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EXHIBIT 1.1
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1,700,000 SHARES
AMERICAN COIN MERCHANDISING TRUST I
(A DELAWARE BUSINESS TRUST)
ASCENDING RATE CUMULATIVE TRUST PREFERRED SECURITIES
(LIQUIDATION AMOUNT OF $10 PER TRUST PREFERRED SECURITY)
UNDERWRITING AGREEMENT
SEPTEMBER __, 1998
EVEREN SECURITIES, INC.
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1,700,000 Shares
American Coin Merchandising Trust I
(a Delaware Business Trust)
Ascending Rate Cumulative Trust Preferred Securities
(Liquidation Amount of $10 per Trust Preferred Security)
UNDERWRITING AGREEMENT
September __, 1998
EVEREN Securities, Inc.
00 Xxxx Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000-0000
Ladies and Gentlemen:
American Coin Merchandising, Inc., a Delaware corporation (the
"Company"), and its financing subsidiary, American Coin Merchandising Trust I, a
Delaware business trust (the "Trust," and together with the Company, the
"Offerors"), confirm their agreements with you, as sole underwriter (the
"Underwriter") as follows:
1. The Shares. Subject to the terms and conditions set forth in
this agreement (the "Agreement"), the Trust proposes to issue and sell to you,
1,700,000 shares of Ascending Rate Cumulative Trust Preferred Securities having
a Liquidation Amount of $10 per share (the "Trust Preferred Securities"), to be
issued under the Trust Agreement (as defined below), the terms of which are more
fully described in the Prospectus (as defined below). Such 1,700,000 shares of
Trust Preferred Securities proposed to be sold by the Trust are hereinafter
referred to as the "Firm Shares." The Trust also proposes to grant to you an
option to purchase up to 255,000 additional shares of Trust Preferred Securities
(the "Additional Shares") solely for the purpose of covering overallotments, if
any, if requested by you as provided in Section 3 hereof. The Firm Shares and
the Additional Shares are herein collectively called the "Shares."
The Offerors hereby confirm their agreements with you as
follows:
2. Registration Statement and Prospectus. The Offerors have
prepared and filed with the Securities and Exchange Commission (the
"Commission") in accordance with the provisions of the Securities Act of 1933,
as amended (the "Act"), and the rules and regulations of the Commission
thereunder (the "Rules and Regulations"), a registration statement on Form S-3
(File No. 333-60267) including a prospectus, relating to the Shares, the
Ascending Rate Junior
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Subordinated Deferrable Interest Debentures due 2028 of the Company (the
"Debentures"), and the Guarantee pursuant to the Guarantee Agreement (as defined
below) for the benefit of the Trust Preferred Securities (the "Guarantee"). To
the extent the registration statement has been amended, each such amendment has
been prepared and filed with the Commission. The registration statement, as
amended, by such filing with the Commission, at the time when it became
effective, and any registration statement filed with the Commission pursuant to
Rule 462(b) under the Act, at the time when it becomes effective, including all
financial schedules and exhibits thereto, all documents incorporated or deemed
to be incorporated by reference therein and all of the information (if any)
deemed to be part of the registration statement at the time of effectiveness
pursuant to Rule 430A under the Act ("Rule 430A"), is hereinafter referred to as
the "Registration Statement;" the prospectus supplement, dated the date hereof
and containing the public offering price of the Shares, the underwriting
discounts and commissions, the plan of distribution of the Shares and such other
information as may be required by the Act, the Rules and Regulations promulgated
thereunder or as you and the Company deem appropriate (the "Prospectus
Supplement"), and the related prospectus dated ______ __, 1998 (the "Base
Prospectus"), each in the form first provided to you by the Offerors for use in
connection with the offering and sale of the Shares (whether or not required to
be filed pursuant to Rule 424(b) under the Act ("Rule 424(b)") and including all
documents incorporated or deemed to be incorporated by reference therein, are
hereinafter referred to collectively as the "Prospectus," provided that in the
event any revised prospectus supplement shall be provided to you by the Offerors
for use in connection with the offering of the Shares that differs from the
Prospectus (whether or not any such revised prospectus is required to be filed
by the Offerors pursuant to Rule 424(b) under the Act), the term "Prospectus"
shall refer to the revised prospectus supplement from and after the time it is
first provided to you for such use; and each preliminary prospectus included in
the Registration Statement prior to the time it became or becomes effective is
herein referred to as a "Preliminary Prospectus." Unless the context otherwise
requires, all references in this Agreement to documents, financial statements
and schedules and other information which is "contained," "included," "stated,"
"described in" or "referred to" in the Registration Statement or the Prospectus
(and all other references of like import) shall be deemed to mean and include
all such documents, financial statements and schedules and other information
which is or is deemed to be incorporated by reference in the Registration
Statement or the Prospectus, as the case may be; and all references in this
Agreement to amendments or supplements to the Registration Statement or the
Prospectus shall be deemed to mean and include the filing of any document under
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), after the
date of this Agreement which is or is deemed to be incorporated by reference in
the Registration Statement or the Prospectus, as the case may be.
3. Agreements to Sell and Purchase.
(a) On the basis of the representations and warranties
contained in this Agreement, and subject to the terms and conditions hereof: (i)
the Offerors, jointly and severally, agree that the Trust will issue and sell to
you, at a price of $10 per Share (the "Purchase Price"), 1,700,000 newly issued
Firm Shares; and (ii) you agree to purchase from the Trust, at the Purchase
Price, 1,700,000 Firm Shares.
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(b) On the basis of the representations and warranties
contained in this Agreement, and subject to the terms and conditions hereof: (i)
the Offerors, jointly and severally, agree that the Trust will issue and sell to
you, at the Purchase Price, up to 255,000 newly issued Additional Shares; and
(ii) you shall have the right to purchase, from time to time as provided in
Section 4(b) below, up to an aggregate of 255,000 Additional Shares at the
Purchase Price. Additional Shares may be purchased as provided in Section 4
hereof solely for the purpose of covering over-allotments made in connection
with the offering of the Firm Shares.
(c) The Offerors are advised by you that you propose to make a
public offering of your Shares as soon after the Registration Statement and this
Agreement become effective as in your judgment is advisable. As compensation to
you for your commitments hereunder and in view of the fact that the proceeds of
the sale of the Shares (together with the entire proceeds from the sale by the
Trust to the Company of the Common Securities (as defined below)) will be used
to purchase the Debentures, the Company hereby agrees to pay by wire transfer of
same day funds on the Closing Date, directly to you, a commission of $0.40 per
Share purchased by you and delivered by the Trust pursuant to this Agreement, or
$600,000 in the aggregate, plus an advisory fee of $.010 per Share or $170,000
in the aggregate (the "Underwriting Commission").
(d) For a period of 90 days from the date this Agreement
becomes effective, the Offerors will not, without your prior written consent ,
directly or indirectly, (1) offer, pledge, sell, contract to sell, sell any
option or contract to purchase, purchase any option or contract to sell, grant
any option, right or warrant to purchase, or otherwise issue any shares of Trust
Preferred Securities or Debentures, any securities convertible into or
exercisable or exchangeable for Trust Preferred Securities, or any securities
substantially similar to the Trust Preferred Securities or Debentures, (2) enter
into any swap or other agreement to do any of the foregoing or (3) file any
registration statement relating to any of the foregoing on behalf of itself or
any other person.
4. Agreements of the Company as to Delivery and Payment. The
Offerors, jointly and severally, agree with you that:
(a) Delivery to you of and payment for the Firm Shares shall
be made at 10:00 A.M., New York City time, on the third full business
day (such time and date being referred to as the "Closing Date")
following the date of the initial public offering of the Firm Shares
pursuant to this Agreement as advised to you by the Offerors, at such
place as you shall designate.
(b) Delivery to you of and payment for any Additional Shares
to be purchased by you shall be made at such place as you shall
designate, at 10:00 A.M., New York City time, on such date or dates
(individually, an "Option Closing Date" and collectively, the "Option
Closing Dates"), which may be the same as the Closing Date but shall in
no event be earlier than the Closing Date, as shall be specified in a
written notice from you to the Offerors of your determination to
purchase a number, specified in said notice, of Additional Shares. Any
such notice may be given within 30 days after the date of this
Agreement. Any Option Closing Date may be after the expiration of 30
days after the date of this Agreement.
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(c) Unless otherwise agreed, the Shares to be purchased by you
in book-entry form and in authorized denominations and registered in
the name of the nominee of The Depository Trust Company ("DTC") shall
be delivered by or on behalf of the Offerors through the facilities of
DTC for your account against payment of the Purchase Price therefor by
wire transfer of same day funds to the Trust, or upon its order, to an
account designated by the Trust, with any transfer taxes payable upon
initial issuance or the transfer thereof duly paid by the Offerors for
your account.
5. Further Agreements of the Offerors. The Offerors, jointly and
severally, also agree with you that, in the case of each Offeror:
(a) it will, if the Registration Statement has not heretofore
become effective under the Act, file an amendment to the Registration
Statement or, if necessary pursuant to Rule 430A under the Act, a
post-effective amendment to the Registration Statement, as soon as
practicable after the execution and delivery of this Agreement, and
will use its best efforts to cause the Registration Statement or such
post-effective amendment to become effective at the earliest possible
time; and the Offerors will comply fully and in a timely manner with
the applicable provisions of Rule 424(b), Rule 430A and the other rules
under the Act;
(b) it will advise you promptly and, if requested by you,
confirm such advice in writing, (i) when the Registration Statement has
become effective, if and when the Prospectus is sent for filing
pursuant to Rule 424 under the Act and when any post-effective
amendment to the Registration Statement becomes effective, (ii) of the
receipt of any comments or correspondence from the Commission that
relate to the Registration Statement or requests by the Commission for
amendments to the Registration Statement or amendments or supplements
to the Prospectus or for additional information, (iii) of the issuance
by the Commission of any stop order suspending the effectiveness of the
Registration Statement, or of the suspension of qualification of the
Shares for offering or sale in any jurisdiction, or the initiation or,
to the best knowledge of the Offerors, threat of any proceedings for
such purpose by the Commission or any state securities commission or
other regulatory authority, and (iv) of the happening of any event or
information becoming known during the period referred to in paragraph
(e) below that makes any statement of a material fact made in the
Registration Statement untrue or that requires the making of any
additions to or changes in the Registration Statement (as amended or
supplemented from time to time) in order to make the statements therein
not misleading or that makes any statement of a material fact made in
the Prospectus (as amended or supplemented from time to time) untrue or
that requires the making of any additions to or changes in the
Prospectus (as amended or supplemented from time to time) in order to
make the statements therein, not misleading; if at any time the
Commission shall issue or institute proceedings (or threaten to
institute any such proceedings) to issue any stop order suspending the
effectiveness of the Registration
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Statement, or any state securities commission or other regulatory
authority shall issue or institute proceedings (or threaten to
institute proceedings) to issue an order suspending the qualification
or exemption of the Shares under any state securities or Blue Sky laws,
the Offerors shall use their best efforts to obtain the withdrawal or
lifting of such order at the earliest possible time;
(c) it will furnish to you without charge one signed copy of
the Registration Statement as first filed with the Commission and of
each amendment to it, including all exhibits filed therewith, and will
furnish to you such number of conformed copies of the Registration
Statement as so filed and of each amendment to it, without exhibits, as
you may reasonably request;
(d) it will not file any amendment or supplement to the
Registration Statement, whether before or after the time when it
becomes effective, or make any amendment or supplement to the
Prospectus of which you shall not previously have been advised and
provided a copy a reasonable period of time prior to the filing thereof
and to which you and your counsel shall reasonably object; and it will
prepare and file with the Commission, promptly upon your reasonable
request, any amendment to the Registration Statement or supplement to
the Prospectus that may be necessary or advisable in connection with
the distribution of the Shares by you in your or your counsel's
opinion, and will use its best efforts to cause the same to become
effective as promptly as possible;
(e) promptly after the Registration Statement becomes
effective, and from time to time thereafter for such period as a
prospectus is required by the Act to be delivered in connection with
the sales by an underwriter or a dealer (in the opinion of your
counsel), it will furnish to you and each dealer without charge as many
copies of the Prospectus (and any amendment or supplement of the
Prospectus) as you or such dealer may reasonably request for the
purposes contemplated by the Act; the Offerors consent to the use of
the Prospectus and any amendment or supplement thereto by you or any
dealer, both in connection with the offering or sale of the Shares and
for such period of time thereafter as the Prospectus is required by the
Act to be delivered in connection therewith;
(f) if during the period specified in paragraph (e) any event
shall occur or information become known as a result of which in the
opinion of your counsel it becomes necessary to amend or supplement the
Prospectus in order to make the statements therein, in light of the
circumstances existing as of the date the Prospectus is delivered to a
purchaser, not misleading, or it is necessary to amend or supplement
the Prospectus to comply with any law, it will forthwith prepare and,
subject to paragraph 5(d) above, file with the Commission at the sole
expense of the Offerors an appropriate amendment or supplement to the
Prospectus so that the statements of any material facts in the
Prospectus, as so amended and supplemented, will not in light of the
circumstances when it is so delivered, be misleading, or so that the
Prospectus will comply with Act and it will furnish to you and to such
dealers as you shall specify, at the sole expense of the Offerors, such
number of copies thereof as you or such dealers may reasonably request;
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(g) without limiting the generality of the foregoing clause
(f), the Offerors acknowledge and agree that if, prior to the exercise
in full or termination or expiration of the option to purchase the
Additional Shares, either Offeror incurs any liability or obligation,
direct or contingent, or enters into any material transaction, or
otherwise takes any action or experiences any change in situation or
circumstances which may render the Prospectus (as it then exists)
misleading, the Offerors shall (i) promptly notify you in writing of
such event, such notice to explain the nature and scope of such event
in reasonable detail insofar as possible, and (ii) forthwith prepare
and, subject to paragraph 5(d) above, file with the Commission at the
sole expense of the Offerors an appropriate amendment to the
Registration Statement or supplement to the Prospectus, and (iii) at
the sole expense of the Offerors, reproduce and distribute such
amendment or supplement to such persons or institutions as you shall
request;
(h) prior to any public offering of the Shares, it will
cooperate with you and your counsel in connection with the filing of
notices of the offer and sale of the Shares by you and by dealers under
the state securities or Blue Sky laws of such jurisdictions as you may
request (provided, that it shall not be obligated to qualify as a
foreign corporation in any jurisdiction in which it is not so qualified
or to take any action which would subject it to general consent to
service of process in any jurisdiction in which it is not now so
subject);
(i) except as contemplated by or described in the Prospectus,
it will not acquire any Trust Preferred Securities or any capital stock
of the Company prior to the earlier of (1) the exercise in full of the
option to purchase the Additional Shares and close of the purchase
thereof by you or (2) the termination or expiration of such option;
(j) the Offerors will make generally available to holders of
beneficial interests in the Trust and furnish to you as soon as
reasonably practicable a consolidated earning statement covering a
period of at least 12 months beginning after the "effective date" (as
defined in Rule 158 under the Act) of the Registration Statement (but
in no event commencing later than 90 days after such date) that will
satisfy the provisions of Section 11(a) of the Act and Rule 158
thereunder, if applicable to holders of beneficial interests in the
Trust;
(k) whether or not the transactions contemplated hereby are
consummated or this Agreement becomes effective as to all of its
provisions or is terminated, to pay all costs, fees, expenses and taxes
incident to the performance by the Offerors of their obligations
hereunder, including (i) the preparation, printing, filing and
distribution under the Act of the Registration Statement (including
financial statements and exhibits), each Preliminary Prospectus, the
Prospectus and all amendments and supplements to any of them prior to
or during the period specified in paragraph (e) above of this Section
5, (ii) the word processing, reproduction and distribution of the Blue
Sky Survey and any related memoranda, correspondence and other
documents prepared and delivered by you or your counsel (including in
each case any disbursements of your counsel relating to such
preparation and delivery), (iii) the filing of notices of the offer and
sale of the Shares
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by you and by dealers under the securities or Blue Sky laws of the
several states (including in each case the fees and disbursements of
your counsel relating to such filings), (iv) the filings and clearance
with the NASD in connection with the offering and sale of the Shares
(but excluding the fees, but not disbursements, of your counsel
relating to such filings and clearance), (v) the approval for quotation
of the Shares on the American Stock Exchange, Inc., (vi) furnishing
such copies of the Registration Statement, each Preliminary Prospectus,
the Prospectus and all amendments and supplements thereto as may
reasonably be requested for use in connection with the offering or sale
of the Shares by you or by dealers to whom the Shares may be sold,
(vii) obtaining the opinions to be provided pursuant to Sections 8(f),
8(g) and 8(h) of this Agreement, (viii) the fees and expenses of the
Property Trustee, the Delaware Trustee, the Guarantee Trustee and the
Indenture Trustee (each as defined below), including the fees and
disbursements of counsel for such trustees, (ix) the cost of qualifying
the Shares with DTC and (x) the performance by the Offerors of all of
their other obligations under this Agreement; if the sale of the Shares
provided for herein is not consummated because you exercise their right
to terminate this Agreement pursuant to Section 9 hereof and any of the
following have occurred during the term of this Agreement: (a) there
has been any material adverse change in the condition (financial or
otherwise), earnings, affairs or business of the Company, or any event
or events that could reasonably be expected to result in such a
material adverse change or (b) the Offerors shall refuse or be unable
to comply with any provision hereof (except as the result of a breach
of this Agreement by you), the Offerors will promptly reimburse you
upon demand for all reasonable out-of-pocket expenses (including the
fees and disbursements of your counsel) that shall have been incurred
by you in connection with the proposed purchase and sale of Shares;
(l) it will use all of the net proceeds received by it from
the sale of the Shares being sold by the Trust in the manner specified
in the Prospectus;
(m) if, at the time of effectiveness of the Registration
Statement, any information shall have been omitted therefrom in
reliance upon Rule 430A, then immediately following the execution and
delivery of this Agreement, it will prepare, and file or transmit for
filing with the Commission in accordance with such Rule 430A and Rule
424(b), copies of an amended prospectus, or, if required by such Rule
430A, a post-effective amendment to the Registration Statement
(including an amended prospectus), containing all information so
omitted;
(n) it will cause the Shares to be approved for quotation,
subject to notice of issuance or sale, on the American Stock Exchange,
Inc.; it will comply with all registration, filing and reporting
requirements of the Exchange Act and American Stock Exchange, Inc. in
connection with the sale of the Shares; and
(o) it will use its best efforts to do and perform all things
required to be done and performed under this Agreement by it prior to
or after the Closing Date or any Option Closing Date, as the case may
be, and to satisfy all conditions precedent to the delivery of the
Shares.
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6. Representations and Warranties.
(a) The Offerors, jointly and severally, represent and
warrant to you as of the date hereof, the Closing Date and each Option
Closing Date that:
(i) The Commission has not issued any order
preventing or suspending the use of any Preliminary Prospectus
relating to the proposed offering of the Shares nor instituted
or threatened any proceedings for that purpose. The
Registration Statement, on the date it became or becomes
effective, and the Prospectus and any amendment or supplement
thereto, on the date of filing thereof with the Commission (or
if not filed, on the date provided by the Offerors to you in
connection with the offering and sale of the Shares) and at
the Closing Date and each Option Closing Date conformed or
will conform with the requirements of the Act, the Rules and
Regulations and the Trust Indenture Act of 1939, as amended
(the "Trust Indenture Act"), and the rules and regulations
promulgated thereunder (the "Trust Indenture Regulations").
The Registration Statement, on the date it became or becomes
effective, did not or will not contain an untrue statement of
material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not
misleading. The Prospectus and any amendment or supplement
thereto, on the date of filing thereof with the Commission (or
if not filed, on the date provided by the Offerors to you in
connection with the offering and sale of the Shares) and at
the Closing Date and each Option Closing Date did not and will
not include an untrue statement of material fact or omit to
state a material fact required to be stated therein or
necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. The
foregoing shall not apply to statements in or omissions from
the Registration Statement and the Prospectus made or omitted
in reliance upon, and in conformity with, information relating
to you furnished in writing to the Offerors by you or on your
behalf with your consent expressly for use therein. The
Offerors hereby acknowledge for all purposes under this
Agreement that the written information furnished to the
Offerors by you or on your behalf for use in the preparation
of the Registration Statement or the Prospectus or any
amendment or supplement thereto ("Underwriter's Information")
consists only of (A) the statements set forth under the
caption "Underwriting" in the Prospectus Supplement, (B) the
stabilization and passive market-making legends on the
gate-fold of the Prospectus and (C) the last paragraph of text
on the cover page of the Prospectus.
(ii) The documents incorporated or deemed to be
incorporated by reference in the Registration Statement and
the Prospectus, when they were filed with the Commission,
complied in all material respects to the requirements of the
Exchange Act and the published rules and regulations of the
Commission thereunder, and none of such documents contained an
untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances
under
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which they were made, not misleading; and any further
documents so filed and incorporated or deemed to be
incorporated by reference, when they are filed with the
Commission, will comply in all material respects with the
requirements of the Exchange Act and the published rules and
regulations of the Commission thereunder and will not contain
an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances
under which they were made, not misleading.
(iii) The Company has been duly incorporated and is a
validly existing corporation in good standing under the laws
of Delaware, with full corporate power and authority to own or
lease its properties and assets and to conduct its business as
described in the Registration Statement and the Prospectus and
is duly qualified to do business in each jurisdiction in which
it owns or leases real property or in which the conduct of its
business or the ownership or leasing of property requires such
qualification, except where the failure to be so qualified,
either individually or in the aggregate, would not have a
material adverse effect on the condition (financial or
otherwise), business, assets, prospects, net worth or results
of operations of the Company (a "Material Adverse Effect,"
and, when used with respect to the Trust, "Material Adverse
Effect" means any material adverse effect on the condition
(financial or otherwise), business, assets, prospects, net
worth or results of operations of the Trust). Other than ACMI
Canada, Inc., a Colorado corporation ("ACMI Canada" or the
"Subsidiary"), the Company has no subsidiaries and has never
had a subsidiary. All of the issued and outstanding capital
stock of ACMI Canada is owned directly by the Company. ACMI
Canada does not now conduct, and never has conducted, any
business and does not now own, and never has owned, any
material assets. ACMI Canada has been duly incorporated and is
a validly existing corporation in good standing under the laws
of Colorado, with full corporate power and authority to own or
lease its properties and assets and to conduct its business
and is duly qualified to do business in each jurisdiction in
which it owns or leases real property or in which the conduct
of its business or the ownership or leasing of property
requires such qualification.
(iv) The Trust has been duly created and is a validly
existing business trust in good standing under the laws of
Delaware, with full power and authority to own or lease its
properties and assets and to conduct its business as described
in the Registration Statement and the Prospectus, including,
without limitation, to enter into this Agreement and the other
agreements or instruments contemplated hereby, to issue and
sell the Shares, to issue and sell the Common Securities and
to otherwise consummate the transactions contemplated hereby.
The Trust is a consolidated subsidiary of the Company and has
no subsidiaries of its own. The Trust is not a party to or
bound by any agreement or instrument other than this Agreement
and the agreements and instruments contemplated by the Trust
Agreement and this Agreement and described in the Registration
Statement and the Prospectus. The Trust has no liabilities or
obligations other than those arising out of the transactions
contemplated by the Trust Agreement and this Agreement and
described in the Registration Statement and
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the Prospectus. The Trust is not, and on the Closing Date will
not be, to the knowledge of the Offerors, classified as an
association taxable as a corporation for United States federal
income tax purposes. The Trust is, and on the Closing Date
will be, to the knowledge of the Offerors, classified as a
grantor trust and not as a partnership or an association
taxable as a corporation for United States federal income tax
purposes.
(v) The capitalization of the Company is, and upon
consummation of the transactions contemplated hereby will be,
as set forth in the Registration Statement and the Prospectus
under the caption "Capitalization." All of the outstanding
shares of capital stock of the Company have been duly
authorized and are validly issued, are fully paid and
non-assessable and conform to the description thereof in the
Registration Statement and the Prospectus and were not issued
in violation of any preemptive rights or other rights to
subscribe for or purchase securities. Except as set forth in
the Registration Statement and the Prospectus with respect to
the Option Plan and Directors' Plan (as defined in the
Prospectus) and the 55,000 shares of its common stock, $0.01
par value per share (the "Common Stock"), issuable upon the
exercise of those certain warrants described in clause (ii) of
footnote 2 under the caption "Capitalization" in the
Prospectus (the "Warrants"), no options, warrants or other
rights to purchase from the Company, agreements or other
obligations of the Company to issue or other rights to convert
any obligation into, or exchange any securities for, shares of
capital stock of or ownership interests in the Company are
outstanding. The description of the Option Plan, the
Directors' Plan, the Warrant and the other options or rights
granted and exercised thereunder, as set forth in the
Registration Statement and the Prospectus, accurately and
fairly presents the information required to be shown under the
Act with respect to such options, warrants and rights.
(vi) Subsequent to the respective dates as of which
information is given in the Registration Statement and
Prospectus, and except as described therein, (A) neither the
Trust, the Company nor the Subsidiary has incurred any
material liabilities or obligations, direct or contingent, or
entered into any material transactions, (B) neither the Trust,
the Company nor the Subsidiary has purchased any of its
outstanding capital stock or declared, paid or otherwise made
any dividend or distribution of any kind on its capital stock
or otherwise and (C) there has not been any material adverse
change in the condition (financial or otherwise), business,
affairs, prospects or results of operations of the Trust, the
Company and the Subsidiary, taken as a whole, or any material
change in the Trust's, the Company's or the Subsidiary's
capital stock, short-term debt or long-term debt.
(vii) The Shares to be sold by the Trust pursuant to
this Agreement have been duly and validly authorized and, when
issued, delivered and paid for
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pursuant to this Agreement, will be validly issued, fully paid
and nonassessable undivided beneficial interests in the assets
of the Trust and will be entitled to the benefits of the Trust
Agreement. The shares of [_____] Cumulative Trust Common
Securities having a Liquidation Amount of $10 per share (the
"Common Securities") will be sold by the Trust to the Company,
and when so sold, will have been duly and validly authorized
and, when issued, delivered and paid for, will be validly
issued, fully paid and nonassessable undivided beneficial
interests in the assets of the Trust and will be entitled to
the benefits of the Trust Agreement. The Shares and the Common
Securities conform to the descriptions thereof contained in
the Registration Statement and the Prospectus.
(viii) Subject to the terms of the Trust Agreement,
holders of the Shares will be entitled to the same limitation
of personal liability under Delaware law as extended to
stockholders of private corporations for profit.
(ix) This Agreement has been duly authorized,
executed and delivered by the Trust and the Company and is a
legal, valid and binding agreement of the Trust and the
Company enforceable in accordance with its terms, except (i)
as the enforceability hereof may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws
affecting creditors' rights generally and by general equity
principles, and (ii) that rights to indemnity or contribution
hereunder may be limited by Federal or state laws or the
public policy underlying such laws.
(x) Each of the Administrative Trustees (as defined
below) of the Trust is an employee of the Company and has been
authorized by the Company to execute and deliver the Amended
and Restated Trust Agreement ( the "Trust Agreement") by and
among the Company, as Depositor, Wilmington Trust Company
("WTC") as Delaware Trustee (the "Delaware Trustee"), WTC as
Property Trustee (the "Property Trustee"), Xxxxxx X. Xxxxx and
W. Xxxx Xxxx, as Administrative Trustees (the "Administrative
Trustees"), and the holders from time to time of undivided
beneficial interests in the assets of the Trust. The Trust
Agreement has been duly authorized by the Company, will be
duly executed and delivered by the Company, as Depositor, and
the Administrative Trustees on the Closing Date, and will be a
legal, valid and binding agreement of the Company and the
Administrative Trustees enforceable against each of them, in
their capacities as Administrative Trustees and not in their
individual capacities, in accordance with its terms, except
(i) as the enforceability thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting creditors' rights generally and by
general equity principles and (ii) that rights to indemnity or
contribution thereunder may be limited by Federal or state
securities laws or the public policy underlying such laws. The
Trust Agreement conforms in all material respects with the
description thereof and all statements relating thereto in the
Registration Statement and the Prospectus and has been
qualified under the Trust Indenture Act.
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(xi) The Indenture ("Indenture") by and between the
Company and WTC, as Indenture Trustee (the "Indenture
Trustee"), has been duly authorized by the Company, will be
duly executed and delivered by the Company on the Closing
Date, and will be the legal, valid and binding agreement of
the Company enforceable in accordance with its terms, except
(i) as the enforceability thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting creditors' rights generally and by
general equity principles and (ii) that rights to indemnity or
contribution thereunder may be limited by Federal or state
securities laws or the public policy underlying such laws. The
Indenture conforms in all material respects with the
description thereof and all statements relating thereto in the
Registration Statement and the Prospectus and has been
qualified under the Trust Indenture Act.
(xii) The Debentures have been duly authorized by the
Company, will be duly executed and delivered by the Company on
the Closing Date, and, when authenticated in the manner
provided for in the Indenture and delivered against payment
therefor as described in the Registration Statement and the
Prospectus, will be the legal, valid and binding obligations
of the Company enforceable in accordance with their terms,
except (i) as the enforceability thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting creditors' rights generally and by
general equity principles and (ii) that rights to indemnity or
contribution thereunder may be limited by Federal or state
securities laws or the public policy underlying such laws, and
will be entitled to the benefits of the Indenture. The
Debentures conform in all material respects with the
description thereof and all statements relating thereto in the
Registration Statement and the Prospectus.
(xiii) The Guarantee Agreement (the "Guarantee
Agreement") by and between the Company and WTC, as Guarantee
Trustee (the "Guarantee Trustee"), has been duly authorized by
the Company, will be duly executed and delivered by the
Company on the Closing Date, and will be the legal, valid and
binding agreement of the Company enforceable in accordance
with its terms, except (i) as the enforceability thereof may
be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting creditors' rights
generally and by general equity principles and (ii) that
rights to indemnity or contribution thereunder may be limited
by Federal or state securities laws or the public policy
underlying such laws. The Guarantee pursuant to the Guarantee
Agreement and related documents conforms in all material
respects with the description thereof and all statements
relating thereto in the Registration Statement and the
Prospectus and has been qualified under the Trust Indenture
Act.
(xiv) The Expense Agreement (the "Expense Agreement")
by and between the Trust and the Company has been duly
authorized by the Trust and the Company, will be duly executed
and delivered by the Trust and the Company on
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the Closing Date, and will be the legal, valid and binding
agreements of the Trust and the Company enforceable in
accordance with its terms, except (i) as the enforceability
thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting
creditors' rights generally and by general equity principles
and (ii) that rights to indemnity or contribution thereunder,
if any, may be limited by Federal or state securities laws or
the public policy underlying such laws. The Expense Agreement
conforms in all material respects with the description thereof
and all statements relating thereto in the Registration
Statement and the Prospectus.
(xv) Neither the Trust nor the Company is in
violation of its Certificate of Trust or Trust Agreement, or
its Certificate of Incorporation or by-laws, respectively.
Neither the Trust nor the Company is in violation of or in
breach of or in default in (nor has any event occurred that
with notice or lapse of time, or both, would be a breach of or
a default in) the performance of any obligation, agreement or
condition contained in any agreement, lease, contract, permit,
license, franchise agreement, mortgage, loan agreement,
debenture, note, deed of trust, bond, indenture or other
evidence of indebtedness or any other instrument or obligation
(collectively, "Obligations and Instruments") to which it is a
party or by which it or any of its properties or assets are
bound or affected (except for such contraventions or defaults
as would not, individually or in the aggregate, have a
Material Adverse Effect). Neither the Trust nor the Company is
in violation of any statute, judgment, decree, order, rule or
regulation (collectively, "Laws") applicable to it or any of
its properties or assets that, alone or together with other
violations of Laws, would result in a Material Adverse Effect.
The Company has not been charged with and, to the best
knowledge of the Offerors (it being understood that, for the
purposes of this Agreement, the "knowledge" of the Offerors
includes the actual knowledge of Xxxxxx X. Xxxxx, W. Xxxx
Xxxx, Xxxxxxx X. Xxxxxxx and Xxxx X. Xxxxxxxx), is not under
investigation with respect to any material violation of any
such Laws. To the best knowledge of the Offerors, no other
party under any contract or other agreement to which the
Company is a party is in material default thereunder except
for such defaults as would not, individually or in the
aggregate, result in a Material Adverse Effect.
Notwithstanding the foregoing, you acknowledge that you have
been advised by the Company of an action commenced by one of
the Company's competitors against Plush 4 Play, Inc.
("Plush"), attempting to prevent the Company from acquiring
certain of Plush's assets (the "Plush Litigation"). The
Company is not a party to the Plush Litigation.
(xvi) The execution, delivery and performance of this
Agreement and delivery of the Shares by the Trust and
compliance by the Trust and the Company with all the
provisions hereof and the consummation of the transactions
contemplated hereby and as described in the Registration
Statement and the Prospectus will not, alone or upon notice or
the passage of time or both (A) require any consent, approval,
authorization or other order of, or filing with,
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any court, regulatory body, administrative agency or other
governmental body or third party (except such as may be
required under the Act and the securities or Blue Sky laws of
the various states or by the NASD), (B) result in the creation
or imposition of any lien, charge or encumbrance upon any of
the properties or assets of the Trust or the Company pursuant
to the terms and provisions of any Obligation or Instrument,
(C) conflict with or constitute a breach or default under any
Obligation or Instrument to which the Trust or the Company is
a party or by which it or any of its properties or assets are
bound (except for such conflicts, breaches or defaults as
would not, individually or in the aggregate, have a Material
Adverse Effect), or (D) assuming compliance with the Act and
all applicable state securities or Blue Sky laws, violate or
conflict with any Laws applicable to the Trust or the Company
or any of its properties or assets (except for such violations
or conflicts as could not, individually or in the aggregate,
have a Material Adverse Effect).
(xvii) Except as set forth in the Registration
Statement and the Prospectus and other than the Plush
Litigation, there is no action, suit, proceeding, inquiry or
investigation, governmental or otherwise, before any court,
arbitrator or governmental agency or body (collectively,
"Proceedings") pending to which the Company is a party or to
which any of its properties or assets are subject, that, if
determined adversely to the Company, might, individually or in
the aggregate, result in a Material Adverse Effect, or that
might materially and adversely affect the properties or assets
thereof, or that seeks to restrain, enjoin, prevent the
consummation of or otherwise challenge the issuance or sale of
any of the Shares to be sold hereunder or the consummation of
the transactions described in the Registration Statement and
the Prospectus and, to the best knowledge of Offerors after
due inquiry of appropriate Company personnel, no such
Proceedings are threatened. There is no contract, document,
agreement or transaction to which the Trust or the Company is
a party, or that (to the Offerors' knowledge) involved or
involves the Trust or the Company or any of their properties
or assets that is required to be described in or filed as an
exhibit to the Registration Statement by the Act or the Rules
and Regulations that has not been so described or filed. No
action has been taken with respect to the Offerors, and, to
the best knowledge of the Offerors, no statute, rule or
regulation or order has been enacted, adopted or issued by any
governmental agency that suspends the effectiveness of the
Registration Statement, prevents or suspends the use of any
Preliminary Prospectus or the Prospectus or suspends the sale
of the Shares in any jurisdiction referred to in Section 5(g)
hereof. No injunction, restraining order or order of any
nature by a federal or state court of competent jurisdiction
has been issued with respect to the Trust, the Company or the
Subsidiary that might prevent the issuance of the Shares,
suspend the effectiveness of the Registration Statement,
prevent or suspend the use of any Preliminary Prospectus or
the Prospectus or suspend the sale of the Shares in any
jurisdiction referred to in Section 5(g) hereof. Every request
of the Commission, or any securities authority or agency of
any jurisdiction, for additional information (to be included
in the Registration Statement or the Prospectus or otherwise)
has been complied with in all material respects.
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(xviii) The Company has not violated, and is not in
violation of, any foreign, federal, state or local law or
regulation relating to the protection of human health and
safety, the environment or hazardous or toxic substances or
wastes, pollutants or contaminants ("Environmental Laws"), nor
any foreign, Federal, state or local law relating to
discrimination in the hiring, promotion or pay of employees
nor any applicable foreign, Federal or state wages and hours
laws, nor any provisions of the Employee Retirement Income
Security Act of 1974, as amended or the rules and regulations
promulgated thereunder or similar foreign laws, that, in each
case or in the aggregate, might result in a Material Adverse
Effect. None of the property leased by the Company is
contaminated with any waste or hazardous substances (except
that certain leased locations may contain asbestos or certain
cleaning materials, the presence of which will not result in a
Material Adverse Effect), nor may the Company be deemed an
"owner or operator" of a "facility" or "vessel" that owns,
possesses, transports, generates, discharges or disposes of a
"hazardous substance" as those terms are defined in Section
9601 of the Comprehensive Response Compensation and Liability
Act of 1980, U.S.C. Section 9601 et seq. (except that the
Company disposes in the ordinary course of its business
ordinary household products that may be classified as or
contain "hazardous substances". The disposal of such products
(A) is in material compliance with all applicable laws as of
the date hereof and (B) has not and will not result in a
Material Adverse Effect).
(xix) The Trust and the Company have such permits,
licenses, franchises and authorizations of governmental or
regulatory authorities or third parties ("Permits"),
including, without limitation, under any applicable
Environmental Laws, as are necessary to own, lease and operate
their properties and assets and to conduct their businesses,
except where such failures to have any such Permit which would
not, individually or in the aggregate, have a Material Adverse
Effect. The Trust and the Company have fulfilled and performed
all of their material obligations with respect to such Permits
and no event has occurred that allows, or after notice or
lapse of time, or both would allow, revocation or termination
thereof or result in any other material impairment of the
rights of the holder of any such Permit. Except as described
in the Prospectus, such Permits contain no restrictions that
are materially burdensome to the Company.
(xx) Neither the Trust nor the Company is, or intends
to conduct its business in a manner in which it would become,
an "investment company" or a company "controlled" by an
"investment company" within the meaning of the Investment
Company Act of 1940, as amended (the "Investment Company
Act");
(xxi) Except as otherwise set forth in the
Prospectus, the Company has good and marketable title, free
and clear of all liens, claims, encumbrances and
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restrictions (except liens for taxes not yet due and payable)
to all property and assets described in the Registration
Statement as being owned by it. All leases to which the
Company is a party are subsisting, valid and binding and no
default of the Company or its affiliates or, to the best
knowledge of the Offerors, any other person has occurred or is
continuing thereunder that might result in a Material Adverse
Effect. The Company enjoys peaceful and undisturbed possession
under all such leases to which the Company is a party as
lessee with such exceptions as do not materially interfere
with the use made thereof by the Company.
(xxii) The Company maintains reasonably adequate
insurance for the conduct of its business in accordance with
prudent business practices (and the insurance maintained by
retailers generally) with reputable third-party insurers.
(xxiii) The Company is not in violation of any
foreign, Federal, state or local law relating to
discrimination in the hiring, promotion or pay of employees
for any applicable foreign, Federal or state wages and hours
laws, nor any provisions of the Employee Retirement Income
Security Act of 1974, as amended, or the rules and regulations
promulgated thereunder ("ERISA") or similar foreign laws, the
violation of which in each case or in the aggregate would
result in a Material Adverse Effect. No "reportable event" (as
defined in ERISA) has occurred with respect to any "pension
plan" (as defined in ERISA) which in each case or in the
aggregate would result in a Material Adverse Effect. The
Company has not incurred any material liability under (i)
Title IV of ERISA with respect to the termination of, or
withdrawal from, any "pension plan" or (ii) Sections 412 or
4971 of the Internal Revenue Code of 1986, as amended.
(xxiv) No labor dispute with the employees of the
Company exists, or to the best knowledge of the Offerors, is
imminent, that could result in a Material Adverse Effect. The
Company does not know of any existing or imminent labor
disturbance by the employees of any of its principle
suppliers, customers, manufacturers or contractors that could
reasonably be expected to result in a Material Adverse Effect.
(xxv) To the best knowledge of the Offerors, KPMG
Peat Marwick is an independent public accounting firm with
respect to the Company as required by the Act.
(xxvi) The financial statements of the Company,
together with related notes of the Company included in the
Registration Statement and the Prospectus, are accurate and
present fairly the financial position, results of operations
and cash flows of the Company at the indicated dates and for
the indicated periods. Such financial statements have been
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prepared in accordance with generally accepted accounting
principles ("GAAP") consistently applied throughout the
periods involved, and all adjustments necessary for a fair
presentation of results for such periods have been made and
any unaudited financial statements have been prepared on a
basis substantially consistent with that of the audited
financial statements included in the Registration Statement
and the Prospectus. The summary and selected financial and
operating data included in the Registration Statement and the
Prospectus presents fairly the information shown therein and
have been compiled on a basis consistent with the audited and
any unaudited financial statements, as the case may be,
included therein. The pro forma information included in the
Prospectus present fairly the information shown therein, have
been prepared in accordance with GAAP and the Commission's
rules and guidelines with respect to pro forma financial
statements and other pro forma information, and has been
properly compiled on the pro forma basis described therein,
and the assumptions used in the preparation thereof are
reasonable and the adjustments used therein are appropriate
under the circumstances.
(xxvii) No holder of any security of the Company has
any right to require inclusion of any such security in the
Registration Statement. There are no preemptive rights with
respect to the offering being made by the Prospectus.
(xxviii) The Trust, the Company and the Subsidiary
have filed or caused to be filed, or have properly filed
extensions for, all foreign, federal, state and local income,
value added and franchise tax returns and has paid all taxes
and assessments shown thereon as due, except for such taxes
and assessments as are disclosed or adequately reserved
against and that are being contested in good faith by
appropriate proceedings, promptly instituted and diligently
conducted. All material tax liabilities are adequately
provided for on the books of the Company, and there is no
material tax deficiency that has been or might be asserted
against the Trust, the Company or the Subsidiary that is not
so provided for. During the time the Company had elected to be
treated as an "S" Corporation under the Internal Revenue Code
of 1986, as amended (the "Code"), and any applicable state
law, the Company's election of such status was validly made,
and at all times until October 12, 1995 the Company qualified
continuously for treatment as an S Corporation under the Code.
(xxix) The Company owns or possesses, or can acquire
on reasonable terms, the patents, patent rights, licenses,
inventions, copyrights, know-how (including trade secrets and
other unpatented and or unpatentable proprietary or
confidential information, systems or procedures), trademarks,
service marks and trade names (collectively, "Patents and
Proprietary Rights") currently employed by it in connection
with the business it now operates except where the failure to
so own, possess or acquire such Patents and Proprietary Rights
would not have a Material Adverse Effect. The Company has not
received any notice and is not otherwise aware of any
infringement of or conflict with asserted rights of others
with respect to any Patent or Proprietary Rights that, if the
subject of any unfavorable decision, ruling or finding, singly
or in the aggregate, could result in a Material Adverse
Effect.
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(xxx) Neither the Trust nor the Company has taken or
will take, directly or indirectly, any action designed to or
which has constituted or that might reasonably be expected to
cause or result, under the Exchange Act or otherwise, in
stabilization or manipulation of the price of any security of
the Trust to facilitate the sale or resale of the Shares.
(xxxi) Neither the Trust, the Company nor, to the
best knowledge of the Offerors, any employee or agent of the
Trust or the Company has made any payment of funds of the
Trust or the Company or received or retained any funds in
violation of any law, rule or regulation (including, without
limitation, the Foreign Corrupt Practices Act) or of a
character required by the Act to be disclosed in the
Prospectus. Neither the Trust nor the Company has, at any time
during the past five years, (1) made any unlawful
contributions to any candidate for any political office, or
failed fully to disclose any contribution in violation of law,
or (2) made any unlawful payment to state, federal or foreign
government officer or officers, or other person charged with
similar public or quasi-public duty.
(xxxii) No transaction has occurred between or among
the Trust and the Company and any of the Trust's or the
Company's officers, directors or trustees or any affiliate or
affiliates of any such officer, director or trustee that is
required to be described in and is not described in the
Registration Statement and the Prospectus;
(xxxiii) The Company maintains a system of internal
accounting controls sufficient to provide reasonable assurance
that (i) transactions are executed in accordance with
management's authorizations, (ii) transactions are recorded as
necessary to permit preparation of financial statements in
conformity with GAAP and to maintain asset accountability,
(iii) access to assets is permitted only in accordance with
management's authorization, and (iv) the recorded
accountability for inventory is compared with the existing
inventory at reasonable intervals and appropriate action is
taken with respect to any differences.
(xxxiv) There is no material contract, document,
agreement, transaction or relationship of a character required
by the Act to be described in the Registration Statement or
the Prospectus or to be filed as an exhibit to the
Registration Statement that is not described or filed as
required.
(xxxv) Other than as contemplated in this Agreement,
neither the Trust nor the Company has incurred any liability
for any finder's or broker's fee or agent's commission in
connection with the execution and delivery of this Agreement
or the consummation of the transactions contemplated hereby.
(xxxvi) The Company has been subject to the
requirements of Section 12 or 15(d) of the Exchange Act and,
other than with respect to its Current Report on Form 8-K due
within 15 days of the closing of the Suncoast Acquisition (as
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defined in the Prospectus) which was not timely filed, has
filed in a timely manner all reports and other material
required to be filed pursuant to Sections 13, 14 or 15(d) of
the Exchange Act since October 12, 1995 and, if the Company
has used Rule 12b-25(b) under the Exchange Act with respect to
a report or a portion of any such report, that report or
portion thereof has actually been filed within the time period
prescribed by that rule. All such reports and other materials
filed pursuant to the Exchange Act were, at the time of their
filing, complete and accurate in all material respects.
(xxxvii) The Company has not, since the end of its
last fiscal year for which certified financial statements of
the Company were included in a report filed pursuant to
Section 13(a) or 15(d) of the Exchange Act defaulted on any
(a) installment or installments of indebtedness for borrowed
money or (b) rental on one or more long term leases, which
defaults in the aggregate are material to the financial
position of the Company.
(b) Any certificate signed by any trustee of the Trust or
officer of the Company and delivered to you or to your counsel shall be
deemed a representation and warranty made by the Trust or the Company,
as the case may be, to you as to the matters covered thereby and shall
be deemed incorporated herein in its entirety and shall be effective as
if such representation and warranty were made herein.
7. Indemnification.
(a) The Offerors agree, jointly and severally, to indemnify
and hold you harmless and each person, if any, who controls you within
the meaning of Section 15 of the Act or Section 20 of the Exchange Act
(collectively you and each such person are sometimes referred to in
this Section 7 as the "indemnified parties") from and against any and
all losses, claims, damages, liabilities and judgments caused by,
arising out of, related to or based upon any untrue statement or
alleged untrue statement of a material fact contained in the
Registration Statement, including the information deemed to be part of
the Registration Statement at the time of effectiveness pursuant to
Rule 430A, if applicable, or the Prospectus or any Preliminary
Prospectus or caused by any 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; provided, however, that the Offerors
shall not be liable in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon an untrue
statement or omission made or omitted in reliance upon and in
conformity with any of the Underwriter's Information.
(b) In case any action shall be brought against any of the
indemnified parties, based upon any Preliminary Prospectus, the
Registration Statement or the Prospectus or any amendment or supplement
thereto, and with respect to which indemnity may be sought against the
Offerors, such indemnified parties shall promptly notify the Offerors
in writing (but the failure so to notify shall not relieve the Offerors
of any liability that they
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may otherwise have to such indemnified parties under this Section 7
(although the Offerors' liability to an indemnified party may be
reduced on a monetary basis to the extent, but only to the extent, they
have been prejudiced by such failure on the part of such indemnified
party)), and the Offerors shall promptly assume the defense thereof,
including the employment of counsel satisfactory to such indemnified
party and payment of all fees and expenses. The indemnified parties
shall each have the right to employ separate counsel in any such action
and participate in the defense thereof, but the fees and expenses of
such counsel shall be at the expense of such indemnified parties unless
(i) the employment of such counsel shall have been specifically
authorized by the Offerors, (ii) the Offerors shall have failed to
assume promptly the defense or to employ counsel reasonably
satisfactory to such indemnified party or (iii) the named parties to
any such action (including any impleaded parties) include both the
indemnified parties and the Offerors, and an indemnified party shall
have been advised by counsel that there may be one or more legal
defenses available to one or more of the indemnified parties that are
different from or additional to those available to the Offerors (in
which case the Offerors shall not have the right to assume the defense
of such action on behalf of such indemnified party, it being
understood, however, that the Offerors shall not, in connection with
any one such action or separate but substantially similar or related
actions in the same jurisdiction arising out of the same general
allegations or circumstances, be liable for the fees and expenses of
more than one separate firm of attorneys (in addition to any local
counsel) for the indemnified parties, which firm shall be designated in
writing by you, and that all such fees and expenses shall be reimbursed
promptly as they are incurred). The Offerors shall not be liable for
any settlement of any such action effected without their written
consent, which consent shall not be unreasonably withheld, but if
settled with the written consent of the Offerors, the Offerors agree to
indemnify and hold harmless the indemnified parties from and against
any and all loss or liability by reason of such settlement.
Notwithstanding the foregoing sentence, if at any time an indemnified
party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel as contemplated by
the second sentence of this paragraph, the indemnifying party agrees
that it shall be liable for any settlement of any proceeding effected
without its written consent if (i) such settlement is entered into more
than 30 days after delivery by registered or certified mail to the
proper address for notice to such indemnifying party of the aforesaid
request (whether or not such delivery is accepted) and (ii) such
indemnifying party shall not have reimbursed the indemnified party in
accordance with such request prior to the date of such settlement. No
indemnifying party shall, without the prior written consent of the
indemnified party, effect any settlement of any pending or threatened
proceeding in respect of which any indemnified party is or could have
been a party and indemnity could have been sought hereunder by such
indemnified party, unless such settlement includes an unconditional and
complete release in writing of such indemnified party from any and all
liability on claims that are the subject matter of such proceeding,
which release shall be in form and substance satisfactory to the
indemnified party. The indemnification provided in this Section 7 will
be in addition to any liability which the Offerors may otherwise have.
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(c) You agree to indemnify and hold harmless each of the
Offerors and its directors, officers or trustees who sign the
Registration Statement and any person controlling the Company within
the meaning of Section 15 of the Act or Section 20 of the Exchange Act,
to the same extent as the indemnity provided in Section 7(a) above from
the Offerors to you, but only with reference to information stated in
or omitted from the Registration Statement, the Prospectus or any
Preliminary Prospectus in reliance upon, and in conformity with,
information relating to you furnished in writing to the Offerors by you
or on your behalf with your consent expressly for use in the
Registration Statement, the Prospectus or any Preliminary Prospectus.
In case any action shall be brought against the Offerors, any of the
Offerors' directors, any such officers or any person controlling the
Offerors based on the Registration Statement, the Prospectus or any
Preliminary Prospectus and in respect of which indemnity may be sought
against you, you shall have the rights and duties given to the Offerors
by Section 7(b) hereof (except that if the Offerors shall have assumed
the defense thereof, you shall not be required to do so, but may employ
separate counsel therein and participate in the defense thereof but the
fees and expenses of such counsel shall be at your expense), and the
Offerors, their directors, any such officers and any person controlling
the Offerors shall have the rights and duties given to the "indemnified
parties" by Section 7(b) hereof.
(d) The Company agrees to indemnify and hold harmless the
Trust, its directors, officers or trustees who sign the Registration
Statement and any person controlling the Trust within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act, to the same
extent as the indemnity provided in Section 7(a) above from the
Offerors to you.
(e) If the indemnification provided for in this Section 7 is
for any reason unavailable to an indemnified party or insufficient to
hold such indemnified party harmless in respect of any losses, claims,
damages, liabilities or judgments referred to therein, then each
indemnifying party, in lieu of indemnifying such indemnified party,
shall contribute to the amount paid or payable by such indemnified
party as a result of such losses, claims, damages, liabilities and
judgments (i) in such proportion as is appropriate to reflect the
relative benefits received by the Offerors on the one hand and you on
the other from the offering of the Shares or (ii) if the allocation
provided in clause (i) above is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative
benefits referred to in clause (i) above but also the relative fault of
the Offerors on the one hand and you on the other in connection with
the statements or omissions or alleged statements or omissions that
resulted in such losses, claims, damages, liabilities or judgments, as
well as any other relevant equitable considerations. The relative
benefits received by the Offerors on the one hand and you on the other
shall be deemed to be in the same proportion as the total net proceeds
from the offering and sale of the Shares (before deducting expenses)
received by the Offerors on the one hand, and the total underwriting
discounts and commissions received by you on the other, bears to the
total price to the public of the Shares, in each case as set forth in
the table on the cover page of the Prospectus. The relative fault of
the Offerors and you shall be determined by reference to, among other
things, whether the untrue or alleged untrue
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statement of a material fact or the omission or the alleged omission to
state a material fact relates to information supplied by the Offerors
or you and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or
omission.
The Offerors and you agree that it would not be just and
equitable if contribution pursuant to this Section 7(e) were determined
by pro rata allocation or by any other method of allocation that does
not take account of the equitable considerations referred to in the
immediately preceding paragraph. The amount paid or payable by an
indemnified party as a result of the losses, claims, damages,
liabilities or judgments referred to in the immediately preceding
paragraph shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any
such action or claim. Notwithstanding the provisions of this Section 7,
you shall not be required to contribute any amount in excess of the
amount of underwriting commissions received by you in connection with
the Shares underwritten by you and distributed to the public. 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.
8. Conditions of the Obligations of the Underwriter. Your
obligation to purchase and pay for the Firm Shares on the Closing Date and the
Additional Shares on any Option Closing Date are subject to the fulfillment of
each of the following conditions on or prior to the Closing Date and each Option
Closing Date:
(a) All the representations and warranties of the Offerors
contained in this Agreement and in any certificate delivered hereunder
shall be true and correct in all material respects on the Closing Date
and each Option Closing Date with the same force and effect as if made
on and as of the Closing Date or Option Closing Date, as applicable.
The Offerors shall not have failed at or prior to the Closing Date or
Option Closing Date, as applicable, to perform or comply in all
respects with any of the agreements herein contained and required to be
performed or complied with by the Offerors at or prior to the Closing
Date.
(b) If the Registration Statement is not effective at the time
of the execution and delivery of this Agreement, the Registration
Statement shall have become effective (or, if a post-effective
amendment is required to be filed pursuant to Rule 430A under the Act,
such post-effective amendment shall have become effective) not later
than 9:30 A.M., New York City time, on the date of this Agreement or
such later time as you may approve in writing or, if the Registration
Statement has been declared effective prior to the execution and
delivery hereof in reliance on Rule 430A, the Prospectus shall have
been filed as required by the Act, if necessary; and at the Closing
Date and each applicable Option Closing Date, no stop order suspending
the effectiveness of the Registration Statement shall have been issued
and no proceedings for that purpose shall have been commenced or shall
be pending before or, to your best knowledge or the best
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knowledge of the Offerors, threatened by the Commission; every request
for additional information on the part of the Commission shall have
been complied with to your satisfaction; no stop order suspending the
sale of the Shares in any jurisdiction referred to in Section 5(g)
shall have been issued and no proceeding for that purpose shall have
been commenced or shall be pending or, to your best knowledge or the
best knowledge of the Offerors, threatened.
(c) The Shares shall have been qualified for sale (or exempt
from qualification) under the Blue Sky laws of such states as shall
have been specified by you.
(d) The legality and sufficiency of the authorization,
issuance and sale or transfer and sale of the Shares hereunder, the
validity and form of the certificates representing the Shares, the
execution and delivery of this Agreement and all corporate proceedings
and other legal matters incident thereto, and the form of the
Registration Statement and the Prospectus (except financial statements)
shall have been approved by your counsel exercising reasonable
judgment, and you shall not have advised the Offerors that the
Registration Statement or the Prospectus, or any amendment or
supplement thereto, contains an untrue statement of a material fact, or
omits to state a fact that in your opinion is material and is required
to be stated therein or is necessary to make the statements therein not
misleading.
(e) Subsequent to the execution and delivery of this
Agreement, there shall not have occurred any material change, or any
material development involving a prospective change, in or affecting
particularly the business or properties of the Trust or the Company,
whether or not arising in the ordinary course of business, that, in
your judgment makes it impractical or inadvisable to proceed with the
public offering or purchase of the Shares as contemplated hereby.
(f) You shall have received an opinion (satisfactory to you
and your counsel) dated the Closing Date or the Option Closing Date, as
the case may be, of Xxxxxx Godward LLP, counsel for the Company, in
form and substance satisfactory to you and attached hereto as Exhibit
A-1;
(g) you shall have received an opinion (satisfactory to you
and your counsel) dated the Closing Date or the Option Closing Date, as
the case may be, of Xxxxxxxx, Xxxxxx & Finger, P.A., special Delaware
counsel for the Offerors, in form and substance satisfactory to you and
attached hereto as Exhibit A-2;
(h) you shall have received an opinion (satisfactory to you
and your counsel) dated the Closing Date or the Option Closing Date, as
the case may be, of Xxxxxxxx, Xxxxxx & Finger, P.A., special counsel
for the Property Trustee, the Indenture Trustee and the Guarantee
Trustee, in form and substance satisfactory to you and attached hereto
as Exhibit A-3.
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(i) You shall have received an opinion of Xxxxxx, Xxxx &
Xxxxxxxx LLP, your counsel, dated the Closing Date or the Option
Closing Date, as the case may be, in form and substance satisfactory to
you and attached hereto as Exhibit A-4.
(j) You shall have received, in connection with the
execution of this Agreement and on the Closing Date and each Option
Closing Date, a "cold comfort" letter from KPMG Peat Marwick LLP, dated
as of each such date in form and substance satisfactory to you with
respect to the financial statements and certain financial information
contained in the Registration Statement and the Prospectus.
(k) You shall have received, in connection with the
execution of this Agreement and on the Closing Date and each Option
Closing Date, a "cold comfort" letter from PricewaterhouseCoopers LLP,
dated as of each such date in form and substance satisfactory to you
with respect to the financial statements and certain financial
information contained in the Registration Statement and the Prospectus,
but only to the extent such financial statements and information
pertain to the Suncoast Acquisition (as defined in the Prospectus) and
the financial condition and operations of the entities which the
Company acquired in the Suncoast Acquisition.
(l) You shall have received from the Company a
certificate, signed by Xxxxxx X. Xxxxx and W. Xxxx Xxxx in their
capacities as the President and Chief Executive Officer and the Vice
President, Chief Financial Officer and Treasurer of the Company,
respectively, addressed to you and dated the Closing Date or Option
Closing Date, as applicable, to the effect that:
(i) such officer does not know of any Proceedings
instituted, threatened or contemplated against the Company of
a character required to be disclosed in the Prospectus that
are not so disclosed; such officer does not know of any
material contract required to be filed as an exhibit to the
Registration Statement which is not so filed;
(ii) such officer has carefully examined the
Registration Statement and the Prospectus and all amendments
or supplements thereto and, in such officer's opinion, such
Registration Statement or such amendment as of its effective
date and as of the Closing Date, and the Prospectus or such
supplement as of its date and as of the Closing Date, did not
contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or
necessary in order to make the statements therein not
misleading and, in such officer's opinion, since the effective
date of the Registration Statement, no event has occurred or
information become known that should have been set forth in an
amendment to the Registration Statement or a supplement to the
Prospectus which has not been so set forth in such amendment
or supplement;
(iii) the representations and warranties of the
Company set forth in Section 6 of this Agreement are true and
correct in all material respects as of the date of this
Agreement and as of the Closing Date or the Option Closing
Date, as
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the case may be, and the Company has complied with all the
agreements and satisfied all the conditions on its part to be
performed or satisfied at or prior to such Closing Date; and
(iv) the Commission has not issued an order
preventing or suspending the use of the Prospectus or any
preliminary prospectus filed as a part of the Registration
Statement or any amendment thereto; no stop order suspending
the effectiveness of the Registration Statement has been
issued; and, to the best knowledge of the respective officers,
no proceedings for that purpose have been instituted or are
pending or contemplated under the Act.
The delivery of the certificate provided for in this
subparagraph shall be and constitute a representation and warranty of
the Company as to the facts set forth in said certificate.
(m) You shall have received from the Trust a certificate,
signed by each of the Administrative Trustees, addressed to you and
dated the Closing Date or Option Closing Date, as applicable, to the
effect that:
(i) such trustee does not know of any Proceedings
instituted, threatened or contemplated against the Trust of a
character required to be disclosed in the Prospectus that are
not so disclosed; such trustee does not know of any material
contract required to be filed as an exhibit to the
Registration Statement which is not so filed;
(ii) such trustee has carefully examined the
Registration Statement and the Prospectus and all amendments
or supplements thereto and, in such trustee's opinion, such
Registration Statement or such amendment as of its effective
date and as of the Closing Date, and the Prospectus or such
supplement as of its date and as of the Closing Date, did not
contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or
necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading
and, in such trustee's opinion, since the effective date of
the Registration Statement, no event has occurred or
information become known that should have been set forth in an
amendment to the Registration Statement or a supplement to the
Prospectus which has not been so set forth in such amendment
or supplement;
(iii) the representations and warranties of the Trust
set forth in Section 6 of this Agreement are true and correct
in all material respects as of the date of this Agreement and
as of the Closing Date or the Option Closing Date, as the case
may be, and the Trust has complied with all the agreements and
satisfied all the conditions on its part to be performed or
satisfied at or prior to such Closing Date; and
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(iv) the Commission has not issued an order
preventing or suspending the use of the Prospectus or any
preliminary prospectus filed as a part of the Registration
Statement or any amendment thereto; no stop order suspending
the effectiveness of the Registration Statement has been
issued; and, to the best knowledge of the respective trustees,
no proceedings for that purpose have been instituted or are
pending or contemplated under the Act.
The delivery of the certificate provided for in this
subparagraph shall be and constitute a representation and warranty of
the Trust as to the facts set forth in said certificate.
(n) You and your counsel, Xxxxxx, Xxxx & Xxxxxxxx LLP, shall
have received on or before the Closing Date or the Option Closing Date,
as the case may be, such further documents, opinions, certificates and
schedules or instruments relating to the business, corporate, legal and
financial affairs of the Offerors as you and they shall have reasonably
requested from the Offerors.
9. Effective Date of Agreement, Termination and Defaults. This
Agreement shall become effective upon, and shall not be deemed delivered until,
the later of (i) execution of this Agreement and (ii) when notification of the
effectiveness of the Registration Statement has been released by the Commission.
This Agreement may be terminated at any time prior to the Closing Date
and any exercise of the option to purchase Additional Shares may be canceled at
any time prior to any Option Closing Date by written notice by you to the
Offerors if any of the following has occurred: (i) since the respective dates as
of which information is given in the Registration Statement and the Prospectus,
any material adverse change or development involving a prospective material
adverse change in the condition, financial or otherwise, of the Trust or the
Company or the earnings, affairs, management or business of the Trust or the
Company, or any event or events that could reasonably be expected to result in
such a material adverse change (in any such case, whether or not arising in the
ordinary course of business) that would, in your judgment, make it impracticable
to market the Shares on the terms and in the manner contemplated in the
Prospectus, (ii) any outbreak or escalation of hostilities or other national or
international calamity or crisis or change in economic conditions or in the
financial markets of the United States that, in your judgment, is material and
adverse and would, in your judgment, make it impracticable to market the Shares
on the terms and in the manner contemplated in the Prospectus, (iii) the
suspension or material limitation of trading in securities on the New York Stock
Exchange, Inc., the American Stock Exchange, Inc., the Nasdaq SmallCap Market or
the Nasdaq National Market System or limitation on prices for securities on
either such exchange, the Nasdaq SmallCap Market or the Nasdaq National Market
System, (iv) the enactment, publication, decree or other promulgation of any
federal or state statute, regulation, rule or order of any court or other
governmental authority that in your opinion materially and adversely affects, or
will materially and adversely affect, the business or operations of the Trust or
the Company, (v) the declaration of a banking moratorium by either federal or
New York, California, Illinois or Colorado state authorities, (vi) the taking of
any action by any Federal, state or local government
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or agency in respect of its monetary or fiscal affairs that in your opinion has
a material adverse effect on the financial markets in the United States, (vii)
there shall be any change in financial markets or in political, economic or
financial conditions which, in your opinion, either renders it impracticable or
inadvisable to proceed with the offering and sale of the Shares on the terms set
forth in the Prospectus or materially adversely affects the market for the
Shares or (vii) any conditions to your obligations shall not have been fulfilled
when and as required by this Agreement.
If, on the Closing Date or on the Option Closing Date, as the
case may be, you fail or refuse to purchase the Firm Shares or Additional
Shares, as the case may be, in an amount that exceeds, in the aggregate, 10% of
the total number of the Shares, this Agreement shall terminate without liability
on the part of the Offerors, except as otherwise provided in this Section 9. In
any such case that does not result in termination of this Agreement, either you
or the Company may postpone the Closing Date or the Option Closing Date, as the
case may be, for not longer than seven (7) days, in order that the required
changes, if any, in the Registration Statement and the Prospectus or any other
documents or arrangements may be effected. Any action taken under this paragraph
shall not relieve you from liability in respect of any default by you under this
Agreement.
The indemnity and contribution provisions and other agreements,
representations and warranties of the Offerors and the Offerors' officers,
directors and trustees set forth in or made pursuant to this Agreement shall
remain operative and in full force and effect, and will survive delivery of and
payment for the Shares, regardless of (i) any investigation, or statement as to
the results thereof, made by you or on your behalf or by or on behalf of the
Offerors or the officers, directors or trustees of the Offerors or any
controlling person of the Offerors, (ii) acceptance of the Shares and payment
therefor hereunder or (iii) termination of this Agreement. Notwithstanding any
termination of this Agreement, the Offerors shall be liable for and shall pay
all expenses they have agreed to pay pursuant to Section 5(k).
Except as otherwise provided, this Agreement has been and is
made solely for the benefit of, and shall be binding upon, the Offerors, you,
any indemnified person referred to herein and their respective successors and
assigns, all as and to the extent provided in this Agreement, and no other
person shall acquire or have any right under or by virtue of this Agreement. The
terms "successors and assigns" shall not include a purchaser of any of the
Shares from you merely because of such purchase.
10. Effectiveness of Registration Statement. You and the Offerors will
use their best efforts to cause the Registration Statement to become effective,
if it has not yet become effective, and to prevent the issuance of any stop
order suspending the effectiveness of the Registration Statement and, if such
stop order be issued, to obtain as soon as possible the lifting thereof.
11. Miscellaneous. All communications hereunder will be in writing and,
if sent to you will be mailed, delivered or telegraphed and confirmed to you at
your corporate headquarters located at 00 Xxxx Xxxxxx Xxxxx, Xxxxxxx, Xxxxxxxx
00000-0000, Attention: Syndicate Department, with a copy to Xxxxxx, Xxxx &
Xxxxxxxx LLP, 000 Xxxxx Xxxxx Xxxxxx, Xxx
00
00
Xxxxxxx, Xxxxxxxxxx 00000, Attention: Xxxxxxx X. Xxxxx, Esq.; and if sent to the
Offerors will be mailed, delivered or telegraphed and confirmed to the Offerors
at the Company's corporate headquarters with a copy to Xxxxxx Godward LLP, 0000
Xxxxxx Xxxxxxxxx, Xxxxx 000, Xxxxxxx, Xxxxxxxx 00000, Attention: Xxxxx X.
Xxxxxxx, Esq.
THIS AGREEMENT SHALL BE GOVERNED AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF CALIFORNIA WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF
LAW THEREOF.
This Agreement may be signed in various counterparts which together
shall constitute one and the same instrument.
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Please confirm that the foregoing correctly sets forth the agreement
among the Offerors and you, as sole underwriter.
Very truly yours,
AMERICAN COIN MERCHANDISING, INC.
By:
--------------------------------------
Xxxxxx X. Xxxxx
President and Chief Executive Officer
Very truly yours,
AMERICAN COIN MERCHANDISING TRUST I
By: American Coin Merchandising, Inc., as
Depositor
By:
---------------------------------
Xxxxxx X. Xxxxx
President and Chief Executive Officer
The foregoing Underwriting Agreement is hereby confirmed and
accepted as of the date first above written.
EVEREN SECURITIES, INC.
By:
------------------------------
Xxxxx X. Xxxxxx
Senior Managing Director
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