AMRESCO, INC.
COMMON STOCK
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UNDERWRITING AGREEMENT
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December 7, 1995
THE XXXXXXXX-XXXXXXXX COMPANY, INC.
XXXXX XXXXXXX INC.
As representatives of the several
Underwriters named in Schedule I hereto,
c/o The Xxxxxxxx-Xxxxxxxx Company, Inc.
0000 Xxxxxxxxx Xxxx, X.X.
Xxxxxxx, Xxxxxxx 00000
Dear Sirs:
AMRESCO, INC., a Delaware corporation (the "Company") proposes, subject to
the terms and conditions stated herein, to issue and sell to the Underwriters
named in Schedule I hereto (the "Underwriters") an aggregate of 2,000,000 shares
of common stock, par value $.05 per share (the "Common Stock"), of the Company
(the "Company Firm Shares"), and the shareholders of the Company named in
Schedule II hereto (the "Selling Shareholders") propose, subject to the terms
and conditions stated herein, to sell to the Underwriters an aggregate of
2,000,000 shares of Common Stock in the respective amounts set forth opposite
their names in Schedule II hereto (such shares together with the Company Firm
Shares, the "Firm Shares") and, at the election of the Underwriters, subject to
the terms and conditions stated herein, the Company and the Selling Shareholders
propose to sell to the Underwriters (for the sole purpose of covering over-
allotments in connection with the sale of the Firm Shares) an aggregate of up to
600,000 additional shares of Common Stock (the "Optional Shares") (the Firm
Shares and the Optional Shares that the Underwriters elect to purchase pursuant
to Section 2 hereof are collectively called the "Shares"). In your capacity as
representatives of the several Underwriters, you are referred to herein as the
"Representatives."
1. (a) REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
represents and warrants to, and agrees with, each of the Underwriters that:
(i) A registration statement on Form S-3 (File No. 33-63683)
with respect to the Shares, including a prospectus subject to
completion, has been filed by the Company with the Securities and
Exchange Commission (the "Commission") under the Securities Act of
1933, as amended (the "Act"), and one or more amendments to such
registration statement has been so filed. After the execution of this
Agreement, the Company will file with the Commission either (A) if
such registration statement, as it may have been amended, has become
effective under the Act and information has been omitted therefrom in
accordance with Rule 430A under the Act, a prospectus in the form most
recently included in an amendment to such registration statement with
such changes or insertions as are required by Rule 430A or permitted
by Rule 424(b) under the Act and as have been provided to and approved
by the Representatives, or (B) if such registration statement, as
amended, has not become effective under the Act, an amendment to such
registration statement, including a form of prospectus, a copy of
which amendment has been provided to and approved by the
Representatives prior to the execution of this Agreement. As used in
this Agreement, the term "Registration
Statement" means such registration statement, as amended at the time
when it was or is declared effective, including (i) all financial
statements, schedules and exhibits thereto, (ii) all documents
incorporated by reference therein filed under the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), and (iii) any
information omitted therefrom pursuant to Rule 430A under the Act and
included in the Prospectus (as hereinafter defined); the term
"Preliminary Prospectus" means each prospectus subject to completion
included in such registration statement or any amendment or post-
effective amendment thereto (including the prospectus subject to
completion, if any, included in the Registration Statement at the time
it was or is declared effective), including all documents incorporated
by reference therein filed under the Exchange Act; and the term
"Prospectus" means the prospectus first filed with the Commission
pursuant to Rule 424(b) under the Act or, if no prospectus is required
to be so filed, such term means the prospectus included in the
Registration Statements, in either case including all documents
incorporated by reference therein filed under the Exchange Act. Any
reference in this Agreement to an "amendment or supplement" to any
Preliminary Prospectus or the Prospectus or an "amendment" to any
registration statement (including the Registration Statement) shall be
deemed to include any document incorporated by reference therein and
filed with the Commission under the Exchange Act after the date of
such Preliminary Prospectus, Prospectus or Registration Statement, as
the case may be. As used herein, any reference to any statement or
information as being "made", "included", "contained", "disclosed", or
"set forth" in any Preliminary Prospectus, a Prospectus or any
amendment or supplement thereto, or the Registration Statement or any
amendment thereto (or other similar references) shall refer both to
information and statements actually appearing in such document as well
as information and statements incorporated by reference therein.
(ii) No order preventing or suspending the use of any Preliminary
Prospectus has been issued and no proceeding for that purpose has been
instituted or overtly threatened by the Commission or the securities
authority of any state or other jurisdiction in which the Shares are
to be offered or sold. If the Registration Statement has become
effective under the Act, no stop order suspending the effectiveness of
the Registration Statement or any part thereof has been issued and no
proceeding for that purpose has been instituted or overtly threatened
or, to the Company's knowledge, contemplated by the Commission or the
securities authority of any state or other jurisdiction in which the
Shares are to be offered or sold.
(iii) When any Preliminary Prospectus and any amendment or
supplement thereto was filed with the Commission it (A) contained all
statements required to be stated therein in accordance with, and
complied in all material respects with the requirements of, the Act
and the rules and regulations of the Commission thereunder, and (B)
did not include any untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made,
not misleading. When the Registration Statement or any amendment
thereto was or is declared effective, and at each Time of Delivery (as
hereinafter defined), it (A) contained or will contain all statements
required to be stated therein in accordance with, and complied or will
comply in all material respects with the requirements of, the Act and
the rules and regulations of the Commission thereunder, and (B) did
not or will not include any untrue statement of a material fact or
omit to state any material fact necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading. When the Prospectus or any amendment or supplement
thereto is filed with the Commission pursuant to Rule 424(b) (or, if
the Prospectus or such amendment or supplement is not required to be
so filed, when the Registration Statement or the amendment thereto
containing such amendment or
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supplement to the Prospectus was or is declared effective) and at each
Time of Delivery, the Prospectus, as amended or supplemented at any
such time, (A) contained or will contain all statements required to be
stated therein in accordance with, and complied or will comply in all
material respects with the requirements of, the Act and the rules and
regulations of the Commission thereunder, and (B) did not or will not
include any untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not
misleading. The foregoing provisions of this paragraph (iii) do not
apply to statements or omissions made in any Preliminary Prospectus
and any amendment or supplement thereto, the Registration Statement or
any amendment thereto, or the Prospectus or any amendment or
supplement thereto in reliance upon and in conformity with written
information furnished to the Company by any Underwriter through the
Representatives specifically for use therein.
(iv) The descriptions in the Registration Statement and the
Prospectus of statutes, legal and governmental proceedings or
contracts and other documents are accurate and fairly present in all
material respects the information required to be shown; and there are
no statutes or legal or governmental proceedings required to be
described in the Registration Statement or the Prospectus that are not
described as required and there are no contracts or documents of a
character that are required to be described in the Registration
Statement or the Prospectus or to be filed as exhibits to the
Registration Statement that are not described and filed as required.
(v) Each of the Company and its material subsidiaries (which
consist of Xxxxxxxx Xxxxxxxx, Inc., AMRESCO Management, Inc., AMRESCO
Residential Credit Corporation, AMRESCO Capital Corporation, AMRESCO
New England, Inc. and Oak Cliff Financial, Inc. (the "Material
Subsidiaries")) has been duly incorporated, is validly existing as a
corporation in good standing under the laws of its jurisdiction of
incorporation, and has full corporate power and authority to own or
lease its properties and conduct its business as described in the
Prospectus. The Company has full corporate power and authority to
enter into this Agreement and to perform its obligations hereunder.
Each of the Company and its subsidiaries is duly qualified to transact
business as a foreign corporation and is in good standing under the
laws of each other jurisdiction in which it owns or leases properties,
or conducts any business, so as to require such qualification, except
where the failure to so qualify would not have a material adverse
effect on the financial position, results of operations or business of
the Company and its subsidiaries taken as a whole.
(vi) The Company's authorized, issued and outstanding capital
stock is as disclosed in the Prospectus. All of the issued shares of
capital stock of the Company have been duly authorized and validly
issued, are fully paid and nonassessable and conform to the
description of the Common Stock contained in the Prospectus. None of
the issued shares of capital stock of the Company or its predecessors
or any of its subsidiaries has been issued or is owned or held in
violation of any preemptive rights of shareholders, and no person or
entity (including any holder of outstanding shares of capital stock of
the Company or its subsidiaries) has any preemptive or other rights to
subscribe for any of the Shares.
(vii) All of the issued shares of capital stock of each of
the Company's subsidiaries have been duly authorized and validly
issued, are fully paid and nonassessable and are owned beneficially by
the Company free and clear of all liens, security interests, pledges,
charges, encumbrances, defects, shareholders' agreements, voting
trusts, equities or claims of any nature whatsoever.
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(viii) Except as disclosed in the Prospectus, there are no
outstanding (A) securities or obligations of the Company or any of its
subsidiaries convertible into or exchangeable for any capital stock of
the Company or any such subsidiary, (B) warrants, rights or options to
subscribe for or purchase from the Company or any such subsidiary any
such capital stock or any such convertible or exchangeable securities
or obligations, or (C) obligations of the Company or any such
subsidiary to issue any shares of capital stock, any such convertible
or exchangeable securities or obligations, or any such warrants,
rights or options.
(ix) Since the date of the most recent audited financial
statements included in the Prospectus, neither the Company nor any of
its subsidiaries has sustained any material loss or interference with
its business, which loss or interference was material to the Company
and its subsidiaries taken as a whole, from fire, explosion, flood or
other calamity, whether or not covered by insurance, or from any labor
dispute or court or governmental action, order or decree, otherwise
than as disclosed in or contemplated by the Prospectus.
(x) Since the respective dates as of which information is given
in the Registration Statement and the Prospectus, (A) neither the
Company nor any of its subsidiaries has incurred any liabilities or
obligations, direct or contingent, or entered into any transactions,
not in the ordinary course of business, that are material to the
Company and its subsidiaries taken as a whole, (B) the Company has not
purchased any of its outstanding capital stock or declared, paid or
otherwise made any dividend or distribution of any kind on its capital
stock, (C) there has not been any change in the capital stock (except
as a result of shares issued upon exercise of stock options pursuant
to existing stock option plans of the Company and its subsidiaries),
long-term debt or, otherwise than in the ordinary course of business
consistent with past practice, short-term debt of the Company or any
of its subsidiaries, and (D) there has not been any material adverse
change, or any development involving a prospective material adverse
change, in or affecting the financial position, results of operations
or business of the Company and its subsidiaries taken as a whole, in
each case other than as disclosed in or contemplated by the
Prospectus.
(xi) The Shares to be issued and sold by the Company have been
duly authorized and, when issued and delivered against payment
therefor as provided herein, will be validly issued and fully paid and
nonassessable and will conform to the description of the Common Stock
contained in the Prospectus; and the certificates evidencing the
Shares will comply with all applicable requirements of Delaware law.
(xii) Except as disclosed in the Prospectus, there are no
contracts, agreements or understandings between the Company and any
person granting such person the right to require the Company to file a
registration statement under the Act with respect to any securities of
the Company owned or to be owned by such person or to require the
Company to include such securities in the securities registered
pursuant to the Registration Statement (or any such right has been
effectively waived) or any securities being registered pursuant to any
other registration statement filed by the Company under the Act.
(xiii) All offers and sales of the Company's capital stock
prior to the date hereof were at all relevant times duly registered
under the Act or exempt from the registration requirements of the Act
and were duly registered or the subject of an available exemption from
the registration requirements of the applicable state securities or
blue sky laws.
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(xiv) Neither the Company nor any of its subsidiaries is, and
no event has occurred that with the giving of notice or passage of
time or both would cause the Company or any of its subsidiaries to be,
in violation of its Articles or Certificate of Incorporation or Bylaws
or in default under any indenture, mortgage, deed of trust, loan
agreement, lease or other agreement or instrument to which the Company
or any of its subsidiaries is a party or to which any of their
respective properties or assets are subject and which is material to
the Company and its subsidiaries taken as a whole.
(xv) The issue and sale of the Shares to be issued and sold by
the Company and the performance of this Agreement and the consummation
of the transactions herein contemplated will not conflict with, or
(with or without the giving of notice or the passage of time or both)
result in a breach or violation of any of the terms or provisions of,
or constitute a default under, any indenture, mortgage, deed of trust,
loan agreement, lease or other material agreement or instrument to
which the Company or any of its subsidiaries is a party or to which
any of their respective properties or assets is subject and which is
material to the Company and its subsidiaries taken as a whole, nor
will such action conflict with or violate any provision of the
Articles or Certificate of Incorporation or Bylaws of the Company or
any of its subsidiaries or any statute, rule or regulation or any
order, judgment or decree of any court or governmental agency or body
having jurisdiction over the Company or any of its subsidiaries or any
of their respective properties or assets.
(xvi) The Company and its subsidiaries have good and
marketable title in fee simple to all real property, if any, and good
title to all personal property owned by them, in each case free and
clear of all liens, security interests, pledges, charges,
encumbrances, mortgages and defects, except such as are disclosed in
the Prospectus or such as do not materially and adversely affect the
value of those properties which individually or in the aggregate are
material to the Company and its subsidiaries taken as a whole and do
not interfere with the use made or proposed to be made of such
property by the Company or any one of its subsidiaries, as the case
may be; and any real property and buildings held under lease by the
Company or any of its subsidiaries are held under valid, subsisting
and enforceable leases, with such exceptions as are disclosed in the
Prospectus or are not material and do not interfere with the use made
or proposed to be made of such property and buildings by the Company
or such subsidiary.
(xvii) No consent, approval, authorization, order or
declaration of or from, or registration, qualification or filing with,
any court or governmental agency or body is required for the sale of
the Shares or the consummation of the transactions contemplated by
this Agreement, except the registration of the Shares under the Act
(which, if the Registration Statement is not effective as of the time
of execution hereof, shall be obtained as provided in this Agreement)
and such as may be required under state securities or blue sky laws in
connection with the offer, sale and distribution of the Shares by the
Underwriters.
(xviii) There is no litigation, arbitration, claim, proceeding
(formal or informal) or investigation pending or overtly threatened
(or any basis therefor) in which the Company or any of its
subsidiaries is a party or of which any of their respective properties
or assets are the subject which, if determined adversely to the
Company or any such subsidiary, could reasonably be expected to have,
individually or in the aggregate, a material adverse effect on the
financial position, results of operations or business of the Company
and its subsidiaries, taken as a whole. Neither the Company nor any
of its subsidiaries is in violation of, or in default with respect to,
any statute, rule, regulation, order, judgment or decree, except as do
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not and will not individually or in the aggregate have a material
adverse effect on the financial position, results of operations or
business of the Company and its subsidiaries, taken as a whole, and
neither the Company nor any of its subsidiaries is required to take
any action in order to avoid any such violation or default.
(xix) Deloitte & Touche LLP, who have certified certain
financial statements of the Company and its consolidated subsidiaries,
are and were during the periods covered by their reports included in
the Registration Statement and the Prospectus, independent public
accountants as required by the Act and the Exchange Act and the
respective rules and regulations of the Commission thereunder.
(xx) The consolidated financial statements and schedules
(including the related notes) of the Company and its consolidated
subsidiaries and predecessor and acquired businesses included in the
Registration Statement, the Prospectus or any Preliminary Prospectus
were prepared in accordance with generally accepted accounting
principles consistently applied throughout the periods involved and
fairly present the financial position and results of operations of the
Company and its subsidiaries or its predecessor or acquired
businesses, as the case may be, at the dates and for the periods
presented. The other financial and statistical information and data
included in the Registration Statement, the Prospectus or any
Preliminary Prospectus set forth under the captions "Summary Financial
and Other Data" and "Summary" in the Prospectus are, in all material
respects, accurately presented and prepared on a basis consistent with
such financial statements and the books and records of the Company.
(xxi) This Agreement has been duly authorized, executed and
delivered by the Company and constitutes the valid and binding
agreement of the Company enforceable against the Company in accordance
with its terms, subject, as to enforcement, to applicable bankruptcy,
insolvency, reorganization and moratorium laws and other laws relating
to or affecting the enforcement of creditors' rights generally and to
general equitable principles.
(xxii) Neither the Company nor any of its officers, directors
or affiliates has (A) taken, directly or indirectly, any action
designed to cause or result in, or that has constituted or might
reasonably be expected to constitute, the stabilization or
manipulation of the price of any security of the Company to facilitate
the sale or resale of the Shares, or (B) since the filing of the
Registration Statement, sold, or paid anyone any compensation for
soliciting purchases of, the Shares.
(xxiii) The Company has obtained for the benefit of the Company
and the Underwriters from each of its directors, executive officers
and the Selling Shareholders a written agreement that for a period of
180 days from the date of the Prospectus such director, executive
officer or Selling Shareholder will not, without the written consent
of the Representatives, offer, pledge, sell, contract to sell, grant
any option for the sale of, or otherwise dispose of (or announce any
offer, pledge, sale, grant of an option to purchase or other
disposition), directly or indirectly, any shares of Common Stock or
securities convertible into, or exercisable or exchangeable for,
shares of Common Stock.
(xxiv) Neither the Company nor any of its subsidiaries, nor
any director, officer, agent, employee or other person associated with
or acting on behalf of the Company or any such subsidiary has,
directly or indirectly: used any corporate funds for unlawful
contributions, gifts, entertainment or other unlawful expenses
relating to political activity; made any
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unlawful payment to foreign or domestic government officials or
employees or to foreign or domestic political parties or campaigns
from corporate funds; violated any provision of the Foreign Corrupt
Practices Act of 1977, as amended; or made any bribe, rebate, payoff,
influence payment, kickback or other unlawful payment.
(xxv) To the Company's knowledge, the operations of the
Company and its subsidiaries with respect to any real property
currently leased or owned or by any means controlled by the Company or
any subsidiary (the "Real Property") are in compliance with all
federal, state, and local laws, ordinances, rules, and regulations
relating to occupational health and safety and the environment
(collectively, "Laws"), except where the failure to so comply would
not have a material adverse effect on the Company's business or
results of operations, and the Company and its subsidiaries have all
licenses, permits and authorizations necessary to operate under all
Laws and are in compliance with all terms and conditions of such
licenses, permits and authorizations, except where such failure would
not have a material adverse effect on the Company's and its
subsidiaries' business or results of operations taken as a whole;
neither the Company nor any subsidiary has authorized, conducted or
has knowledge of the generation, transportation, storage, use,
treatment, disposal or release of any hazardous substance, hazardous
waste, hazardous material, hazardous constituent, toxic substance,
pollutant, contaminant, petroleum product, natural gas, liquefied gas
or synthetic gas defined or regulated under any environmental law on,
in or under any Real Property in violation of any Laws except where
such violation would not have a material adverse effect on the
Company's business or results of operations; and there is no material
pending or threatened claim, litigation or any administrative agency
proceeding, nor has the Company or any subsidiary received any written
or oral notice from any governmental entity or third party that: (A)
alleges a violation of any Laws by the Company or any subsidiary; (B)
alleges the Company or any subsidiary is a liable party under the
Comprehensive Environmental Response, Compensation, and Liability Act,
42 U.S.C. Section 9601 ET SEQ. or any state superfund law; (C) alleges
possible contamination of the environment by the Company or any
subsidiary; or (D) alleges possible contamination of the Real
Property, except as to each of the above, for any violations,
liability or contamination that would not have a material adverse
effect on the Company's and its subsidiaries' business or results of
operations taken as a whole.
(xxvi) The Company and its subsidiaries own or have the right
to use all patents, patent applications, trademarks, trademark
applications, trade names, service marks, copyrights, franchises,
trade secrets, proprietary or other confidential information and
intangible properties and assets (collectively, "Intangibles")
necessary to their respective businesses as presently conducted or as
the Prospectus indicates the Company or such subsidiary proposes to
conduct; to the Company's knowledge, neither the Company nor any
subsidiary has infringed or is infringing, and neither the Company nor
any subsidiary has received notice of infringement with respect to,
asserted Intangibles of others; and, to the Company's knowledge, there
is no infringement by others of Intangibles of the Company or any of
its subsidiaries which would have a material adverse effect on the
Company and its subsidiaries taken as a whole.
(xxvii) The Company and each of its subsidiaries are insured by
insurers of recognized financial responsibility against such losses
and risks and in such amounts as are prudent and customary in the
businesses in which they are engaged by similarly-situated companies;
and neither the Company nor any such subsidiary has any reason to
believe that it will not be able to renew its existing insurance
coverage as and when such coverage expires or to obtain
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similar coverage from similar insurers as may be necessary to continue
its business at a comparable cost, except as disclosed in the
Prospectus.
(xxviii) Each of the Company and its subsidiaries makes and
keeps accurate books, records and accounts, which, in reasonable
detail, accurately and fairly reflect the transactions and
dispositions of its assets and maintains a system of internal
accounting controls sufficient to provide reasonable assurance that
(A) transactions are executed in accordance with management's general
and specific authorization, (B) transactions are recorded as necessary
to permit preparation of the Company's consolidated financial
statements in accordance with generally accepted accounting principles
and to maintain accountability for the assets of the Company, (C)
access to the assets of the Company and each of its subsidiaries is
permitted only in accordance with management's general and specific
authorization, and (D) the recorded accountability for assets of the
Company and each of its subsidiaries is compared with existing assets
at reasonable intervals and appropriate action is taken with respect
to any differences.
(xxix) No subsidiary of the Company is currently prohibited,
directly or indirectly, from paying any dividends to the Company, from
making any other distributions on such subsidiary's capital stock,
from repaying to the Company any loans or advances to such subsidiary
or from transferring any of such subsidiary's property or assets to
the Company or any other subsidiary of the Company, except as
disclosed in the Prospectus.
(xxx) The Company and its subsidiaries have filed all
foreign, federal, state and local tax returns that are required to be
filed by them and, other than taxes the Company or its subsidiaries
are contesting, have paid all taxes shown as due on such returns as
well as all other taxes, assessments and governmental charges that are
due and payable; and no deficiency with respect to any such return has
been assessed or proposed.
(xxxi) The Company is not, will not become as a result of the
transactions contemplated hereby, and does not intend to conduct its
business in a manner that would cause it to become, an "investment
company" or a company "controlled" by an "investment company" within
the meaning of the Investment Company Act of 1940.
(xxxii) The Common Stock is registered pursuant to Section
12(g) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), and is qualified as a Nasdaq National Market security
of The Nasdaq Stock Market, Inc. The Company has taken no action
designed to terminate, or likely to have the effect of terminating,
the registration of the Common Stock under the Exchange Act or
qualification of the Common Stock on the Nasdaq National Market, nor
has the Company received any notification that the Commission or the
NASD is contemplating terminating such registration or qualification.
(xxxiii) The conditions for use of a Registration Statement on
Form S-3 set forth in the General Instructions to Form S-3 have been
satisfied with respect to the Company and the transactions
contemplated by this Agreement and the Registration Statement.
(b) REPRESENTATIONS AND WARRANTIES OF THE SELLING SHAREHOLDERS. Each
Selling Shareholder, severally and not jointly, represents and warrants to, and
agrees with, each of the several Underwriters and the Company that:
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(i) Such Selling Shareholder has full right, power (corporate
and other) and authority to enter into this Agreement, the Power of
Attorney and the Custody Agreement (as hereinafter defined) and to
sell, assign, transfer and deliver to the Underwriters the Shares to
be sold by such Selling Shareholder hereunder; and the execution and
delivery of this Agreement, the Power of Attorney and the Custody
Agreement have been duly authorized by all necessary action of such
Selling Shareholder.
(ii) Such Selling Shareholder has duly executed and delivered
this Agreement, the Power of Attorney and the Custody Agreement, and
each constitutes the valid and binding agreement of such Selling
Shareholder enforceable against such Selling Shareholder in accordance
with its terms, subject, as to enforcement, to applicable bankruptcy,
insolvency, reorganization and moratorium laws and other laws relating
to or affecting the enforcement of creditors' rights generally and to
general equitable principles.
(iii) No consent, approval, authorization, order or
declaration of or from, or registration, qualification or filing with,
any court or governmental agency or body is required for the sale of
the Shares to be sold by such Selling Shareholder or the consummation
of the transactions contemplated by this Agreement, the Power of
Attorney or the Custody Agreement, except the registration of such
Shares under the Act (which, if the Registration Statement is not
effective as of the time of execution hereof, shall be obtained as
provided in this Agreement) and such as may be required under state
securities or blue sky laws in connection with the offer, sale and
distribution of such Shares by the Underwriters.
(iv) The sale of the Shares to be sold by such Selling
Shareholder and the performance of this Agreement, the Power of
Attorney and the Custody Agreement and the consummation of the
transactions herein and therein contemplated will not conflict with,
or (with or without the giving of notice or the passage of time or
both) result in a breach of violation of any of the terms or
provisions of, or constitute a default under, any indenture, mortgage,
deed of trust, loan agreement, lease or other agreement or instrument
to which such Selling Shareholder is a party or to which any of their
respective properties or assets is subject, nor will such action
conflict with or violate any provision of the Articles of
Incorporation or Bylaws or other governing instruments of such Selling
Shareholder or any of its subsidiaries or any statute, rule or
regulation or any order, judgment or decree of any court or
governmental agency or body having jurisdiction over such Selling
Shareholder or any of such Selling Shareholder's properties or assets.
(v) Such Selling Shareholder has, and immediately prior to each
Time of Delivery (as hereinafter defined), such Selling Shareholder
will have, good and valid title to the Shares to be sold by such
Selling Shareholder hereunder, free and clear of all liens, security
interests, pledges, charges, encumbrances, defects, shareholders'
agreements, voting trusts, equities or claims of any nature
whatsoever; and, upon delivery of such Shares against payment therefor
as provided herein, good and valid title to such Shares, free and
clear of all liens, security interests, pledges, charges,
encumbrances, defects, shareholders' agreements, voting trusts,
equities or claims of any nature whatsoever, will pass to the several
Underwriters.
(vi) Neither such Selling Shareholder nor any of its officers,
directors or affiliates has (A) taken, directly or indirectly, any
action designed to cause or result in, or that has constituted or
might reasonably be expected to constitute, the stabilization or
manipulation of the price of any security of the Company to facilitate
the sale or resale of the Shares, or (B)
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since the filing of the Registration Statement (l) sold, bid for,
purchased or paid anyone any compensation for soliciting purchases of,
the Shares or (2) paid or agreed to pay to any person any compensation
for soliciting another to purchase any other securities of the
Company.
(vii) With respect to statements made concerning such Selling
Shareholder, when any Preliminary Prospectus was filed with the
Commission it (A) contained all statements required to be stated
therein in accordance with, and complied in all material respects with
the requirements of, the Act and the rules and regulations of the
Commission thereunder, and (B) did not include any untrue statement of
a material fact or omit to state any material fact necessary in order
to make the statements therein, in the light of the circumstances
under which they were made, not misleading. With respect to
statements made concerning such Selling Shareholder, when the
Registration Statement or any amendment thereto was or is declared
effective and at each Time of Delivery (as hereinafter defined), it
(A) contained or will contain all statements required to be stated
therein in accordance with, and complied or will comply in all
material respects with the requirements of, the Act and the rules and
regulations of the Commission thereunder, and (B) did not or will not
include any untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein not misleading.
With respect to statements made concerning such Selling Shareholder,
when the Prospectus or any amendment or supplement thereto is filed
with the Commission pursuant to Rule 424(b) (or, if the Prospectus or
such amendment or supplement is not required to be so filed, when the
Registration Statement or the amendment thereto containing such
amendment or supplement to the Prospectus was or is declared
effective), and at each Time of Delivery, the Prospectus, as amended
or supplemented at any such time, (A) contained or will contain all
statements required to be stated therein in accordance with, and
complied or will comply in all material respects with the requirements
of, the Act and the rules and regulations of the Commission thereunder
and (B) did not or will not include any untrue statement of a material
fact or omit to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made, not misleading. The foregoing provisions of this paragraph
(vii) do not apply to statements or omissions made in any Preliminary
Prospectus, the Registration Statement or any amendment thereto or the
Prospectus or any amendment or supplement thereto in reliance upon and
in conformity with written information furnished to the Company by any
Underwriter through the Representatives specifically for use therein.
(viii) Such Selling Shareholder, without undertaking any
independent investigation, is not aware that any of the
representations or warranties set forth in Section 1(a) above is
untrue or inaccurate in any material respect. Such Selling
Shareholder has also reviewed the Preliminary Prospectus, the
Registration Statement and the Prospectus and with respect to such
documents, has no knowledge of any untrue statement of a material fact
or omission of any material fact necessary in order to make the
statements made therein, in the light of the circumstances under which
they were made, not misleading.
In order to document the Underwriters' compliance with the reporting and
withholding provisions of the Internal Revenue Code of 1986, as amended, with
respect to the transactions herein contemplated, each of the Selling
Shareholders agrees to deliver to you prior to or at each Time of Delivery (as
hereinafter defined) a properly completed and executed United States Treasury
Department Form W-9 (or other applicable form or statement specified by Treasury
Department regulations in lieu thereof).
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Each of the Selling Shareholders represents and warrants that certificates
in negotiable form representing all of the Shares to be sold by such Selling
Shareholder hereunder have been placed in custody under a Custody Agreement, in
the form heretofore furnished to and approved by you, duly executed and
delivered by such Selling Shareholder to SunTrust Bank, as custodian (the
"Custodian"), and that such Selling Shareholder has duly executed and delivered
a Power of Attorney, in the form heretofore furnished to and approved by you,
appointing the persons indicated in Schedule II hereto as such Selling
Shareholder's attorneys-in-fact (the "Attorneys-in-Fact") with authority to
execute and deliver this Agreement on behalf of such Selling Shareholder, to
determine the purchase price to be paid by the Underwriters to the Selling
Shareholders as provided in Section 2 hereof, to authorize the delivery of the
Shares to be sold by such Selling Shareholder hereunder, and otherwise to act on
behalf of such Selling Shareholder in connection with the transactions
contemplated by this Agreement and the Custody Agreement.
Each of the Selling Shareholders specifically agrees that the Shares
represented by the certificates held in custody for such Selling Shareholder
under the Custody Agreement are subject to the interests of the Underwriters
hereunder, and that the arrangements made by such Selling Shareholder for such
custody, and the appointment by such Selling Shareholder of the Attorneys-in-
Fact by the Power of Attorney, are irrevocable. Each of the Selling
Shareholders specifically agrees that the obligations of the Selling
Shareholders hereunder shall not be terminated by operation of law, whether by
the death or incapacity of any individual Selling Shareholder or, in the case of
an estate or trust, by the death or incapacity of any executor or trustee or the
termination of such estate or trust, or in the case of a partnership or
corporation, by the dissolution of such partnership or corporation, or by the
occurrence of any other event.
2. PURCHASE AND SALE OF SHARES. Subject to the terms and conditions
herein set forth, (a) the Company and each Selling Shareholder agree, severally
and not jointly, to sell to each of the Underwriters, and each of the
Underwriters agrees, severally and not jointly, to purchase from the Company and
each Selling Shareholder, at a purchase price of $11.10 per share, the number of
Firm Shares (to be adjusted by the Representatives so as to eliminate fractional
shares) determined by multiplying the aggregate number of Shares to be sold by
the Company and the Selling Shareholders as set forth opposite their respective
names in Schedule II hereto by a fraction, the numerator of which is the
aggregate number of Firm Shares to be purchased by such Underwriter as set forth
opposite the name of such Underwriter in Schedule I hereto, and the denominator
of which is the aggregate number of Firm Shares to be purchased by the
Underwriters from the Company and the Selling Shareholders hereunder, and (b) in
the event and to the extent that the Underwriters shall exercise the election to
purchase Optional Shares as provided below, the Company and each of the Selling
Shareholders agree to sell to each of the Underwriters, and each of the
Underwriters agrees, severally and not jointly, to purchase from the Company and
each Selling Shareholder, at the purchase price per share set forth in clause
(a) of this Section 2, that portion of the number of Optional Shares as to which
such election shall have been exercised (to be adjusted by the Representatives
so as to eliminate fractional shares) determined by multiplying such number of
Optional Shares to be sold by the Company and the Selling Shareholders by a
fraction, the numerator of which is the maximum number of Optional Shares that
such Underwriter is entitled to purchase as set forth opposite the name of such
Underwriter in Schedule II hereto and the denominator of which is the maximum
number of the Optional Shares that all of the Underwriters are entitled to
purchase hereunder.
The Company and each of the Selling Shareholders, as and to the extent
indicated in Schedule I hereto, severally and not jointly, hereby grant to the
Underwriters the right to purchase at their election in whole or in part from
time to time up to an aggregate of 600,000 Optional Shares, at the purchase
price per share set forth in clause (a) in the paragraph above, for the sole
purpose of covering over-allotments in the sale of Firm Shares. Any such
election to purchase Optional Shares shall be made in proportion to the maximum
number of Optional Shares to be sold by each of the Selling Shareholders as set
forth in
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Schedule I hereto. Any such election to purchase Optional Shares may be
exercised by written notice from the Representatives to the Company, given from
time to time within a period of 30 calendar days after the date of this
Agreement and setting forth the aggregate number of Optional Shares to be
purchased and the date on which such Optional Shares are to be delivered, as
determined by you but in no event earlier than the First Time of Delivery (as
hereinafter defined) or, unless the Representatives and the Company otherwise
agree in writing, earlier than two or later than ten business days after the
date of such notice. In the event you elect to purchase all or a portion of the
Optional Shares, the Company and each of the Selling Shareholders agree to
furnish or cause to be furnished to you the certificates, letters and opinions,
and to satisfy all applicable conditions, set forth in Section 7 hereof at each
Subsequent Time of Delivery (as hereinafter defined).
3. OFFERING BY THE UNDERWRITERS. Upon the authorization by the
Representatives of the release of the Shares, the several Underwriters propose
to offer the Shares for sale upon the terms and conditions disclosed in the
Prospectus.
4. DELIVERY OF SHARES; CLOSING. Certificates in definitive form for the
Shares to be purchased by each Underwriter hereunder, and in such denominations
and registered in such names as The Xxxxxxxx-Xxxxxxxx Company, Inc. may request
upon at least 48 hours' prior notice to the Company shall be delivered by or on
behalf of the Company and the Selling Shareholders to the Representatives for
the account of such Underwriter, against payment by such Underwriter on its
behalf of the purchase price therefor, by wire transfer to accounts designated
by the Company and each of the Selling Shareholders in immediately available
funds. The closing of the sale and purchase of the Shares shall be held at the
offices of Xxxxx, Xxxxxxxx & Xxxxxxx, 0000 Xxxxxxxxx Xxxx, X.X., Xxxxxxx,
Xxxxxxx 00000, except that physical delivery of such certificates shall be made
at the office of The Depository Trust Company, 00 Xxxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx 00000. The time and date of such delivery and payment shall be, with
respect to the Firm Shares, at 10:00 a.m., Atlanta time, on the third (or, if
the Shares are priced, as contemplated by Rule 15c6-1(c), promulgated pursuant
to the Exchange Act, after 4:30 p.m. Washington, D.C. time, the fourth) full
business day after this Agreement is executed or at such other time and date as
the Representatives, the Company and the Attorneys-in-Fact, on behalf of the
Selling Shareholders, may agree upon in writing, and, with respect to the
Optional Shares, at 10:00 a.m., Atlanta time, on the date specified by the
Representatives in the written notice given by the Representatives of the
Underwriters' election to purchase all or part of such Optional Shares, or at
such other time and date as the Representatives and the Company may agree upon
in writing. Such time and date for delivery of the Firm Shares is herein called
the "First Time of Delivery," such time and date for delivery of any Optional
Shares, if not the First Time of Delivery, is herein called a "Subsequent Time
of Delivery," and each such time and date for delivery is herein called a "Time
of Delivery." The Company will make such certificates available for checking and
packaging at least 24 hours prior to each Time of Delivery at the office of The
Depository Trust Company, 00 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 or at such
other location in New York, New York specified by the Representatives in writing
at least 48 hours prior to such Time of Delivery.
5. (a) COVENANTS OF THE COMPANY. The Company covenants and agrees with
each of the Underwriters:
(i) If the Registration Statement has been declared
effective prior to the execution and delivery of this Agreement, the
Company will file the Prospectus with the Commission pursuant to and
in accordance with Rule 424(b)(1) (or, if applicable and if consented
to by the Representatives, Rule 424(b)(4)) not later than the earlier
of (A) the second business day following the execution and delivery of
this Agreement or (B) the fifteenth business day after the date on
which the Registration Statement is declared effective. The Company
will advise you promptly of any such filing pursuant to Rule 424(b).
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(ii) The Company will not file with the Commission the
Prospectus or the amendment referred to in the second sentence of
Section l(a)(i) hereof, any amendment or supplement to the Prospectus
or any amendment to the Registration Statement unless the
Representatives have received a reasonable period of time to review
any such proposed amendment or supplement and consented to the filing
thereof and will use its best efforts to cause any such amendment to
the Registration Statement to be declared effective as promptly as
possible. Upon the reasonable request of the Representatives or
counsel for the Underwriters, the Company will promptly prepare and
file with the Commission, in accordance with the rules and regulations
of the Commission, any amendments to the Registration Statement or
amendments or supplements to the Prospectus that may be necessary or
advisable in connection with the distribution of the Shares by the
several Underwriters and will use its best efforts to cause any such
amendment to the Registration Statement to be declared effective as
promptly as possible. If required, the Company will file any
amendment or supplement to the Prospectus with the Commission in the
manner and within the time period required by Rule 424(b) under the
Act. The Company will advise the Representatives, promptly after
receiving notice thereof, of the time when the Registration Statement
or any amendment thereto has been filed or declared effective or the
Prospectus or any amendment or supplement thereto has been filed and
will provide evidence to the Representatives of each such filing or
effectiveness.
(iii) The Company will advise the Representatives
promptly after receiving notice or obtaining knowledge of (A) the
issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or any part thereof or any
order preventing or suspending the use of any Preliminary Prospectus
or the Prospectus or any amendment or supplement thereto, (B) the
suspension of the qualification of the Shares for offer or sale in any
jurisdiction or of the initiation or threatening of any proceeding for
any such purpose, or (C) any request made by the Commission or any
securities authority of any other jurisdiction for amending the
Registration Statement, for amending or supplementing the Prospectus
or for additional information. The Company will use its best efforts
to prevent the issuance of any such stop order and, if any such stop
order is issued, to obtain the withdrawal thereof as promptly as
possible.
(iv) If the delivery of a Prospectus relating to the Shares
is required under the Act at any time prior to the expiration of nine
months after the date of the Prospectus and if at such time any events
have occurred as a result of which the Prospectus as then amended or
supplemented would include an untrue statement of a material fact or
omit to state any material fact necessary in order to make the
statements therein, in light of the circumstances under which they
were made, not misleading, or if for any reason it is necessary during
such same period to amend or supplement the Prospectus or to file
under the Exchange Act any document incorporated by reference in the
Prospectus to comply with the Act or the Exchange Act or the
respective rules and regulations thereunder, the Company will promptly
notify the Representatives and upon the request of the Representatives
(but at the Company's expense) prepare and file with the Commission an
amendment or supplement to the Prospectus or any such incorporated
document that corrects such statement or omission or effects such
compliance and will furnish without charge to each Underwriter and to
any dealer in securities as many copies of such amended or
supplemented Prospectus as you may from time to time reasonably
request. If the delivery of a prospectus relating to the Shares is
required under the Act at any time nine months or more after the date
of the Prospectus, upon request of the Representatives but at the
expense of such Underwriter, the Company will prepare and deliver to
such Underwriter as many copies as the Representatives may request of
an amended or supplemented Prospectus complying with Section 10(a)(3)
of the Act. Without limiting the application of this sentence, the
Company will use its best efforts to, not later than (A) 6:00 p.m.,
New York City time, on the date of determination of the public
offering price,
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if such determination occurred at or prior to 12:00 Noon, New York
City time, on such date or (B) 6:00 p.m., New York City time, on the
business day following the date of determination of the public
offering price, if such determination occurred after 12:00 Noon, New
York City time, on such date, deliver to the Representatives, without
charge, as many copies of the Prospectus and any amendment or
supplement thereto as the Representatives may reasonably request for
purposes of confirming orders that are expected to settle on the First
Time of Delivery. Neither the Representatives' consent to, nor the
Underwriters' delivery of, any such amendment or supplement shall
constitute a waiver of any of the conditions set forth in Section 7.
(v) The Company promptly from time to time will take such
action as the Representatives may reasonably request to qualify the
Shares for offering and sale under the securities or blue sky laws of
such jurisdictions as the Representatives may request and will
continue such qualifications in effect for as long as may be necessary
to complete the distribution of the Shares, provided that in
connection therewith the Company shall not be required to qualify as a
foreign corporation or to file a general consent to service of process
in any jurisdiction.
(vi) The Company will promptly provide the Representatives,
without charge, (A) two manually executed copies of the Registration
Statement as originally filed with the Commission and of each
amendment thereto, including all documents or information incorporated
by reference therein, (B) for each other Underwriter a conformed copy
of the Registration Statement and of each amendment thereto, without
exhibits but including all documents or information incorporated by
reference therein, and (C) so long as a prospectus relating to the
Shares is required to be delivered under Act, as many copies of each
Preliminary Prospectus or the Prospectus or any amendment or
supplement thereto as the Representatives may reasonably request.
(vii) As soon as practicable, but in any event not later
than the last day of the fifteenth month after the effective date of
the Registration Statement, the Company will make generally available
to its security holders an earnings statement of the Company and its
subsidiaries, if any, covering a period of at least 12 months
beginning after the effective date of the Registration Statement
(which need not be audited) complying with Section 11(a) of the Act
and the rules and regulations thereunder.
(viii) During the period beginning from the date hereof
and continuing to and including the date 180 days after the date of
the Prospectus, the Company will not, without the prior written
consent of the Representatives, offer, pledge, issue, sell, contract
to sell, grant any option for the sale of, or otherwise dispose of (or
announce any offer, pledge, sale, grant of an option to purchase or
other disposition), directly or indirectly, any shares of Common Stock
or securities convertible into, exercisable or exchangeable for,
shares of Common Stock, except as provided in Section 2, except for
(A) the grant of stock options and restricted stock under existing
stock option and restricted stock plans of the Company, (B) the
issuance of Common Stock upon the exercise of stock options or
warrants outstanding on the date of this Agreement to the extent that
such stock options or warrants are disclosed in the Prospectus and (C)
except pursuant to the conversion of the Company's 8% Convertible
Subordinated Debentures due 2005 as disclosed in the Prospectus.
(ix) During a period of five years from the effective date
of the Registration Statement, the Company will furnish to the
Representatives and, upon request, to each of the other Underwriters,
without charge, (A) copies of all reports or other communications
(financial or other) furnished to shareholders, and (B) as soon as
they are available, copies of any reports and financial statements
furnished to or filed with the Commission or any national securities
exchange.
-15-
(x) Prior to the termination of the underwriting syndicate
contemplated by this Agreement, the Company will not, and will use its
best efforts to cause its officers, directors or affiliates not to (A)
take, directly or indirectly, any action designed to cause or to
result in, or that might reasonably be expected to constitute, the
stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of any of the Shares or, (B)
sell, or pay anyone any compensation for soliciting purchases of, the
Shares.
(xi) The Company will apply the net proceeds from the
offering in the manner set forth under "Use of Proceeds" in the
Prospectus.
(xii) The Company will use its best efforts to cause the
Shares to be listed on the Nasdaq National Market at each Time of
Delivery and will use its best efforts to cause the Shares to be so
listed for at least one year from the date hereof.
(xiii) The Company will file promptly all reports and any
definitive proxy or information statements required to be filed by the
Company with the Commission pursuant to Section 13(a), 13(c), 14 or
15(d) of the Exchange Act subsequent to the date of the Prospectus and
for so long as the delivery of a prospectus is required in connection
with the offering, sale and distribution of the Shares.
(b) COVENANTS OF THE SELLING SHAREHOLDERS. Each Selling Shareholder
covenants and agrees with each of the Underwriters:
(i) During the period beginning from the date hereof and
continuing to and including the date 180 days after the date of the
Prospectus, such Selling Shareholder will not, without the prior
written consent of the Representatives, offer, pledge, sell, contract
to sell, grant any option for the sale of, or otherwise dispose of (or
announce any offer, pledge, sale, grant of an option to purchase or
other disposition), directly or indirectly, any shares of Common Stock
or securities convertible into, exercisable or exchangeable for,
shares of Common Stock, except as provided in Section 2.
(ii) Neither such Selling Shareholder (nor any of its
officers, directors or affiliates) will (A) take, directly or
indirectly, prior to the termination of the underwriting syndicate
contemplated by this Agreement, any action designed to cause or to
result in, or that might reasonably be expected to constitute, the
stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of any of the Shares, (B)
sell, bid for, purchase or pay anyone any compensation for soliciting
purchases of, the Shares, or (C) pay to or agree to pay any person any
compensation for soliciting another to purchase any other securities
of the Company.
6. EXPENSES. The Company and the Selling Shareholders will pay all costs
and expenses incident to the performance of their obligations under this
Agreement in such proportions as they agree among themselves, whether or not the
transactions contemplated hereby are consummated or this Agreement is terminated
pursuant to Section 10 hereof, including, without limitation, all costs and
expenses incident to (i) the fees, disbursements and expenses of the Company's
counsel and accountants in connection with the registration of the Shares under
the Act and all other expenses in connection with the preparation, printing and,
if applicable, filing of the Registration Statement (including all amendments
thereto), any Preliminary Prospectus, the Prospectus and any amendments and
supplements thereto, this Agreement and any blue sky memoranda; (ii) the
delivery of copies of the foregoing documents to the Underwriters; (iii) the
filing fees of the Commission and the National Association of Securities
Dealers, Inc. relating to the Shares; (iv) the
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preparation, issuance and delivery to the Underwriters of any certificates
evidencing the Shares, including transfer agent's and registrar's fees; (v) the
qualification of the Shares for offering and sale under state securities and
blue sky laws, including filing fees and reasonable fees and disbursements of
counsel for the Underwriters relating thereto; (vi) any listing of the Shares on
the Nasdaq National Market; and (vii) any expenses for travel, lodging and meals
incurred by the Company and any of its officers, directors and employees in
connection with any meetings with prospective investors in the Shares. It is
understood, however, that, except as provided in this Section, Section 8 and
Section 10 hereof, the Underwriters will pay all of their own costs and
expenses, including the fees of their counsel, stock transfer taxes on resale of
any of the Shares by them, and any advertising expenses relating to the offer
and sale of the Shares.
7. CONDITIONS OF THE UNDERWRITERS' OBLIGATIONS. The obligations of the
Underwriters hereunder to purchase and pay for the Shares to be delivered at
each Time of Delivery shall be subject, in their discretion, to the accuracy of
the representations and warranties of the Company and the Selling Shareholders
contained herein as of the date hereof and as of such Time of Delivery, to the
accuracy of the statements of Company officers made pursuant to the provisions
hereof, to the performance by the Company and the Selling Shareholders of their
respective covenants and agreements hereunder, and to the following additional
conditions precedent:
(a) If the registration statement as amended to date has not become
effective prior to the execution of this Agreement, such registration statement
shall have been declared effective not later than 5:00 p.m., Atlanta time, on
the date of this Agreement or such later date and/or time as shall have been
consented to by the Representatives in writing. The Prospectus and any
amendment or supplement thereto shall have been filed with the Commission
Pursuant to Rule 424(b) within the applicable time period prescribed for such
filing and in accordance with Section 5(a) of this Agreement; no stop order
suspending the effectiveness of the Registration Statement or any part thereof
shall have been issued and no proceedings for that purpose shall have been
instituted, overtly threatened or, to the knowledge of the Company and the
Representatives, contemplated by the Commission; and all requests for additional
information on the part of the Commission shall have been complied with to your
reasonable satisfaction.
(b) Xxxxx, Xxxxxxxx & Xxxxxxx, counsel for the Underwriters, shall
have furnished to the Representatives such opinion or opinions, dated such Time
of Delivery, with respect to the incorporation of the Company, the validity of
the Shares being delivered at such Time of Delivery, the Registration Statement,
the Prospectus, and other related matters as you may reasonably request, and the
Company shall have furnished to such counsel such documents as they reasonably
request for the purpose of enabling them to pass upon such matters.
(c) The Representatives shall have received an opinion, dated such
Time of Delivery, of Xxxxxx and Xxxxx, L.L.P., counsel for the Company, in form
and substance satisfactory to the Representatives and their counsel, to the
effect that:
(i) The Company has been duly incorporated, is validly
existing as a corporation in good standing under the laws of the State
of Delaware and has the corporate power and authority to own or lease
its properties and conduct its business as described in the
Prospectus.
(ii) Each of the Material Subsidiaries has been duly
incorporated, is validly existing as a corporation in good standing
under the laws of its jurisdiction of incorporation and has the
corporate power and authority to own or lease its properties and
conduct its business as described in the Prospectus.
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(iii) The Company's authorized, issued and outstanding
capital stock is as disclosed in the Prospectus. All of the issued
shares of capital stock of the Company (including the Shares to be
sold by the Selling Shareholders) have been duly authorized and
validly issued, are fully paid and nonassessable. The statements
contained in the Prospectus under the caption "Description of Capital
Stock," insofar as they purport to summarize the material provisions
of the Shares, present fair summaries of the material provisions
relating thereto. To such counsel's actual knowledge, none of the
issued shares of capital stock of the Company, its predecessors or the
Material Subsidiaries has been issued in violation of any preemptive
rights of shareholders, and no person or entity (including any holder
of outstanding shares of capital stock of the Company) has any
preemptive or, to the actual knowledge of such counsel, other rights
to subscribe for any of the Shares.
(iv) All of the shares of capital stock of each of the
Material Subsidiaries have been duly authorized and validly issued,
are fully paid and nonassessable, and, to such counsel's actual
knowledge, are owned of record by the Company and the Company has not
received notice of any adverse claim, except for security interests in
a majority of the present and future capital stock of all of the
Material Subsidiaries granted by the Company pursuant to the Revolving
Loan Agreement.
(v) To such counsel's actual knowledge and except as
disclosed in the Prospectus, there are no outstanding (A) securities
or obligations of the Company or any of its subsidiaries convertible
into or exchangeable for any capital stock of the Company or any such
subsidiary, (B) warrants, rights or options to subscribe for or
purchase from the Company or any such subsidiary any such capital
stock or any such convertible or exchangeable securities or
obligations, or (C) obligations of the Company or any such subsidiary
to issue any shares of capital stock, any such convertible or
exchangeable securities or obligations, or any such warrants, rights
or options.
(vi) The Shares to be issued and sold by the Company have
been duly authorized and, when issued and delivered to the
Underwriters against payment therefor as provided herein, will be
validly issued and fully paid and nonassessable and will conform in
all material respects to the description of the Common Stock
contained in the Prospectus; the form of certificate evidencing the
Shares complies with all applicable requirements of the Delaware
General Corporation Law; and the Shares to be issued and sold by the
Company have been listed on the Nasdaq National Market.
(vii) To the actual knowledge of such counsel, except as
disclosed in the Prospectus, there are no contracts, agreements or
understandings between the Company and any person granting such person
the right to require the Company to file a registration statement
under the Act with respect to any securities of the Company owned or
to be owned by such person or to require the Company to include such
securities in the Shares registered pursuant to the Registration
Statement (or any such right has been effectively waived) or in any
securities being registered pursuant to any other registration
statement filed by the Company under the Act.
(viii) Execution and delivery by the Company of, and
performance of its obligations in, this Agreement do not (i) violate
the Company's Certificate of Incorporation or Bylaws, (ii) breach, or
result in a default under, any existing obligation of the Company (or,
as applicable, the Material Subsidiaries) under the written contracts
listed on an exhibit to such opinion, or (iii) breach or otherwise
violate any existing obligation of the Company under any court order
listed on an exhibit to such opinion.
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(ix) Execution and delivery by the Company of, and
performance by the Company of its agreements in, this Agreement do not
violate applicable provisions of statutory law or regulation.
(x) Except for permits and similar authorizations required
under the Act and the blue sky laws of certain jurisdictions and for
permits and authorizations which have been obtained and registrations
which have been effected, no consent, approval, authorization,
registration or order of any court or governmental agency or body is
required in connection with the sale of the Shares to be issued and
sold by the Company.
(xi) To such counsel's actual knowledge, the Company is not
named as a party to any pending or overtly threatened litigation,
arbitration, claim or proceeding that is material to the Company and
its subsidiaries taken as a whole, except as disclosed on the
Company's Defensive Litigation/Counterclaim Report for the Third
Quarter 1995, and all attachments thereto.
(xii) This Agreement has been duly authorized, executed
and delivered by the Company.
(xiii) The Registration Statement and the Prospectus and
each amendment or supplement thereto (other than the financial
statements and related schedules therein, as to which such counsel
need express no opinion), as of their respective effective or issue
dates, complied as to form in all material respects with the
applicable requirements of the Act and the Exchange Act and the
respective rules and regulations thereunder. The statements contained
in the Prospectus under the captions "Recent Developments -
Acquisition of EQS," "Recent Developments - Acquisition of Acacia,"
"Management's Discussion and Analysis of Financial Condition and
Results of Operations - Liquidity and Capital Resources" and
"Description of Capital Stock," insofar as they purport to summarize
the provisions of statutes, legal and governmental proceedings or
contracts and other documents, are materially accurate and fairly
present in all material respects the information required to be shown.
(xiv) The Registration Statement is effective under the Act;
any required filing of the Prospectus pursuant to Rule 424(b) has been
made in the manner and within the time period required by Rule 424(b);
and to such counsel's actual knowledge, no stop order suspending the
effectiveness of the Registration Statement or any part thereof has
been issued and no proceedings for that purpose have been instituted
or threatened or are contemplated by the Commission.
(xv) The Company is not, and immediately after the
consummation of the Offering in accordance with this Agreement will
not be, required to be registered under the Investment Company Act of
1940, as amended, as an "investment company" and, to the actual
knowledge of such counsel is not a company "controlled" by an
"investment company" within the meaning of the Investment Company Act
of 1940, as amended.
Such counsel shall also state that on the basis of the information
developed by such counsel during the course of preparing the Prospectus, which
involved attending conferences with officers of the Company, the Company's
accountants and other parties for the purpose of preparing the Prospectus, and
as a result of such participation, but otherwise without independent check or
verification, except as specified, they have no reason to believe that the
Registration Statement, or any further amendment thereto made prior to such Time
of Delivery, on its effective date and as of such Time of Delivery, contained or
contains any untrue statement of a material fact or omitted or omits to state
any material fact required to be stated therein or necessary to make the
statements therein not misleading, or that the Prospectus, or any
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amendment or supplement thereto made prior to such Time of Delivery, as of its
issue date and as of such Time of Delivery, contained or contains any untrue
statement of a material fact or omitted or omits to state a material fact
necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading (provided that such counsel need
express no belief regarding the financial statements and related schedules and
other financial data contained in the Registration Statement, any amendment
thereto, or the Prospectus, or any amendment or supplement thereto).
In rendering any such opinion, such counsel may rely, as to matters of
fact, to the extent such counsel deem proper, on certificates of responsible
officers of the Company and public officials. In addition, such opinion shall
state that it is governed by and shall be interpreted in accordance with the
Legal Opinion Accord of the ABA Section of Business Law (1991).
(d) The Representatives shall have received an opinion, dated such
Time of Delivery, of L. Xxxxx Xxxxxxxxx, Esq., General Counsel for the Company,
in form and substance satisfactory to the Representatives and their counsel, to
the effect that:
(i) The Company is duly qualified to transact business as a
foreign corporation and is in good standing under the laws of each
other jurisdiction in which it owns or leases material property, or
conducts material business, so as to require such qualification,
except where the failure to so qualify would not have a material
adverse effect on the financial position of the Company and its
subsidiaries, taken as a whole.
(ii) Each of the United States and Canadian subsidiaries of the
Company is duly qualified to transact business as a foreign
corporation and is in good standing under the laws of each other
United States and Canadian jurisdiction in which it owns or leases
material property, or conducts material business, so as to require
such qualification, except where the failure to so qualify would not
have a material adverse effect on the financial position of the
Company and its subsidiaries, taken as a whole.
(iii) Each sale of the Company's capital stock during the
period from December 13, 1992 through each Time of Delivery was, at
the time of each such sale, registered or exempt from the
registration requirements of the Act and applicable state securities
or blue sky laws.
(iv) To such counsel's actual knowledge, neither the Company nor
any of the Material Subsidiaries has (A) breached or otherwise
violated any existing obligation of the Company under any court order
that names the Company as a party, or (B) violated applicable
provisions of statutory law or regulation, in either case where any
such breach or violation would have a material adverse effect on the
financial position of the Company and its subsidiaries, taken as a
whole.
(v) To such counsel's actual knowledge, (A) the Company has not
violated its Certificate of Incorporation or Bylaws and (B) neither
the Company nor any of the Material Subsidiaries has breached or
otherwise violated any existing obligation under any material
agreement to which the Company is a party, in either case where any
such breach or violation would have a material adverse effect on the
financial position of the Company and its subsidiaries, taken as a
whole.
(e) The Representatives shall have received an opinion, dated such
Time of Delivery, of Xxxxxx & Bird, counsel for the Selling Shareholders in form
and substance satisfactory to the Representatives and their counsel, to the
effect that:
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(i) Each of the Selling Shareholders has full right, power
(corporate and other) and authority to enter into this Agreement, the Power
of Attorney and the Custody Agreement and to sell, assign, transfer and
deliver to the Underwriters the Shares to be sold by such Selling
Shareholder hereunder and the execution and delivery of this Agreement, the
Power of Attorney and the Custody Agreement have been duly authorized by
all necessary action of such Selling Shareholder.
(ii) This Agreement, a Power of Attorney and a Custody Agreement
have been duly executed and delivered by such Selling Shareholder, each of
which is enforceable against such Selling Shareholder in accordance with
its terms subject, as to enforcement, to applicable bankruptcy, insolvency,
fraudulent transfer, reorganization and moratorium laws and other laws
relating to or affecting the enforcement of creditors' rights generally and
to general equitable principles (except that the right to indemnity and
contribution may be limited by federal or state securities laws) (provided
that such counsel need express no opinion regarding the irrevocability of
the Power of Attorney and Custody Agreement).
(iii) The sale of the Shares to be sold by such Selling
Shareholder at such Time of Delivery and the performance of this Agreement,
the Power of Attorney and the Custody Agreement and the consummation of the
transactions herein and therein contemplated will not conflict with, or
(with or without the giving of notice or the passage of time or both)
result in a breach or violation of any of the terms or provisions of, or
constitute a default under, any indenture, mortgage, deed of trust, loan
agreement, lease or other material agreement or instrument known to such
counsel to which such Selling Shareholder is a party or to which any of its
properties or assets is subject, nor will such action conflict with or
violate any provision of the Articles of Incorporation or Bylaws or other
governing instruments of such Selling Shareholder or any statute, rule or
regulation or any order, judgment or decree of any court or governmental
agency or body having jurisdiction over such Selling Shareholder or any of
such Selling Shareholder's properties or assets.
(iv) No consent, approval, authorization, order or declaration of
or from, or registration, qualification or filing with, any court or
governmental agency or body is required for the issue and sale of the
Shares being sold by such Selling Shareholder or the consummation of the
transactions contemplated by this Agreement, the Power of Attorney or the
Custody Agreement, except the registration of such Shares under the Act and
such as may be required under state securities or blue sky laws in
connection with the offer, sale and distribution of such Shares by the
Underwriters.
(v) Upon delivery to the Underwriters, good and valid title to
the Shares to be sold by such Selling Shareholder hereunder, free and clear
of all liens, encumbrances, equities, claims, restrictions, security
interests, voting trusts or other defects of title whatsoever, will have
been transferred to the Underwriters (whom such counsel may assume to be
bona fide purchasers) who have purchased Shares hereunder. To the best of
such counsel's knowledge, there are no such liens, encumbrances, equities,
claims, restrictions, security interests, voting trusts or other defects of
title.
In rendering any such opinion, such counsel may rely, as to matters of
fact, to the extent such counsel deem proper, on certificates of responsible
officers of the Company, the Selling Shareholders and public officials, provided
that such counsel shall state that they believe that both the Representative and
such counsel are justified in relying on such certificate.
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(f) The Representatives shall have received from Deloitte & Touche
LLP letters dated, respectively, the date hereof (or, if the Registration
Statement has been declared effective prior to the execution and delivery of
this Agreement, dated such effective date and the date of this Agreement) and
each Time of Delivery, in form and substance satisfactory to the
Representatives, to the effect set forth in Annex I hereto. In the event that
the letters referred to in this Section 7(f) set forth any changes, decreases or
increases in the items specified in paragraph (v) of Annex I, it shall be a
further condition to the obligations of the Underwriters that (i) such letters
shall be accompanied by a written explanation by the Company as to the
significance thereof, unless the Representatives deem such explanation
unnecessary, and (ii) such changes, decreases or increases do not, in the sole
judgment of the Representatives, make it impracticable or inadvisable to proceed
with the purchase, sale and delivery of the Shares being delivered at such Time
of Delivery as contemplated by the Registration Statement, as amended as of the
date of such letter.
(g) Since the date of the latest audited financial statements
included in the Prospectus, neither the Company nor any of its subsidiaries
shall have sustained (i) any loss or interference with their respective
businesses from fire, explosion, flood, hurricane or other calamity, whether or
not covered by insurance, or from any labor dispute or court or governmental
action, order or decree, otherwise than as disclosed in or contemplated by the
Prospectus, or (ii) any change, or any development involving a prospective
change (including without limitation a change in management or control of the
Company), in or affecting the position (financial or otherwise), results of
operations, net worth or business prospects of the Company and its subsidiaries,
otherwise than as disclosed in or contemplated by the Prospectus, the effect of
which, in either such case, is in your judgment so material and adverse as to
make it impracticable or inadvisable to proceed with the purchase, sale and
delivery of the Shares being delivered at such Time of Delivery as contemplated
by the Registration Statement, as amended as of the date hereof.
(h) Subsequent to the date hereof there shall not have occurred any
of the following: (i) any suspension or limitation in trading in securities
generally on the New York Stock Exchange, or any setting of minimum prices for
trading on such exchange, or in the Common Stock by the Commission or the Nasdaq
National Market; (ii) a moratorium on commercial banking activities in New York
declared by either federal or state authorities; (iii) any downgrading in the
rating of any debt securities of the Company by any "nationally recognized
statistical rating organization" (as defined for purposes of Rule 436(g) under
the Act), or any public announcement that any such organization has under
surveillance or review its rating of any debt securities of the Company (other
than an announcement with positive implications of a possible upgrading, and no
implication of a possible downgrading, of such rating); or (iv) any outbreak or
escalation of hostilities involving the United States, declaration by the United
States of a national emergency or war or any other national or international
calamity or emergency if the effect of any such event specified in this clause
(iv) in your judgment makes it impracticable or inadvisable to proceed with the
purchase, sale and delivery of the Shares being delivered at such Time of
Delivery as contemplated by the Registration Statement, as amended as of the
date hereof.
(i) The Company shall have furnished to the Representatives at such
Time of Delivery certificates of officers of the Company and the Selling
Shareholders shall have furnished certificates of the Selling Shareholders,
satisfactory to the Representatives, as to the accuracy of the representations
and warranties of the Company and such Selling Shareholders respectively herein
at and as of such Time of Delivery, as to the performance by the Company and
such Selling Shareholders of all of its and their respective obligations
hereunder to be performed at or prior to such Time of Delivery, and as to such
other matters as the Representatives may reasonably request, and the Company and
the Selling Shareholders shall have furnished or caused to be furnished
certificates as to the matters set forth in subsections (a) and (g) of this
Section 7, and as to such other matters as the Representatives may reasonably
request.
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(j) The Shares shall be listed on the Nasdaq National Market.
8. INDEMNIFICATION AND CONTRIBUTION.
(a) The Company agrees to indemnify and hold harmless each
Underwriter against any losses, claims, damages or liabilities, joint or
several, to which such Underwriter may become subject, under the Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon: (i) any untrue statement or
alleged untrue statement made by the Company in Section 1(a) of this Agreement;
(ii) any untrue statement or alleged untrue statement of any material fact
contained in (A) the Registration Statement or any amendment thereto, any
Preliminary Prospectus or the Prospectus or any amendment or supplement thereto,
or (B) any application or other document, or any amendment or supplement
thereto, executed by the Company or based upon written information furnished by
or on behalf of the Company filed in any jurisdiction in order to qualify the
Shares under the securities or blue sky laws thereof or filed with the
Commission or any securities association or securities exchange (each an
"Application"); or (iii) the omission or alleged omission to state in the
Registration Statement or any amendment thereto, any Preliminary Prospectus, the
Prospectus or any amendment or supplement thereto, or any Application a material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading, and
will reimburse each Underwriter for any legal or other expenses reasonably
incurred by such Underwriter in connection with investigating, defending against
or appearing as a third-party witness in connection with any such loss, claim,
damage, liability or action; PROVIDED, HOWEVER, that the Company shall not be
liable in any such case to the extent that any such loss, claim, damage,
liability or action arises out of or is based upon an untrue statement or
alleged untrue statement or omission or alleged omission made in the
Registration Statement or any amendment thereto, any Preliminary Prospectus, the
Prospectus or any amendment or supplement thereto or any Application in reliance
upon and in conformity with written information furnished to the Company by any
Underwriter through the Representatives expressly for use therein; PROVIDED
FURTHER, HOWEVER, that the Company shall not be liable to any Underwriter in
respect of any Preliminary Prospectus to the extent that (i) the Prospectus did
not contain the untrue statement or alleged untrue statement or omission or
alleged omission giving rise to such loss, claim, damage, liability or action,
(ii) the Prospectus was not sent or given to the purchaser of the Shares in
question at or prior to the time at which the written confirmation of the sale
of such Shares was sent or given to such person, and (iii) the failure to
deliver such Prospectus was not the result of the Company's noncompliance with
its obligations under Sections 5(a) (ii) and 5(a) (vi) hereof. The Company will
not, without the prior written consent of each Underwriter, settle or compromise
or consent to the entry of any judgment in any pending or threatened claim,
action, suit or proceeding (or related cause of action or portion thereof) in
respect of which indemnification may be sought hereunder (whether or not such
Underwriter is a party to such claim, action, suit or proceeding), unless such
settlement, compromise or consent includes an unconditional release of such
Underwriter from all liability arising out of such claim, action, suit or
proceeding (or related cause of action or portion thereof).
(b) Each of the Selling Shareholders, severally (and not jointly)
agrees to indemnify and hold harmless each Underwriter against any losses,
claims, damages or liabilities, joint or several, to which such Underwriter may
become subject, under the Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon: (i) any untrue statement or alleged untrue statement made by such Selling
Shareholder in Section 1(b) of this Agreement; or (ii) with respect to
statements made concerning such Selling Shareholder, any untrue statement or
alleged untrue statement of any material fact contained in the Registration
Statement or any amendment thereto, any Preliminary Prospectus, the Prospectus
or any amendment or supplement thereto, or any Application or which arise out of
or are based upon the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein
not misleading with respect to such Selling
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Shareholder, and will reimburse each Underwriter for any legal or other expenses
reasonably incurred by such Underwriter in connection with investigating,
defending against or appearing as a third-party witness in connection with any
such loss, claim, damage, liability or action; PROVIDED, HOWEVER, that no such
Selling Shareholder shall be liable in any such case to the extent that any such
loss, claim, damage, liability or action arises out of or is based upon an
untrue statement or alleged untrue statement or omission or alleged omission
made in the Registration Statement or any amendment thereto, any Preliminary
Prospectus, the Prospectus or any amendment or supplement thereto or any
Application in reliance upon and in conformity with written information
furnished to the Company by any Underwriter through the Representatives
expressly for use therein; PROVIDED FURTHER, HOWEVER, that no Selling
Shareholder shall be liable to any Underwriter in respect of any Preliminary
Prospectus to the extent that (i) the Prospectus did not contain the untrue
statement or alleged untrue statement or omission or alleged omission giving
rise to such loss, claim, damage, liability or action, (ii) the Prospectus was
not sent or given to the purchaser of the Shares in question at or prior to the
time at which the written confirmation of sale of such Shares was sent or given
to such person, and (iii) the failure to deliver such Prospectus was not the
result of the Company's noncompliance with its obligations under Sections 5(a)
(ii) and 5(a) (vi) hereof). No Selling Shareholder will, without the prior
written consent of the Representatives, settle or compromise or consent to the
entry of any judgment in any pending or threatened claim, action, suit or
proceeding (or related cause of action or portion thereof) in respect of which
indemnification may be sought hereunder (whether or not such Underwriter is a
party to such claim, action, suit or proceeding), unless such settlement,
compromise or consent includes an unconditional release of such Underwriter from
all liability arising out of such claim, action, suit or proceeding (or related
cause of action or portion thereof).
(c) Each Underwriter, severally but not jointly, agrees to indemnify
and hold harmless the Company and each Selling Shareholder against any losses,
claims, damages or liabilities to which the Company or any Selling Shareholder
may become subject under the Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon any untrue statement or alleged untrue statement of any material fact
contained in the Registration Statement or any amendment thereto, the
Preliminary Prospectus or the Prospectus or any amendment or supplement thereto,
or any Application or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading, in each case to the extent, but only to
the extent, that such untrue statement or alleged untrue statement or omission
or alleged omission was made in reliance upon and in conformity with written
information furnished to the Company by such Underwriter through the
Representatives expressly for use therein; and will reimburse the Company and
each Selling Shareholder for any legal or other expenses reasonably incurred by
the Company or such Selling Shareholder in connection with investigating or
defending any such loss, claim, damage, liability or action.
(d) Promptly after receipt by an indemnified party under subsection
(a), (b) or (c) above of notice of the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made against the
indemnifying party under such subsection, notify the indemnifying party in
writing of the commencement thereof; but the omission so to notify the
indemnifying party shall not relieve it from any liability which it may have to
any indemnified party otherwise than under such subsection or unless the
indemnifying party is materially prejudiced by such omission. In case any such
action shall be brought against any indemnified party and it shall notify the
indemnifying party of the commencement thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it shall wish, jointly
with any other indemnifying party similarly notified, to assume the defense
thereof, with counsel reasonably satisfactory to such indemnified party (who
shall not, except with the consent of the indemnified party, be counsel to the
indemnifying party); PROVIDED, HOWEVER, that if the defendants in any such
action include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded that there may be one or more
legal defenses available to it or other indemnified parties which
-24-
are different from or additional to those available to the indemnifying party,
the indemnifying party shall not have the right to assume the defense of such
action on behalf of such indemnified party and such indemnified party shall have
the right to select separate counsel to defend such action on behalf of such
indemnified party. After such notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof and approval
by such indemnified party of counsel appointed to defend such action, the
indemnifying party will not be liable to such indemnified party under this
Section 8 for any legal or other expenses, other than reasonable costs of
investigation, subsequently incurred by such indemnified party in connection
with the defense thereof, unless (i) the indemnified party shall have employed
separate counsel in accordance with the proviso to the next preceding sentence
or (ii) the indemnifying party has authorized the employment of counsel for the
indemnified party at the expense of the indemnifying party or (iii) the
indemnifying party shall have failed to assume the defense thereof. Nothing in
this Section 8(d) shall preclude an indemnified party from participating at its
own expense in the defense of any such action so assumed by the indemnifying
party.
(e) If the indemnification provided for in this Section 8 is
unavailable to or insufficient to hold harmless an indemnified party under
subsection (a), (b) or (c) above in respect of any losses, claims, damages or
liabilities (or actions in respect thereof) referred to therein, then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or liabilities (or
actions in respect thereof) in such proportion as is appropriate to reflect the
relative benefits received by the Company and the Selling Shareholders,
respectively on the one hand and the Underwriters on the other from the offering
of the Shares. If, however, the allocation provided by the immediately
preceding sentence is not permitted by applicable law, then each indemnifying
party shall contribute to such amount paid or payable by such indemnified party
in such proportion as is appropriate to reflect not only such relative benefits
but also the relative fault of the Company and the Selling Shareholders,
respectively on the one hand and the Underwriters on the other in connection
with the statements or omissions that resulted in such losses, claims, damages
or liabilities (or actions in respect thereof), as well as any other relevant
equitable considerations. The relative benefits received by the Company and the
Selling Shareholders, respectively on the one hand and the Underwriters on the
other shall be deemed to be in the same proportion as the total net proceeds
from the offering (before deducting expenses) received by the Company and the
Selling Shareholders, respectively bear to the total underwriting discounts and
commissions received by the Underwriters. The relative fault shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Company or the Selling
Shareholders on the one hand or the Underwriters on the other and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission. The Company, the Selling Shareholders and
the Underwriters agree that it would not be just and equitable if contributions
pursuant to this subsection (e) were determined by pro rata allocation (even if
the Underwriters were treated as one entity for such purpose) or by any other
method of allocation which does not take account of the equitable considerations
referred to above in this subsection (e). The amount paid or payable by an
indemnified party as a result of the losses, claims, damages or liabilities (or
actions in respect thereof) referred to above in this subsection (e) shall be
deemed to include any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any such action
or claim. Notwithstanding the provisions of this subsection (e), no Underwriter
shall be required to contribute any amount in excess of the amount by which the
total price at which the Shares underwritten by it and distributed to the public
were offered to the public exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Underwriters' obligations in this subsection
(e) to contribute are several in proportion to their respective underwriting
obligations and not joint.
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(f) The obligations of the Company and the Selling Shareholders under
this Section 8 are several and not joint and shall be in addition to any
liability which the Company or such Selling Shareholders may otherwise have and
shall extend, upon the same terms and conditions, to each person, if any, who
controls any Underwriter within the meaning of the Act; and the obligations of
the Underwriters under this Section 8 shall be in addition to any liability
which the respective Underwriters may otherwise have and shall extend, upon the
same terms and conditions, to each officer and director of the Company and any
Selling Shareholder and to each person, if any, who controls the Company or any
Selling Shareholder within the meaning of the Act. Notwithstanding the
foregoing, the liability of each Selling Shareholder to the Underwriters arising
on account of the offering, whether such liability arises under this Agreement
or otherwise, shall not exceed the amount set forth in Section 8(g) of this
Agreement.
(g) Notwithstanding anything to the contrary in this Section 8, the
liability of each Selling Shareholder for indemnification and contribution under
this Section 8 shall be limited to an amount equal to the net proceeds received
by such Selling Shareholder from the Underwriters in the offering.
9. DEFAULT OF UNDERWRITERS.
(a) If any Underwriter defaults in its obligation to purchase Shares
at a Time of Delivery, the Representatives may in their discretion arrange for
the Representatives or another party or other parties to purchase such Shares on
the terms contained herein. If within thirty-six (36) hours after such default
by any Underwriter the Representatives do not arrange for the purchase of such
Shares, the Company and the Selling Shareholders shall be entitled to a further
period of thirty-six (36) hours within which to procure another party or other
parties satisfactory to the Representatives to purchase such Shares on such
terms. In the event that, within the respective prescribed periods, the
Representatives notify the Company and the Selling Shareholders that the
Representatives have so arranged for the purchase of such Shares, or the Company
and the Selling Shareholders notify the Representatives that they have so
arranged for the purchase of such Shares, the Representatives or the Company and
the Selling Shareholders shall have the right to postpone a Time of Delivery for
a period of not more than seven days in order to effect whatever changes may
thereby be made necessary in the Registration Statement or the Prospectus, or in
any other documents or arrangements, and the Company agrees to file promptly any
amendments to the Registration Statement or the Prospectus that in the opinion
of the Representatives may thereby be made necessary. The cost of preparing,
printing and filing any such amendments shall be paid for by the Underwriters.
The term "Underwriter" as used in this Agreement shall include any person
substituted under this Section with like effect as if such person had originally
been a party to this Agreement with respect to such Shares. The thirty-six (36)
hour periods referred to in this subsection (a) shall not include the hours
between (i) 5:00 p.m., Atlanta time, on any Friday through 9:00 a.m. Atlanta
time, the following Monday or (ii) 5:00 p.m., Atlanta time, on the day preceding
a day on which the New York Stock Exchange is closed for trading (a "holiday")
through 9:00 a.m., Atlanta time, on the day following that holiday.
(b) If, after giving effect to any arrangements for the purchase of
the Shares of a defaulting Underwriter or Underwriters by the Representatives
and the Company and the Selling Shareholders as provided in subsection (a)
above, the aggregate number of such Shares which remains unpurchased does not
exceed one-eleventh of the aggregate number of Shares to be purchased at such
Time of Delivery, then the Company and the Selling Shareholders shall have the
right to require each non-defaulting Underwriter to purchase the number of
Shares which such Underwriter agreed to purchase hereunder at such Time of
Delivery and, in addition, to require each non-defaulting Underwriter to
purchase its pro rata share (based on the number of Shares which such
Underwriter agreed to purchase hereunder) of the Shares of such defaulting
Underwriter or Underwriters for which such arrangements have not been made, but
nothing herein shall relieve a defaulting Underwriter from liability for its
default.
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10. TERMINATION.
(a) This Agreement may be terminated with respect to the Firm Shares
or any Optional Shares in the sole discretion of the Representatives by notice
to the Company given prior to the First Time of Delivery or any Subsequent Time
of Delivery, respectively, in the event that (i) any condition to the
obligations of the Underwriters set forth in Section 7 hereof has not been
satisfied, or (ii) the Company or the Selling Shareholders shall have failed,
refused or been unable to deliver the Shares or to perform all obligations and
satisfy all conditions on their respective parts to be performed or satisfied
hereunder at or prior to such Time of Delivery, in either case other than by
reason of a default by any of the Underwriters. If this Agreement is terminated
pursuant to this Section 10(a), the Company and the Selling Shareholders, pro
rata in accordance with the number of Shares proposed to be sold hereunder will
reimburse the Underwriters severally upon demand for all out-of-pocket expenses
(including counsel fees and disbursements) that shall have been incurred by them
in connection with the proposed purchase and sale of the Shares. Neither the
Company nor any Selling Shareholder shall in any event be liable to any of the
Underwriters for the loss of anticipated profits from the transactions covered
by this Agreement.
(b) If, after giving effect to any arrangements for the purchase of
the Shares of a defaulting Underwriter or Underwriters by you and the Company
and the Selling Shareholders as provided in Section 9(a), the aggregate number
of such Shares which remains unpurchased exceeds one-eleventh of the aggregate
number of Shares to be purchased at such Time of Delivery, or if the Company and
the Selling Shareholders shall not exercise the right described in Section 9(b)
to require non-defaulting Underwriters to purchase Shares of a defaulting
Underwriter or Underwriters, then this Agreement (or, with respect to a
Subsequent Time of Delivery, the obligations of the Underwriters to purchase and
of the Company to sell the Optional Shares) shall thereupon terminate, without
liability on the part of any non-defaulting Underwriter, the Company or the
Selling Shareholders, except for the expenses to be borne by the Company, the
Selling Shareholders and the Underwriters as provided in Section 6 hereof and
the indemnity and contribution agreements in Section 8 hereof; but nothing
herein shall relieve a defaulting Underwriter from liability for its default.
11. SURVIVAL. The respective indemnities, agreements, representations,
warranties and other statements of the Company, its officers, the Selling
Shareholders and the several Underwriters, as set forth in this Agreement or
made by or on behalf of them, respectively, pursuant to this Agreement, shall
remain in full force and effect, regardless of any investigation (or any
statement as to the results thereof) made by or on behalf of any Underwriter or
any controlling person referred to in Section 8(e) or the Company, any Selling
Shareholder or any officer or director or controlling person of the Company or
any Selling Shareholder referred to in Section 8(e), and shall survive delivery
of and payment for the Shares. The respective agreements, covenants,
indemnities and other statements set forth in Sections 6 and 8 hereof shall
remain in full force and effect, regardless of any termination or cancellation
of this Agreement.
12. NOTICES. All communications hereunder shall be in writing and, if
sent to any of the Underwriters, shall be mailed, delivered or telegraphed and
confirmed in writing to you in care of The Xxxxxxxx-Xxxxxxxx Company, Inc., 0000
Xxxxxxxxx Xxxx, X.X., Xxxxxxx, Xxxxxxx 00000, Attention: Corporate Finance
Department (with a copy to Xxxxx, Xxxxxxxx & Xxxxxxx, 0000 Xxxxxxxxx Xxxx,
Xxxxxxx, Xxxxxxx 00000, Attention: Xxxxxx X. Xxxxxxxx); if to any Selling
Shareholder shall be sufficient in all respects if delivered or sent by
registered mail to counsel for such Selling Shareholder at its address set forth
in Schedule II hereto; and if sent to the Company, shall be mailed, delivered or
telegraphed and confirmed in writing to the Company at AMRESCO, Inc., 0000
Xxxxxxx Xxxxxx Xxxxxxx, Xxxxxx, Xxxxx 00000, Attention: Xxxxxx X. Xxxx, Xx.,
with a copy to the General Counsel of the Company.
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13. REPRESENTATIVES. The Representatives will act for the several
Underwriters in connection with the transactions contemplated by this Agreement,
and any action under this Agreement taken by you jointly or by The Xxxxxxxx-
Xxxxxxxx Company, Inc. will be binding upon all the Underwriters.
14. BINDING EFFECT. This Agreement shall be binding upon, and inure
solely to the benefit of, the Underwriters, the Company and the Selling
Shareholders and to the extent provided in Sections 8 and 10 hereof, the
officers and directors and controlling persons referred to therein and their
respective heirs, executors, administrators, successors and assigns, and no
other person shall acquire or have any right under or by virtue of this
Agreement. No purchaser of any of the Shares from any Underwriter shall be
deemed a successor or assign by reason merely of such purchase.
15. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Georgia without giving effect to any
provisions regarding conflict of laws.
16. 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 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 us one of the counterparts hereof, and upon the
acceptance hereof by The Xxxxxxxx-Xxxxxxxx Company, Inc., on behalf of each of
the Underwriters, this letter will constitute a binding agreement among the
Underwriters and the Company. It is understood that your acceptance of this
letter on behalf of each of the Underwriters is pursuant to the authority set
forth in the Master Agreement among Underwriters, a copy of which shall be
submitted to the Company for examination, upon request, but without warranty on
your part as to the authority of the signers thereof.
Very truly yours,
AMRESCO, INC.
By: /s/ Xxxxxx X. Xxxx, Xx.
------------------------------------------
Name: Xxxxxx X. Xxxx, Xx.
Title: Chairman and Chief Executive Officer
CGW SOUTHEAST PARTNERS I, L.P.
CGW SOUTHEAST PARTNERS II, L.P.
By: /s/ Xxxxxxx X. Xxxxxx
------------------------------------------
Xxxxxxx X. Xxxxxx, Attorney-in-Fact acting on
behalf of each of the Selling Shareholders
The foregoing Agreement is hereby
confirmed and accepted as of the
date first written above at
Atlanta, Georgia.
THE XXXXXXXX-XXXXXXXX COMPANY, INC.
XXXXX XXXXXXX, INC.
BY: THE XXXXXXXX-XXXXXXXX COMPANY, INC.
By: /s/ Xxxxxx X. X'Xxxxx, Xx.
----------------------------------------
(Authorized Representative)
On behalf of each of the Underwriters
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SCHEDULE I
Number of
Optional
Total Shares to be
Number of Firm Purchased if
Shares to be Maximum Option
Underwriter Purchased Exercised
----------- -------------- --------------
The Xxxxxxxx-Xxxxxxxx Company, Inc. .. 1,222,500 183,375
Xxxxx Xxxxxxx Inc. ................... 1,222,500 183,375
BT Securities Corporation ............ 85,000 12,750
X.X. Xxxxxxxx & Co. .................. 85,000 12,750
Xxxxxx Xxxxxx & Company, Inc. ........ 85,000 12,750
Xxxxxxx Xxxxx & Associates, Inc. ..... 85,000 12,750
Advest, Inc. ........................ 65,000 9,750
Everen Securities, Inc. .............. 65,000 9,750
Xxxxxx Xxxx Incorporated ............. 65,000 9,750
Interstate/Xxxxxxx Xxxx Corporation... 65,000 9,750
XxXxxxxx & Company Securities, Inc. .. 65,000 9,750
Principal Financial Securities, Inc. . 65,000 9,750
Xxxxxxxx Xxxxxx Refsnes, Inc. ........ 65,000 9,750
Xxxxxxxx Inc. ........................ 65,000 9,750
Wheat First Butcher Singer ........... 65,000 9,750
Xxxxx Xxxxxx, Xxxxxx Securities, Inc.. 45,000 6,750
Xxxxxxxx & Xxxxxxxx, Incorporated .... 45,000 6,750
Equitable Securities Corporation ..... 45,000 6,750
First Equity Corporation of Florida... 45,000 6,750
First Southwest Company .............. 45,000 6,750
Friedman, Billings, Xxxxxx & Co., Inc. 45,000 6,750
Xxxxxxxxxx Xxxx & Xxxx Incorporated... 45,000 6,750
Mesirow Financial, Inc. .............. 45,000 6,750
Pennsylvania Merchant Group Ltd. ..... 45,000 6,750
Xxxxxx & Xxxxxxx, Inc. ............... 45,000 6,750
Xxxxxxx Xxxxxx Xxxxx Inc. ........... 45,000 6,750
Xxxxx & Xxxxxxxxxxxx, Inc. .......... 45,000 6,750
Southwest Securities, Inc. .......... 45,000 6,750
Sterne, Agee & Xxxxx, Inc. .......... 45,000 6,750
--------- --------
Total 4,000,000 600,000
--------- --------
--------- --------
SCHEDULE II
Number of
Total Optional
Number of Firm Shares to be
Shares to be Sold if Maximum
Selling Shareholders(l) Purchased Option Exercised
----------------------- -------------- ----------------
CGW Southeast Partners I, L.P. ..... 1,290,000 200,000
CGW Southeast Partners II, L.P. .... 710,000 100,000
---------- -------
Total .................... 2,000,000 300,000
---------- -------
---------- -------
_________________________
(1) Each of the Selling Shareholders has executed and delivered a Power of
Attorney appointing Xxxxxxx X. Xxxxxx and Xxxxxx X. Xxxxx, XX such Selling
Shareholder's Attorneys-in-Fact and is represented by Xxxxxx & Bird, One
Atlantic Center, 0000 Xxxx Xxxxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxx 00000-0000,
Attention: Xxxxxx X. Xxxxxx, Esq.
ANNEX I
Pursuant to Section 7(e) of the Underwriting Agreement, Deloitte & Touche,
L.L.P. shall furnish letters to the Underwriters to the effect that:
(i) they are independent public accountants with respect to the
Company and its consolidated subsidiaries within the meaning the Act and
the respective applicable published rules and regulations thereunder;
(ii) in their opinion, the consolidated financial statements and
schedules audited by them and included in the Prospectus and the
Registration Statement comply as to form in all material respects with the
applicable accounting requirements of the Act and the related published
rules and regulations thereunder;
(iii) the financial statements of the Company as of and for the
nine month period ended September 30, 1995 were reviewed by them in
accordance with the standards established by the American Institute of
Certified Public Accountants and based upon their review they are not aware
of any material modifications that should be made to such financial
statements for them to be in conformity with generally accepted accounting
principles, and such financial statements comply as to form in all material
respects with the applicable accounting requirements of the Act and the
applicable rules and regulations thereunder;
(iv) On the basis of limited procedures, not constituting an audit in
accordance with generally accepted auditing standards, consisting of a
reading of the unaudited financial statements and other information
referred to below, a reading of the latest available interim financial
statements of the Company and its subsidiaries, inspection of the minute
books of the Company and its subsidiaries since the date of the latest
audited financial statements included in the Prospectus, inquiries of
officials of the Company and its subsidiaries responsible for financial
accounting matters and such other inquiries and procedures as may be
specified in such letter, nothing came to their attention that caused them
to believe that:
(A) the unaudited consolidated condensed financial statements of
the Company and its consolidated subsidiaries included in the
Registration Statement and the Prospectus do not comply in form in all
material respects with the applicable accounting requirements of the
Act and the Exchange Act and the respective related published rules
and regulations thereunder or are not in conformity with generally
accepted principles applied on the basis substantially consistent with
that of the audited consolidated financial statements included in the
Registration Statement and the Prospectus;
(B) as of a specified date not more than 5 days prior to the
date of such letter, there were any changes in the capital stock
(other than the issuance of capital stock upon exercise of options
which were outstanding on the date of the latest balance sheet
included in the Prospectus) or any increase in inventories or the
long-term debt or short-term debt of the Company and its subsidiaries,
or any decreases in net current assets or net assets or other items
specified by the Representatives, or any increases in any items
specified by the Representatives, in each case as compared with
amounts shown in the latest balance sheet included in the Prospectus,
except in each case for changes, increases or decreases which the
Prospectus discloses have occurred or may occur or which are described
in such letter; and
(C) for the period from the date of the latest financial
statements included in the Prospectus to the specified date referred
to in Clause (B) there were any decreases in net sales or operating
income or the total or per share amounts of net income or other items
specified by the Representatives, or any increases in any items
specified by the Representatives, in each case as compared with the
comparable period of the preceding year and with any other period of
corresponding length specified by the Representatives, except in each
case for increases or decreases which the Prospectus discloses have
occurred or may occur which are described in such letter; and
(v) In addition to the audit referred to in their report(s) included
in the Prospectus and the limited procedures, inspection of minute books,
inquiries and other procedures referred to in paragraph (iv) above, they
have carried out certain specified procedures, not constituting an audit in
accordance with generally accepted auditing standards, with respect to
certain amounts, percentages and financial information specified by the
Representatives which are derived from the general accounting records of
the Company and its subsidiaries, included in the Registration Statement
and the Prospectus, or which appear in Part II of, or in exhibits and
schedules to, the Registration Statement specified by the Representatives,
and have compared certain of such amounts, percentages and financial
information with the accounting records of the Company and its subsidiaries
and have found them to be in agreement.
References to the Registration Statement and the Prospectus in this Annex I
shall include any amendment or supplement thereto at the date of such letter.
-2-
