, in
light of the circumstances in which they are made, not misleading and
(v) of receipt by the Company or any representative or attorney of the
Company of any other communication from the Commission relating to the
Company, the Registration Statement, any Preliminary Prospectus or the
Prospectus. If at any time the Commission shall issue any order
suspending the effectiveness of the Registration Statement, the Company
will use its best efforts to obtain the withdrawal of such order at the
earliest possible moment. The Company will prepare the Prospectus in a
form approved by the Underwriter and will file such Prospectus pursuant
to Rule 424(b) under the Act not later than the
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Commission's close of business on the second business day following
the execution and delivery of this Agreement or, if applicable, such
earlier time as may be required by Rule 430A(a)(3) under the
Securities Act. If the Company has omitted any information from the
Registration Statement pursuant to Rule 430A, the Company will use its
best efforts to comply with the provisions of, and to make all
requisite filings with the Commission pursuant to, said Rule 430A and
to notify the Underwriter promptly of all such filings.
(c) If, at any time when a Prospectus relating to the
Debentures 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 the Registration Statement, as then amended or
supplemented, would include any untrue statement of a material fact or
omit to state a material fact necessary to make the statements therein
not misleading, or if for any other reason it is necessary at any time
to amend or supplement the Prospectus or the Registration Statement to
comply with the Act or the Rules and Regulations, the Company will
promptly notify the Underwriter thereof and, subject to Section 5(b)
hereof, will prepare and file with the Commission, at the Company's
expense, an amendment to the Registration Statement or an amendment or
supplement to the Prospectus that corrects such statement or omission
or effects such compliance.
(d) To make generally available to its shareholders
as soon as practicable, but in any event not later than 90 days after
the close of the period covered thereby, an earnings statement in form
complying with the provisions of Section 11(a) of the Act covering a
period of 12 consecutive months beginning not later than the first day
of the Company's fiscal quarter next following the Effective Date.
(e) To file on a timely basis all documents required
to be filed with the Commission pursuant to Section 13, 14 or 15(d) of
the Exchange Act subsequent to the Effective Date and during any period
when the Prospectus is required to be delivered.
(f) The Company will comply with all the provisions
of all undertakings contained in the Registration Statement.
(g) During the period of three years commencing on
the Effective Date, the Company will furnish to the Underwriter, upon
request, a copy of such financial statements and other periodic and
special reports as the Company may from time to time distribute
generally to the holders of any class of its capital stock, and will
furnish to the Underwriter, upon request, a copy of each annual or
other report it shall be required to file with the Commission or the
NYSE; and (ii) such additional information concerning, the business and
financial condition of the Company as you may from time to time
reasonably request in connection with your obligations hereunder.
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(h) To apply the net proceeds from the sale of the
Securities in the manner set forth in the Prospectus under the caption
"Use of Proceeds."
(i) That it will not take, directly or indirectly,
any action designed to cause or result in, or that might reasonably be
expected to cause or result in stabilization or manipulation of the
price of any security of the Company to facilitate the sale or resale
of the Securities.
(j) The Company will not for a period of 90 days
after the date hereof, without your prior written consent, offer to
sell, sell, contract to sell, grant any option to purchase or otherwise
dispose (or announce any offer to sell, sale, contract to sell, grant
of any option to purchase or other disposition) of any shares of Common
Stock or any securities convertible into or exchangeable for shares of
Common Stock (except that the Company may grant options to purchase or
award shares of Common Stock under the Stock Incentive Plan and the
Stock Purchase Plan and may issue privately placed shares in connection
with any acquisitions).
(k) That it has caused the Securities and the
Conversion Shares to be authorized for quotation on the NYSE upon
notice of issuance.
6. The Company covenants and agrees with you that the Company
will pay or cause to be paid: (i) the fees, disbursements and expenses
of counsel and accountants for the Company, and all other expenses, in
connection with the preparation, printing and filing of the
Registration Statement and the Prospectus and any amendments and
supplements thereto and the furnishing of copies thereof, including
charges for mailing, air freight and delivery and counting and
packaging thereof and of any Preliminary Prospectus and related
offering documents to the Underwriter and dealers; (ii) the cost of
printing this Agreement, communications with the Underwriter and
selling group and the Preliminary and Supplemental Blue Sky Memoranda
and any other documents in connection with the offering, purchase, sale
and delivery of the Securities; (iii) all expenses in connection with
the exemption of the Securities for offering and sale under securities
laws as provided in Section 5(b) hereof, including the fees,
disbursements and expenses for counsel for the Underwriter in
connection with such exemption and in connection with Blue Sky surveys
or similar advice with respect to sales; (iv) the filing fees (but
not the fees and disbursements of counsel for the Underwriter) in
connection with securing any required review by the National
Association of Securities
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Dealers, Inc. of the terms of the sale of the Securities; (v) all fees
and expenses in connection with the quotation of the Securities and
the Conversion Shares on the NYSE; and (vi) all other costs and
expenses incident to the performance of the Company's obligations
hereunder that are not otherwise specifically provided for in this
Section 6, including the fees of the Company's Transfer Agent and
Registrar, the Trustee under the Indenture, the cost of the Company's
personnel and other internal costs, the cost of printing and
engraving the certificates representing the Securities and all
expenses and taxes incident to the sale and delivery of the Securities
to be sold by the Company to the Underwriter hereunder. It is
understood, however, that, except as provided in this Section, Section
8 and Section 11 hereof, the Underwriter will pay all of it own costs
and expenses, including the fees of its counsel, stock transfer
taxes on the resale of any of the Securities by it, and any
advertising expenses connected with any offers that it may make.
7. The obligations of the Underwriter hereunder shall be
subject, in its discretion, to (i) the condition that all
representations and warranties and other statements of the Company
herein are true and correct in all material respects, when made and on
each Delivery Date, (ii) the condition that the Company shall have
performed all its obligations hereunder theretofore to be performed and
(iii) the following additional conditions:
(a) The Registration Statement shall have become
effective, and you shall have received notice thereof not later than
10:00 P.M., New York City time, on the date of execution of this
Agreement, or at such other time as you and the Company may agree and
the Prospectus shall have been filed with the Commission in the manner
and within the time period required by Rule 424(b).
(b) (i) No stop order suspending the effectiveness of
the Registration Statement shall have been issued and no proceedings
for that purpose shall be pending or threatened by the Commission, (ii)
no order suspending the effectiveness of the Registration Statement or
the exemption of the Securities under the securities or Blue Sky laws
of any jurisdiction shall be in effect and no proceeding for such
purpose shall be pending before or threatened or contemplated by the
Commission or the authorities of any such jurisdiction, (iii) any
request for additional information on the part of the staff of the
Commission or any such authorities shall have been complied with to the
satisfaction of the staff of the Commission or such authorities and
(iv) after the date hereof no amendment or supplement to the
Registration Statement or the Prospectus shall have been filed unless a
copy thereof was first submitted to the Underwriter and the Underwriter
did not object thereto in good faith, and the Underwriter shall have
received certificates, dated the Closing Date and the Option Closing
Date and signed by the Chief Executive Officer of the Company and the
Chief Financial Officer of the Company (who
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xxx, as to proceedings threatened, rely upon the best of their
information and belief), to the effect of the foregoing clauses (i),
(ii) and (iii).
(c) You shall not have advised the Company that the
Registration Statement or Prospectus, or any amendment or supplement
thereto, contains an untrue statement of fact or omits to state a fact
which in your judgment is in either case material and in the case of an
omission is required to be stated therein or is necessary to make the
statements therein, in light of the circumstances under which they were
made, not misleading.
(d) Bass, Xxxxx & Xxxx PLC, counsel to the Company,
shall have furnished to you their written opinion, dated such Delivery
Date, in form and substance satisfactory to you, to the effect that:
(i) Each of the Company and the Subsidiaries
(A) has been duly incorporated or organized and is a validly
existing corporation, partnership or limited liability
company, to the extent applicable, in good standing under the
laws of its jurisdiction of incorporation or organization with
full power and authority (corporate, partnership or other) to
own or lease and to operate its properties and to conduct its
business as described in the Registration Statement and
Prospectus and (B) is duly qualified to do business as a
foreign corporation or partnership and is in good standing in
each jurisdiction (x) in which the conduct of its business
requires such qualification and (y) in which it owns or leases
property;
(ii) To the knowledge of such counsel, the
Company owns no capital stock or other beneficial interest in
any corporation, partnership, joint venture or other business
entity except for equity interests in the Subsidiaries and
except as set forth in the Registration Statement;
(iii) The Indenture has been duly
authorized, executed and delivered by the Company and duly
qualified under the Trust Indenture Act and, assuming due
authorization, execution and delivery by the Trustee, is a
valid and legally binding instrument of the Company,
enforceable against the Company in accordance with its terms,
subject to the effects of bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and other similar laws
relating to or affecting creditors' rights generally, general
equitable principles (whether considered in a proceeding in
equity or at law) and except as rights to indemnity and
contribution may be limited by federal and state securities
laws or the public policy underlying such laws;
(iv) The Securities have been validly
authorized, duly executed by authorized officers of the
Company, and assuming the due authentication and delivery of
the Securities by the Trustee,
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are the validly issued, outstanding and legally binding
obligations of the Company, entitled to the benefits of the
Indenture and enforceable against the Company in accordance
with their terms, subject to the effects of bankruptcy,
insolvency, fraudulent conveyance, reorganization moratorium
and other similar laws relating to or affecting creditors'
rights generally, and general equitable principles (whether
considered in a proceeding in equity or at law);
(v) The Company has authorized capital stock
as set forth in the Prospectus and all of the authorized
Common Stock, including the Conversion Shares, have been duly
authorized, all of the Conversion Shares have been duly
reserved for issuance upon such conversion, and all of the
issued and outstanding shares of Common Stock are, and all the
Conversion Shares, when issued pursuant to the Indenture, will
be, validly issued, fully paid and nonassessable, with no
personal liability attaching to the ownership thereof; all of
the outstanding shares of Common Stock were issued and sold in
compliance with all applicable Federal and state securities
laws; except as described in the Prospectus and except with
respect to existing stock incentive or stock purchase plans
and the Company's proposed dividend reinvestment plan, to the
knowledge of such counsel, there are no outstanding options,
warrants or other rights calling for the issuance of, and
there are no commitments, plans or arrangements to issue any
shares of capital stock of the Company;
(vi) To the best of such counsel's
knowledge, except as set forth in the Prospectus, there are no
legal or governmental proceedings pending or threatened to
which the Company or any Subsidiary is a party or of which any
property of the Company or any Subsidiary is the subject
which, if resolved against the Company or any Subsidiary,
individually, or to the extent involving related claims or
issues, in the aggregate, is of a character required to be
disclosed in the Prospectus;
(vii) This Agreement has been duly
authorized, executed and delivered by the Company and is a
legal, valid and binding agreement of the Company subject to
the effects of bankruptcy, insolvency, fraudulent conveyance,
reorganization moratorium and other similar laws relating to
or affecting creditors' rights generally, and general
equitable principles (whether considered in a proceeding in
equity or at law);
(viii) The Company has full corporate power
and authority to execute, deliver and perform this Agreement
and the Indenture, and the execution, delivery and performance
of this Agreement and the Indenture, the consummation of the
transactions herein and therein contemplated and the
compliance by the Company with all the provisions of this
Agreement, the Indenture and the Securities will not conflict
with, or result in a breach of any of the terms or provisions
of, or constitute a default under, or result in the creation
or imposition of any lien, charge, claim or encumbrance upon
any of the property or assets of
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the Company or any Subsidiary pursuant to, the terms of any
material contract or other agreement known to such counsel to
which the Company or any Subsidiary is a party or by which the
Company or any Subsidiary is bound or to which any of the
respective property or assets of the Company or any Subsidiary
is subject, nor will such action result in any violation of
the provisions of the charter or bylaws or partnership
agreement or operating agreement, in each case as amended, of
the Company or any Subsidiary, any statute or any rule or
regulation known to such counsel of any Governmental Body
having jurisdiction over the Company or any Subsidiary or any
of their respective properties or the terms of any judgment,
decree or order, known to such counsel, of any arbitrator or
Governmental Body having such jurisdiction;
(ix) No consent, approval, authorization,
order, registration or qualification of or with any court or
any regulatory authority or other governmental body is
required for the consummation of the transactions contemplated
by this Agreement and the Indenture, except such as have been
obtained under the Act or may be required by the NASD, and
such consents, approvals, authorizations, registrations or
qualifications as may be required under state or foreign
securities or Blue Sky laws in connection with the purchase
and distribution of the Securities by the Underwriter;
(x) To the best of such counsel's knowledge,
neither the Company nor any Subsidiary is currently in
violation of its charter or bylaws, partnership agreement or
operating agreement, in each case as amended to the date
hereof, or in material default under any indenture, mortgage,
deed of trust, lease, bank loan or credit agreement or any
other agreement or instrument of which such counsel has
knowledge to which the Company or any Subsidiary is a party or
by which any of them or any of their respective property may
be bound or affected;
(xi) There are no preemptive or other rights
to subscribe for or to purchase, nor any restriction upon the
voting or transfer of, any Securities or Common Stock issuable
upon conversion thereof, pursuant to the Company's Charter or
Bylaws, in each case as amended to the date hereof, or any
agreement or other instrument known to such counsel; and no
holders of securities of the Company have rights to the
registration thereof under the Registration Statement;
(xii) To the extent summarized therein, all
contracts and agreements summarized in the Registration
Statement and the Prospectus are fairly summarized therein,
conform in all material respects to the descriptions thereof
contained therein, and, to the extent such contracts or
agreements or any other material agreements are required under
the Act or the rules and regulations thereunder to be filed or
incorporated by reference therein as exhibits to the
Registration Statement, they are so filed or incorporated by
reference; and such
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counsel does not know of any contracts or other documents
required to be summarized or disclosed in the Prospectus or to
be so filed or incorporated by reference as an exhibit to the
Registration Statement, which have not been so summarized or
disclosed, or so filed or incorporated by reference;
(xiii) All descriptions in the Prospectus of
legal or governmental proceedings are fair summaries thereof
and fairly present the information required to be shown with
respect to such matters;
(xiv) The Registration Statement has become
effective under the Act, the Prospectus has been filed in
accordance with Rule 424(b) of the rules and regulations of
the Commission under the Act, including the applicable time
periods set forth therein, or such filing is not required and,
to the best knowledge of such counsel, no stop order
suspending the effectiveness of the Registration Statement has
been issued and no proceedings for that purpose have been
instituted or are pending or threatened under the Act, and the
Registration Statement, the Prospectus and each amendment or
supplement thereto, as of their respective effective or issue
dates, complied as to form in all material respects with the
requirements of the Act, the Trust Indenture Act and the rules
and regulations thereunder, it being understood that such
counsel need express no opinion as to the financial statements
and schedules or other financial data contained in the
Registration Statement or the Prospectus;
(xv) The Securities, the Indenture and the
Common Stock conform as to legal matters, in all material
respects, to the statements concerning them in the
Registration Statement and the Prospectus;
(xvi) The Company is not an "investment
company" or an "affiliated person" of, or "promoter" or
"principal underwriter" for, an "investment company," as such
terms are defined in the Investment Company Act; and
(xvii) The Securities have been duly
authorized for listing on the NYSE, subject only to official
notice of issuance.
In addition, such counsel shall 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 Accountants, at which
conferences such counsel made inquiries of such officers,
representatives and Accountants and discussed the contents of the
Registration Statement and the Prospectus and (without taking any
further action to verify independently the statements made in the
Registration Statement and the Prospectus (other than the sections
identified in paragraph (xiv) above) and, except as stated in the
foregoing opinion, without assuming
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responsibility for the accuracy, completeness or fairness of such
statements) nothing has come to such counsel's attention that causes
such counsel to believe that the Registration Statement as of the date
it was declared effective or as of the Closing Date or the Prospectus
as of the date thereof or as of the Closing Date contained or contains
any untrue statement of a material fact or omitted or omits to state a
material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they
were made, not misleading (it being understood that such counsel need
not express any opinion with respect to the financial statements,
schedules and other financial and statistical data included in the
Registration Statement or the Prospectus).
In rendering any such opinion, such counsel may rely,
as to matters of fact, to the extent such counsel deems proper, on
certificates of responsible officers of the Company and public
officials and, as to matters involving the application of the laws of
any State other than Tennessee (to the extent satisfactory in form and
scope to counsel for the Underwriter) such counsel may rely upon the
opinion of local counsel to the Company. The foregoing opinion shall
also state that the Underwriter is justified in relying upon such
opinion of local counsel, and copies of such opinion shall be delivered
to the Underwriter and counsel for the Underwriter.
(f) Xxxxxxx & Xxxxxxx & Xxxxx LLP, counsel to the
Underwriter, shall have furnished to you their written opinion or
opinions, dated such Delivery Date, in form and substance satisfactory
to you, with respect to the incorporation of the Company, the validity
of the Securities, the Registration Statement, the Prospectus and other
related matters as you may reasonably request, and such counsel shall
have received such papers and information as they may reasonably
request to enable them to pass upon such matters. In rendering such
opinion, such counsel may rely as to all matters of Tennessee law upon
the opinion of Bass, Xxxxx & Xxxx PLC, Nashville, Tennessee.
(g) With respect to the letter of KPMG Peat Marwick
LLP delivered to you concurrently with the execution of this Agreement
(the "initial letter"), the Company shall have furnished to the
Underwriter a letter (as used in this paragraph, the "bring-down
letter") of such accountants, addressed to the Underwriter and dated
such Delivery Date (i) confirming that they are independent public
accountants within the meaning of the Act and are in compliance with
the applicable requirements relating to the qualification of
accountants under Rule 2-01 of Regulation S-X of the Commission, (ii)
stating, as of the date of the bring-down letter (or, with respect to
matters involving changes or developments since the respective dates as
of which specified financial information is given in the Prospectus, as
of a date not more than five days prior to the date of the bring-down
letter), the conclusions and findings of such firm with respect to the
financial information and other matters covered by the initial letter
and (iii) confirming in all material respects the conclusions and
findings set forth in the initial letter.
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(h) Neither the Company nor any Subsidiary shall have
sustained since the date as of which information is given in the
Prospectus, any loss or interference with its business from fire,
explosion, flood or other calamity, whether or not covered by
insurance, or from any labor dispute or court or governmental action,
order or decree; and since the respective dates as of which information
is given in the Prospectus, there shall not have been any change in the
capital stock (other than shares issued pursuant to the exercise of
stock options or pursuant to the terms of the Securities) or short-term
debt or long-term debt of the Company or any Subsidiary nor any change
or any development involving a prospective change, in or affecting the
general affairs, management, financial position, shareholders' equity
or results of operations of the Company and its subsidiaries, otherwise
than as set forth or contemplated in the Prospectus, the effect of
which, in any such case, is in your judgment so material and adverse as
to make it impracticable or inadvisable to proceed with the public
offering or the delivery of the Securities on the terms and in the
manner contemplated in the Prospectus.
(i) Between the date hereof and such Delivery Date
there shall have been no declaration of war by the Government of the
United States; on such Delivery Date there shall not have occurred any
material adverse change in the financial or securities markets in the
United States or in political, financial or economic conditions in the
United States or any outbreak or material escalation of hostilities or
other calamity or crisis, the effect of which is such as to make it, in
the judgment of the Underwriter, impracticable to market the Securities
or to enforce contracts for the resale of Securities and no event shall
have occurred resulting in (i) trading in securities generally on the
NYSE or in the Common Stock on the NYSE being suspended or limited or
minimum or maximum prices being generally established on the NYSE, or
(ii) additional material governmental restrictions, not in force on the
date of this Agreement, being imposed upon trading in securities
generally by the NYSE or in the Common Stock on the NYSE or by order of
the Commission or any court or other governmental authority, or (iii) a
general banking moratorium being declared by either Federal or New York
authorities.
(j) At the Closing Date and, as to the Option
Securities, the Option Closing Date, there shall be furnished to the
Underwriter an accurate certificate, dated the date of its delivery,
signed by each of the Chief Executive Officer and the President of the
Company, in form and substance reasonably satisfactory to the
Underwriter, to the effect that:
(i) Each signer of such certificate has
carefully examined the Registration Statement and the
Prospectus and (A) as of the date of such certificate, (x) the
Registration Statement does not contain any untrue statement
of a material fact or omit to state a material fact required
to be stated therein or necessary in order to make the
statements therein not misleading and (y) the Prospectus does
not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or
necessary in order to make the
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statements therein, in light of the circumstances under which
they were made, not misleading and (B) since the Effective Date
no event has occurred as a result of which it is necessary to
amend or supplement the Prospectus in order to make the
statements therein not untrue or misleading in any material
respect;
(ii) Each of the representations and
warranties of the Company contained in this Agreement were,
when originally made, and are, at the time such certificate is
delivered, true and correct in all material respects; and
(iii) Each of the covenants required herein
to be performed by the Company on or prior to the date of such
certificate has been duly, timely and fully performed and each
condition herein required to be complied with by the Company
on or prior to the delivery of such certificate has been duly,
timely and fully complied with.
(k) The Company shall have delivered to you evidence
that the Securities and the Conversion Shares have been authorized for
quotation on the NYSE upon notice of issuance.
8. (a) The Company will indemnify and hold you harmless for
any losses, claims, damages or liabilities to which you may become
subject, under the 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
a material fact contained in any Preliminary Prospectus, the
Registration Statement or the Prospectus, or any amendment or
supplement thereto, or filed with the Commission or any securities
association or securities exchange (each, an "Application"), or the
omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements made therein
not misleading, (ii) any untrue statement or alleged untrue statement
made by the Company in Section 1 of this Agreement, or (iii) the
employment by the Company of any device, scheme or artifice to defraud,
or the engaging by the Company in any act, practice or course of
business which operates or would operate as a fraud or deceit, or any
conspiracy with respect thereto, in which the Company shall
participate, in connection with the issuance and sale of any of the
Securities, and will reimburse you for any legal or other expenses
reasonably incurred by you in connection with investigating, preparing
to defend, defending or appearing as a third-party witness in
connection with any such action or claim; provided, however, that the
Company shall 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 an
untrue statement or alleged untrue statement or omission or alleged
omission relating to you made in any Preliminary Prospectus, the
Registration Statement, or the Prospectus or such amendment or
supplement or any Application in reliance upon and in conformity with
written information furnished to the Company by you expressly for use
therein; and provided, further, that, the indemnity agreement contained
in this Section 8(a) with respect to any
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Preliminary Prospectus shall not inure to your benefit (or any persons
controlling you) on account of any losses, claims, damages,
liabilities or litigation arising from the sale of Securities to any
person, if you fail to send or give a copy of the Prospectus, as the
same may be then supplemented or amended, to such person, within the
time required by the Act and the untrue statement or alleged untrue
statement or omission or alleged omission to state a material fact
contained in such Preliminary Prospectus was corrected in the
Prospectus, unless such failure is the result of noncompliance by the
Company with Section 5(b) hereof.
(b) The Underwriter will indemnify and hold harmless
the Company against any losses, claims, damages or liabilities to which
the Company may become subject, under the Act or otherwise, insofar as
such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon an untrue statement or alleged
untrue statement of a material fact contained in any Preliminary
Prospectus, the Registration Statement or the Prospectus, or any
amendment or supplement thereto, or any Application, or arise out of or
are based upon the omission or alleged omission to state therein a
material fact required to be stated therein 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 any Preliminary Prospectus,
the Registration Statement, the Prospectus or such amendment or
supplement or any Application in reliance upon and in conformity with
written information furnished to the Company by you relating to you
expressly for use therein, and will reimburse the Company for any legal
or other expenses reasonably incurred by the Company in connection with
investigating or defending any such action or claim.
The indemnity agreement in this Section 8(b) shall be
in addition to any liability which you may otherwise have and shall
extend, upon the same terms and conditions, to each officer and
director of the Company and to each person, if any, who controls the
Company within the meaning of the Act or the Exchange Act.
(c) Promptly after receipt by an indemnified party
under Section 8(a) or 8(b) of notice of the commencement of any action
(including any governmental investigation), such indemnified party
shall, if a claim in respect thereof is to be made against the
indemnifying party under such subsection, notify the indemnifying party
in writing of the commencement thereof; but the omission so to notify
the indemnifying party shall not relieve it from any liability which it
may have to any indemnified party under Section 8(a) or 8(b) except to
the extent it was unaware of such action and has been prejudiced in any
material respect by such failure or from any liability which it may
have to any indemnified party otherwise than under such Section 8(a) or
8(b). In case any such action shall be brought against any indemnified
party and it shall notify the indemnifying party of the commencement
thereof, the indemnifying party shall be entitled to participate
therein and, to the extent that it shall wish, jointly with any other
indemnifying party
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similarly notified, to assume the defense thereof, with counsel
satisfactory to such indemnified party, and after notice from the
indemnifying party to such indemnified party of its election so to
assume the defense thereof, the indemnifying party shall not be liable
to such indemnified party under such subsection for any legal or other
expenses subsequently incurred by such indemnified party in connection
with the defense thereof other than reasonable costs of investigation.
If, however, (i) the indemnifying party has
authorized the employment of counsel for the indemnified party at the
expense of the indemnifying party or (ii) an indemnified party shall
have reasonably concluded that representation of such indemnified party
and the indemnifying party by the same counsel would be inappropriate
under applicable standards of professional conduct due to actual or
potential differing interests between them and the indemnified party so
notifies the indemnifying party, then the indemnified party shall be
entitled to employ counsel different from counsel for the indemnifying
party at the expense of the indemnifying party and the indemnifying
party shall not have the right to assume the defense of such
indemnified party. In no event shall the indemnifying parties be liable
for fees and expenses of more than one counsel (in addition to local
counsel) for all indemnified parties in connection with any one action
or separate but similar or related actions in the same jurisdiction
arising out of the same set of allegations or circumstances. The
counsel with respect to which fees and expenses shall be so reimbursed
shall be designated in writing by Xxxxxxxx & Co. Inc. in the case of
parties indemnified pursuant to Section 8(a) and by the Company in the
case of parties indemnified pursuant to Section 8(b). If at any time an
indemnified party shall have requested an indemnifying party to
reimburse the indemnified party for fees and expenses of counsel to
which such indemnified party is entitled under Section 8(a) or 8(b),
the indemnifying party agrees that it shall be liable for any
settlement of any proceeding effected without its written consent if
(i) such settlement is entered into more than 30 days after receipt by
such indemnifying party of the aforesaid request and (ii) such
indemnifying party shall not have reimbursed the indemnified
party in accordance with such request prior to the date of such
settlement. No indemnifying party shall, without the prior written
consent of the indemnified party, effect any settlement of any pending
or threatened proceeding in respect of which any indemnified party is
or could have been a party and indemnity could have been sought
hereunder by such indemnified party, unless such settlement includes
an unconditional release of such indemnified party from all liability
on claims that are the subject matter of such proceeding.
(d) In order to provide for you just and equitable
contribution under the Act in any case in which (i) the Underwriter (or
any person who controls any Underwriter within the meaning of the Act
or the Exchange Act) makes a claim for indemnification pursuant to
Section 8(a) hereof, but it is judicially determined (by the entry of a
final judgment or decree by a court of competent jurisdiction and the
expiration of time to appeal or the denial of the last right of appeal)
that such indemnification may not be
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enforced in such case notwithstanding the fact that Section 8(a)
provides for indemnification in such case or (ii) contribution under
the Act may be required on the part of the Underwriter or any such
controlling person in circumstances for which indemnification is
provided under Section 8(b), then, and in each such case, each
indemnifying party shall contribute to the aggregate losses, claims,
damages or liabilities to which they may be subject as an indemnifying
party hereunder (after contribution from others) in such proportion as
is appropriate to reflect the relative benefits received by the
Company on the one hand and the Underwriter on the other from the
offering of the Securities. If, however, the allocation provided by
the immediately preceding sentence is not permitted by applicable law
or if the indemnified party failed to give the notice required under
Section 8(c) above, then each indemnifying party shall contribute to
such amount paid or payable by such indemnified party in such
proportion as is appropriate to reflect not only such relative
benefits but also the relative fault of the Company on the one hand
and the Underwriter on the other in connection with the statements or
omissions which resulted in such losses, claims, damages or
liabilities (or actions in respect thereof), as well as any other
relevant equitable considerations. The relative benefits received by
the Company on the one hand and the Underwriter on the other shall be
deemed to be in the same proportion as the total net proceeds from the
offering of the Securities purchased under this Agreement (before
deducting expenses) received by the Company bear to the total
underwriting discounts and commissions received by the Underwriter
with respect to the Securities purchased under this Agreement, in each
case as set forth in the table on the cover page of the Prospectus.
The relative fault 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 on the one hand or the
Underwriter on the other and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such
statement or omission. The Company and the Underwriter agree that it
would not be just and equitable if contributions pursuant to this
Section 8(d) were determined by pro rata allocation or by any other
method of allocation which does not take account of the equitable
considerations referred to above in this Section 8(d). The amount paid
or payable by an indemnified party as a result of the losses, claims,
damages or liabilities (or actions in respect thereof) referred to
above in this Section 8(d) shall be deemed to include any legal or
other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 8(d), the Underwriter
shall not be required to contribute any amount in excess of the amount
by which the total price at which the Securities underwritten by it
and distributed to the public were offered to the public exceeds the
amount of any damages which the Underwriter has otherwise been
required to pay by reason of such untrue or alleged untrue statement
or omission or alleged omission. No person guilty of a 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.
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(e) Promptly after receipt by any party to this
Agreement of notice of the commencement of any action, suit or
proceeding, such party will, if a claim for contribution in respect
thereof is to be made against another party (the "contributing party"),
notify the contributing party of the commencement thereof, but the
omission so to notify the contributing party will not relieve it from
any liability which it may have to any other party for contribution
under the Act except to the extent it was unaware of such action and
has been prejudiced in any material respect by such failure or from any
liability which it may have to any other party other than for
contribution under the Act. In case any such action, suit or proceeding
is brought against any party, and such party notifies a contributing
party of the commencement thereof, the contributing party will be
entitled to participate therein with the notifying party and any other
contributing party similarly notified.
9. The respective indemnities, agreements, representations,
warranties and other statements of the Company and the Underwriter, as 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 any
investigation (or any statement as to the results thereof) made by or on behalf
of the Underwriter or any controlling person of the Underwriter, or the Company,
or an officer or director or controlling person of the Company, and shall
survive delivery of and payment for the Securities.
10. This Agreement shall become effective (a) if the
Registration Statement has not heretofore become effective, at the earlier of
12:00 Noon, New York City time, on the first full business day after the
Registration Statement becomes effective, or at such time after the Registration
Statement becomes effective as you may authorize the sale of the Securities to
the public by the Underwriter or other securities dealers, or (b) if the
Registration Statement has heretofore become effective, at the earlier of 24
hours after the filing of the Prospectus with the Commission or at such time as
you may authorize the sale of the Securities to the public by yourself or
securities dealers, unless, prior to any such time you shall have received
notice from the Company that it elects that this Agreement shall not become
effective, or you shall have given notice to the Company that you elect that
this Agreement shall not become effective; provided, however, that the
provisions of this Section and Section 6 and Section 8 hereof shall at all times
be effective.
If this Agreement shall be terminated pursuant to Section 9
hereof, or if this Agreement, by election of you, shall not become effective
pursuant to the provisions of this Section, the Company shall not then be under
any liability to you except as provided in Section 6 and Section 8 hereof, but
if this Agreement becomes effective and is not so terminated but the Securities
are not delivered by or on behalf of the Company as provided herein because the
Company has been unable for any reason beyond its control and not due to any
default by it to comply with the terms and conditions hereof, the Company will
reimburse you for all out-of-pocket expenses, including fees and disbursements
of counsel, actually and reasonably incurred by you in making preparations for
the purchase, sale and delivery of the Securities, but the
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Company shall then be under no further liability to you except as provided in
Section 6 and Section 8 hereof and in no event will the Company be liable to the
Underwriter for any loss of anticipated profits from transactions contemplated
by this Agreement.
11. The statements set forth in the last paragraph on the
front cover page of the Prospectus, the paragraph on the inside front cover of
the Prospectus containing stabilization language and the third and eighth
paragraphs under the caption "Underwriting" in the Prospectus constitute the
only information furnished by the Underwriter to the Company for purposes of
Sections 1(b), 1(c) and 8 hereof.
12. All statements, requests, notices and agreements
hereunder, unless otherwise specified in this Agreement, shall be in writing
and, if to the Underwriter, shall be delivered or sent by mail, telex or
facsimile transmission (subsequently confirmed by delivery or by letter sent by
mail) to Xxxxxxxx & Co. Inc. at Equitable Center, 000 Xxxxxxx Xxxxxx, Xxx Xxxx,
Xxx Xxxx 00000, Attention: Syndicate Department; and if to the Company, shall be
delivered or sent by mail, telex or facsimile transmission (subsequently
confirmed by delivery or by letter sent by mail) to the address of the Company
set forth in the Registration Statement, Attention: Chief Financial Officer. Any
such statements, requests, notices or agreements shall take effect at the time
of receipt thereof.
13. This Agreement shall be binding upon, and inure solely to
the benefit of, the Underwriter, the Company and, to the extent provided in
Section 8 and Section 10 hereof, the officers and directors of the Company and
each person who controls the Company or the Underwriter, and their respective
heirs, executors, administrators, successors and assigns, and no other person
shall acquire or have any right under or by virtue of this Agreement. No
purchaser of any of the Securities from the Underwriter shall be deemed a
successor or assign by reason merely of such purchase.
14. Time shall be of the essence of this Agreement. As used
herein, the term "business day" shall mean any day when the Commission's office
in Washington, D.C. is open for business.
15. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO THE CONFLICTS OF LAWS
PRINCIPLES THEREOF.
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16. This Agreement may be executed by any one or more of the
parties hereto in any number of counterparts, each of which shall be deemed to
be an original, but all such counterparts shall together constitute one and the
same instrument. If the foregoing is in accordance with your understanding,
please sign and return to us two counterparts hereof. Upon the acceptance hereof
by you, this letter and such acceptance hereof shall constitute a binding
agreement among you and the Company.
Very truly yours,
AMERICAN RETIREMENT CORPORATION
By:____________________________________
Name:
Title:
Accepted as of the date hereof:
XXXXXXXX & CO. INC.,
as Underwriter
By:________________________________
Name:
Title:
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EXHIBIT A
SUBSIDIARIES
American Retirement Corporation II
ARCLP - Charlotte, LLC
A.R.C. Management Corporation
ARC Corpus Christi, Inc.
ARC Oak Park, Inc.
ARC Equities - Lexington, Inc.
ARC Fort Austin Properties, Inc.
Fort Austin Limited Partnership
Trinity Towers Limited Partnership
Xxxxxx Court Terrace, L.P.
A.R.C. Chattanooga, Inc.
ARC Tarpon Springs, Inc.
ARC Sun City Center, Inc.
A-1
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EXHIBIT B
September __, 1997
XXXXXXXX & CO. INC.
As Underwriter
Equitable Center
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
In order to induce Shroder & Co. Inc. ("Schroders") to underwrite a
proposed public offering (the "Offering") of ___% Convertible Subordinated
Debentures due 2002 (the "Debentures") of American Retirement Corporation, a
Tennessee corporation (the "Company"), as contemplated by a registration
statement filed with the Securities and Exchange Commission on Form S-1
(Registration No. 333-34339), the undersigned hereby agrees that the undersigned
will not, directly or indirectly, for a period of 90 days after the commencement
of the Offering, without Schroders' prior written consent, offer to sell, sell,
contract to sell, grant any option to purchase or otherwise dispose (or announce
any offer, sale, grant of any option to purchase or other disposition) of any
shares of the Company's common stock, par value $0.01 per share (the "Common
Stock") or any securities convertible into or exchangeable for shares of Common
Stock (except that the Company may grant options to purchase or award shares of
Common Stock under the Stock Incentive Plan and the Stock Option Plan and issue
privately placed shares in connection with any acquisitions).
This letter shall have no further force or effect if the Company and
the Underwriter shall not have executed and delivered an underwriting agreement
related to the Offering by [_______ __, 1997] or if any underwriting agreement
entered into by such parties shall be terminated prior to the initial closing
date provided for therein.
This letter agreement shall not prohibit the undersigned from
transferring any Debentures or shares of Common Stock to members of his or her
immediate family or to a trust for their benefit, provided that such persons or
trust agree to be bound by the terms hereof.
Very truly yours,
By: _________________________________
Name:
B-1
