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EXHIBIT 1.1
4,000,000 Preferred Securities
FREMONT GENERAL FINANCING I
(a Delaware Trust)
[ ]% Trust Originated Preferred Securities(SM) ("TOPrS"(SM))
(Liquidation Amount of $25 Per Preferred Security)
PURCHASE AGREEMENT
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February __, 1996
XXXXXXX XXXXX & CO.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
XXXX XXXXXX XXXXXXXX INC.
XXXXXXX, XXXXX & CO.
PAINEWEBBER INCORPORATED
as Representatives of the several Underwriters
c/x Xxxxxxx Xxxxx World Headquarters
North Tower
World Financial Center
New York, New York 10281
Dear Sirs:
Fremont General Financing I (the "Trust"), a statutory
business trust organized under the Business Trust Act (the "Delaware Act") of
the State of Delaware (Chapter 38, Title 12, of the Delaware Code, 12 Del. C.
Sections 3801 et seq.), and Fremont General Corporation, a Nevada corporation
(the "Company" and, together with the Trust, the "Offerors"), confirm their
agreement (the "Agreement") with Xxxxxxx Xxxxx & Co., Xxxxxxx Lynch, Xxxxxx,
Xxxxxx & Xxxxx Incorporated ("Xxxxxxx Xxxxx"), Xxxx Xxxxxx Xxxxxxxx Inc. ("Xxxx
Xxxxxx"), Xxxxxxx, Xxxxx & Co. ("Goldman"), PaineWebber, Incorporated
("PaineWebber") and each of the other Underwriters 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
Xxxxxxx Xxxxx, Xxxx Xxxxxx, Xxxxxxx and PaineWebber are acting as
representatives (in such capacity, Xxxxxxx Xxxxx, Xxxx Xxxxxx, Xxxxxxx and
PaineWebber
_______________________
(SM) "Trust Originated Preferred Securities" and "TOPrS" are service marks
of Xxxxxxx Xxxxx & Co., Inc.
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shall hereinafter be 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 [ ]% Trust Originated Preferred
Securities (liquidation amount of $25 per preferred security) of the Trust (the
"Preferred Securities") set forth in said Schedule A (except as may otherwise
be provided in the Pricing Agreement, as hereinafter defined) and with respect
to the grant by the Offerors to the Underwriters, acting severally and not
jointly, of the option described in Section 2(c) hereof to purchase all or any
part of 600,000 additional shares of Preferred Securities to cover
over-allotments (except as may otherwise be provided in the Pricing Agreement).
All or any part of the 600,000 shares of Preferred Securities subject to the
option described in Section 2(c) hereof are hereinafter referred to as the
"Option Securities". The Preferred Securities will be guaranteed by the
Company with respect to distributions and payments upon liquidation, redemption
and otherwise (the "Preferred Securities Guarantee") pursuant to and subject to
the limitations set forth therein, the Preferred Securities Guarantee Agreement
(the "Preferred Securities Guarantee Agreement"), dated as of February __,
1996, between the Company and The Chase Manhattan Bank, N.A., a national
banking association, as trustee (the "Guarantee Trustee"), and entitled to the
benefits of certain undertakings pursuant to the Indenture (as defined herein)
to pay all expenses relating to administration of the Trust (the
"Undertakings"). The Preferred Securities and the related Preferred Securities
Guarantee and the Option Securities are referred to herein as the "Securities."
Prior to the purchase and public offering of the Preferred
Securities by the several Underwriters, the Offerors and the Representatives,
acting on behalf of the several Underwriters, shall enter into an agreement
substantially in the form of Exhibit A hereto (the "Pricing Agreement"). The
Pricing Agreement may take the form of an exchange of any standard form of
written telecommunication between the Offerors and the Representative and shall
specify such applicable information as is indicated in Exhibit A hereto. The
offering of the Preferred Securities will be governed by this Agreement, as
supplemented by the Pricing Agreement. From and after the date of the
execution and delivery of the Pricing Agreement, this Agreement shall be deemed
to incorporate the Pricing Agreement.
The Offerors have filed with the Securities and Exchange
Commission (the "Commission") a registration statement on Form S-3 (No.
33-64771) and a related preliminary prospectus for the registration under the
Securities Act of 1933 (the "1933 Act") of a combination of (i) 4,000,000
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Preferred Securities, and at the election of the Underwriters, up to
600,000 Option Securities, (ii) the Preferred Securities Guarantee, (iii) the
Subordinated Debt Securities (as defined below) to be issued and sold to the
Trust by the Company, and (iv) the back-up undertakings of the Company in
connection with the Preferred Securities, have filed such amendments thereto,
if any, and such amended preliminary prospectuses as may have been required to
the date hereof, and will file such additional amendments thereto and such
amended prospectuses as may hereafter be required by the 1933 Act, the 1933 Act
Regulations (as defined below) and the 1934 Act (as defined below) in
connection with the distribution by the Underwriters of the Securities. Such
registration statement (as amended at the Effective Time) and if any
post-effective amendment is filed, as amended, at the Effective Time of any
such post-effective amendment, and the prospectus constituting a part thereof
(including, in each case, all documents incorporated or deemed to be
incorporated by reference therein pursuant to Item 12 of Form S-3 under the
1933 Act and all information contained in the final prospectus filed with the
Commission pursuant to Rule 424(b) of the 1933 Act Regulations (as defined
below) and the information, if any, deemed to be part thereof at the Effective
Time pursuant to Rule 430A(b) or Rule 434(d) of the rules and regulations of
the Commission under the 1933 Act (the "1933 Act Regulations")), as from time
to time amended or supplemented pursuant to the 1933 Act, the Securities
Exchange Act of 1934, as amended (the "1934 Act"), or otherwise, are
hereinafter referred to as the "Registration Statement" and the "Prospectus,"
respectively, except that, if any revised prospectus shall be provided to the
Underwriters by the Offerors for use in connection with the offering of the
Preferred Securities which differs from the Prospectus on file at the
Commission at the time the Registration Statement becomes effective (whether or
not such revised prospectus is required to be filed by the Offerors pursuant to
Rule 424(b) of the 1933 Act Regulations), the term "Prospectus" shall refer to
such revised prospectus from and after the time it is first provided to the
Underwriters for such use. As used in this Agreement, "Effective Time" means
the date and time as of which such Registration Statement, or the most recent
post-effective amendment thereto, if any, was declared effective by the
Commission. All references in this Agreement to financial statements and
schedules and other information that is "contained," "included" or "stated" in
the Registration Statement or the Prospectus (and all other references of like
import) shall be deemed to mean and include all such financial statements and
schedules and other information that are or are deemed to be incorporated by
reference in the Registration Statement or the Prospectus, as the case may be;
and all refer-
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ences in this Agreement to amendments or supplements to the Registration
Statement or the Prospectus shall be deemed to mean and include the filing of
any document under the 1934 Act that is or is deemed to be incorporated by
reference in the Registration Statement or the Prospectus, as the case may be.
The Offerors understand that the Underwriters propose to make
a public offering of the Securities as soon as the Representatives deem
advisable after the Pricing Agreement has been executed and delivered, and the
Declaration (as defined herein), the Indenture (as defined herein), and the
Preferred Securities Guarantee Agreement have been qualified under the Trust
Indenture Act of 1939, as amended (the "1939 Act"). The entire proceeds from
the sale of the Securities will be combined with the entire proceeds from the
sale by the Trust to the Company of its common securities (the "Common
Securities"), as 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 (the "Common Securities Guarantee Agreement" and, together
with the Preferred Securities Guarantee Agreement, the "Guarantee Agreements"),
dated as of February __, 1996, between the Company and the Guarantee Trustee,
as trustee, and will be used by the Trust to purchase $100,000,000 principal
amount (or up to $115,000,000 if the over-allotment option is exercised) of
[ ]% junior subordinated debt securities (the "Subordinated Debt Securities")
issued by the Company. 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 February __, 1996 (the "Declaration"), among the Company, as
Sponsor, Xxxxx X. Xxxxxxx and Xxxxx X. Xxxxxx, as trustees (the "Regular
Trustees"), and The Chase Manhattan Bank N.A., a national banking association,
as property trustee (the "Property Trustee" and, together with the Regular
Trustees, the "Trustees"). The Subordinated Debt Securities will be issued
pursuant to an indenture, dated as of February __, 1996 (the "Indenture"),
between the Company and First Interstate Bank of California, a California
banking corporation, as trustee (the "Debt Trustee").
Section 1. Representations and Warranties.
(a) The Offerors jointly and severally represent
and warrant to each Underwriter as of the date hereof and as of the date of the
Pricing Agreement (such later date being hereinafter referred to as the
"Representation Date") and as of the Closing Time referred to in
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Section 2(c) hereof (except for representations or warranties which by their
terms speak as of a different date or dates), as follows:
(i) At the time the Registration Statement
becomes effective and at the Representation Date and at the Closing
Time (and if any Option Securities are purchased, at each Date of
Delivery referred to below), the Registration Statement will comply in
all material respects with the requirements of the 1933 Act and the
1933 Act Regulations, and the Declaration, the Preferred Securities
Guarantee and the Indenture will conform in all material respects to
the applicable requirements of the 1939 Act and the rules and
regulations of the Commission under the 1939 Act (the "1939 Act
Regulations"), and the Registration Statement 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. The Prospectus, at the Representation Date
(unless the term "Prospectus" refers to a prospectus that has been
provided to the Underwriters by the Trust for use in connection with
the offering of the Securities that differs from the Prospectus on
file at the Commission at the time the Registration Statement becomes
effective, in which case, at the time it is first provided to the
Underwriters for such use) and at the Closing Time (and, if any Option
Securities are purchased, at each Date of Delivery referred to below),
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 under which they were made,
not misleading; provided, however, that the representations and
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
Offerors in writing by any Underwriter through Xxxxxxx Xxxxx, on
behalf of the Representatives, expressly for use in the Registration
Statement or Prospectus and to the Statement of Eligibility of the
Property Trustee on Form T-1, the Statement of Eligibility of the
Guarantee Trustee on Form T-1, and the Statement of Eligibility of the
Debt Trustee on Form T-1, each as filed with the Commission as part of
the Registration Statement.
(ii) The documents incorporated or deemed to
be incorporated by reference in the Registration Statement or
Prospectus, at the time they were or hereafter are filed with the
Commission, complied
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and will comply in all material respects with the requirements of the
1933 Act, the 1933 Act Regulations, the 1934 Act and the rules and
regulations of the Commission under the 1934 Act (the "1934 Act
Regulations"), as applicable, and, at the time the Registration
Statement and any amendments thereto become effective and at the
Closing Time (and, if any Option Securities are purchased, at each
Date of Delivery referred to below), 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) To the Company's knowledge, Ernst &
Young LLP, the accountants who certified the financial statements and
supporting schedules of the Company in the Registration Statement, are
independent public accountants as required by the 1933 Act and the
1933 Act Regulations.
(iv) The consolidated financial statements
of the Company included or incorporated by reference in the
Registration Statement and the Prospectus present fairly the financial
position of the Company and its consolidated subsidiaries, as at the
dates indicated and the results of their operations for the periods
specified; except as otherwise stated in the Registration Statement,
said financial statements have been prepared in conformity with
generally accepted accounting principles applied on a consistent
basis; the Company's ratio of earnings to fixed charges included in
the Prospectus and in Exhibit 12 to the Registration Statement have
been calculated in compliance with Item 503(d) of Regulation S-K of
the Commission and the supporting schedules included in the
Registration Statement present fairly in all material respects the
information required to be stated therein; and the selected financial
data included in the Prospectus present fairly the information shown
therein and have been compiled on a basis consistent with that of the
audited consolidated financial statements included or incorporated by
reference in the Registration Statement.
(v) The conditions for use of Form S-3, as
set forth in the General Instructions thereto, have been satisfied by
each of the Offerors.
(vi) Since the respective dates as of which
information is given in the Registration State-
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ment and the Prospectus, except as otherwise stated
therein, (A) there has been no material adverse change in the
condition (financial or otherwise), earnings, business affairs or
business prospects of the Company and its Subsidiaries (as defined in
Section 1(ix) herein), considered as one enterprise or of the Trust,
whether or not arising in the ordinary course of business, other than
fluctuations in the market value of securities held by the Company as
part of its investment portfolio which are not required to be
recognized for financial statement reporting purposes, (B) there have
been no transactions entered into by the Trust or by the Company or
any of its Subsidiaries, other than those in the ordinary course of
business, which are material with respect to the Trust or the Company
and its Subsidiaries, considered as one enterprise and (C) except for
regular quarterly dividends, there has been no dividend or
distribution of any kind declared, paid or made by the Company on its
capital stock or by the Trust on any of the trust securities.
(vii) The Company has been duly incorporated
and is validly existing as a corporation in good standing under the
laws of the State of Nevada with corporate power and authority to own,
lease and operate its properties and to conduct its business as
described in the Registration Statement and Prospectus, to enter into
and perform its obligations under this Agreement, the Pricing
Agreement, the Declaration, the Indenture and each of the Guarantees
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, whether by reason of the
ownership or leasing of property or the conduct of business, except
where the failure so to qualify would not have a material adverse
effect on the condition (financial or otherwise), earnings, business
affairs or business prospects of the Company and its Subsidiaries,
considered as one enterprise (a "Material Adverse Effect").
(viii) The authorized, issued and
outstanding capital stock of the Company is as set forth in the
Prospectus under the caption "Capitalization of Fremont General"
(except for the effect of the three for two stock split effective on
February 7, 1996, subsequent issuances, if any, pursuant to
reservations, agreements, employee benefit plans, employee or
non-employee director stock option plans or conversion
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of convertible securities referred to in the Prospectus); and all of
the issued and outstanding shares of capital stock of the Company have
been duly authorized and validly issued and are fully paid and
non-assessable.
(ix) The Company's subsidiaries which are
considered "Significant Subsidiaries" as defined in Regulation S-X, as
promulgated under the 1933 Act, are as listed on Schedule B attached
hereto (collectively referred to herein as the "Subsidiaries"). Each
Subsidiary is a corporation duly organized, validly existing and in
good standing under the laws of the jurisdiction of its incorporation
with corporate power and authority under such laws to own, lease and
operate its properties and conduct its business; and each Subsidiary
is duly qualified to transact business as a foreign corporation and is
in good standing in each other jurisdiction in which it owns or leases
property of a nature, or transacts business of a type, that would make
such qualification necessary, except to the extent that the failure to
so qualify would not have a Material Adverse Effect. All of the
outstanding shares of capital stock of each Subsidiary have been duly
authorized and validly issued and are fully paid and non-assessable
and are owned by the Company, directly or through Subsidiaries, free
and clear of any pledge, lien, security interest, mortgage, charge,
claim, equity or encumbrance of any kind, except that the stock of
Fremont Insurance Group, Inc. has been pledged to The Chase Manhattan
Bank, N.A. by the Company in connection with the Credit Agreement
dated _____ between the Company and The Chase Manhattan Bank, N.A.
(x) The Trust has been duly created and is
validly existing in good standing as a business trust under the
Delaware Act with the power and authority to own property and to
conduct its business as described in the Registration Statement and
Prospectus and to enter into and perform its obligations under this
Agreement, the Pricing Agreement, the Preferred Securities, the Common
Securities and the Declaration; the Trust is duly qualified to
transact business as a foreign company and is in good standing in any
other jurisdiction in which such qualification is necessary, except to
the extent that the failure to so qualify or be in good standing would
not have a material adverse effect on the Trust; the Trust is not a
party to or otherwise bound by any agreement other than those
described in this Agreement or in the Prospectus; the Trust is and
will be classified for United States
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federal income tax purposes as a grantor trust and not as an
association taxable as a corporation; and the Trust is and will be
treated as a consolidated subsidiary of the Company pursuant to
generally accepted accounting principles.
(xi) The Common Securities have been duly
authorized by the Declaration and, when issued and delivered by the
Trust to the Company against payment therefor as described in the
Registration Statement and Prospectus, will be validly issued and
(subject to the terms of the Declaration) fully paid and
non-assessable undivided beneficial interests in the assets of the
Trust and will conform to all statements relating thereto contained in
the Prospectus; the issuance of the Common Securities is not subject
to preemptive rights; and at the Closing Time all of the issued and
outstanding Common Securities of the Trust will be directly owned by
the Company free and clear of any security interest, mortgage, pledge,
lien, encumbrance, claim or equity.
(xii) This Agreement has been and, at
Closing Time, the Pricing Agreement will have been duly authorized by
all necessary business trust or corporate action, as the case may be,
executed and delivered by each of the Offerors and each of this
Agreement and the Pricing Agreement at the Closing Time, will be a
valid and binding obligation of the Offerors, enforceable against each
of them in accordance with each of their terms except to the extent
that enforcement thereof may be limited by (A) bankruptcy, insolvency,
receivership, reorganization, moratorium, liquidation, fraudulent
conveyance or other similar laws relating to or affecting the rights
and remedies of creditors generally or (B) by general principles of
equity, including applicable law relating to fiduciary duties
(regardless of whether enforcement is considered, and applied in a
proceeding at law or in equity) (the enforceability exceptions
referred to in classes (A) and (B) above and referred to herein as the
"Enforceability Exceptions") and the effect of applicable public
policy on the enforceability of provisions relating to indemnification
or contribution.
(xiii) The Declaration has been duly
authorized by the Company by all necessary corporate action and, at
the Closing Time, will have been duly executed and delivered by the
Company and the Trustees, and assuming due authorization, execution
and delivery of the Declaration by the Property Trustee,
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the Declaration will, at the Closing Time, 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 to the extent that enforcement may be limited by the
Enforceability Exceptions and the effect of applicable public policy
on the enforceability of provisions relating to indemnification and
contribution, and will conform in all material respects to all
statements relating thereto in the Prospectus; and at the Closing
Time, the Declaration will have been qualified under the 1939 Act.
(xiv) Each of the Guarantee Agreements has
been duly authorized by the Company by all necessary corporate action
and, when validly executed and delivered by the Company, and, in the
case of the Preferred Securities Guarantee Agreement, assuming due
authorization, execution and delivery of the Preferred Securities
Guarantee by the Guarantee Trustee, will constitute a valid and
binding obligation of the Company, enforceable against the Company in
accordance with its terms except to the extent that enforcement
thereof may be limited by the Enforceability Exceptions, and each of
the Guarantees and the Guarantee Agreements will conform in all
material respects to all statements relating thereto contained in the
Prospectus; and the Preferred Securities Guarantee Agreement, at the
Closing Time, will have been qualified under the 1939 Act.
(xv) The Preferred Securities have been duly
authorized by the Declaration and, when issued and delivered pursuant
to the Declaration and this Agreement against payment of the
consideration set forth in the Pricing Agreement, will be validly
issued and (subject to the terms of the Declaration) fully paid and
non-assessable undivided beneficial interests in the assets of the
Trust, will be entitled to the benefits of the Declaration and will
conform in all material respects to all statements relating thereto
contained in the Prospectus; the issuance of the Preferred Securities
is not subject to any preemptive or other similar rights; and (subject
to the terms of the Declaration) holders of Preferred Securities, as
beneficial owners of the Trust, will be entitled to the same
limitation of personal liability as extended to stockholders of
private corporations for profit organized under the General
Corporation Law of the State of Delaware.
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(xvi) The Indenture has been duly authorized
by the Company by all necessary corporate action and, when validly
executed and delivered by the Company, will constitute a valid and
binding agreement of the Company, enforceable against the Company in
accordance with its terms except to the extent that enforcement
thereof may be limited by the Enforceability Exceptions and by the
enforceability of Section 515 of the Indenture; the Indenture will
conform in all material respects to all statements relating thereto
contained in the Prospectus; and at the Closing Time, the Indenture
will have been qualified under the 1939 Act.
(xvii) The Subordinated Debt Securities have
been duly authorized by the Company and, at the Closing Time, will
have been duly executed by the Company and, when authenticated in the
manner provided for in the Indenture and delivered against payment
therefor as described in the Prospectus, will constitute valid and
binding obligations of the Company, enforceable against the Company in
accordance with their terms except to the extent that enforcement
thereof may be limited by the Enforceability Exceptions, will be in
substantially the form contemplated by, and entitled to the benefits
of, the Indenture and will conform in all material respects to all
statements relating thereto in the Prospectus.
(xviii) 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; the Declaration
has been duly executed and delivered by the Regular Trustees and is a
valid and binding obligation of the Regular Trustees, enforceable
against the Regular Trustees in accordance with its terms except to
the extent that enforcement thereof may be limited by the
Enforceability Exceptions and the effect of applicable public policy
on the enforceability provisions relating to indemnification or
contribution.
(xix) None of the Offerors 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").
(xx) Neither the Company nor any of the
Subsidiaries is in violation of its charter or by-laws; the Trust is
not in violation of the Declaration or its certificate of trust filed
with the State of Delaware on December 4, 1995 (the "Certificate of
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Trust"); none of the Company, any of the Subsidiaries or the Trust is
in default in the performance or observance of any obligation,
agreement, covenant or condition contained in any contract, indenture,
mortgage, loan agreement, note, lease or other agreement or instrument
to which the Company, any of the Subsidiaries or the Trust is a party
or by which it or any of them 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 defaults that would not have a
Material Adverse Effect or have any material adverse effect on the
Trust; and the execution, delivery and performance of this Agreement,
the Pricing Agreement, the Declaration, the Preferred Securities, the
Common Securities, the Indenture, the Subordinated Debt Securities,
the Guarantee Agreements and the Guarantees and the consummation of
the transactions contemplated herein and therein and compliance by the
Offerors with their respective obligations hereunder and thereunder
have been duly authorized by all necessary action (corporate or
otherwise) on the part of the Offerors and do not and will not result
in (A) any violation of the charter or by-laws of the Company or any
Subsidiary, or any provision of the Declaration or Certificate of
Trust (B) a breach of or conflict with any of the terms or provisions
of, or constitute a default under, any material contract, indenture,
mortgage, loan agreement, note, lease or other agreement or instrument
to which the Trust, the Company or any Subsidiary is a party or by
which it may be bound or to which any of its properties may be subject
(except for such conflicts, breaches or defaults that would not have a
Material Adverse Effect or have any material adverse effect on the
Trust) or (C) a breach or violation of or conflict with or result in
the creation or imposition of any lien, change or encumbrance upon any
property or assets of the Trust, the Company or any Subsidiary under
any existing applicable law, rule, regulation, (other than the
securities or blue sky laws of the various states), judgment, order or
decree of any government, governmental instrumentality or court,
domestic or foreign, or any regulatory body or administrative agency
or other governmental body (including, without limitation, any
insurance or banking regulatory body or agency) having jurisdiction
over the Trust, the Company, or any Subsidiary or any of their
respective properties, except for such creation or imposition of any
lien, charge or encumbrance that would not have a Material Adverse
Effect or any material adverse effect on the Trust.
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(xxi) Except as disclosed in the Prospectus,
there is no action, suit or proceeding before or by any government,
governmental instrumentality or court, domestic or foreign,
(including, without limitation, any insurance, banking, or lending
regulatory authority, agency or body), now pending or, to the
knowledge of the Trust or the Company, threatened against or affecting
the Trust, the Company or any Subsidiary that is required to be
disclosed in the Prospectus or that could reasonably be expected to
result in any Material Adverse Effect or any material adverse effect
on the Trust, or that could materially and adversely affect the
properties or assets of the Trust or the Company and its Subsidiaries,
considered as one enterprise, or that could adversely affect the
consummation of the transactions contemplated in this Agreement or any
applicable Pricing Agreement; the aggregate of all pending legal or
governmental proceedings that are not described in the Prospectus to
which the Trust, the Company or any Subsidiary is a party or which
affect any of their respective properties, including ordinary routine
litigation incidental to the business of the Trust, the Company or any
Subsidiary, would not have a Material Adverse Effect or any material
adverse effect on the Trust; and there are no contracts or documents
of the Company, any of its Subsidiaries or the Trust that are required
to be filed as exhibits to the Registration Statement by the 1933 Act
or by the 1933 Act Regulations that have not been so filed.
(xxii) No authorization, approval, consent
or order of any court or governmental authority or agency (including,
without limitation, any insurance, banking or lending regulatory
authority, agency or body) is necessary in connection with the
issuance and sale of the Common Securities or the offering and sale of
the Preferred Securities, the Subordinated Debt Securities or the
Guarantees hereunder, except (a) such as have already been obtained or
as may be required under the 1933 Act or the 1933 Act Regulations, the
1934 Act or the 1934 Act Regulations or state securities laws, or (b)
the qualification of the Declaration, the Preferred Securities
Guarantee Agreement and the Indenture under the 1939 Act.
(xxiii) Each of the Company and the
Subsidiaries has good and marketable title to all properties and
assets described in the Prospectus as owned by it to the extent and
subject to the limitations set forth in the Prospectus, free and clear
of all liens, charges, encumbrances or restrictions,
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except such as (A) are described in the Prospectus or (B) are neither
material in amount nor materially significant in relation to the
business of the Company and its subsidiaries, considered as one
enterprise; all of the leases and subleases material to the business
of the Company and its subsidiaries, considered as one enterprise, and
under which the Company or any Subsidiary holds properties described
in the Prospectus, are in full force and effect, and neither the
Company nor any Subsidiary has any notice of any material claim of any
sort that has been asserted by anyone adverse to the rights of the
Company or any Subsidiary under any of the leases or subleases
mentioned above, or affecting or questioning the rights of such
corporation to the continued possession of the leased or subleased
premises under any such lease or sublease.
(xxiv) Each of the Trust, the Company and
the Subsidiaries owns, possesses or has obtained, all material
licenses, franchises, consents, orders, approvals, permits,
certificates and other authorizations issued by the appropriate local,
state, federal or foreign regulatory agencies or bodies (including,
without limitation, (x) insurance licenses from the insurance
regulatory authorities, agencies or bodies of the various states where
it conducts business (the "Insurance Licenses") and (y) banking and
lending licenses from the banking regulatory authorities, agencies or
bodies of the various states where it conducts business (the "Banking
Licenses")) necessary to conduct the business now operated by any of
them; none of the Trust, the Company or any of the Subsidiaries has
received any notice of proceedings relating to the revocation,
modification or suspension of any such license, franchise, consent,
order, approval, permit, certificate or authority (including, without
limitation, the Insurance Licenses and the Banking Licenses) which,
singly or in the aggregate, if the subject of an unfavorable decision,
ruling or finding, is reasonably likely to have a Material Adverse
Effect or a material adverse effect on the Trust; and, except as
disclosed in the Registration Statement, no insurance or banking
regulatory authority, agency or body has issued any order or decree
impairing, restricting or prohibiting the payment of dividends by any
Subsidiary to its parent which, singularly in the aggregate, or is
reasonably likely to have a Material Adverse Effect.
(xxv) No labor problem or dispute exists
with the employees of the Company or any of its
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Subsidiaries, or to the knowledge of the Company, is imminent, that
could reasonably be expected to have a Material Adverse Effect.
(xxvi) The Company and the Trust have, and
all "affiliated purchasers" have, complied with Rule 10b-6 under the
1934 Act and neither the Company nor the Trust has taken and neither
will take, directly or indirectly, any action designed to, or that
might reasonably be expected to, cause or result in stabilization or
manipulation of the price of the Preferred Securities or any other
securities of the Trust or the Company which may be deemed to be of
the same "class" as the Preferred Securities or the Junior
Subordinated Debentures for purposes of Rule 10b-6 under the 1934 Act.
(xxvii) Except as disclosed in the
Registration Statement, the Company and the Subsidiaries have made no
material changes in their insurance reserve practices during the past
two years except where such change in such insurance reserving
practices could not be expected to have a Material Adverse Effect.
(xxviii) Fremont Compensation Insurance
Company and Pacific Compensation Insurance Company are rated "A-
(Excellent)"; Fremont Indemnity Company is rated "B++ (Very Good)";
Casualty Insurance Company is rated "A- (Excellent)" and Workers'
Compensation and Indemnity Company is rated "A- (Excellent)" by A.M.
Best Company ("A.M. Best") for 1995 and neither the Company nor any
such Subsidiaries is aware of any threatened or pending downgrading in
the Company's or any such Subsidiaries' A.M. Best.
(xxix) All reinsurance treaties, contracts,
agreements and arrangements and all retrocessional treaties,
contracts, agreements and arrangements to which the Company or any
Subsidiary is a party are in full force and effect and none of the
Company or the Subsidiaries is in violation of, or in default in the
performance, observance or fulfillment of, any obligation, agreement,
covenant or condition contained therein, except to the extent that any
such violation or default, singularly or in the aggregate with all
such other violations or defaults, would not have a Material Adverse
Effect; neither the Company nor any of the Subsidiaries has received
any notice from any of the other parties to such treaties, contracts,
agreements or arrangements that such other party is unable or intends
not to perform in any mate-
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rial respect such treaty, contract, agreement or arrangement or if
such notice has been received, adequate reserves have been
established.
(xxx) The 1994 statutory annual statements
and the 1995 statutory quarterly statements of the Subsidiaries
engaged in the insurance or an insurance-related business and the
statutory balance sheets and income statements included in such
statutory annual and quarterly statements have been prepared in
conformity with statutory accounting principles or practices required
or permitted by the appropriate Insurance Department of the state of
domicile of each such Subsidiary, and such statutory accounting
practices have been applied on a consistent basis throughout the
periods involved, except as may otherwise be indicated in the notes
thereto, and present fairly in all material respects the statutory
financial position of the Subsidiaries as of the date thereof, and the
statutory basis results of operations of the Subsidiaries for the
periods covered thereby.
(xxxi) The Company and the Subsidiaries have
filed all material federal, state and local tax returns and other
reports that have been required to be filed and which are true,
complete and correct in all material respects, and have paid all taxes
and fees indicated by said returns and reports and franchise reports
and all assessments received by them or any of them to the extent that
such taxes and/or fees have become due, except where being contested
in good faith and for which the Company has established adequate
reserves.
(xxxii) No change in any insurance or
lending or banking laws or regulations applicable to the Company or
the Subsidiaries is formally pending which is likely to be adopted and
if adopted, could reasonably be expected to have, individually or in
the aggregate with all such changes, a Material Adverse Effect.
(xxxiii) Each of the Offerors is in
compliance with all provisions of Section 1 of the Laws of Florida,
Chapter 92-198, An Act Relating to Disclosure of Doing Business With
Cuba.
(b) Any certificate signed by any officer of the Company
or either Regular Trustee of the Trust and delivered to any of the
Representatives or to counsel for the Underwriters in connection with the
offering of the Securities shall be deemed a representation and warranty by the
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Company or the Trust, as the case may be, to each Underwriter as to the matters
covered hereby.
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 per security set forth in the Pricing Agreement, the number
of Preferred Securities set forth in Schedule A opposite the name of such
Underwriter (except as otherwise provided in the Pricing Agreement), plus any
additional number of Preferred Securities that such Underwriter may become
obligated to purchase pursuant to the provisions of Section 10 hereof.
The purchase price per security to be paid by the several
Underwriters for the Preferred Securities shall be an amount equal to the
initial public offering price. The initial public offering price per Preferred
Security shall be a fixed price to be determined by agreement between the
Representatives and the Offerors. The initial public offering price and the
purchase price, when so determined, shall be set forth in the Pricing
Agreement. In the event that such prices have not been agreed upon and the
Pricing Agreement has not been executed and delivered by all parties thereto by
the close of business on the fourteenth business day following the date of this
Agreement, this Agreement shall terminate forthwith, without liability of any
party to any other party, unless otherwise agreed to by the Offerors and the
Representatives. As compensation to the Underwriters for their commitments
hereunder and in view of the fact that the proceeds of the sale of the
Preferred Securities will be used to purchase the Subordinated Debt Securities
of the Company, the Company hereby agrees to pay at Closing Time (as defined
below) to the Representatives, for the accounts of the several Underwriters, a
commission per Preferred Security determined by agreement between the
Representative and the Company for the Preferred Securities to be delivered by
the Trust hereunder at Closing Time. The commission, when so determined, shall
be set forth in the Pricing Agreement.
(b) Payment of the purchase price for, and delivery
of certificates for, the Preferred Securities shall be made at the office of
Skadden, Arps, Slate, Xxxxxxx & Xxxx, 000 Xxxxx Xxxxx Xxxxxx, Xxxxx 0000, Xxx
Xxxxxxx, Xxxxxxxxxx 00000, or at such other place as shall be agreed upon by
the Representatives and the Trust, at 10:00 A.M.,
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New York City time, on the third or fourth business day (as permitted under
Rule 15c6-1 under the 1934 Act), unless postponed in accordance with the
provisions of Section 10, after execution of the Pricing Agreement, or such
other time not later than ten business days after such date as shall be agreed
upon by the Representatives, the Trust and the Company (such time and date of
payment and delivery being herein called "Closing Time"). Payment shall be
made to the Trust by certified or official bank check or checks drawn in New
York Clearing House funds or similar next day funds payable to the order of the
Trust to an account designated by the Trust, against delivery to the
Representatives for the respective accounts of the Underwriters of certificates
for the Preferred Securities to be purchased by them. Certificates for the
Preferred Securities shall be in such denominations and registered in such
names as the Representatives may request in writing at least two business days
before the Closing Time. 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 Preferred Securities which it has
agreed to purchase. Xxxxxxx Xxxxx, Xxxx Xxxxxx, Xxxxxxx or PaineWebber,
individually and not as a Representative of the Underwriters, may (but shall
not be obligated to) make payment of the purchase price for the Preferred
Securities to be purchased by any Underwriter whose check has not been received
by the Closing Time, but such payment shall not relieve such Underwriter from
its obligations hereunder.
The certificate(s) for the Preferred Securities will be made
available for examination and packaging by the Representatives not later than
10:00 A.M., New York City time, on the last business day prior to the Closing
Time. For purposes of this Agreement, "business day" means a day on which the
New York Stock Exchange Inc. is open for business.
At the Closing Time, the Company will pay, or cause to be
paid, the commission payable at such time to the Underwriters under Section 2
hereof by certified or official bank check or checks payable to Xxxxxxx Lynch,
Pierce, Xxxxxx & Xxxxx Incorporated in New York Clearing House funds or other
similar next day funds.
(c) In addition, on the basis of the representations
and warranties herein contained and subject to the terms and conditions herein
set forth, the Offerors hereby grant an option to the Underwriters, severally
and not jointly, to purchase up to all of the Option Securities at the purchase
price per share set forth in the Pricing Agreement. The option granted will
expire 30 days after
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the Representation Date 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 Preferred Securities upon
notice by the Representatives to the Offerors setting forth the number of
Option Securities as to which the several Underwriters are then exercising the
option and the time and date of payment and delivery for such Option
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 hereinabove defined, unless otherwise agreed by the
Representatives and the Offerors. If the option is exercised as to all or any
portion of the Option Securities, each of the Underwriters, acting severally
and not jointly, will purchase that proportion of the total number of Options
Securities then being purchased which the number of Preferred Securities set
forth in Schedule A opposite the name of such Underwriter bears to the total
number of Preferred Securities (except as otherwise provided in the Pricing
Agreement), subject in each case to such adjustments as the Representatives in
their discretion shall make to eliminate any purchases of fractional interests,
plus any additional number of Option Securities which such Underwriter may
become obligated to purchase pursuant to the provisions of Section 10 hereof.
(d) In addition, in the event that any or all of the
Option Securities are purchased by the Underwriters, payment of the purchase
price for such Option Securities shall be made at the above-mentioned offices
of Skadden, Arps, Slate, Xxxxxxx & Xxxx, or at such other place as shall be
agreed upon by the Representatives and the Offerors, on the Date of Delivery as
specified in the notice from the Representatives to the Offerors. Payment
shall be made to the Trust by certified or official bank check or checks drawn
in New York Clearing House funds or similar next day funds payable to the order
of the Trust to an account designated by the Trust, against delivery to the
Representatives for the respective accounts of the Underwriters of certificates
for the Option Securities to be purchased by them. Certificates, if any, for
the Option Securities, if any, shall be in such denominations and registered in
such names as the Representatives may request in writing at least two business
days before the Closing Time or the relevant Date of Delivery, as the case may
be. It is understood that each Underwriter has authorized the Representatives,
for their accounts, to accept delivery of, receipt for, and make payment of the
purchase price for the Option Securities, if any, which it has agreed to
purchase. Xxxxxxx Xxxxx, individually and not as a representative of
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20
the Underwriters, may (but shall not be obligated to) make payment of the
purchase price for the Option Securities, if any, to be purchased by any
Underwriter whose check has not been received by the relevant Date of Delivery,
as the case may be, but such payment shall not relieve such Underwriter from
its obligations hereunder. The certificates, if any, for the Option
Securities, if any, will be made available for examination and packaging by the
Representatives not later than 10:00 A.M. on the last business day prior to the
Closing Time or the relevant Date of Delivery, as the case may be.
Section 3. Covenants of the Offerors. Each of the Offerors
jointly and severally covenant with each Underwriter as follows:
(a) The Offerors will notify the Representatives
immediately, and, if requested by any Representative, confirm the notice in
writing, (i) of the effectiveness of the Registration Statement and any
amendment thereto (including any post-effective amendment), (ii) of the
receipt of any comments from the Commission, (iii) 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 (iv) 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.
(b) The Offerors will give the Representatives
notice of their intention to file or prepare (i) any amendment to the
Registration Statement (including any post-effective amendment) or (ii) any
amendment or supplement to the Prospectus (including any revised prospectus
which the Offerors propose for use by the Underwriters in connection with the
offering of the Preferred Securities which differs from the prospectus on file
at the Commission at the time the Registration Statement becomes effective,
whether or not such revised prospectus is required to be filed pursuant to Rule
424(b) of the 1933 Act Regulations), or (iii) any document that would as a
result thereof be incorporated by reference in the Prospectus whether pursuant
to the 1933 Act, the 1934 Act or otherwise, will furnish the Representative
with copies of any such amendment, supplement or other document within a
reasonable period of time prior to such proposed filing or use, as the case may
be, and will not file any such amendment, supplement or other document or use
any such prospectus to which the Representatives or counsel for the
Underwriters shall
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21
reasonably object. The Offerors will file the Prospectus pursuant to Rule
424(b) under the 1933 Act not later than the Commission's close of business on
the second business day following the execution and delivery of this Agreement,
or, if applicable, such earlier time as may be required by Rule 430A(a)(3)
under the 1933 Act.
(c) The Offerors will deliver to the Representatives
as many signed copies of the Registration Statement as originally filed and of
each amendment thereto (including exhibits filed therewith or incorporated by
reference therein and documents incorporated or deemed to be incorporated by
reference therein) as the Representatives may reasonably request and will also
deliver to the Representatives a conformed copy of the Registration Statement
as originally filed and of each amendment thereto (without exhibits) for each
of the Underwriters.
(d) The Offerors will furnish to each Underwriter,
from time to time during the period when the Prospectus is required to be
delivered under the 1933 Act, such number of copies of the Prospectus (as
amended or supplemented) as such Underwriter may reasonably request for the
purposes contemplated by the 1933 Act or the 1934 Act or the respective
applicable rules and regulations of the Commission thereunder.
(e) If at any time when the Prospectus is required
by the 1933 Act to be delivered in connection with sales of the Preferred
Securities, any event shall occur or condition exists as a result of which it
is necessary, in the opinion of counsel for the Underwriters or counsel to the
Company and the Trust, to amend or supplement the Prospectus in order to make
the Prospectus not misleading in the light of the circumstances existing at the
time it is to be delivered to a purchaser, or if it shall be necessary at any
such time, to amend the Registration Statement or amend or supplement the
Prospectus in order to comply with the requirements of the 1933 Act or the 1933
Act Regulations, the Offerors will promptly prepare and file with the
Commission subject to paragraph (b) above such amendment or supplement as may
be necessary to correct such untrue statement or omission or to make the
Registration Statement or the Prospectus comply with such requirements; and the
Offerors will furnish to the Underwriters a reasonable number of copies of such
amendment or supplement.
(f) The Offerors will endeavor, in cooperation with
the Underwriters, to qualify the Securities and the Subordinated Debt
Securities for offering and sale under the applicable securities laws of such
states and the other jurisdictions of the United States as the Representa-
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tives may designate; provided, however, that none of the Offerors
shall be obligated to file any general consent to service of process in any
jurisdiction in which it is not so subject or to qualify as a foreign
corporation in any jurisdiction in which it is not so qualified.
(g) The Trust will make generally available to its
security holders as soon as practicable but not later than 60 days after the
close of the period covered thereby, an earnings statement of the Trust (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
Trust's fiscal quarter next following the "effective date" (as defined in said
Rule 158) of the Registration Statement.
(h) For a period of five years after the Closing
Time, the Company will furnish to the Representatives and, upon request, to
each Underwriter, copies of all annual reports, quarterly reports and current
reports filed with the Commission on Forms 10-K, 10-Q and 8-K, or such other
similar forms as may be designated by the Commission, and such other documents,
reports and information as shall be furnished by the Company to its
stockholders or security holders generally.
(i) The Offerors will use all reasonable efforts to
effect the listing of the Securities on the New York Stock Exchange, Inc.; if
the Preferred Securities are exchanged for Subordinated Debt Securities, the
Company will use all reasonable efforts to effect the listing of the
Subordinated Debt Securities on the principal national securities exchange on
which the Preferred Securities were then listed.
(j) During a period of 30 days from the date of the
Pricing Agreement, neither the Trust nor the Company will, without the
Representatives' prior written consent, directly or indirectly, sell, offer to
sell, grant any option for the sale of, or otherwise dispose of, any Preferred
Securities, any security convertible into or exchangeable into or exercisable
for Preferred Securities or the Subordinated Debt Securities or any debt
securities substantially similar to the Subordinated Debt Securities or
securities substantially similar to the Preferred Securities (except for the
Subordinated Debt Securities and the Preferred Securities issued pursuant to
this Agreement).
Section 4. Payment of Expenses. The Company will pay all
expenses incident to the performance of each Offerors' obligations under this
Agreement, including, but not limited to, (i) the printing and filing of the
Regis-
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tration Statement as originally filed and of each amendment thereto, (ii)
the printing of this Agreement and the Pricing Agreement, (iii) the
preparation, issuance and delivery to the Underwriters of the certificates for
the Preferred Securities, (iv) the fees and disbursements of the Offerors'
counsel and accountants, (v) the qualification of the Preferred Securities, the
Preferred Securities Guarantee and the Subordinated Debt Securities under state
securities laws in accordance with the provisions of Section 3(f) hereof,
including filing fees and the fees and disbursements of counsel for the
Underwriters in connection therewith and in connection with the preparation of
any blue sky survey and any legal investment survey, (vi) the printing and
delivery to the Underwriters of copies of the Registration Statement as
originally filed and of each amendment thereto, of each preliminary prospectus,
and of the Prospectus and any amendments or supplements thereto, (vii) the
printing and delivery to the Underwriters of copies of any blue sky survey and
any legal investment survey, (viii) any fees of the National Association of
Securities Dealers, Inc., (ix) the fees and expenses of the Debt Trustee, the
Property Trustee and the Guarantee Trustee, including the fees and
disbursements of counsel for the Debt Trustee in connection with the Indenture
and the Subordinated Debt Securities and for the Property Trustee in connection
with the Declaration and the Certificate of Trust, (x) any fees payable in
connection with the rating of the Preferred Securities and Subordinated Debt
Securities, (xi) the fees and expenses incurred in connection with the listing
of the Preferred Securities (and the related Preferred Securities Guarantee)
and, if applicable, the Subordinated Debt Securities, on the New York Stock
Exchange Inc., (xii) the cost and charges of any transfer agent or registrar
and (xiii) the cost of qualifying the Preferred Securities with The Depository
Trust Company.
If this Agreement is terminated by the Representatives in
accordance with the provisions of Section 5 or Section 9 hereof, the Company
shall reimburse the Underwriters for all of their reasonable out-of-pocket
expenses, including the reasonable fees and expenses of counsel for the
Underwriters.
Section 5. Conditions of Underwriters' Obligations. The
obligations of the Underwriters hereunder are subject to the accuracy of the
representations and warranties of the Offerors herein contained, to the
performance by the Offerors of their obligations hereunder, and to the
following further conditions:
(a) The Registration Statement shall have become
effective not later than 5:30 P.M., New York City
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24
time, on the date hereof, or with the consent of the Representatives, at a
later time and date, not later, however, than 5:30 P.M., New York City time, on
the first business day following the date hereof, or at such later time and
date as may be approved by the Representatives; and at the 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. The Prospectus shall have been filed with the Commission
pursuant to Rule 424(b) within the applicable time period prescribed for such
filing by the 1933 Regulations and in accordance with Section 3(b), and prior
to the Closing Time the Offerors shall have provided evidence satisfactory to
the Representatives of such timely filing.
(b) At the Closing Time the Representatives shall
have received:
(1) The favorable opinion, dated as of the
Closing Time, of Xxxxxx, Xxxxxxx, Xxxxxxxx & Xxxxxx, counsel for the Offerors,
in form and substance satisfactory to counsel for the Underwriters, to the
effect that:
(i) The Company has been duly incorporated
and is validly existing in good standing under the laws of the State
of Nevada with corporate power and authority under such laws to own,
lease and operate its properties and conduct its business as described
in the Prospectus.
(ii) This Agreement and the Pricing
Agreement have been duly authorized by all necessary business trust or
corporate action, as the case may be, executed and delivered by each
of the Trust and the Company.
(iii) The Trust has been duly created and is
validly existing in good standing as a business trust under the
Delaware Act; all filings required under the laws of the State of
Delaware with respect to the creation and valid existence of the Trust
as a business trust have been made; under the Delaware Act and the
Declaration the Trust has the business trust power and authority (x)
to own property and to conduct its business, all as described in the
Registration Statement and the Prospectus, (y) to execute and deliver
and to perform its obligations under this Agreement and the Pricing
Agreement, and (z) to issue and perform its obligations under the
Preferred Securities and the Common Securities; the Trust is duly
qualified and in good standing as a foreign company in
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any other jurisdiction in which such qualification is necessary,
except to the extent that the failure to so qualify or be in good
standing would not have a material adverse effect on the Trust; and to
our knowledge the Trust is not a party to or otherwise bound by any
agreement other than those described in the Prospectus.
(iv) The Declaration has been duly
authorized, executed and delivered by the Company, by all necessary
corporate action, and by the Regular Trustees and constitutes a valid
and binding obligation of the Company and the Regular Trustees, and is
enforceable against the Company and the Regular Trustees, in
accordance with its terms, except to the extent that the enforcement
thereof may be limited by the Enforceability Exceptions and the effect
of the applicable public policy on the enforceability of provisions
relating to indemnification or contribution; and the Declaration has
been qualified under the 1939 Act.
(v) The Common Securities have been duly
authorized by the Declaration and, when issued, delivered and paid for
in accordance with the Declaration and as described in the Prospectus,
will be validly issued and represent undivided beneficial interests in
the assets of the Trust, and the issuance of the Common Securities is
not subject to preemptive rights.
(vi) The Preferred Securities have been duly
authorized by the Declaration and, when issued, delivered and paid for
in accordance with this Agreement, will be validly issued, and,
subject to the qualifications set forth herein, fully paid and
non-assessable undivided beneficial interests in the assets of the
Trust; the holders of the Preferred Securities, as beneficial owners
of the Trust, will be entitled to the same limitation of personal
liability as is extended to stockholders of private corporations for
profit organized under the General Corporation Law of the State of
Delaware; and the issuance of the Preferred Securities is not subject
to preemptive rights. The Preferred Security holders may be obligated
to make payments set forth in the Declaration.
(vii) Each of the Guarantee Agreements has
been duly authorized, executed and delivered by the Company; the
Preferred Securities Guarantee Agreement, assuming it is duly
authorized, executed, and delivered by the Guarantee Trustee,
constitutes a
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valid and binding obligation of the Company, enforceable against the
Company in accordance with its terms, except to the extent that
enforcement thereof may be limited by the Enforceability Exceptions
and the effect of applicable public policy on the enforceability of
provisions relating to indemnification and contribution; and the
Preferred Securities Guarantee Agreement has been qualified under the
1939 Act.
(viii) The Indenture has been duly
authorized, executed and delivered by the Company and, assuming due
authorization, execution, and delivery thereof by the Debt Trustee, is
a valid and binding obligation of the Company, enforceable against the
Company in accordance with its terms, except to the extent that
enforcement thereof may be limited by the Enforceability Exceptions
and the effect of applicable public policy on the enforceability of
provisions relating to indemnification or contribution, and such
counsel need not express any opinion regarding the enforceability or
effect of Section 515 of the Indenture, and the Indenture has been
qualified under the 1939 Act.
(ix) The Subordinated Debt Securities are in
substantially the form contemplated by the Indenture, have been duly
authorized, executed and delivered by the Company and, when
authenticated by the Debt Trustee in the manner provided for in the
Indenture and delivered against payment therefor, will constitute
valid and binding obligations of the Company, enforceable against the
Company in accordance with their terms, except to the extent that
enforcement thereof may be limited by the Enforceability Exceptions
and the effect of applicable public policy on the enforceability of
provisions relating to indemnification or contribution.
(x) The Common Securities, the Preferred
Securities, the Subordinated Debt Securities, each of the Guarantees,
the Declaration, the Indenture and each of the Guarantee Agreements
conform in all material respects to all statements relating thereto
contained in the Prospectus and the statements in the Prospectus under
the captions "Description of the Preferred Securities," "Description
of the Guarantees," "Fremont General Financing I," "Description of the
Subordinated Debt Securities" and "Effect of Obligations under the
Subordinated Debt Securities and the Guarantee," insofar as they
constitute matters of law, summaries of legal matters, documents or
proceedings, or legal conclusions, have been reviewed by them and
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27
fairly present the information disclosed therein in all material
respects.
(xi) The Registration Statement is effective
under the 1933 Act and, to the best of their knowledge and
information, no stop order suspending the effectiveness of the
Registration Statement has been issued under the 1933 Act and no
proceedings therefor have been initiated or threatened by the
Commission.
(xii) The Registration Statement and the
Prospectus, and each amendment or supplement thereto (other than the
financial statements, financial and statistical data and supporting
schedules included therein, as to which such counsel need express no
opinion) as of the effective date of the Registration Statement and at
the Representation Date, complied as to form in all material respects
with the requirements of the 1933 Act and the 1933 Act Regulations,
and the Declaration, the Indenture, the Preferred Securities Guarantee
Agreement and the Statements of Eligibility on Forms T-1 with respect
to each of the Property Trustee, the Debt Trustee, and the Guarantee
Trustee filed with the Commission as part of the Registration
Statement complied as to form in all material respects with the
requirements of the 1939 Act and the 1939 Act Regulations.
(xiii) Each of the documents incorporated by
reference in the Registration Statement or the Prospectus at the time
they were filed or last amended (other than the financial statements,
financial and statistical data and supporting schedules included
therein, as to which such counsel need express no opinion) complied as
to form in all material respects with the requirements of the 1933
Act, the 1933 Act Regulations, the 1934 Act and the 1934 Act
Regulations, as applicable.
(xiv) Each of the Offerors meets the
registrant requirements for use of Form S-3 under the 1933 Act
Regulations.
(xv) Neither the Company nor the Trust is an
"investment company" or a company "controlled" by an "investment
company" within the meaning of the 1940 Act.
(xvi) No authorization, approval, consent or
order of any Delaware, California, New York or Nevada court or
governmental authority or agency (ex-
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cept for insurance or lending regulatory authorities or agencies,
and except for thrift and loan-related authorities or agencies, as to
which such counsel need not opine) is required to be obtained by the
Trust, the Company or its Subsidiaries, in connection with the
issuance and sale of the Common Securities and the Preferred
Securities, the Subordinated Debt Securities or the Guarantees, except
(a) such as may be required under the 1933 Act or the 1933 Act
Regulations, the 1934 Act or the 1934 Act Regulations or state
securities or Blue Sky laws, and (b) the qualification of the
Declaration, the Preferred Securities Guarantee Agreement and the
Indenture under the 1939 Act and 1939 Act Regulations.
(xvii) The issuance and sale by the Trust
of the Preferred Securities and the Common Securities, the execution,
delivery and performance by the Trust and the Company, respectively
of, this Agreement, the Pricing Agreement, the Declaration, the
Indenture, the Subordinated Debt Securities, the Guarantee Agreements,
and the Guarantees; the consummation of the transactions contemplated
herein and therein; and the compliance by each of the Offerors with
their respective obligations hereunder and thereunder do not result in
(A) any violation of the charter or bylaws of the Company or any
Subsidiary or any of the provisions of the Declaration or the
Certificate of Trust, (B) a breach of a conflict with any of the terms
or provisions of, or constitute a default under, any material
contract, indenture, mortgage, loan agreement, note, lease or any
other agreement or instrument known to such counsel to which the Trust
or the Company or any Subsidiary is a party or by which it may be
bound or to which any of its properties may be subject (except for
such conflicts, breaches or defaults that would not have a Material
Adverse Effect or a material adverse effect on the Trust), (C) a
breach or violation of or conflict with or result in the creation or
imposition of any lien, charge or encumbrance upon any assets or
property of the Trust, the Company or any Subsidiary under any
existing applicable law, rule or regulation (other than the securities
or blue sky laws of the various states, and except for insurance or
lending regulatory authorities or agencies, and except for thrift and
loan related authorities or agencies, as to which such counsel need
express no opinion) which, in the experience of such counsel, is
customarily applicable to transactions of this kind and, which would
have a Material Adverse Effect or a material adverse effect on the
Trust, or (D) any material judgment, order or decree of any
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government, governmental instrumentality or court, domestic or
foreign, or any regulatory body or administrative agency or other
governmental body (except for insurance or lending regulatory
authorities or agencies, and except for thrift and loan-related
authorities or agencies, as to which such counsel need not opine)
having jurisdiction over the Trust, the Company or any Subsidiary or
any of their respective properties.
In addition, such counsel shall state that they have
participated in conferences with officers and other representatives of the
Offerors, representatives of the independent public accountants for the
Offerors and the Representatives and counsel for the Underwriters, at which
conferences the contents of the Registration Statement and the Prospectus and
related matters were discussed and, such counsel shall state that although they
have not verified the accuracy, completeness or fairness of the statements
contained in the Registration Statement or the Prospectus, nothing has come to
the attention of such counsel which (except as set forth in paragraph (x)
above), caused them to believe that, at the time the Registration Statement
became effective, at the Representation Date and at the Closing Time (and if
any Option Securities are purchased, at the Date of Delivery referred to
above), the Registration Statement (except as to financial statements,
financial data and supporting schedules contained therein, as to which such
counsel need express no opinion) contained any 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 at the
Representation Date or at the Closing Time (or if any Option Securities are
purchased, at the Date of Delivery referred to above), the Prospectus (except
as aforesaid) contained any untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary to make the
statements made therein, in the light of the circumstances under which they
were made, not misleading.
Such opinion shall be limited to the internal laws of the
State of California, Delaware and New York, the federal laws of the United
States, and the general corporate law of the State of Nevada, and shall
specifically exclude any laws pertaining to insurance, lending, or thrift and
loan-related activities. In giving such opinion such counsel may rely, as to
matters set forth in paragraphs __ above, on consultations with Xxxxxx,
Xxxxxxxxxx & Xxxxxxxxx, admitted to the bar of New York, and in paragraphs
(b)(1)(ii)-(vi), (xix) and (xx) above on the opinion of Xxxxxxxx, Xxxxxx &
Finger, admitted to the bar of Dela-
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ware, in both instances the opinions shall state that your firm believes
that the Underwriters are entitled to so rely on such opinions. Such counsel
may also state that, insofar as such opinion involves factual matters, they
have relied, to the extent they deemed proper, upon representations of officers
of the Company and certificates of public officials; provided, that such
Certificates have been delivered to the Underwriter.
(2) The favorable opinion, dated as of
Closing Time, of Xxxx X. Xxxxxx, Esq., General Counsel and Secretary for the
Company, in form and substance satisfactory to counsel for the Underwriters, to
the effect that:
(i) The Company is duly qualified to
transact business as a foreign corporation and is in good standing in
each other jurisdiction in which it owns or leases property of a
nature, or transacts business of a type, that would make such
qualification necessary, except to the extent that the failure to so
qualify or be in good standing would not have a Material Adverse
Effect.
(ii) All of the outstanding shares of
capital stock of each Subsidiary have been duly authorized and validly
issued and are fully paid and non-assessable; all of such shares are
owned by the Company, either directly or through wholly owned
subsidiaries, free and clear of any pledge, lien, security interest,
charge, claim, equitable right or encumbrance of any kind (except that
the stock of Fremont Insurance Group, Inc. has been pledged to The
Chase Manhattan Bank, N.A. by the Company in connection with the
Credit Agreement dated _________ between the Company and The Chase
Manhattan Bank, N.A.); no holder thereof is subject to personal
liability by reason of being such a holder; and none of such shares
was issued in violation of the preemptive rights of any stockholders
of the Subsidiaries.
(iii) All of the issued and outstanding
Common Securities of the Trust are directly owned by the Company free
and clear of any security interest, mortgage, pledge, lien,
encumbrance, claim or equitable right.
(iv) Each Subsidiary is a corporation duly
incorporated, validly existing and in good standing under the laws of
the jurisdiction of its incorporation with corporate power and
authority under such
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laws to own, lease and operate its properties and conduct its business.
(v) Each Subsidiary is duly qualified to
transact business as a foreign corporation and is in good standing in
each other jurisdiction in which it owns or leases property of a
nature, or transacts business of a type, that would make such
qualification necessary, except to the extent that the failure to so
qualify or be in good standing would not have a Material Adverse
Effect.
(vi) Each of the Trust, the Company and the
Subsidiaries owns, possesses or has obtained all material licenses,
franchises, permits, certificates, consents, orders, approvals and
other authorizations issued by the appropriate local, state, federal
or foreign regulatory agencies or bodies (including, without
limitation, Insurance Licenses and Banking Licenses) necessary to own
or lease, as the case may be, and to operate its properties and to
carry on its business as described in the Registration Statement; none
of the Trust, the Company or any of the Subsidiaries has received any
notice of proceedings relating to the recovation, modification or
suspension of any such license, franchise, consent, order, approval,
permit, certificate of authority, which, singly or in the aggregate is
the subject of an unfavorable decision, ruling or finding, and is
reasonably likely to have a Material Adverse Effect or a material
adverse effect on the Trust.
(vii) 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 that are filed or incorporated by reference as
exhibits thereto; the descriptions thereof or references thereto have
been reviewed by such counsel and fairly present such information in
all material respects; and no default exists in the due performance or
observance of any material obligation, agreement, covenant or
condition contained in any contract, indenture, mortgage, loan
agreement, note, lease or other instrument so described, referred to,
or filed or incorporated by reference that would have a Material
Adverse Effect or a material adverse effect on the Trust.
(viii) There are no legal or governmental
proceedings pending or, to the best of such
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counsel's knowledge and information, threatened (including, without
limitation, any proceeding to revoke or deny renewal of any Insurance
License or Banking License) that are required to be disclosed in the
Registration Statement or Prospectus other than those disclosed
therein, and all pending legal or governmental proceedings to which
the Company, any of the Subsidiaries or the Trust is a party, or to
which any of their property is subject, that are not described in the
Registration Statement or Prospectus, including ordinary routine
litigation incidental to the business, are, considered in the
aggregate, not material.
(ix) This Agreement and the Pricing
Agreement have been duly authorized by all necessary business trust or
corporate action, as the case may be, executed and delivered by the
Company and the Trust.
(x) The issuance and sale by the Trust of
the Preferred Securities and the Common Securities, the execution,
delivery and performance by the Trust and the Company, respectively,
of this Agreement, the Pricing Agreement, the Declaration, the
Indenture, the Subordinated Debt Securities, the Guarantee Agreements,
and the Guarantees; the consummation of the transactions contemplated
herein and therein; and the compliance by each of the Offerors with
their respective obligations hereunder and thereunder do not result in
(A) any violation of the charter or bylaws of the Company or any
Subsidiary or any of the provisions of the Declaration or the
Certificate of Trust, (B) a breach of or conflict with any of the
terms or provisions of, or constitute a default under, any material
contract, indenture, mortgage, loan agreement, note, lease or any
other agreement or instrument to which the Trust or the Company or any
Subsidiary is a party or by which it may be bound or to which any of
its properties may be subject (except for such conflicts, breaches or
defaults that would not have a Material Adverse Effect or a material
adverse effect on the Trust), (C) a breach or violation or conflict
with or result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Trust, the Company or
any Subsidiary under any existing applicable law, rule or regulation
(other than the securities or blue sky laws of the various states, as
to which such counsel need express no opinion) or which in the
experience of such counsel, is customarily applicable to transactions
of this kind and which would have a Material Adverse Effect or a
material adverse effect on the Trust, (D)
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any material judgment, order or decree of any government, governmental
instrumentality or court, domestic or foreign, or any regulatory body
or administrative agency or other governmental body (including,
without limitation, any insurance regulatory agency or body) having
jurisdiction over the Trust, the Company or any Subsidiary or any of
their respective properties.
(xi) No authorization, approval, consent or
order of any Delaware, New York, California or Nevada court or
governmental authority or agency is required to be obtained by the
Trust, the Company or its Subsidiaries, in connection with the
issuance and sale of the Common Securities and the Preferred
securities, the Subordinated Debt Securities or the Guarantees, except
(a) such as may be required under the 1933 Act or the 1933 Act
Regulations, the 1934 Act or the 1934 Act Regulations or state
securities or Blue Sky laws, and (b) the qualification of the
Declaration, the Preferred Securities Guarantee Agreement and the
Indenture under the 1939 Act and 1939 Act Regulations.
In addition, such counsel shall state that he has participated
in conferences with other officers and representatives of the Offerors,
representatives of the independent public accountants for the Offerors and the
Representative and counsel for the Underwriters, at which conferences the
contents of the Registration Statement and the Prospectus and related matters
were discussed and, such counsel shall state that although they have not
verified the accuracy, completeness or fairness of the statements contained in
the Registration Statement or the Prospectus, nothing has come to the attention
of such counsel which caused them to believe that, at the time the Registration
Statement became effective, at the Representation Date and at the Closing Time
(and if any Option Securities are purchased, at the Date of Delivery referred
to above), the Registration Statement (except as to financial statements,
financial data and supporting schedules contained therein, as to which such
counsel need express no opinion) contained any 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 at the
Representation Date or at the Closing Time (or if any Option Securities are
purchased, at the Date of Delivery referred to above), the Prospectus (except
as aforesaid) contained any untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary to make the
statements made therein, in the light of the circumstances under which they
were made, not misleading.
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34
Such opinion shall be to such further effect with respect to
other legal matters relating to this Agreement and the sale of the Securities
hereunder as counsel for the Underwriters may reasonably request. Such opinion
shall be limited to the internal laws of the State of California, Delaware and
New York, the federal laws of the United States, and the general corporate law
of the State of Nevada. Such counsel may also state that, insofar as such
opinion involves factual matters, he has relied, to the extent he deemed
proper, upon representations of officers of the Company and certificates of
public officials; provided, that such certificates have been delivered to the
Underwriter.
(3) The favorable opinion, dated as of
the Closing Time, of Xxxxxxxx, Xxxxxx & Fingers, counsel for the Property
Trustee under the Declaration, and Guarantee Trustee under the Preferred
Securities Guarantee Agreements, in form and substance satisfactory to counsel
for the Underwriters, to the effect that,
(i) The Property Trustee is a Delaware
banking corporation with trust powers, duly organized, 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 terms of the
Declaration and the Preferred Securities Guarantee Agreement.
(ii) The execution, delivery and
performance by the Property Trustee of the Declaration and the
execution, delivery and performance by the Guarantee Trustee of the
Preferred Securities Guarantee Agreement have been duly authorized by
all necessary corporate action on the part of the Property Trustee and
the Guarantee Trustee, respectively. The Declaration and the
Preferred Securities Guarantee Agreement have been duly executed and
delivered by the Property Trustee and the Guarantee Trustee,
respectively, and constitute the legal, 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
thereof may be limited by the Bankruptcy Exceptions.
(iii) The execution, delivery and
performance of the Declaration and the Preferred Securities Guarantee
Agreement by the Property Trustee and the Guarantee Trustee,
respectively, does not conflict
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with or constitute a breach of the Articles of Organization or Bylaws
of the Property Trustee and the Guarantee Trustee, respectively.
(iv) No consent, approval or authorization
of, or registration with or notice to, any Delaware or federal banking
authority is required for the execution, delivery or performance by
the Property Trustee and the Guarantee Trustee of the Declaration and
the Preferred Securities Guarantee Agreement.
(4) The opinion of Xxxxxx, Sonsini, Xxxxxxxx
& Xxxxxx, counsel to the Company and the Trust, generally to the effect that:
(i) Under current United States federal
income tax law, the Trust will be classified 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 will generally be considered the owner of an undivided
interest in the Subordinated Debt Securities, and each holder will be
required to include in its gross income any original issue discount
accrued with respect to its allocable share of the Subordinated Debt
Securities.
(ii) Although no entirely free from doubt,
under current United States federal income tax law, the Subordinated
Debt Securities will be classified for United States federal income
tax purposes as indebtedness of the Company.
(iii) Although the discussion set forth in
the Prospectus under the heading "United States Federal Income
Taxation" does not purport to discuss all possible United States
federal income tax consequences of the acquisition, ownership and
disposition of Preferred Securities, such discussion constitutes in
all material respects, a fair and accurate summary of the United
States federal income tax consequences of the acquisition, ownership
and disposition of Preferred Securities under current law and the
assumptions stated or referred to therein.
Such opinion may be conditioned on, among other things, the
initial and continuing accuracy of the facts, financial and other information,
covenants and representations set forth in certificates of officers of the
Company and the Trust and other documents deemed necessary for such opinion,
and customary assumptions set forth therein which are reasonably satisfactory
to the Underwriters.
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36
(5) The favorable opinion, dated as of the
Closing Time, of Xxxxxxx, Arps, Slate, Xxxxxxx & Xxxx, counsel for the
Underwriters, in form and substance satisfactory to the Underwriters with
respect to such matters as the Representatives may reasonably require.
(c) At the 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), earnings, business affairs or
business prospects of the Trust or the Company and its Subsidiaries considered
as one enterprise, whether or not arising in the ordinary course of business,
and the Representative shall have received a certificate of the President or a
Vice President of the Company and of the chief financial or chief accounting
officer of the Company and a certificate of the Regular Trustee of the Trust,
each dated as of Closing Time, to the effect that (i) there has been no such
material adverse change, (ii) the representations and warranties in Section 1
hereof are true and correct with the same force and effect as though expressly
made at and as of the Closing Time (except for representations or warranties
which by their terms speak as of a different date or dates), (iii) the Trust
and the Company have complied with all agreements and satisfied all conditions
on its part to be performed or satisfied at or prior to the Closing Time, and
(iv) no stop order suspending the effectiveness of the Registration Statement
has been issued and no proceedings for that purpose have been initiated or
threatened by the Commission.
(d) At the time of the execution of this Agreement,
the Representatives shall have received from Ernst & Young LLP a letter dated
such date, in form and substance satisfactory to the Representatives, to the
effect that:
(i) they are independent auditors with
respect to the Company and its consolidated subsidiaries, within the
meaning of the 1933 Act and the 1933 Act Regulations;
(ii) in their opinion, the consolidated
financial statements and schedules audited (and, if applicable,
prospective financial statements and/or pro forma financial
information examined) by them and included or incorporated by
reference in the Registration Statement or the Prospectus comply as to
form in all material respects with the accounting requirements of the
1933 Act or the 1934 Act, as applicable, and
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37
the related published rules and regulations thereunder, as applicable;
(iii) based upon limited procedures set
forth in detail in such letter, nothing has come to their attention
which causes them to believe that:
(A) the unaudited consolidated
financial statements of the Company included or incorporated by
reference in the Registration Statement do not comply as to form in
all material respects with the applicable accounting requirements of
the 1934 Act and the 1934 Act Regulations, as they apply to Form 10-Q,
or are not presented in conformity with generally accepted accounting
principles applied on a basis substantially consistent with that of
the audited financial statements included in the Registration
Statement,
(B) the unaudited amounts of
revenues, net income and net income per share set forth under
"Selected Consolidated Financial and Operating Data" in the Prospectus
were not determined on a basis substantially consistent with that used
in determining the corresponding amounts in the audited financial
statements included in the Registration Statement, or
(C) at a specified date not more
than five days prior to the date of this Agreement, there has been any
change in the consolidated capital stock of the Company and its
subsidiaries, considered as one enterprise or any increase in the
consolidated long-term debt of the Company and its Subsidiaries or any
decrease in total assets or net assets as compared with the amounts
shown on the date of the most recent consolidated balance sheet
included in or incorporated by reference in the Registration Statement
and the Prospectus or, during the period from the date of the most
recent consolidated balance sheet included in or incorporated by
reference in the Registration Statement and the Prospectus to a
specified date not more than five days prior to the date of this
Agreement, there were any decreases, as compared with the
corresponding period in the preceding year, in operating revenues, net
earnings available for common stock or net earnings per common share
of the Company and its Subsidiaries, except in all instances for
changes, increases or decreases which the Registration Statement and
the Prospectus disclose have occurred or may occur; and
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(iv) in addition to the audit referred to
in their opinions and the limited procedures referred to in clause
(iii) above, they have carried out certain specified procedures, not
constituting an audit, with respect to certain amounts, percentages
and financial information which are included in the Registration
Statement and Prospectus, or incorporated therein by reference, and
which are specified by the Representatives, and have found such
amounts, percentages and financial information to be in agreement with
the relevant accounting, financial and other records of the Company
and its Subsidiaries identified in such letter.
(e) At the Closing Time, the Representatives
shall have received from Ernst & Young LLP a letter, dated as of the 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 shall be a date not more than five days prior to the Closing
Time.
(f) At the Closing Time, and 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 as
herein 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 Offerors
in connection with the issuance and sale of the Preferred Securities as herein
contemplated shall be reasonably satisfactory in form and substance to the
Representative and Skadden, Arps, Slate, Xxxxxxx & Xxxx, counsel for the
Underwriters.
(g) At the Closing Time, the Preferred Securities
and the Subordinated Debt Securities shall be rated in one of the four highest
rating categories for long-term debt ("Investment Grade") by any nationally
recognized statistical rating agency (as defined for purposes of Rule 436(g)
under the Act) ("NRSO"), and the Trust shall have delivered to the
Representatives a letter, dated the Closing Time, from such NRSO, or other
evidence satisfactory to the Representatives, confirming that the Preferred
Securities and the Subordinated Debt Securities have Investment Grade ratings;
and there shall not have occurred any decrease in the rating of either (i) the
Preferred Securities by any NRSO or (ii) the Company or any Subsidiary by A.M.
Best, and such organization shall not have publicly announced that it has under
surveillance or re-
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view, with possible negative implications, its rating of the Preferred
Securities or the Company, as the case may be.
(h) At the Closing Time, the Preferred Securities
shall have been approved for listing on the New York Stock Exchange upon notice
of issuance.
If any condition specified in this Section 5 shall not have
been fulfilled when and as required to be fulfilled, this Agreement may be
terminated by the Representatives by notice to the Offerors 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.
Notwithstanding any such termination, the provisions of Sections 6, 7 and 8
shall remain in effect.
Section 6. Indemnification.
(a) The Offerors agree to jointly and severally
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 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 information deemed to be part of the Registration
Statement pursuant to Rule 430A(b) or Rule 434(d) of the 1933 Act
Regulations, 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
contained 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
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alleged untrue statement or omission, if such settlement is effected
with the written consent of the Company; and
(iii) against any and all expense whatsoever,
as incurred (including, subject to Section 6(d) hereof, the fees and
disbursements of counsel chosen by Xxxxxxx Xxxxx), 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, 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 Trust or the
Company by any Underwriter through Xxxxxxx Xxxxx expressly for use in the
Registration Statement (or any amendment thereto) or any preliminary prospectus
or the Prospectus (or any amendment or supplement thereto); and provided,
further, that this indemnity agreement with respect to any preliminary
prospectus shall not inure to the benefit of any Underwriter from whom the
person asserting any such losses, liabilities, claims, damages or expenses
purchased Securities, or any person controlling such Underwriter, if the
Offerors sustain the burden that they have complied with their prospectus
delivery obligations under Section 3(d) hereof and that a copy of the
Prospectus (as then amended or supplemented if the Company or the Trust shall
have furnished any such amendments or supplements thereto), but excluding
documents incorporated or deemed to be incorporated by reference, was not sent
or given by or on behalf of such Underwriter to such person, if such is
required by law, at or prior to the written confirmation of the sale of such
Securities to such person and if the Prospectus (as so amended or supplemented,
but excluding documents incorporated or deemed to be incorporated by reference
therein) would have corrected the defect giving rise to such loss, liability,
claim, damage or expense, it being understood that this proviso shall have no
application if such defect shall have been corrected in a document which is
incorporated or deemed to be incorporated by reference in the Prospectus.
(b) The Company agrees to indemnify the Trust
against all loss, liability, claim, damage and expense whatsoever, as due from
the Trust under Section 6(a) hereunder.
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(c) Each Underwriter severally agrees to
indemnify and hold harmless the Offerors, their directors, trustees, each of
its officers who signed the Registration Statement, and each person, if any,
who controls the Offerors within the meaning of Section 15 of the 1933 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 information deemed to be a part of the Registration Statement
pursuant to Rule 430 A(b) or Rule 434(d) of the 1933 Act Regulations, 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, on behalf of the Representatives, expressly for use in the Registration
Statement (or any amendment thereto) or such preliminary prospectus or the
Prospectus (or any amendment or supplement thereto).
(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 which it may have otherwise than on account of this
indemnity agreement. An indemnifying party may participate at its own expense
in the defense of any such action. In no event shall the indemnifying parties
be liable for fees and expenses of more than one counsel (in addition to any
local counsel) 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.
Section 7. Contribution. In order to provide for just and
equitable contribution in circumstances in which the indemnity agreement
provided for in Section 6 hereof is for any reason held to be unenforceable by
the indemnified parties although applicable in accordance with its terms, the
Offerors and the Underwriters shall contribute to the aggregate losses,
liabilities, claims, damages and expenses of the nature contemplated by said
indemnity agreement incurred by the Offerors and one or more of the
Underwriters, as incurred, in such proportions that the Underwriters are
responsible for that portion represented by the percentage that the
underwriting compensation paid by the Company appearing on the cover page of
the Prospectus bears to the initial public offering price appearing
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42
thereon and the Offerors are responsible for the balance; provided, however,
that no person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the 1933 Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation. For purposes
of this Section, each person, if any, who controls an Underwriter within the
meaning of Section 15 of the 1933 Act shall have the same rights to
contribution as such Underwriter, and each director of the Company and 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 shall have the same rights to contribution as the
Offerors.
Section 8. Representations, Warranties and Agreements to
Survive Delivery. All representations, warranties and agreements contained in
this Agreement and the Pricing Agreement, or contained in certificates of
officers or Trustees of the Offerors 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, by notice to the Offerors, at any time at or prior to the 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 Registration
Statement, any material adverse change in the condition (financial or
otherwise), earnings, business affairs or business prospects of the Trust or
the Company and its Subsidiaries, considered as one enterprise, whether or not
arising in the ordinary course of business, (ii) if there has occurred any
material adverse change in the financial markets in the United States or
elsewhere or any outbreak of hostilities or escalation thereof or other
calamity or crisis the effect of which is such as 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, (iii) if trading in
the Preferred Securities has been suspended by the Commission, or if trading
generally on the New York Stock Exchange Inc. has been suspended, limited or
restricted or minimum or maximum prices for trading have been fixed, or maximum
ranges for prices for securities have been required, by said exchange or by
order of the Commission or any other governmental authority, or if a banking
moratorium has been declared by
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either Federal, California, New York, Nevada, Texas or Delaware authorities or
(iv) if (A) there has been any decrease in the rating of the Preferred
Securities by any NRSO or any NRSO has publicly announced that it has placed
any of such securities on what is commonly termed a "watch list" for possible
downgrading, or (B) there has been any decrease in the rating of the Company or
Fremont Compensation and Indemnity Company or Casualty Insurance Company by
A.M. Best, or such organization shall have publicly announced that it has such
ratings under review with possible negative implications.
(b) If this Agreement is terminated pursuant to
this Section, such termination shall be without liability of any party to any
other party except as provided in Section 4 hereof. Notwithstanding any such
termination, the provisions of Sections 6, 7 and 8 shall remain in effect.
Section 10. Default by One or More of the Underwriters. If
one or more of the Underwriters shall fail at the Closing Time to purchase the
Preferred Securities that it or they are obligated to purchase under this
Agreement and the Pricing Agreement (the "Defaulted Securities"), 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, the Representatives shall not have completed such
arrangements within such 24-hour period, then:
(a) if the number of Defaulted Securities does
not exceed 10% of the Preferred Securities, 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 hereunder bear to the underwriting
obligations of all non-defaulting Underwriters, or
(b) if the number of Defaulted Securities exceeds
10% of the Preferred Securities, this Agreement 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.
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In the event of any such default which does not result in a
termination of this Agreement, either the Representatives or the Offerors shall
have the right to postpone the Closing Time for a period not exceeding seven
days in order 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/x Xxxxxxx Xxxxx at
Xxxxxxx Xxxxx World Headquarters, North Tower, World Financial Center, New
York, New York 10281-1201, attention of General Counsel, copy (which shall not
constitute notice) to Xxxxxx X. Xxxxxx, Esq., c/o Skadden, Arps, Slate, Xxxxxxx
& Xxxx, 000 Xxxxx Xxxxx Xxxxxx, Xxxxx 0000, Xxx Xxxxxxx, XX. 90071; notices to
the Trust and the Company shall be directed to them at 0000 Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxx 000, Xxxxx Xxxxxx, Xxxxxxxxxx, xxxxxxxxx xx Xxxxx J. Rampino,
copy to Xxxx X. Xxxxxx, Esq., c/o Wilson, Sonsini, Xxxxxxxx & Xxxxxx, 000 Xxxx
Xxxx Xxxx, Xxxx Xxxx, XX. 94304-1050.
Section 12. Parties. This Agreement and the Pricing
Agreement shall each inure to the benefit of and be binding upon the
Underwriters and the Trust, the Company and their respective successors.
Nothing expressed or mentioned in this Agreement or the Pricing Agreement is
intended or shall be construed to give any person, firm or corporation, other
than the Underwriters and the Trust and the Company and their respective
successors and the controlling persons and officers, directors and trustees
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 the Pricing Agreement or any provision herein or therein contained. This
Agreement and the Pricing Agreement and all conditions and provisions hereof
and thereof are intended to be for the sole and exclusive benefit of the
Underwriters and the Trust and the Company and their respective successors, and
said controlling persons and officers, directors and trustees and their heirs
and legal representatives, and for the benefit of no other person, firm or
corporation. No purchaser of Securities from any Underwriter shall be deemed
to be a successor by reason merely of such purchase.
Section 13. Governing Law and Time. This Agreement and the
Pricing 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
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said State. Except as otherwise set forth herein, specified times of day refer
to New York City time.
Section 14. Counterparts. This Agreement may be executed by
any one or more of the parties hereto in any number of counterparts, each of
which shall be deemed to be an original, but all such respective counterparts
shall together constitute one and the same instrument.
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If the foregoing is in accordance with your understanding of
our agreement, please sign and return to the Trust a counterpart hereof,
whereupon this instrument, along with all counterparts, will become a binding
agreement between the Underwriters and the Trust and the Company in accordance
with its terms.
Very truly yours,
FREMONT GENERAL CORPORATION
By____________________________________
Title:
FREMONT GENERAL FINANCING I
By____________________________________
Title: Regular Trustee
By____________________________________
Title: Regular Trustee
CONFIRMED AND ACCEPTED,
as of the date first above written:
XXXXXXX XXXXX & CO.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
XXXX XXXXXX XXXXXXXX INC.
XXXXXXX, XXXXX & CO.
PAINEWEBBER INCORPORATED
For themselves and as Representatives of the other Underwriters named
in Schedule A hereto.
By XXXXXXX XXXXX & CO.
By__________________________________
Authorized Signatory
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SCHEDULE A
Number of Number of
Preferred Option
Name of Underwriter Securities Securities
------------------- ---------- ----------
Xxxxxxx Xxxxx, Xxxxxx Xxxxxx &
Xxxxx Incorporated . . . . . . . . . . . . . . . .
Xxxx Xxxxxx Xxxxxxxx, Inc . . . . . . . . . . . . . .
Xxxxxxx, Xxxxx & Co . . . . . . . . . . . . . . . . .
PaineWebber Incorporated . . . . . . . . . . . . . . _________ _______
Total . . . . . . . . . . . . . . . 4,000,000 600,000
========= =======
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SCHEDULE B
Fremont Insurance Group, Inc.
Fremont Indemnity Company
Fremont Pacific Insurance Group, Inc.
Casualty Insurance Company
Worker's Compensation & Indemnity Co.
Fremont Compensation Insurance Co.
Pacific Compensation Insurance
Investors Bancor
Fremont Investment & Loan
Fremont Financial Corporation
Fremont Funding Inc.
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EXHIBIT A
4,000,000 Preferred Securities
FREMONT GENERAL FINANCING I
(a Delaware business trust)
_____% Trust Originated Preferred Securities ("TOPrS")
(Liquidation Amount of $25 Per Security)
PRICING AGREEMENT
XXXXXXX XXXXX & CO. February __ , 1996
Xxxxxxx Lynch, Xxxxxx, Xxxxxx
& Xxxxx Incorporated
XXXX XXXXXX XXXXXXXX INC.
XXXXXXX, XXXXX & CO.
PAINEWEBBER INCORPORATED
as Representative of the several
Underwriters named in the within-
mentioned Purchase Agreement
c/x Xxxxxxx Xxxxx World Headquarters
North Tower World Financial Center
New York, New York 10281
Dear Sirs:
Reference is made to the Purchase Agreement, dated February
__, 1996 (the "Purchase Agreement"), relating to the purchase by the several
Underwriters named in Schedule A thereto, for whom Xxxxxxx Xxxxx & Co., Xxxxxxx
Lynch, Xxxxxx, Xxxxxx & Xxxxx Incorporated, Xxxx Xxxxxx Xxxxxxxx, Inc.,
Xxxxxxx, Xxxxx & Co. and PaineWebber Incorporated are acting as representatives
(the "Representatives"), of the above ___% Trust Originated Preferred
Securities (the "Preferred Securities"), of FREMONT GENERAL FINANCING I, a
Delaware business trust (the "Trust").
Pursuant to Section 2 of the Purchase Agreement, the Trust and
Fremont General Corporation (the "Company"), a Nevada corporation, agree with
each Underwriter as follows:
1. The initial public offering price per security
for the Preferred Securities, determined as provided in said Section
2, shall be $25.00.
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2. The purchase price per security for the Preferred
Securities to be paid to the Trust by the several Underwriters shall
be $25.00, being an amount equal to the initial public offering price
set forth above.
3. The compensation per Preferred Security to be
paid by the Company to the several Underwriters in respect of their
commitments hereunder shall be $______; provided, however, that the
compensation per Preferred Security for sales of 10,000 or more
Preferred Securities to a single purchaser shall be $_____.
2
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If the foregoing is in accordance with your understanding of
our agreement, please sign and return to the Trust a counterpart hereof,
whereupon this instrument, along with all counterparts, will become a binding
agreement between the Underwriters and the Trust and the Company in accordance
with its terms.
Very truly yours,
FREMONT GENERAL CORPORATION
By____________________________________
Title:
FREMONT GENERAL FINANCING I
By____________________________________
Title: Regular Trustee
By____________________________________
Title: Regular Trustee
CONFIRMED AND ACCEPTED,
as of the date first above written:
XXXXXXX XXXXX & CO.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
XXXX XXXXXX XXXXXXXX INC.
XXXXXXX, XXXXX & CO.
PAINEWEBBER INCORPORATED
For themselves and as Representatives of the other Underwriters named
in the Underwriting Agreement.
By XXXXXXX XXXXX & CO.
By________________________________
Authorized Signatory
