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EXHIBIT 99.4
Letterhead of
Bernstein Litowitz Berger & Grossmann LLP
1285 Avenue of the Americas
New York, NY 10019-6028
Telephone - 212-554-1400
Facsimile - 212-554-1444
August 29, 2000
Via Facsimile and Federal Express
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John Patterson, Esq.
D'Amato & Lynch
70 Pine Street
New York, NY 10270-0110
RE: Assisted Living Concepts, Inc. Securities Litigation
Dear John:
As you know, we are serving as plaintiffs' co-lead counsel in the Assisted
Living Concepts, Inc. ("ALC") securities fraud case. This letter is intended to
confirm our agreement with your client, National Union, regarding National
Union's willingness to contribute the proceeds of its $10 million Directors,
Officers and Corporate Liability Insurance Policy toward the settlement of the
ALC case. We have discussed National Union's willingness to contribute its
policy in several conversations, and we have reached agreement on National
Union's $10 million contribution to settlement on the following terms:
1. The $10 million payment to the settlement fund by National Union
will be completely unconditional, although National Union
reserves any and all rights it may have in law and in equity to
seek damages, recoupment and/or restitution from ALC and, if
necessary, other Insureds;
2. National Union will be a party to the settlement of the
underlying securities case;
3. National Union agrees that plaintiffs will have undisputed
priority over certain real property collateral that secures the
approximately $9 million promissory note that ALC will deliver
to plaintiffs as part of the settlement;
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John Patterson, Esq.
August 29, 2000
Page 2
4. National Union's payment will be upon final approval of the
settlement, which is anticipated in January 2001, and in no event
earlier than January 7, 2001 or later than January 31, 2001;
5. National Union agrees that it will not take any action to enforce
any judgment it may obtain against ALC until after the expiration
of at least 90 days from the date National Union makes its
payment into the settlement fund; and
6. National Union's agreement to the foregoing is conditioned on the
case being settled in accordance with the foregoing and the MOU.
We would like to confirm National Union's agreement to the above terms.
Please either sign this letter where indicated or have an authorized National
Union representative countersign this letter and return it to me. Thank you.
Sincerely yours,
/s/ Max W. Berger
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Max W. Berger
The foregoing terms are agreed to
by the undersigned authorized
representative of National Union.
_____________________________________
cc: Gary Berne, Esq. (by facsimile)
David Rees, Esq. (by facsimile)
David Kessler, Esq. (by facsimile)
