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EXHIBIT 1.1
2,000,000 PREFERRED SECURITIES
FINOVA FINANCE TRUST
(A DELAWARE TRUST)
% CONVERTIBLE TRUST ORIGINATED PREFERRED SECURITIES(SM)("CONVERTIBLE TOPRS(SM)")
(LIQUIDATION AMOUNT OF $50 PER PREFERRED SECURITY)
PURCHASE AGREEMENT
December , 1996
XXXXXXX XXXXX & CO.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
XXXXXXXXXX SECURITIES
XXXXXX XXXXXXX & CO. INCORPORATED
as Representatives of the several Underwriters
x/x Xxxxxxx Xxxxx & Xx.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
Xxxxxxx Xxxxx World Headquarters
Xxxxx Xxxxx
Xxxxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
FINOVA Finance Trust (the "Trust"), a statutory business trust
organized under the Business Trust Act of the State of Delaware (Chapter 38,
Title 12 of the Delaware Code, 12 Del. C. Section 3801 et seq.) (the "Delaware
Act"), and The FINOVA Group Inc., a Delaware corporation (the "Company" and,
together with the Trust, the "Offerors"), confirm their agreement with Xxxxxxx
Xxxxx & Co., Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated ("Xxxxxxx
Xxxxx"), Xxxxxxxxxx Securities, Xxxxxx Xxxxxxx & Co. Incorporated and each of
the other Underwriters, if any, named in Schedule A hereto (collectively, the
"Underwriters", which term shall also include any underwriter substituted as
hereinafter provided in Section 10 hereof), for whom you are acting as
representatives (in such capacity, you shall hereinafter be
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(SM) "Trust Originated Preferred Securities" and "Convertible TOPrS" are service
marks of Xxxxxxx Xxxxx & Co., Inc.
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referred to as the "Representatives"), with respect to the sale by the Trust and
the purchase by the Underwriters, acting severally and not jointly, of the
respective numbers of the Trust's % Convertible Trust Originated Preferred
Securities (liquidation amount $50 per preferred security) (the "Convertible
TOPrS") set forth in Schedule A hereto, and with respect to the grant by the
Trust to the Underwriters, acting severally and not jointly, of the option
described in Section 2(b) hereof to purchase all or any part of 300,000
additional Convertible TOPrS to cover over-allotments. The aforesaid 2,000,000
Convertible TOPrS (the "Initial Preferred Securities") to be purchased by the
Underwriters and all or any part of the 300,000 Convertible TOPrS subject to the
option described in Section 2(b) hereof (the "Option Preferred Securities") are
collectively hereinafter called the "Preferred Securities."
The Preferred Securities will be guaranteed by the Company, to the
extent set forth in the Prospectus (as defined herein), with respect to
distributions and payments upon liquidation, redemption and otherwise (the
"Preferred Securities Guarantee"), pursuant to the Preferred Securities
Guarantee Agreement dated as of December , 1996 (the "Preferred Securities
Guarantee Agreement") between the Company and Fleet National Bank, a national
banking association ("Fleet"), as trustee (the "Guarantee Trustee"), and
entitled to the benefits of certain backup undertakings described in the
Prospectus with respect to the Company's agreement pursuant to the Indenture (as
defined herein) to pay all expenses relating to the administration of the Trust.
Each Preferred Security will be convertible, in accordance with the terms of the
Preferred Securities and the Indenture, at the option of the holder thereof into
shares of common stock, par value $.01 per share, of the Company (the "Common
Stock").
The entire proceeds from the sale of the Preferred Securities will be
combined with the entire proceeds from the sale by the Trust to the Company of
its common securities (the "Common Securities"), and will be used by the Trust
to purchase $103,092,800 aggregate principal amount (plus up to an additional
$15,463,950 aggregate principal amount if the Underwriters' over-allotment
option is exercised) of % Convertible Subordinated Debentures due 2016 (the
"Convertible Debentures") issued by the Company. The Common Securities will be
guaranteed by the Company, to the extent set forth in the Prospectus, with
respect to distributions and payments upon liquidation and redemption (the
"Common Securities Guarantee" and, together with the Preferred Securities
Guarantee, the "Guarantees") pursuant to the Common Securities Guarantee
Agreement dated as of December , 1996 executed by the Company (the "Common
Securities Guarantee Agreement" and, together with the Preferred Securities
Guarantee Agreement, the "Guarantee Agreements"). The Preferred Securities and
the Common Securities will be issued pursuant to the Amended and Restated
Declaration of Trust of the Trust dated as of December , 1996 (the
"Declaration") among the Company, as sponsor, Xxxxxx X. Xxxxxxxxxxx and Xxxxx X.
Xxxxxxxxxx (the "Regular Trustees"), Fleet, as property trustee (the "Property
Trustee"), and First Union Bank of Delaware, as Delaware trustee (the "Delaware
Trustee," and together with the Regular Trustees and the Property Trustee, the
"Trustees"), and the holders from time to time of undivided beneficial interests
in the assets of the Trust. The Convertible Debentures will be issued pursuant
to an Indenture dated as of December , 1996 (the "Indenture") between the
Company and Fleet, as trustee (the "Indenture Trustee").
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The Offerors have filed with the Securities and Exchange Commission
(the "Commission") a registration statement on Form S-3 (No. 333-15445),
including the related preliminary prospectus or prospectuses, for the
registration under the Securities Act of 1933, as amended (the "1933 Act"), of
(i) the Preferred Securities, (ii) the Preferred Securities Guarantee, (iii) the
Convertible Debentures, (iv) the Common Stock issuable upon conversion of the
Preferred Securities and (v) certain junior participating preferred share
purchase rights (the "Rights") issuable pursuant to an Amended and Restated
Rights Agreement dated as of September 14, 1995, as amended (the "Rights
Agreement"), between the Company and Xxxxxx Trust & Savings Bank, N.A.
(successor to BankOne Arizona, N.A.), as rights agent (the securities set forth
in the foregoing clauses (i) through (v) inclusive, collectively, the
"Registered Securities"). Promptly after execution and delivery of this
Agreement, the Company will either (i) prepare and file a prospectus in
accordance with the provisions of Rule 430A ("Rule 430A") of the rules and
regulations of the Commission under the 1933 Act (the "1933 Act Regulations")
and paragraph (b) of Rule 424 ("Rule 424(b)") of the 1933 Act Regulations or
(ii) if the Company has elected to rely upon Rule 434 ("Rule 434") of the 1933
Act Regulations, prepare and file a term sheet (a "Term Sheet") in accordance
with the provisions of Rule 434 and Rule 424(b). The information included in
such prospectus or in such Term Sheet, as the case may be, that was omitted from
such registration statement at the time it became effective but that is deemed
to be part of such registration statement at the time it became effective (i)
pursuant to paragraph (b) of Rule 430A is referred to as "Rule 430A Information"
or (ii) pursuant to paragraph (d) of Rule 434 is referred to as "Rule 434
Information." Each prospectus used before such registration statement became
effective, and any prospectus that omitted, as applicable, the Rule 430A
Information or the Rule 434 Information, that was used after such effectiveness
and prior to the execution and delivery of this Agreement, is herein called a
"preliminary prospectus." Such registration statement, including the exhibits
thereto, schedules thereto, if any, and the documents incorporated by reference
therein pursuant to Item 12 of Form S-3 under the 1933 Act, at the time it
became effective and including the Rule 430A Information and the Rule 434
Information, as applicable, is herein called the "Registration Statement." Any
registration statement filed pursuant to Rule 462(b) of the 1933 Act Regulations
is herein referred to as a "Rule 462(b) Registration Statement," and after such
filing the term "Registration Statement" shall include the Rule 462(b)
Registration Statement. The final prospectus, including the documents
incorporated by reference therein pursuant to Item 12 of Form S-3 under the 1933
Act, in the form first furnished to the Underwriters for use in connection with
the offering of the Securities is herein called the "Prospectus." If Rule 434 is
relied on, the term "Prospectus" shall refer to the preliminary prospectus dated
November 20, 1996 together with the Term Sheet and all references in this
Agreement to the date of the Prospectus shall mean the date of the Term Sheet.
For purposes of this Agreement, all references to the Registration Statement,
any preliminary prospectus, the Prospectus or any Term Sheet or any amendment or
supplement to any of the foregoing shall be deemed to include the copy filed
with the Commission pursuant to its Electronic Data Gathering, Analysis and
Retrieval system ("XXXXX").
All references in this Agreement to financial statements and schedules
and other information which is "contained," "included," "stated," "described" or
"referred to" in the Registration Statement, any preliminary prospectus or the
Prospectus (and all other references
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of like import) shall be deemed to mean and include all such documents,
financial statements and schedules and other information which is or is deemed
to be incorporated by reference in the Registration Statement, such preliminary
prospectus or the Prospectus, as the case may be; and all references in this
Agreement to amendments or supplements to the Registration Statement, any
preliminary prospectus or the Prospectus shall be deemed to mean and include the
filing of any document under the Securities Exchange Act of 1934, as amended
(the "1934 Act"), after the date of this Agreement which is or is deemed to be
incorporated by reference in the Registration Statement, such preliminary
prospectus or the Prospectus, as the case may be.
The Offerors understand that the Underwriters propose to make a public
offering of the Preferred Securities as soon as the Representatives deem
advisable after this Agreement has been executed and delivered and the
Declaration, the Indenture and the Preferred Securities Guarantee Agreement have
been qualified under the Trust Indenture Act of 1939, as amended (the "1939
Act").
SECTION 1. Representations and Warranties.
(a) The Offerors jointly and severally represent and warrant to, and
covenant and agree with, each Underwriter as of the date hereof, as of Closing
Time (as defined in Section 2) and as of each Date of Delivery (as defined in
Section 2), if any, as follows:
(i) The Offerors meet the requirements for use of Form S-3
under the 1933 Act. Each of the Registration Statement and any Rule
462(b) Registration Statement has become effective under the 1933 Act
and no stop order suspending the effectiveness of the Registration
Statement or any Rule 462(b) Registration Statement has been issued
under the 1933 Act and no proceedings for that purpose have been
instituted or are pending or, to the knowledge of either of the
Offerors, are contemplated by the Commission, and any request on the
part of the Commission for additional information has been complied
with.
At the respective times the Registration Statement, any Rule
462(b) Registration Statement and any post-effective amendments thereto
became or become effective and at the Closing Time (and, if any Option
Securities are purchased, at each Date of Delivery), the Registration
Statement, the Rule 462(b) Registration Statement and any amendments
and supplements thereto complied and will comply in all material
respects with the requirements of the 1933 Act and the 1933 Act
Regulations and did not and will not contain an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading.
Neither the Prospectus nor any amendments or supplements thereto, at
the time the Prospectus or any such amendment or supplement was issued
and the Closing Time (and, if any Option Securities are purchased, at
each Date of Delivery), included or will include an untrue statement of
a material fact or omitted or will 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. If Rule 434
is used, the Company will comply with the requirements of Rule 434. The
representations and
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warranties in this subsection shall not apply to statements in or
omissions from the Registration Statement or Prospectus made in
reliance upon and in conformity with information furnished to the
Company in writing by any Underwriter through Xxxxxxx Xxxxx expressly
for use in the Registration Statement or Prospectus and that part of
the Registration Statement which constitutes the Statement of
Eligibility on Form T-1 of the Indenture Trustee, the Guarantee Trustee
or the Property Trustee under the 1939 Act (each, a "Form T-1").
Each preliminary prospectus and the Prospectus delivered to
the Underwriters for use in connection with this offering was identical
to the electronically transmitted copies thereof filed with the
Commission pursuant to XXXXX, except to the extent permitted by
Regulation S-T.
(ii) The documents incorporated or deemed to be incorporated
by reference in the Registration Statement or the Prospectus, at the
time they were or hereafter are filed with the Commission, complied and
will comply in all material respects with the requirements of the 1934
Act and the rules and regulations of the Commission under the 1934 Act
(the "1934 Act Regulations"), as applicable, and, when read together
with the other information in the Prospectus, at the respective times
the Registration Statement, any Rule 462(b) Registration Statement or
any post-effective amendment thereto became or becomes effective and at
the Closing Time (and, if any Option Securities are purchased, at each
Date of Delivery) did not and will not contain an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading.
(iii) The accountants who certified the financial statements
included in the Prospectus are independent public accountants as
required by the 1933 Act and the 1933 Act Regulations.
(iv) The financial statements of the Company and its
consolidated subsidiaries included in the Prospectus, together with the
related schedules (if any) and notes, present fairly the financial
position of the Company and its consolidated subsidiaries at or as of
the dates indicated and the results of their operations for the periods
specified; and except as stated therein, said financial statements have
been prepared in conformity with generally accepted accounting
principles applied on a consistent basis.
(v) Since the respective dates as of which information is
given in the Registration Statement and the Prospectus, except as
otherwise stated therein or contemplated thereby, (A) there has been no
material adverse change in the condition, financial or otherwise, of
the Company and its subsidiaries considered as one enterprise or of the
Trust or in the earnings, business affairs or business prospects of the
Company and its subsidiaries considered as one enterprise or of the
Trust, whether or not arising in the ordinary course of business, (B)
there have been no transactions entered into by the Company or any of
its subsidiaries other than those in the ordinary
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course of business, which are material with respect to the Company and
its subsidiaries considered as one enterprise, and (C) except for
regular quarterly dividends on the Common Stock in amounts per share
that are consistent with past practice, there has been no dividend or
distribution of any kind declared, paid or made by the Company on any
class of its capital stock.
(vi) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State
of Delaware with corporate power and authority to own, lease and
operate its properties and conduct its business as described in the
Registration Statement and to enter into and perform its obligations
under this Agreement, the Indenture, the Convertible Debentures, the
Guarantee Agreements and the Declaration and to purchase, own and hold
the Common Securities issued by the Trust; and the Company is duly
qualified as a foreign corporation to transact business and is in good
standing in each jurisdiction in which such qualification is required,
except where the failure of the Company to so qualify, in the
aggregate, will not have a material adverse effect on the consolidated
financial condition or combined operations of the Company and its
subsidiaries.
(vii) Each subsidiary of the Company has been duly
incorporated and is validly existing as a corporation in good standing
under the laws of the jurisdiction of its incorporation, has corporate
power and authority to own, lease and operate its properties and
conduct its business as described in the Registration Statement and is
duly qualified as a foreign corporation to transact business and is in
good standing in each jurisdiction in which such qualification is
required, except where the failure of any such subsidiaries to so
qualify, in the aggregate, will not have a material adverse effect on
the consolidated financial condition or combined operations of the
Company and its subsidiaries; all of the issued and outstanding capital
stock of each such subsidiary has been duly authorized and validly
issued and is fully paid and non-assessable; and all the capital stock
of each such subsidiary is owned by the Company or its affiliates,
directly or through subsidiaries, except for directors' qualifying
shares, free and clear of any mortgage, pledge, lien, encumbrance,
claim or equity.
(viii) The authorized, issued and outstanding capital stock of
the Company is as set forth in the Registration Statement (except for
subsequent issuances, if any, pursuant to reservations, agreements or
employee benefit plans referred to in the Registration Statement); all
of the shares of issued and outstanding Common Stock have been duly
authorized and validly issued and are fully paid and non-assessable and
are not subject to any preemptive or other similar rights; the
Registered Securities, the Common Securities, the Common Securities
Guarantee, the Indenture, the Guarantee Agreements, the Rights
Agreement, the Company's charter and by-laws and the Declaration
conform and will conform to all statements relating thereto contained
in the Registration Statement and the Prospectus.
(ix) Neither the Company nor any of its subsidiaries is in
violation of its charter or by-laws; the Trust is not in violation of
the Declaration or its certificate of trust dated November 1, 1996
filed with the State of Delaware (the "Certificate of
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Trust"); neither the Company nor any of its subsidiaries nor the Trust
is in default in the performance or observance of any obligations,
agreements, covenants or conditions contained in any contracts,
indentures, mortgages, loan agreements, notes, leases or other
instruments to which the Company, any of its subsidiaries or the Trust
is a party or by which any of them or any of their respective
properties may be bound, except for such defaults which, alone or in
the aggregate, would not have a material adverse effect on the Company
and its subsidiaries considered as one enterprise or on the Trust; and
the execution, delivery and performance of this Agreement, the
Indenture, the Convertible Debentures, the Guarantee Agreements, the
Declaration, the Certificate of Trust, the Preferred Securities and the
Common Securities (collectively, the "Operative Instruments"), the
consummation of the transactions contemplated herein and therein
(including, without limitation, the issuance and sale of the Preferred
Securities, Common Securities, Convertible Debentures and Guarantees
and the issuance of shares of Common Stock and Rights upon conversion
of the Preferred Securities and Convertible Debentures), and the
performance of the other obligations hereunder and thereunder, have
been duly authorized by all necessary action on the part of the
Offerors and do not and will not conflict with or constitute a breach
of, or default under, or result in the creation or imposition of any
lien, charge or encumbrance upon any property or assets of the Company,
any of its subsidiaries or the Trust pursuant to, any contract,
indenture, mortgage, loan agreement, note, lease or other instrument to
which the Company, any of its subsidiaries or the Trust is a party or
by which the Company, any of its subsidiaries or the Trust may be bound
or to which any of the property or assets of the Company, any of its
subsidiaries or the Trust is subject, except for such conflicts,
breaches, defaults, liens, charges or encumbrances that would not,
alone or in the aggregate, have a material adverse effect on the
Company and its subsidiaries considered as one enterprise or on the
Trust, nor will such action result in any violation of the provisions
of the charter or by-laws of the Company or the Declaration or
Certificate of Trust or, to the best knowledge of the Offerors, any
applicable law, administrative regulation or administrative or court
order or decree; and no consent, approval, authorization, order or
decree of any court or governmental agency or body is required for the
execution, delivery and performance of the Operative Instruments, the
consummation of the transactions contemplated by the Operative
Instruments (including, without limitation, the issuance and sale of
the Preferred Securities, Common Securities, Convertible Debentures and
Guarantees and the issuance of shares of Common Stock and Rights upon
conversion of the Preferred Securities and Convertible Debentures), and
the performance of the other obligations under the Operative
Instruments, except such as may have already been obtained and as to
which the Offerors shall have advised you in writing and such as may be
required under the 1933 Act, the 1933 Act Regulations, the 1939 Act or,
if applicable, state securities or Blue Sky laws in connection with the
purchase and distribution of the Registered Securities.
(x) The Company and its subsidiaries own or possess or have
obtained, can obtain on reasonable terms or are in the process of
obtaining all material governmental licenses, permits, consents,
orders, approvals and other authorizations necessary to lease or own,
as the case may be, and to operate their respective properties and to
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carry on their respective businesses as presently conducted, except
such as may be required under state securities or Blue Sky laws, if
applicable, in connection with the purchase and distribution of the
Registered Securities.
(xi) The Company and its subsidiaries own or possess, or can
acquire on reasonable terms, adequate trademarks, service marks and
trade names necessary to conduct the business now operated by them, and
neither the Company nor any of its subsidiaries has received any notice
of infringement of or conflict with asserted rights of others with
respect to any trademarks, servicemarks or trade names which, singly or
in the aggregate, if the subject of an unfavorable decision, ruling or
finding, would reasonably be expected to materially adversely affect
the conduct of the business, operations, financial condition or income
of the Company and its subsidiaries considered as one enterprise.
(xii) There is no action, suit or proceeding before or by any
court or governmental agency or body, domestic or foreign, now pending,
or, to the actual knowledge of the Offerors, threatened against or
affecting, the Company or any of its subsidiaries, which would
reasonably be expected to result in any material adverse change in the
condition, financial or otherwise, of the Company and its subsidiaries
considered as one enterprise, or in the business prospects of the
Company and its subsidiaries considered as one enterprise or which
could reasonably be expected to materially and adversely affect the
consummation of the transactions contemplated by this Agreement; there
is no action, suit or proceeding before or by any court or governmental
agency or body, domestic or foreign, now pending, or, to the actual
knowledge of the Offerors, threatened against or affecting the Trust;
and there are no material contracts or documents of the Company, any of
its subsidiaries or the Trust which are required to be filed as
exhibits to the Registration Statement by the 1933 Act or the 1933 Act
Regulations which have not been so filed.
(xiii) No labor dispute with the employees of the Company or
any of its subsidiaries exists or, to the knowledge of the Company, is
imminent and the Company is not aware of any existing or imminent labor
disturbance by the employees of any of its principal suppliers,
manufacturers or contractors, in any such case which would be expected
to result in any material adverse change in the condition, financial or
otherwise, or in the earnings, affairs or business prospects of the
Company and its subsidiaries considered as one enterprise.
(xiv) The financing contracts reflected in the consolidated
balance sheet of the Company and its consolidated subsidiaries as of
September 30, 1996, and the financing contracts entered into by the
Company or any subsidiary since such date, are legal, valid and binding
obligations of the obligors enforceable in accordance with their
respective terms, except as enforcement thereof may be limited by
bankruptcy, insolvency, moratorium or other similar laws relating to or
affecting creditors' rights generally or by general equity principles,
including concepts of commercial reasonableness, and except where the
failure of any such financing contracts to be legal, valid, binding or
enforceable would not, individually or in the aggregate, have a
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material adverse effect on the Company and its subsidiaries considered
as one enterprise; the obligors thereunder are, in all material
respects, in the good faith business judgment of the Company and except
to the extent reflected or stated in the Prospectus, financially
capable of performing their respective obligations thereunder, and any
defaults in the payments under all such contracts in the aggregate are
not of such amount that, were no more payments to be received under the
financing contracts in respect of which such defaults exist, and after
considering estimated collateral values to be recovered, the
consolidated financial condition or operations of the Company and its
consolidated subsidiaries would be materially adversely affected
thereby, excluding impairment of related reserves.
(xv) Neither of the Offerors nor FINOVA Capital Corporation
("FINOVA Capital") is an "investment company" or a company "controlled"
by an "investment company" within the meaning of the Investment Company
Act of 1940, as amended (the "1940 Act").
(xvi) This Agreement has been duly authorized, executed and
delivered by the Company and the Trust.
(xvii) The Trust has been duly created and is validly existing
and in good standing as a business trust under the Delaware Act; the
Trust has the power and authority to own property and to conduct its
business as described in the Registration Statement and the Prospectus
and to enter into and perform its obligations under this Agreement, the
Preferred Securities, the Common Securities and the Declaration and to
comply with its obligations hereunder and thereunder; the Trust is duly
qualified to transact business and is in good standing in each
jurisdiction in which such qualification is necessary, except to the
extent that the failure to so qualify would not have a material adverse
effect on the Trust; the Trust is not a party to or otherwise bound by
any agreement or instrument other than those described in the
Registration Statement; the Trust is and will be classified for United
States federal income tax purposes as a grantor trust and not as an
association taxable as a corporation, and the Offerors will treat the
Convertible Debentures as indebtedness of the Company for United States
federal income tax purposes; and the Trust is and will be treated as a
consolidated subsidiary of the Company pursuant to generally accepted
accounting principles.
(xviii) The Declaration has been duly authorized by the
Company and, at the Closing Time, the Declaration will have been duly
executed and delivered by the Company and the Regular Trustees and will
be a valid and binding obligation of the Company and the Regular
Trustees, enforceable against the Company and the Regular Trustees in
accordance with its terms, except as enforcement thereof may be limited
by bankruptcy, insolvency (including without limitation all laws
relating to fraudulent transfers), reorganization, moratorium or other
similar laws relating to or affecting creditors' rights generally or by
general equity principles (regardless of whether enforcement is
considered in a proceeding at law or in equity), including concepts of
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commercial reasonableness; and at the Closing Time, the Declaration
will have been duly qualified under the 1939 Act.
(xix) The Common Securities have been duly authorized by the
Declaration and, when issued and delivered by the Trust to the Company
against payment of the consideration therefor as described in the
Registration Statement, will be validly issued and (except as provided
in Section 9.1(b) of the Declaration) fully paid and non-assessable
undivided beneficial interests in the assets of the Trust; the issuance
of the Common Securities is not subject to any preemptive or other
similar rights; and at the Closing Time, all of the issued and
outstanding Common Securities of the Trust will be owned by the
Company, directly or through wholly-owned subsidiaries, free and clear
of any security interest, mortgage, pledge, lien, encumbrance, claim or
equity.
(xx) The Preferred Securities have been duly authorized by the
Declaration and, when authenticated in the manner provided for in the
Declaration and issued and delivered by the Trust against payment of
the consideration therefor set forth in this Agreement, will be validly
issued and fully paid and non-assessable undivided beneficial interests
in the assets of the Trust and will be entitled to the benefits of the
Declaration; the issuance of the Preferred Securities is not subject to
any preemptive or other similar rights; and holders of Preferred
Securities will be entitled to the same limitation of personal
liability under Delaware law as extended to stockholders of private
corporations for profit.
(xxi) Each of the Guarantee Agreements has been duly
authorized by the Company and, at the Closing Time, each of the
Guarantee Agreements will have been duly executed and delivered by the
Company and will constitute a valid and binding obligation of the
Company, enforceable against the Company in accordance with its terms,
except as enforcement thereof may be limited by bankruptcy, insolvency
(including without limitation all laws relating to fraudulent
transfers), reorganization, moratorium or other similar laws relating
to or affecting creditors' rights generally or by general equity
principles (regardless of whether enforcement is considered in a
proceeding at law or in equity), including concepts of commercial
reasonableness; and at the Closing Time, the Preferred Securities
Guarantee Agreement will have been duly qualified under the 0000 Xxx.
(xxii) The Indenture has been duly authorized by the Company
and, at the Closing Time, the Indenture will have been duly executed
and delivered by the Company and will be a valid and binding agreement
of the Company, enforceable against the Company in accordance with its
terms, except as enforcement thereof may be limited by bankruptcy,
insolvency (including without limitation all laws relating to
fraudulent transfers), reorganization, moratorium or other similar laws
relating to or affecting creditors' rights generally or by general
equity principles (regardless of whether enforcement is considered in a
proceeding at law or in equity), including concepts of commercial
reasonableness; and at the Closing Time, the Indenture will have been
duly qualified under the 1939 Act.
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(xxiii) The Convertible Debentures have been duly authorized
by the Company; at the Closing Time, the Convertible Debentures will
have been duly executed by the Company and, when issued and delivered
in the manner provided for in the Indenture and sold and paid for as
described in the Prospectus, will constitute valid and binding
obligations of the Company, enforceable against the Company in
accordance with their terms, except as enforcement thereof may be
limited by bankruptcy, insolvency (including without limitation all
laws relating to fraudulent transfers), reorganization, moratorium or
other similar laws relating to or affecting creditors' rights generally
or by general equity principles (regardless of whether enforcement is
considered in a proceeding at law or in equity), including concepts of
commercial reasonableness, and will be in the form contemplated by, and
entitled to the benefits of, the Indenture; and the issuance of the
Convertible Debentures is not and will not be subject to any preemptive
or other similar rights.
(xxiv) The Company's obligations under the Guarantees are and
will be subordinate and junior in right of payment to all liabilities
of the Company and are and will be pari passu with the most senior
preferred stock hereafter issued by the Company and any guarantee
hereafter entered into by the Company in respect of any preferred or
preference stock or preferred securities of any affiliate of the
Company.
(xxv) The Convertible Debentures are and will be subordinate
and junior in right of payment to all "Senior Indebtedness" (as defined
in the Indenture) of the Company.
(xxvi) The shares of Common Stock issuable by the Company upon
conversion of the Convertible Debentures and the Preferred Securities
have been duly and validly authorized and reserved for issuance upon
such conversion by the Company and such shares, when issued upon such
conversion, will be validly issued, fully paid and non-assessable, and
the issuance of such shares upon such conversion is not and will not be
subject to any preemptive or other similar rights.
(xxvii) The Rights have been duly authorized by the Company
and, when shares of Common Stock are issued and delivered by the
Company upon conversion of the Preferred Securities and the Convertible
Debentures, the Rights attached to such shares will be validly issued
(unless the Rights have theretofore been redeemed or exchanged or have
expired pursuant to the Rights Agreement).
(xxviii) Each of the Regular Trustees of the Trust is an
employee of the Company and has been duly authorized by the Company to
execute and deliver the Declaration.
(xxix) There are no persons with registration or other similar
rights to have any securities registered pursuant to the Registration
Statement or otherwise registered by the Company under the 1933 Act.
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Any certificate signed by any officer of the Company or any Trustee of
the Trust and delivered to the Representatives or to counsel for the
Underwriters shall be deemed a joint and several representation and warranty by
the Company and the Trust to each Underwriter as to the matters covered thereby.
SECTION 2. Sale and Delivery to Underwriters; Closing.
(a) On the basis of the representations and warranties herein
contained, and subject to the terms and conditions herein set forth, the Trust
agrees to sell to each Underwriter, severally and not jointly, and each
Underwriter, severally and not jointly, agrees to purchase from the Trust, at
the price of $50.00 per Preferred Security, the number of Preferred Securities
set forth in Schedule A opposite the name of such Underwriter, plus any
additional number of Preferred Securities which such Underwriter may become
obligated to purchase pursuant to the provisions of Section 10 hereof.
(b) In addition, on the basis of the representations and warranties
herein contained and subject to the terms and conditions herein set forth, the
Trust hereby grants an option to the Underwriters, severally and not jointly, to
purchase up to an additional 300,000 Preferred Securities at the price of $50.00
per Preferred Security, less an amount per Preferred Security equal to any
distributions payable on the Initial Preferred Securities but not payable on the
Option Preferred Securities. The option hereby granted will expire 30 days after
the date hereof and may be exercised in whole or in part from time to time only
for the purpose of covering over-allotments which may be made in connection with
the offering and distribution of the Initial Preferred Securities upon notice by
the Representatives to the Offerors setting forth the number of Option Preferred
Securities as to which the several Underwriters are then exercising the option
and the time and date of payment and delivery for such Option Preferred
Securities. Any such time and date of delivery (a "Date of Delivery") shall be
determined by the Representatives, but shall not be later than seven full
business days after the exercise of said option, nor in any event prior to the
Closing Time (as hereinafter defined) unless otherwise agreed by the
Representatives and the Offerors. If the option is exercised as to all or any
portion of the Option Preferred Securities, each of the Underwriters, acting
severally and not jointly, will purchase that proportion of the total number of
Option Preferred Securities then being purchased which the number of Initial
Preferred Securities set forth in Schedule A opposite the name of such
Underwriter bears to the total number of Initial Preferred Securities, subject
in each case to such adjustments as the Representatives in their discretion
shall make to eliminate any sales or purchases of fractional shares.
(c) Payment of the purchase price for, and delivery of the certificates
evidencing, the Initial Preferred Securities shall be made at the office of the
Company in Phoenix, Arizona, or at such other place as shall be agreed upon by
the Representatives and the Offerors, at 9:00 a.m. (Eastern time) on the third
(or fourth, if the pricing occurs after 4:30 p.m. (Eastern time) on any given
day) business day after the date hereof (unless postponed in accordance with the
provisions of Section 10 hereof), or at such other time not later than ten
business days after such date as shall be agreed upon by the Representatives and
the Offerors (such time and date being herein called "Closing Time"). In
addition, in the event that any or all of the Option Preferred Securities are
purchased by the Underwriters, payment of the
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purchase price for, and delivery of certificates for, such Option Preferred
Securities shall be made at the above-mentioned offices or at such other place
as shall be agreed upon by the Representatives and the Offerors, on each Date of
Delivery as specified in the notice from the Representatives to the Offerors.
Payment shall be made to the Trust by wire transfer of immediately
available funds to a bank account designated by the Company against delivery to
the Representatives for the respective accounts of the Underwriters of the
certificates for the Preferred Securities purchased by them. Certificates for
the Initial Preferred Securities and the Option Preferred Securities, if any,
shall be in such denominations and registered in such names as the
Representatives may request in writing at least one full business day prior to
Closing Time or the relevant Date of Delivery, as the case may be. It is
understood that each Underwriter has authorized the Representatives, for its
account, to accept delivery of, receipt for, and make payment of the purchase
price for, the Initial Preferred Securities and the Option Preferred Securities,
if any, which such Underwriter has agreed to purchase. Xxxxxxx Xxxxx,
individually and not as a representative of the Underwriters, may (but shall not
be obligated to) make payment of the purchase price for the Initial Preferred
Securities or the Option Preferred Securities, if any, to be purchased by any
Underwriter whose funds have not been received by Closing Time or the relevant
Date of Delivery, as the case may be, but such payment shall not relieve such
Underwriter from its obligations hereunder.
(d) The certificates for the Initial Preferred Securities and the
Option Preferred Securities, if any, will be made available for examination and
packaging by the Representatives at or before 10:00 a.m. New York City time on
the last business day prior to Closing Time or the relevant Date of Delivery, as
the case may be.
(e) In view of the fact that the proceeds of the sale of the Preferred
Securities will be invested by the Trust in the Convertible Debentures, the
Company hereby agrees to pay the several Underwriters as compensation (the
"Underwriters' Compensation") for their arranging for the investment therein of
such proceeds, $ per Preferred Security purchased by the Underwriters at the
Closing Time and each Date of Delivery, if any ($ in the aggregate assuming no
exercise of the Underwriters' over-allotment option or $ in the aggregate
assuming exercise of such over-allotment option in full). Such Underwriters'
Compensation shall be payable to the Underwriters by wire transfer of
immediately available funds to Xxxxxxx Xxxxx at the Closing Time and at each
Date of Delivery (if any) or, if agreed by Xxxxxxx Xxxxx and the Company, by
deduction from the amount payable by the Underwriters to the Trust in respect of
the Preferred Securities being purchased on such date.
SECTION 3. Covenants of the Offerors. Each of the Offerors jointly and
severally covenants with each Underwriter as follows:
(a) The Offerors, subject to Section 3(b), will comply with
the requirements of Rule 430A or 434, as applicable and will notify the
Representatives immediately, and confirm the notice in writing, (i) of
the effectiveness of any post-effective amendment to the Registration
Statement, (ii) of the mailing or the delivery to the Commission for
filing of the Prospectus or any amendment or supplement to the
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Prospectus or any document to be filed pursuant to the 1934 Act, (iii)
of the receipt of any comments from the Commission, (iv) of any request
by the Commission for any amendment to the Registration Statement or
any amendment or supplement to the Prospectus or for additional
information, and (v) 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. The Offerors will make
every reasonable effort to prevent the issuance of any stop order and,
if any stop order is issued, to obtain the lifting thereof at the
earliest possible moment. The Offerors will promptly effect the filings
necessary pursuant to Rule 424(b) and will take such steps as they deem
necessary to ascertain promptly whether the form of prospectus
transmitted for filing under Rule 424(b) was received for filing by the
Commission and, in the event that it was not, will promptly file such
prospectus.
(b) The Offerors will give the Representatives notice of their
intention to file or prepare any post-effective amendment to the
Registration Statement (including any filing under Rule 462(b)), any
Term Sheet or any amendment or supplement to the Prospectus, whether
pursuant to the 1934 Act, the 1933 Act or otherwise, and will furnish
the Representatives with copies of any such amendment or supplement or
other document proposed to be filed a reasonable amount of time prior
to such proposed filing and will not file any such amendment or
supplement or other document or use any such prospectus to which the
Representatives or counsel to the Underwriters shall reasonably object.
(c) The Company will deliver to each Representative a copy of
each document incorporated by reference in the Prospectus.
(d) The Offerors will deliver to the Representatives a signed
copy of the registration statement as originally filed and of each
amendment thereto (including exhibits filed therewith or incorporated
by reference therein) and will also deliver to the Representatives as
many conformed copies of the Registration Statement and of each
amendment thereto as the Representatives may reasonably request. The
copies of the Registration Statement, and each amendment thereto
furnished to the Underwriters will be identical to the electronically
transmitted copies thereof filed with the Commission pursuant to XXXXX,
except to the extent permitted by Regulation S-T.
(e) The Offerors have delivered to each Underwriter, without
charge, as many copies of each preliminary prospectus as such
Underwriter reasonably requested, and the Offerors hereby consent to
the use of such copies for purposes permitted by the 1933 Act. The
Offerors will furnish to each Underwriter, without charge, during the
period when the Prospectus is required to be delivered under the 1933
Act or the 1934 Act, such number of copies of the Prospectus (as
amended or supplemented) as such Underwriter may reasonably request. If
applicable, the Prospectus and any amendments or supplements thereto
furnished to the Underwriters will be identical to the electronically
transmitted copies thereof filed with the Commission pursuant to XXXXX,
except to the extent permitted by Regulation S-T.
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(f) If, at any time when a Prospectus is required by the 1933
Act to be given in connection with sales of the Preferred Securities,
any event shall occur or condition exist as a result of which it is
necessary, in the opinion of counsel to the Underwriters or counsel to
the Company, to amend or supplement the Prospectus to make the
Prospectus not misleading in the light of circumstances existing at the
time it is delivered to a purchaser, the Offerors will forthwith amend
or supplement the Prospectus (subject to Section 3(b) hereof), whether
by filing documents pursuant to the 1934 Act or otherwise, so that, as
so amended or supplemented, the Prospectus will not include an 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 existing at the time it is delivered to a purchaser, not
misleading, and the Offerors will furnish to the Underwriters a
reasonable number of copies of such amendment or supplement.
(g) The Offerors will endeavor, in cooperation with the
Underwriters, to qualify the Registered Securities for offering and
sale under the applicable securities laws of such states and other
jurisdictions of the United States as the Representatives may
reasonably designate, but only to the extent that such qualification is
required by law; provided, however, that neither of the Offerors shall
be obligated to file any general consent to service of process or to
qualify as a foreign corporation or trust in any jurisdiction in which
it is not so qualified or to subject itself to taxation in respect of
doing business in any jurisdiction in which it is not otherwise so
subject. In each jurisdiction in which the Registered Securities have
been so qualified, the Offerors will file such statements and reports
as may be required by the laws of such jurisdiction to continue such
qualification in effect for as long as may be required for the
distribution of the Preferred Securities or, in the case of such
Convertible Debentures, for as long as such Convertible Debentures are
issuable as contemplated by the Prospectus or, in the case of shares of
Common Stock and Rights issuable upon conversion of Preferred
Securities and Convertible Debentures, for so long as is required by
applicable law. The Offerors will promptly advise the Representatives
of the receipt by either of the Offerors of any notification with
respect to the suspension of the qualification of the Registered
Securities for sale or issuance, as the case may be, in any such state
or jurisdiction or the initiating or threatening of any proceeding for
such purpose.
(h) The Company will, on behalf of the Trust, make generally
available to the Trust's security holders as soon as practicable, but
not later than 120 days after the close of the period covered thereby,
an earnings statement (in form complying with the provisions of Rule
158 of the 1933 Act Regulations) covering a twelve month period
beginning not later than the first day of the Company's fiscal quarter
next following the "effective date" (as defined in said Rule 158) of
the Registration Statement.
(i) The Offerors will use their best efforts to effect the
listing of the Preferred Securities and the Common Stock issuable upon
conversion of the Preferred Securities on the New York Stock Exchange
(the "NYSE"); if the Preferred Securities are exchanged for Convertible
Debentures, the Company will use its best efforts to
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effect the listing of the Convertible Debentures on the exchange or
quotation system on which the Preferred Securities were then listed.
(j) The Offerors, during the period when the Prospectus is
required to be delivered under the 1933 Act or the 1934 Act, will file,
in accordance with the 1934 Act, all documents required to be filed
with the Commission pursuant to Section 13, 14 or 15 of the 1934 Act
within the time periods required by the 1934 Act and the 1934 Act
Regulations.
(k) The Offerors will use the net proceeds received in
connection with the sale of the Preferred Securities and the
Convertible Debentures in the manner specified in the Prospectus under
"Use of Proceeds".
(l) During the period beginning the date hereof and continuing
for 90 days from such date, neither the Trust nor the Company will,
without the prior written consent of Xxxxxxx Xxxxx, directly or
indirectly, (I) sell, offer to sell, grant any option for the sale of,
or otherwise dispose of, (a) any trust certificates or other securities
of the Trust (other than the Preferred Securities and the Common
Securities issued to the Company), (b) any preferred stock or any other
security of the Company that is substantially similar to the Preferred
Securities, (c) any shares of any class of common stock of the Company
(other than (i) shares of Common Stock issuable upon conversion of the
Preferred Securities or pursuant to the exercise of options or warrants
outstanding on the date hereof and (ii) the grant of stock options or
other stock-based awards (and the exercise thereof) to directors,
officers and employees of the Company and its subsidiaries), (d) any
debt securities of the Company that are substantially similar to the
Convertible Debentures (other than the Convertible Debentures issued to
the Trust) or (e) any other securities which are convertible into, or
exercisable or exchangeable for, any securities of the type referred to
in clauses (a) through (d) above (subject, however, to the same
exceptions, to the extent applicable, as are set forth in clauses (a)
through (d) above) or (II) enter into any swap or any other agreement
or any transaction that transfers, directly or indirectly, the economic
consequences of ownership of any of the securities described in clauses
(a) through (d) above whether or not such swap is to be settled by
delivery of such securities, in cash or otherwise.
SECTION 4. Payment of Expenses. The Company will pay all expenses
incident to the performance of the obligations of the Offerors under this
Agreement, including (i) the printing and filing of the Registration Statement
as originally filed and of each amendment thereto, (ii) the preparation,
issuance and delivery of the certificates for the Preferred Securities, (iii)
the fees and disbursements of the Company's and the Trust's counsel and
accountants, (iv) the printing and delivery to the Underwriters of copies of the
Registration Statement as originally filed and all amendments thereto, of each
preliminary prospectus, any Term Sheets, and of the Prospectus and any
amendments or supplements thereto, (v) the fees and expenses of the Indenture
Trustee, including the fees and disbursements of counsel for the Indenture
Trustee, (vi) the fees and expenses of the Property Trustee, including the fees
and disbursements of counsel for the Property Trustee, (vii) the fees and
expenses of the
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Guarantee Trustee, (viii) the filing fees incident to the review by the National
Association of Securities Dealers, Inc. (the "NASD") of the terms of sale of the
Preferred Securities, (ix) any fees in connection with the rating of Preferred
Securities and, if applicable, the Convertible Debentures, and (x) the fees and
expenses incurred in connection with the listing on the NYSE of the Preferred
Securities and the shares of Common Stock issuable upon conversion of the
Preferred Securities, and, if applicable, the Convertible Debentures, (xi) the
fees and expenses of any transfer agent, paying agent or registrar, and (xii)
the cost of qualifying the Preferred Securities, and if applicable, the
Convertible Debentures, with The Depository Trust Company.
If this Agreement is terminated by the Representatives in accordance
with the provisions of Section 5 or Section 9(a)(i) hereof, the Company shall
reimburse the Underwriters for all of their reasonable out-of-pocket expenses,
including the reasonable fees and disbursements of counsel for the Underwriters.
SECTION 5. Conditions of Underwriters' Obligations. The several
obligations of the Underwriters to purchase the Preferred Securities pursuant to
this Agreement are subject to the accuracy of the representations and warranties
of the Offerors herein contained, to the accuracy of the statements of the
Company's officers or the Trustees, as the case may be, made in any certificate
furnished pursuant to the provisions hereof, to the performance by the Offerors
of all of their respective covenants and other obligations hereunder, and to the
following further conditions:
(a) The Registration Statement, including any Rule 462(b)
Registration Statement, shall be effective as of the time of execution
of this Agreement; and at Closing Time no stop order suspending the
effectiveness of the Registration Statement shall have been issued
under the 1933 Act or proceedings therefor initiated or threatened by
the Commission. A Prospectus containing the Rule 430A Information shall
have been filed with the Commission in accordance with Rule 424(b) (or
a post-effective amendment providing such information shall have been
filed and declared effective in accordance with the requirements of
Rule 430A) or, if the Company has elected to rely upon Rule 434, a Term
Sheet shall have been filed with the Commission in accordance with Rule
424(b).
(b) At Closing Time, you shall have received:
(1) The favorable opinion, dated as of the Closing
Time, of Xxxxxxx X. Xxxxxxxx, Esq., Senior Vice President,
General Counsel and Secretary of the Company, in form and
scope satisfactory to the Representatives and to counsel for
the Underwriters, to the effect that:
(i) The Company has been duly incorporated
and is validly existing as a corporation in good
standing under the laws of the State of Delaware.
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(ii) The Company has corporate power and
authority to own, lease and operate its properties
and conduct its business as described in the
Registration Statement.
(iii) The Company is duly qualified as a
foreign corporation to transact business and is in
good standing in each jurisdiction in which such
qualification is required, except where the failure
of the Company to so qualify, in the aggregate, will
not have a material adverse effect on the
consolidated financial condition or combined
operations of the Company and its subsidiaries.
(iv) Each subsidiary of the Company has been
duly incorporated and is validly existing as a
corporation in good standing under the laws of the
jurisdiction of its incorporation, has corporate
power and corporate authority to own, lease and
operate its properties and conduct its business as
described in the Registration Statement, and is duly
qualified as a foreign corporation to transact
business and is in good standing in each jurisdiction
in which such qualification is required, whether by
reason of the ownership or leasing of property or the
conduct of business, except where the failure to so
qualify, in the aggregate, will not have a material
adverse effect on the consolidated financial
condition or combined operations of the Company and
its subsidiaries; and all of the issued and
outstanding capital stock of each such subsidiary has
been duly authorized and validly issued and is fully
paid and nonassessable, and all of such capital stock
is owned by the Company or its affiliates, directly
or through subsidiaries, free and clear of any
mortgage, pledge, lien, encumbrance or claim.
(v) The authorized, issued and outstanding
capital stock of the Company is as set forth in the
Prospectus in the column entitled "Actual" under the
caption "Capitalization" (and in the line items
corresponding to such column) and under the caption
"Description of Capital Stock", and the shares of
issued and outstanding Common Stock have been duly
authorized and validly issued and are fully paid and
nonassessable.
(vi) There are no legal or governmental
proceedings pending or to the best knowledge of such
counsel threatened which are required to be disclosed
in the Registration Statement, other than those
disclosed therein, and all pending legal or
governmental proceedings to which the Company or any
subsidiary is a party or of which any of their
property is the subject which are not described in
the Registration Statement, including ordinary
routine litigation incidental to the business, are
reasonably expected not to have, individually or in
the aggregate, a material adverse effect on the
Company and its subsidiaries considered as one
enterprise or on the Trust. Neither the Trust nor any
of its
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property is subject to any pending or, to the best
knowledge of such counsel, threatened legal or
governmental proceedings.
(vii) To the best of such counsel's
knowledge, there are no contracts, indentures,
mortgages, loan agreements, notes, leases or other
instruments required to be described or referred to
in the Registration Statement or to be filed as
exhibits thereto other than those described or
referred to therein or filed or incorporated by
reference as exhibits thereto, the descriptions
thereof or references thereto are correct (provided
that such counsel need express no opinion as to the
descriptions of the Operative Instruments), and no
default exists by the Company or the Trust in the due
performance or observance of obligations, agreements,
covenants or conditions, which alone or in the
aggregate are material, contained in any contracts,
indentures, loan agreements, notes, leases or other
instruments, which alone or in the aggregate are
material, so described, referred to, filed or
incorporated by reference.
(viii) No consent, approval, authorization,
or order of any court or governmental authority or
agency is required in connection with the execution,
delivery and performance of the Operative Instruments
by the Offerors, the consummation of the transactions
contemplated in the Operative Instruments (including,
without limitation, the issuance and sale of the
Preferred Securities, Common Securities, Convertible
Debentures and Guarantees and the issuance of shares
of Common Stock and Rights upon conversion of the
Preferred Securities and Convertible Debentures), and
the performance by the Offerors of their other
obligations under the Operative Instruments, except
such as may be required under the 1933 Act, the 1933
Act Regulations, the 1939 Act or, if applicable,
state securities laws; and the execution, delivery
and performance of the Operative Instruments by the
Offerors, the consummation of the transactions
contemplated by the Operative Instruments (including,
without limitation, the issuance and sale of the
Preferred Securities, Common Securities, Convertible
Debentures and Guarantees and the issuance of shares
of Common Stock and Rights upon conversion of the
Preferred Securities and Convertible Debentures), and
performance by the Offerors of their other
obligations under the Operative Instruments, do not
and will not conflict with or constitute a breach of,
or default under, or result in the creation or
imposition of any lien, charge or encumbrance upon
any property or assets of the Company or any
subsidiary or the Trust pursuant to, any material
contract, indenture, mortgage, loan agreement, note,
lease or other instrument known to such counsel and
to which the Company, any of its subsidiaries or the
Trust is a party or by which the Company, any of its
subsidiaries or the Trust may be bound or to which
any of the property or assets of the Company or any
of its subsidiaries or the Trust
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is subject, or any law, administrative regulation or
administrative or court decree known to such counsel
to be applicable to the Company or the Trust of any
court or governmental agency, authority or body or
any arbitrator having jurisdiction over the Company
or the Trust.
(ix) Each document filed pursuant to the
1934 Act (other than the financial statements,
schedules and other financial and statistical data
included therein, as to which no opinion need be
rendered) and incorporated by reference in the
Prospectus, complied when filed as to form in all
material respects with the 1934 Act and the 1934 Act
Regulations.
(x) To the best knowledge of counsel, the
Company and its subsidiaries own or possess or have
obtained adequate trademarks, service marks and trade
names necessary to conduct the business now operated
by them, and neither the Company nor any of its
subsidiaries has received any notice of infringement
of or conflict with asserted rights of others with
respect to any trademarks, service marks or trade
names which, singly or in the aggregate, if the
subject of an unfavorable decision, ruling or
finding, would reasonable be expected to materially
adversely affect the conduct of the business,
operations, financial condition or income of the
Company and its subsidiaries considered as one
enterprise.
(xi) Neither the Company nor FINOVA Capital
is an "investment company" or "controlled" by an
"investment company" as such terms are defined in the
Investment Company Act.
(xii) The Trust is duly qualified to
transact business and is in good standing in each
jurisdiction in which such qualification is
necessary, except where the failure to so qualify
would not have a material adverse effect on the
Trust; and, to the best knowledge of such counsel,
the Trust is not a party to or otherwise bound by any
agreements or instruments other than those described
in the Prospectus.
(xiii) The Declaration has been duly
executed and delivered by the Regular Trustees and
(assuming due authorization, execution and delivery
by the Company, the Property Trustee and the Delaware
Trustee) the Declaration constitutes a valid and
binding obligation of the Regular Trustees,
enforceable against the Regular Trustees in
accordance with its terms, except as enforcement may
be limited by bankruptcy, insolvency (including
without limitation all laws relating to fraudulent
transfers), reorganization, moratorium or other
similar laws relating to or affecting creditors'
rights generally and except as enforcement thereof
may be subject to general principles of equity
(regardless of whether
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enforcement is considered in a proceeding at law or
in equity), including concepts of commercial
reasonableness.
and to such further effect with respect to other legal matters
relating to this Agreement and the sale of the Preferred
Securities hereunder as counsel to the Underwriters may
reasonably request. In giving such opinions such counsel may
rely as to all matters of state law other than the Federal
laws of the United States of America, the laws of the State of
Arizona and the General Corporation Law of the State of
Delaware (the "DGCL"), and as to all matters of foreign law,
upon opinions of counsel satisfactory to counsel for the
Underwriters, in which case, the opinion shall state that,
although such counsel has not made an independent
investigation of the laws of any jurisdiction other than the
Federal laws of the United States of America, the DGCL and the
laws of Arizona, such counsel believes that the Underwriters
and he are entitled so to rely. In giving the opinions
referred to in the foregoing clause (iv), such counsel may
omit reference to a foreign subsidiary as long as (A) he shall
have delivered to you a signed opinion of other counsel for
such foreign subsidiary, satisfactory to counsel for the
Underwriters, which other opinion shall give substantially the
same opinions with respect to such foreign subsidiary as
required by the foregoing clause (iv), and (B) he states that
such other opinion is satisfactory to him and that although he
has not made an independent investigation of the foreign laws
applicable to such foreign subsidiary, he believes that the
Underwriters are entitled to rely on such other opinion. Any
such opinion may be in the form and contain such assumptions,
qualifications and limitations as customarily appear in legal
opinions issued in the jurisdiction in which any such opinion
is rendered or as may have appeared in opinions previously
delivered to Xxxxxxx Xxxxx by the Company's local counsel.
(2) The favorable opinion of Skadden, Arps, Slate,
Xxxxxxx & Xxxx LLP or Skadden, Arps, Slate, Xxxxxxx & Xxxx
(Illinois), special counsel for the Company and the Trust,
dated as of Closing Time, in form and scope satisfactory to
the Representatives and to counsel for the Underwriters, to
the effect that:
(i) The Company has corporate power and
corporate authority to enter into and to perform its
obligations under the Operative Instruments to which
it is a party and to purchase, own and hold the
Common Securities issued by the Trust.
(ii) The Trust has been duly created and is
validly existing in good standing as a business trust
under the Delaware Act.
(iii) Under the Delaware Act and the
Declaration, the Trust has the power and authority
(a) to enter into and perform its obligations under
this Agreement, (b) to perform its obligations under
the Declaration, (c) to issue and perform its
obligations under the Preferred
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Securities and the Common Securities and (d) to
purchase and hold the Convertible Debentures.
(iv) The Declaration has been duly
authorized, executed and delivered by the Company and
(assuming due authorization, execution and delivery
by the Regular Trustees, the Property Trustee and the
Delaware Trustee) the Declaration constitutes a valid
and binding obligation of the Company and the Regular
Trustees, enforceable against the Company and the
Regular Trustees in accordance with its terms, except
as enforcement may be limited by bankruptcy,
insolvency (including without limitation all laws
relating to fraudulent transfers), reorganization,
moratorium or other similar laws relating to or
affecting creditors' rights generally and except as
enforcement thereof may be subject to general
principles of equity (regardless of whether
enforcement is considered in a proceeding at law or
in equity), including concepts of commercial
reasonableness; and the Declaration has been duly
qualified under the 1939 Act.
(v) The Common Securities have been duly
authorized by the Declaration and, when duly issued
and delivered by the Trust to the Company against
payment of the consideration therefor as described in
the Registration Statement, will be validly issued
and, except as otherwise provided in Section 9.1 of
the Declaration, fully paid and non-assessable
undivided beneficial interests in the assets of the
Trust and will be owned of record by the Company; and
the issuance of the Common Securities is not subject
to preemptive or other similar rights arising under
the Delaware Act or the Declaration.
(vi) The Preferred Securities have been duly
authorized by the Declaration and, when issued,
delivered and paid for in accordance with the terms
of this Agreement, will be validly issued, fully paid
and non-assessable undivided beneficial interests in
the assets of the Trust and will entitle the holders
thereof to the benefits of the Declaration; the
holders of the Preferred Securities will be entitled
to the same limitation of personal liability as
extended to stockholders of private corporations for
profit organized under the DGCL; and the issuance of
the Preferred Securities is not subject to preemptive
or other similar rights arising under the Delaware
Act or the Declaration. Such counsel may state that
they bring to your attention that holders of
Preferred Securities may be obligated, pursuant to
the Declaration, to (a) provide indemnity and/or
security in connection with and pay taxes or
governmental charges arising from transfers of
Preferred Securities and the issuance of replacement
Preferred Securities, and (b) provide security and
indemnity in connection with requests of or
directions to the Property Trustee to exercise its
rights and powers under the Declaration.
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(vii) Each of the Guarantee Agreements has
been duly authorized, executed and delivered by the
Company and, assuming, with respect to the Preferred
Securities Guarantee Agreement, due authorization,
execution and delivery thereof by the Guarantee
Trustee, each of the Guarantee Agreements constitutes
a valid and binding agreement of the Company,
enforceable against the Company in accordance with
its terms, except as enforcement thereof may be
limited by the bankruptcy, insolvency (including
without limitation all laws relating to fraudulent
transfers), reorganization, moratorium or other
similar laws relating to or affecting creditors'
rights generally and except as enforcement thereof
may be subject to general principles of equity
(regardless of whether enforcement is considered in a
proceeding at law or in equity), including concepts
of commercial reasonableness; and the Preferred
Securities Guarantee Agreement has been duly
qualified under the 1939 Act.
(viii) The Indenture has been duly
authorized, executed and delivered by the Company and
(when duly authorized, executed and delivered by the
Indenture Trustee) will constitute a valid and
binding obligation of the Company, enforceable
against the Company in accordance with its terms,
except as enforcement thereof may be limited by the
bankruptcy, insolvency (including without limitation
all laws relating to fraudulent transfers),
reorganization, moratorium or other similar laws
relating to or affecting creditors' rights generally
and except as enforcement thereof may be subject to
general principles of equity (regardless of whether
enforcement is considered in a proceeding at law or
in equity), including concepts of commercial
reasonableness; and the Indenture has been duly
qualified under the 1939 Act.
(ix) The Convertible Debentures have been
duly authorized by the Company and, when the
Convertible Debentures have been duly executed by the
Company and authenticated and delivered by the
Indenture Trustee in the manner provided in the
Indenture and paid for by the Trust of the
consideration therefor, will constitute valid and
binding obligations of the Company, enforceable
against the Company in accordance with their terms,
except as enforcement thereof may be limited by
bankruptcy, insolvency (including without limitation
all laws relating to fraudulent transfers),
reorganization, moratorium or other similar laws
relating to or affecting creditors' rights generally
and except as enforcement thereof may be subject to
general principles of equity (regardless of whether
enforcement is considered in a proceeding at law or
in equity), including concepts of commercial
reasonableness, and will be entitled to the benefits
of the Indenture; and the issuance of the Convertible
Debentures is not subject to preemptive or other
similar rights arising under the charter or by-laws
of the Company, under the DGCL or, to the best
knowledge of such counsel, otherwise.
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(x) The shares of Common Stock issuable upon
conversion of the Convertible Debentures have been
duly authorized and reserved by the Company for
issuance upon such conversion and, if and when issued
upon such conversion in accordance with the
provisions of the Indenture at conversion prices
equal to or in excess of the par value of such shares
of Common Stock at such time, will be validly issued,
fully paid and non-assessable, and the issuance of
such shares is not subject to preemptive or other
similar rights arising under the charter or by-laws
of the Company, under the DGCL or, to the best
knowledge of such counsel, otherwise.
(xi) This Agreement has been duly
authorized, executed and delivered by the Company and
the Trust.
(xii) No authorization, approval, consent or
order of any court or governmental authority or
agency (other than under the 1933 Act and the 1933
Act Regulations, which have been obtained, or as may
be required under the securities or blue sky laws of
the various states, as to which such counsel need
express no opinion) is required in connection with
the issuance and sale of the Preferred Securities by
the Trust to the Underwriters pursuant to this
Agreement, the issuance and sale of the Common
Securities by the Trust to the Company, the issuance
and sale of the Convertible Debentures by the Company
to the Trust, the issuance by the Company of shares
of Common Stock and rights upon conversion of the
Convertible Debentures or the execution, delivery or
performance by the Company or the Trust of their
respective obligations under this Agreement, the
Indenture, the Convertible Debentures, the Guarantee
Agreements, the Declaration, the Preferred Securities
or the Common Securities, except that such counsel
need not express any opinion as to (i) the rules and
regulations of the NASD and (ii) laws other than
those that, in such counsel's experience, are
normally applicable to transactions of the type
contemplated by this Agreement. The execution,
delivery and performance of this Agreement, the
Declaration, the Guarantee Agreements and the
Indenture (including, without limitation, the
issuance and sale of the Preferred Securities, Common
Securities, Convertible Debentures and the issuance
of shares of Common Stock and Rights upon conversion
of the Convertible Debentures) and the consummation
by the Company and the Trust of the transactions
contemplated hereby and thereby do not and will not
result in any violation of the provisions of the
charter or by-laws of the Company, the Declaration or
any applicable law, administrative regulation or
administrative or court decree known to such counsel
to be applicable to the Company or the Trust.
(xiii) The Trust is not required to be
registered under the 1940 Act.
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(xiv) Such counsel has been orally advised
by the staff of the Commission that the Registration
Statement, including any Rule 462(b) Registration
Statement, was declared effective under the 1933 Act;
any required filing of the Prospectus pursuant to
Rule 424(b) under the 1933 Act has been made in the
manner and within the time period required by Rule
424(b); and such counsel has been orally advised by
the staff of the Commission that no stop order
suspending the effectiveness of the Registration
Statement, including any Rule 462(b) Registration
Statement, has been issued by the Commission and, to
such counsel's knowledge, no proceedings for that
purpose have been initiated or threatened by the
Commission.
(xv) Each of the Registration Statement and
any 462(b) Registration Statement, as of its
effective date and as of the effective date of any
subsequent amendment thereto, and the Prospectus, as
of its date and as of the date of any amendments or
supplements thereto, appeared on its face to be
appropriately responsive in all material respects to
the requirements of the 1933 Act and the 1933 Act
Regulations (except that in each case such counsel
need not express an opinion as to documents
incorporated or deemed to be incorporated by
reference therein, the financial statements,
schedules and other financial and statistical data
included therein or excluded therefrom and any Form
T-1, and such counsel need not assume any
responsibility for the accuracy, completeness or
fairness of the statements contained in the
Registration Statement or the Prospectus except
insofar as set forth in paragraph (xvi) and (xix)
below).
(xvi) The statements in the Prospectus under
the captions "Description of the Preferred
Securities," "Description of the Guarantee,"
"Description of the Convertible Debentures," "Effect
of Obligations under the Convertible Debentures and
the Guarantee" and "Description of Capital Stock,"
insofar as such statements constitute a summary of
certain provisions of law or certain provisions of
the Preferred Securities, the Common Securities, the
Convertible Debentures, the Guarantees, the
Indenture, the Declaration, the Guarantee Agreements,
the charter and by-laws of the Company or the Rights
Agreement, or legal conclusions, have been reviewed
by such counsel and are, in all material respects an
accurate summary of such provisions and legal
conclusions.
(xvii) The Trust will be classified for
United States federal income tax purposes as a
grantor trust and not as an association taxable as a
corporation; accordingly, for United States federal
income tax purposes, each holder of Preferred
Securities generally will be considered the owner of
an undivided interest in the Convertible Debentures.
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(xviii) The Convertible Debentures will be
classified for United States federal income tax
purposes as indebtedness of the Company.
(xix) The discussion set forth in the
Prospectus under the caption "Certain Federal Income
Tax Considerations" is a fair and accurate summary of
the matters set forth therein, based upon current law
and the assumptions stated therein; and the opinions
of such counsel set forth under such caption are
confirmed.
In rendering such opinion, such counsel (i) shall
state that such opinion is limited to matters arising under
the laws of the States of New York, Illinois, and Delaware and
the federal laws of the United States, (ii) may rely as to all
matters of Delaware law (other than the DGCL) on the opinion
of Skadden, Arps, Slate, Xxxxxxx & Xxxx (Delaware) ("Delaware
Counsel"), so long as such opinion of Delaware Counsel shall
be addressed to you, as Representatives of the several
Underwriters, shall expressly state that Xxxxx & Wood LLP may
rely on such opinion in rendering their opinion pursuant to
this Agreement, and shall be in form and substance
satisfactory to the Representatives and to counsel for the
Underwriters, and (iii) shall state that, in rendering their
opinion pursuant to this Agreement, Xxxxx & Xxxx LLP may rely
on such opinion of special counsel to the Company and the
Trust with respect to matters involving the application of
Delaware law as to the Trust, the Declaration, the Preferred
Securities and matters related thereto.
(3) The favorable opinion of Xxxxxxx & Xxxxxxx LLP,
counsel to the Property Trustee and Guarantee Trustee, dated
as of the Closing Time, in form and substance satisfactory to
the Representatives and counsel for the Underwriters, to the
effect that:
(i) Fleet National Bank is a national
banking association with trust powers, duly
organized, validly existing and in good standing
under the federal laws of the United States of
America, with all necessary corporate power and
authority to execute and deliver, and to carry out
and perform its obligations under, the Declaration
and the Preferred Securities Guarantee Agreement.
(ii) The Declaration and the Preferred
Securities Guarantee Agreement have been duly
authorized, executed and delivered by the Property
Trustee and the Guarantee Trustee, respectively, and
constitute valid and binding obligations of the
Property Trustee and the Guarantee Trustee,
respectively, enforceable against the Property
Trustee and the Guarantee Trustee, respectively, in
accordance with their terms, except as enforcement
may be limited by bankruptcy, insolvency, moratorium
or other similar laws relating to or affecting
creditors' rights generally or by general equity
principles, including concepts of commercial
reasonableness.
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(iii) The execution, delivery and
performance of the Declaration and the Preferred
Securities Guarantee Agreement by the Property
Trustee and the Guarantee Trustee, respectively, do
not conflict with or constitute a breach of the
charter or by-laws of the Property Trustee or the
Guarantee Trustee, respectively.
(iv) No consent, approval or authorization
of, or registration with or notice to, any federal
banking authority is required for the execution,
delivery or performance by the Property Trustee or
the Guarantee Trustee of the Declaration or the
Preferred Securities Guarantee Agreement,
respectively.
(4) The favorable opinion of Morris, James, Hitchens
& Xxxxxxxx, counsel to the Delaware Trustee, dated as of the
Closing Time, in form and scope satisfactory to the
Representatives and counsel for the Underwriters, to the
effect that:
(i) First Union Bank of Delaware is a
Delaware banking corporation with trust powers,
validly existing and in good standing under the laws
of the State of Delaware, with all necessary power
and authority to execute and deliver, and to carry
out and perform its obligations under, the
Declaration.
(ii) The Declaration has been duly
authorized, executed and delivered by the Delaware
Trustee and constitutes a valid and binding
obligation of the Delaware Trustee, enforceable
against the Delaware Trustee in accordance with its
terms, except as enforcement may be limited by
bankruptcy, insolvency, moratorium or other similar
laws relating to or affecting creditors' rights
generally or by general equity principles, including
concepts of commercial reasonableness.
(iii) The execution, delivery and
performance of the Declaration by the Delaware
Trustee do not conflict with or constitute a breach
of the charter or by-laws of the Delaware Trustee.
(iv) No consent, approval or authorization
of, or registration with or notice to, any federal or
Delaware banking authority is required for the
execution, delivery or performance by the Delaware
Trustee of the Declaration.
(5) The favorable opinion, dated as of Closing Time,
of Xxxxx & Xxxx LLP, counsel for the Underwriters, in form and
scope satisfactory to the Representatives, with respect to the
incorporation and legal existence of the Company, the legal
existence of the Trust, the Preferred Securities, the
Indenture, the Preferred Securities Guarantee Agreement, this
Agreement, the Registration Statement, the Prospectus and
other related matters as the
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Representatives may require. In rendering such opinion, such
counsel may rely, with respect to certain matters involving
the application of Delaware law as to the Trust, the Preferred
Securities and matters related thereto, to the extent they
deem proper and specified in such opinion, upon the opinion of
special counsel to the Company and the Trust delivered
pursuant to Section 5(b)(2) hereof.
(6) In giving their opinions required by subsections
(b)(1), (b)(2) and (b)(5), respectively, of this Section ,
Xxxxxxx X. Xxxxxxxx, Esq., Skadden, Arps, Slate, Xxxxxxx &
Xxxx (Illinois) and Xxxxx & Wood LLP shall each additionally
state that nothing has come to their attention that would lead
such counsel to believe that the Registration Statement or any
amendment thereto, including the Rule 430A Information and
Rule 434 Information (if applicable), (except for financial
statements and schedules and other financial and statistical
data included or incorporated by reference therein and except
for any Form T-1, as to which such counsel need make no
statement), at the time the Registration Statement or any such
amendment became effective, contained an untrue statement of a
material fact or omitted to state a material fact required to
be stated therein or necessary to make the statements therein
not misleading or that the Prospectus or any amendment or
supplement thereto (except for financial statements and
schedules and other financial data included or incorporated by
reference therein, as to which such counsel need make no
statement), as of the date of the Prospectus or any such
amended or supplemented prospectus or as of the Closing Time
(or, if applicable, as of the Date of Delivery), included or
includes any untrue statement of a material fact or omitted or
omits 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.
(c) At Closing Time, there shall not have been, since the date
hereof or since the respective dates as of which information is given
in the Registration Statement and the Prospectus, any material adverse
change in the condition, financial or otherwise, of the Company and its
subsidiaries considered as one enterprise or of the Trust, or in the
earnings, business affairs or business prospects of the Company and its
subsidiaries considered as one enterprise or of the Trust, in each case
whether or not arising in the ordinary course of business, and the
Representatives shall have received a certificate of the Chairman,
President and Chief Executive Officer or a Senior Vice President or
Vice President of the Company and of the chief financial officer or
chief accounting officer of the Company and of the Regular Trustees of
the Trust, dated as of Closing Time, to the effect that (i) there has
been no such material adverse change, (ii) the other representations
and warranties contained in Section 1 are true and correct as of
Closing Time with the same force and effect as though expressly made at
and as of Closing Time, (iii) the Trust and the Company have complied
with all agreements and satisfied all conditions on their part to be
performed or satisfied at or prior to the Closing Time, and (iv) to the
best of their knowledge, no stop order suspending the effectiveness of
the Registration Statement has been issued under the
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1933 Act and no proceedings for that purpose have been initiated or
threatened by the Commission.
(d) At the time of execution of this Agreement, the
Representatives shall have received from Deloitte & Touche LLP a
letter, dated the date of this Agreement, in form and substance
satisfactory to the Representatives, and substantially in the same form
as the draft letter previously delivered to and approved by the
Representatives.
(e) At Closing Time the Representatives shall have received
from Deloitte & Touche LLP a letter, dated as of Closing Time, to the
effect that they reaffirm the statements made in the letter furnished
pursuant to subsection (d) of this Section , except that the "specified
date" referred to in such letter shall be a date not more than five
days prior to the Closing Time.
(f) At the date of this Agreement and at Closing Time, the
Preferred Securities and Convertible Debentures shall have been rated
at least BBB+ by Standard and Poor's Ratings Group ("Standard &
Poor's") and at least Baa2 by Xxxxx'x Investors Service Inc.
("Moody's"); and, since the date of this Agreement, there shall not
have occurred any downgrading in the ratings of any of the Convertible
Debentures or any other securities of the Company or of the Preferred
Securities by Standard & Poor's or Moody's or any other "nationally
recognized statistical rating organization", as that term is defined by
the Commission for purposes of Rule 436(g)(2) under the 1933 Act, and
neither Standard & Poor's nor Moody's nor any other "nationally
recognized statistical rating organization" shall have publicly
announced that it has under surveillance or review, with possible
negative implications, its rating of the Convertible Debentures or any
other securities of the Company or of the Preferred Securities.
(g) At the date of this Agreement and at the Closing Time, the
Preferred Securities and the shares of Common Stock issuable upon
conversion of the Preferred Securities shall have been approved for
listing on the NYSE, subject only to official notice of issuance.
(h) At the date of this Agreement, the NASD shall have
confirmed that it has not raised any objection with respect to the
fairness and reasonableness of the underwriting terms and arrangements.
(i) On or prior to the date of this Agreement, the Company
shall have delivered to the Representatives an agreement, substantially
in the form of Exhibit A hereto, signed by Xx. Xxxxxx X. Xxxxxxxxxxx,
Chairman, President and Chief Executive Officer of the Company.
(j) At Closing Time and at each Date of Delivery (if any),
counsel for the Underwriters shall have been furnished with such
documents and opinions as they may reasonably require for the purpose
of enabling them to pass upon the issuance and sale of the Preferred
Securities, Common Securities and Convertible Debentures as herein
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contemplated and related proceedings, or in order to evidence the
accuracy of any of the representations or warranties, or the
fulfillment of any of the conditions, herein contained, and all
proceedings taken by the Company and the Trust in connection with the
authorization, issuance and sale of the Preferred Securities, Common
Securities and Convertible Debentures as herein contemplated shall be
reasonably satisfactory in form and scope to the Representatives and
counsel for the Underwriters.
(k) In the event that the Underwriters exercise their option
provided in Section 2(b) hereof to purchase all or any portion of the
Option Preferred Securities, the representations and warranties of the
Company and the Trust contained herein and the statements in any
certificates furnished by the Company or the Trust hereunder shall be
true and correct as of each Date of Delivery and, at the relevant Date
of Delivery, the Representatives shall have received:
(1) A certificate, dated such Date of Delivery, of
the Chairman, President and Chief Executive Officer or a
Senior Vice President or Vice President of the Company and of
the chief financial officer or chief accounting officer of the
Company and of the Regular Trustees of the Trust confirming
that the certificate delivered at the Closing Time pursuant to
Section 5(c) hereof remains true and correct as of such date
of delivery.
(2) The favorable opinion of Xxxxxxx X. Xxxxxxxx,
Esq., Senior Vice President and General Counsel of the
Company, in form and scope satisfactory to the Representatives
and counsel for the Underwriters, dated such Date of Delivery,
relating to the Option Preferred Securities to be purchased on
such Date of Delivery (and the related Convertible Debentures
to be sold to the Trust) and otherwise to the same effect as
the opinion required by Sections 5(b)(1) and 5(b)(6) hereof.
(3) The favorable opinions of Skadden, Arps, Slate,
Xxxxxxx & Xxxx (Illinois) and Skadden, Arps, Slate, Xxxxxxx &
Xxxx LLP, special counsel for the Company and Trust, in form
and scope satisfactory to the Representatives and to counsel
for the Underwriters, dated such Date of Delivery, relating to
the Preferred Securities to be purchased on such Date of
Delivery (and the related Convertible Debentures to be sold to
the Trust) and otherwise to the same effect as the opinions
required by Sections 5(b)(2) and 5(b)(6) hereof.
(4) The favorable opinion of Xxxxxxx & Xxxxxxx LLP,
counsel for the Property Trustee and the Guarantee Trustee, in
form and scope satisfactory to the Representatives and to
counsel to the Underwriters, dated such Date of Delivery, to
the same effect as the opinion required by Section 5(b)(3).
(5) The favorable opinion of Morris, James, Hitchens
& Xxxxxxxx, counsel for the Delaware Trustee, in form and
scope satisfactory to the
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Representatives and to counsel to the Underwriters, dated such
Date of Delivery, to the same effect as the opinion required
by Section 5(b)(4) hereof.
(6) The favorable opinion of Xxxxx & Wood LLP,
counsel for the Underwriters, dated such Date of Delivery,
relating to the Preferred Securities to be purchased on such
Date of Delivery (and the related Convertible Debentures to be
sold to the Trust) and otherwise to the same effect as the
opinion required by Sections 5(b)(5) and 5(b)(6) hereof.
(7) A letter from Deloitte & Touche LLP, in form and
substance satisfactory to the Representatives and dated such
Date of Delivery, substantially the same in form and substance
as the letter furnished to the Representatives pursuant to
Section 5(e) hereof, except that the "specified date" in the
letter furnished pursuant to this paragraph shall be a date
not more than five days prior to such Date of Delivery.
If any condition specified in this Section shall not have been
fulfilled when and as required to be fulfilled, this Agreement may be terminated
by the Representatives by notice to the Company at any time at or prior to
Closing Time, and such termination shall be without liability of any party to
any other party except as provided in Section 4 hereof.
SECTION 6. Indemnification.
(a) The Offerors agree, jointly and severally, to indemnify and hold
harmless each Underwriter and each person, if any, who controls any Underwriter
within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act
as follows:
(i) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, arising out of any untrue statement or
alleged untrue statement of a material fact contained in the
Registration Statement (or any amendment thereto), including the Rule
430A Information and the Rule 434 Information, if applicable, or the
omission or alleged omission therefrom of a material fact required to
be stated therein or necessary to make the statements therein not
misleading or arising out of any untrue statement or alleged untrue
statement of a material fact included in any preliminary prospectus or
the Prospectus (or any amendment or supplement thereto) or the omission
or alleged omission therefrom of a material fact necessary in order to
make the statements therein, in the light of the circumstances under
which they were made, not misleading;
(ii) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, to the extent of the aggregate amount
paid in settlement of any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or threatened,
or of any claim whatsoever based upon any such untrue statement or
omission, or any such alleged untrue statement or omission; provided
that (subject to Section 6(e) below) any such settlement is effected
with the written consent of the Company; and
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(iii) against any and all expense whatsoever, as incurred
(including the fees and disbursements of counsel chosen by Xxxxxxx
Xxxxx), as incurred, reasonably incurred in investigating, preparing or
defending against any litigation, or any investigation or proceeding by
any governmental agency or body, commenced or threatened, or any claim
whatsoever based upon any such untrue statement or omission, or any
such alleged untrue statement or omission, to the extent that any such
expense is not paid under (i) or (ii) above;
provided, however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Company by any
Underwriter through Xxxxxxx Xxxxx expressly for use in the Registration
Statement (or any amendment thereto), including the Rule 430A Information and
the Rule 434 Information, if applicable, or any preliminary prospectus or the
Prospectus (or any amendment or supplement thereto); and provided, further, that
the foregoing indemnity with respect to any untrue statement or alleged untrue
statement contained in or omission or alleged omission from a preliminary
prospectus shall not inure to the benefit of any Underwriter (or any person
controlling such Underwriter) from whom the person asserting any such loss,
liability, claim, damage or expense purchased the Preferred Securities which are
the subject thereof if such person was not sent or given a copy of the
Prospectus (or the Prospectus as then amended or supplemented if the Offerors
shall have furnished any amendments or supplements thereto), in each case
exclusive of documents incorporated or deemed to be incorporated therein by
reference, at or prior to the written confirmation of the sale of such Preferred
Securities to such person in any case where such delivery is required by the
1933 Act and such untrue statement contained in or omission from such
preliminary prospectus was corrected in the Prospectus (or the Prospectus as so
amended or supplemented).
(b) The Company agrees to indemnify and hold harmless the Trust against
any and all loss, liability, claim, damage and expense whatsoever, as due from
the Trust under Section 6(a) hereunder.
(c) Each Underwriter severally agrees to indemnify and hold harmless
the Offerors, the directors of the Company, the Trustees of the Trust, each
officer of the Company who signed the Registration Statement, and each person,
if any, who controls the Offerors within the meaning of Section 15 of the 1933
Act or Section 20 of the 1934 Act against any and all loss, liability, claim,
damage and expense described in the indemnity contained in subsection (a) of
this Section , as incurred, but only with respect to untrue statements or
omissions, or alleged untrue statements or omissions, made in the Registration
Statement, or any amendment thereto, including the Rule 430A Information and the
Rule 434 Information, if applicable, or any preliminary prospectus or the
Prospectus (or any amendment or supplement thereto) in reliance upon and in
conformity with written information furnished to the Offerors by such
Underwriter through Xxxxxxx Xxxxx expressly for use in the Registration
Statement (or any amendment thereto) or such preliminary prospectus or the
Prospectus (or any amendment or supplement thereto).
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(d) Each indemnified party shall give notice as promptly as reasonably
practicable to each indemnifying party of any action commenced against it in
respect of which indemnity may be sought hereunder, but failure to so notify an
indemnifying party shall not relieve such indemnifying party from any liability
hereunder to the extent it is not materially prejudiced as a result thereof and
in any event shall not relieve it from any liability which it may have otherwise
than on account of this indemnity agreement. In the case of the parties
indemnified pursuant to Section 6(a) above, counsel to the indemnified party
shall be selected by Xxxxxxx Xxxxx and, in the case of parties indemnified
pursuant to 6(b) and 6(c) above, counsel to the indemnified parties shall be
selected by the Company. An indemnifying party may participate at its own
expense in the defense of any such action; provided, however, that counsel to
the indemnifying party shall not (except with the consent of the indemnified
party) also be counsel to the indemnified party. In no event shall the
indemnifying parties be liable for the fees and expenses of more than one
counsel (in addition to one local counsel per jurisdiction) separate from their
own 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 general allegations or circumstances. No indemnifying party shall,
without the prior written consent of the indemnified parties, settle or
compromise or consent to the entry of any judgment with respect to any
litigation or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever in respect of which
indemnification or contribution could be sought under this Section 6 or Section
7 hereof (whether or not the indemnified parties are actual or potential parties
thereto), unless such settlement, compromise or consent (i) includes an
unconditional release of each indemnified party from all liability arising out
of such litigation, investigation, proceeding or claim and (ii) does not include
a statement as to or an admission of fault, culpability or a failure to act by
or on behalf of any indemnified party.
(e) If at any time an indemnified party shall have requested an
indemnifying party to reimburse the indemnified party for fees and expenses of
counsel, such indemnifying party agrees that it shall be liable for any
settlement of the nature contemplated by Section 6(a)(ii) effected without its
written consent if (i) such settlement is entered into more than 45 days after
receipt by such indemnifying party of the aforesaid request, (ii) such
indemnifying party shall have received notice of the terms of such settlement at
least 30 days prior to such settlement being entered into and (iii) such
indemnifying party shall not have reimbursed such indemnified party in
accordance with such request prior to the date of such settlement.
Notwithstanding the immediately preceding sentence, if at any time an
indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel, such indemnifying party
shall not be liable for any settlement of the nature contemplated by Section
6(a)(ii) effected without its consent if such indemnifying party (x) reimburses
such indemnified party in accordance with such request to the extent the
indemnifying party in its judgment considers such request to be reasonable and
(y) provides written notice to the indemnified party stating the reason it deems
the unpaid balance unreasonable, in each case prior to 45 days after receipt by
such indemnifying party of the aforesaid request from the indemnified party.
SECTION 7. Contribution. If the indemnification provided for in Section
6 hereof is for any reason unavailable to or insufficient to hold harmless an
indemnified party in respect
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of any losses, liabilities, claims, damages or expenses referred to therein,
then each indemnifying party shall contribute to the aggregate amount of such
losses, liabilities, claims, damages and expenses incurred by such indemnified
party, as incurred, (i) in such proportion as is appropriate to reflect the
relative benefits received by the Offerors on the one hand and the Underwriters
on the other hand from the offering of the Preferred Securities pursuant to this
Agreement or (ii) if the allocation provided by clause (i) is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the relative fault of
the Offerors on the one hand and of the Underwriters on the other hand in
connection with the statements or omissions which resulted in such losses,
liabilities, claims, damages or expenses, as well as any other relevant
equitable considerations.
The relative benefits received by the Offerors on the one hand and the
Underwriters on the other hand in connection with the offering of the Preferred
Securities pursuant to this Agreement shall be deemed to be in the same
respective proportions as the total net proceeds received by the Offerors from
the offering of the Preferred Securities pursuant to this Agreement (before
deducting expenses but after deducting the total Underwriters' Compensation
received by the Underwriters) and the total Underwriters' Compensation received
by the Underwriters, in each case as set forth on the cover of the Prospectus
(or, if Rule 434 is used, the corresponding location on the Term Sheet), bear to
the aggregate initial public offering price of the Preferred Securities as set
forth on such cover (or corresponding location on the Term Sheet, as the case
may be).
The relative fault of the Offerors on the one hand and the Underwriters
on the other hand shall be determined by reference to, among other things,
whether any such untrue or alleged untrue statement of a material fact or
omission or alleged omission to state a material fact relates to information
supplied by the Offerors or by the Underwriters and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission.
The Offerors and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this Section 7 were determined by pro rata
allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to above in this Section 7. The aggregate
amount of losses, liabilities, claims, damages and expenses incurred by an
indemnified party and referred to above in this Section 7 shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue or alleged untrue
statement or omission or alleged omission.
Notwithstanding the provisions of this Section 7, no Underwriter shall
be required to contribute any amount in excess of the amount by which the total
price at which the Preferred Securities underwritten by it and distributed to
the public were offered to the public exceeds the amount of any damages which
such Underwriter has otherwise been required to pay by reason of any such untrue
or alleged untrue statement or omission or alleged omission.
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No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the 0000 Xxx) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 7, each person, if any, who controls an
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act shall have the same rights to contribution as such Underwriter, and
each director of the Company, each officer of the Company who signed the
Registration Statement, each Trustee of the Trust and each person, if any, who
controls an Offeror within the meaning of Section 15 of the 1933 Act or Section
20 of the 1934 Act shall have the same rights to contribution as such Offeror.
The obligations of the Offerors to contribute pursuant to this Section 7 are
joint and several. The Underwriters' respective obligations to contribute
pursuant to this Section 7 are several in proportion to the number of Initial
Preferred Securities set forth opposite their respective names in Schedule A
hereto and not joint.
SECTION 8. Representations, Warranties and Agreements to Survive
Delivery. All representations, warranties and agreements contained in this
Agreement or contained in certificates of officers of the Company or Trustees of
the Trust submitted pursuant hereto, shall remain operative and in full force
and effect, regardless of any investigation made by or on behalf of any
Underwriter or controlling person, or by or on behalf of the Offerors, and shall
survive delivery of the Preferred Securities to the Underwriters.
SECTION 9. Termination of Agreement.
(a) The Representatives may terminate this Agreement, immediately upon
notice to the Company, at any time at or prior to Closing Time (i) if there has
been since the date of this Agreement or since the respective dates as of which
information is given in the Prospectus, any material adverse change in the
condition, financial or otherwise, or in the earnings, business affairs or
business prospects of the Company and its subsidiaries considered as one
enterprise or of the Trust, whether or not arising in the ordinary course of
business, or (ii) if there has occurred any material adverse change in the
financial markets in the United States or elsewhere or any outbreak or
escalation of hostilities or other calamity or crisis the effect of which on the
financial markets of the United States is to make it, in the judgment of the
Representatives, impracticable to market the Preferred Securities or to enforce
contracts for the sale of the Preferred Securities, or (iii) if trading in the
Preferred Securities or the Common Stock shall have been suspended by the
Commission or the NYSE, or trading generally on any of the American Stock
Exchange, the NYSE or the Nasdaq National Market shall have been suspended, or
minimum or maximum prices for trading have been fixed, or maximum ranges for
prices for securities have been required, by any of said Exchanges or by the
Nasdaq National Market or by order of the Commission or any other governmental
authority, or if a banking moratorium has been declared by either federal or New
York authorities. Notice of any such termination may be given to the Company by
telegram, telecopy or telephone and shall be subsequently confirmed by letter.
(b) If this Agreement is terminated pursuant to this Section , such
termination shall be without liability of any party except as provided in
Section 4.
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SECTION 10. Default by One or More of the Underwriters. If one or more
of the Underwriters shall fail at Closing Time or a Date of Delivery to purchase
the Preferred Securities which it or they are obligated to purchase hereunder
(the "Defaulted Securities"), then the Representatives shall have the right,
within 24 hours thereafter, to make arrangements for one or more of the
non-defaulting Underwriters, or any other underwriters, to purchase all, but not
less than all, of the Defaulted Securities in such amounts as may be agreed upon
and upon the terms herein set forth; if, however, during such 24 hours the
Representatives shall not have completed such arrangements for the purchase of
all of the Defaulted Securities, then:
(a) if the number of Defaulted Securities does not exceed 10%
of the number of Preferred Securities to be purchased on such date
pursuant to this Agreement, each of the non-defaulting Underwriters
shall be obligated, severally and not jointly, to purchase the full
amount thereof in the proportions that their respective underwriting
obligations bear to the underwriting obligations of all non-defaulting
Underwriters, or
(b) if the number of Defaulted Securities exceeds 10% of the
number of Preferred Securities to be purchased on such date pursuant to
this Agreement, this Agreement or, with respect to any Date of Delivery
which occurs after the Closing Time, the obligations of the
Underwriters to purchase and of the Company to sell the Option
Preferred Securities to be purchased and sold on such Date of Delivery,
shall terminate without liability on the part of any non-defaulting
Underwriter.
No action taken pursuant to this Section shall relieve any defaulting
Underwriter from liability in respect of its default under this Agreement.
In the event of any such default by any Underwriter or Underwriters as
set forth in this Section which does not result in a termination of this
Agreement or, in the case of a Date of Delivery which is after the Closing Time,
which does not result in a termination of the obligation of the Underwriters to
purchase and the Company to sell the relevant Option Securities, as the case may
be, either the Representatives or the Company shall have the right to postpone
the Closing Time or the relevant Date of Delivery, as the case may be, for a
period not exceeding seven days to effect any required changes in the
Registration Statement or Prospectus or in any other documents or arrangements.
SECTION 11. Notices. All notices and other communications hereunder
shall be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the
Underwriters shall be directed to the Representatives c/o Merrill Xxxxx at the
address set forth above; and notices to the Offerors shall be directed to them
at 0000 Xxxxx Xxxxxxx Xxxxxx, X.X. Xxx 0000, Xxxxxxx, Xxxxxxx 00000-0000,
attention of Xxxxxx X. Xxxxxxxxxxx, Senior Vice President, Treasurer and
Investor Relations.
SECTION 12. Parties. This Agreement shall inure to the benefit of and
be binding upon the Underwriters, the Company, the Trust and their respective
successors. Nothing
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expressed or mentioned in this Agreement is intended or shall be construed to
give any person, firm or corporation, other than the parties hereto and their
respective successors and the controlling persons and officers, trustees and
directors referred to in Sections 6 and 7 and their heirs and legal
representatives, any legal or equitable right, remedy or claim under or in
respect of this Agreement or any provision herein contained. This Agreement and
all conditions and provisions hereof are intended to be for the sole and
exclusive benefit of the parties hereto and their respective successors and said
controlling persons and said officers, trustees and directors and their heirs
and legal representatives, and for the benefit of no other person, firm or
corporation. No purchaser of Preferred Securities from any Underwriter shall be
deemed to be a successor by reason merely of such purchase.
SECTION 13. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York applicable to
agreements made and to be performed in said State.
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If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us a counterpart hereof, whereupon this
instrument along with all counterparts will become a binding agreement between
the Underwriters, on the one hand, and the Company and the Trust, on the other,
in accordance with its terms.
Very truly yours,
THE FINOVA GROUP INC.
By: ________________________________________
Name:
Title:
FINOVA FINANCE TRUST
By: ________________________________________
Trustee
By: ________________________________________
Trustee
Confirmed and accepted, as of the date first above written.
XXXXXXX XXXXX & CO.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
XXXXXXXXXX SECURITIES
XXXXXX XXXXXXX & CO. INCORPORATED
By: XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX
INCORPORATED
By: ______________________________________
Authorized Signature
For themselves and as Representatives of the Underwriters named in Schedule
A hereto.
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SCHEDULE A
Number of
Preferred
Name of Underwriter Securities
------------------- ----------
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated................
Xxxxxxxxxx Securities.............................................
Xxxxxx Xxxxxxx & Co. Incorporated.................................
---------
Total............................................. 2,000,000
=========
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Exhibit A
December , 1996
XXXXXXX XXXXX & CO.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
Xxxxxxxxxx Securities
Xxxxxx Xxxxxxx & Co. Incorporated
as Representatives of the several
Underwriters to be named in the
within-mentioned Purchase Agreement
x/x Xxxxxxx Xxxxx & Xx.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
Xxxxxxx Xxxxx World Headquarters
Xxxxx Xxxxx
Xxxxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Ladies and Gentlemen:
The undersigned, the Chairman, President and Chief Executive Officers
of The FINOVA Group Inc., a Delaware corporation (the "Company"), understands
that Xxxxxxx Xxxxx & Co., Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
("Xxxxxxx Xxxxx"), Xxxxxxxxxx Securities and Xxxxxx Xxxxxxx & Co. Incorporated
propose to enter into a Purchase Agreement (the "Purchase Agreement") with the
Company and FINOVA Finance Trust, a Delaware business trust (the "Trust"),
providing for the public offering of Convertible Trust Originated Preferred
Securities (the "Preferred Securities") of the Trust which will be convertible
into the common stock, par value $.01 per share (the "Common Stock"), of the
Company. In recognition of the benefits that such an offering will confer upon
the undersigned as an officer and stockholder of the Company, and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the undersigned agrees with each underwriter to be named in the
Purchase Agreement that, during a period of 90 days from the date of the
Purchase Agreement, the undersigned will not, in my individual capacity, without
the prior written consent of Xxxxxxx Xxxxx, directly or indirectly, (i) sell,
offer to sell, grant any option for the sale of, or otherwise dispose of, any
shares of Common Stock or any securities convertible into or exchangeable or
exercisable for Common Stock, whether now owned or hereafter acquired by the
undersigned or with respect to which the undersigned has or hereafter acquires
the power of disposition, or (ii) enter into any swap or any other agreement or
any transaction that transfers, in whole or in part, directly or
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indirectly, the economic consequence of ownership of the Common Stock, or any
securities convertible into or exchangeable or exercisable for Common Stock,
whether any such swap or transaction is to be settled by delivery of Common
Stock or other securities, in cash or otherwise; provided that the foregoing
prohibition shall not be applicable with respect to [the offer to sell, sale or
other disposition of any agreement or transaction that transfers or purports to
transfer any shares of Common Stock or any securities convertible into or
exchangeable or exercisable for Common Stock in the event of the acceleration of
the vesting or exercisability of, or the termination of transfer or other
restrictions with respect, to such shares or securities as a result of a "change
of control" of the Company or a "change in control" of the Company, as such
terms are defined or referred to in any employee benefit plan of the Company or
other similar agreement or other arrangement of the Company to which the
undersigned is a party or under which the undersigned is a beneficiary.]
Very truly yours,
Signature: ____________________________
Xxxxxx X. Xxxxxxxxxxx
