EXHIBIT 1.1
DRAFT 1/15/96
$50,000,000 PRINCIPAL AMOUNT OF __% SENIOR SUBORDINATED NOTES
DUE 2003(1)
AMRESCO, INC.
PURCHASE AGREEMENT
------------------
, 1996
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XXXXX XXXXXXX INC.
X.X. XXXXXXXX & CO.
XXXXXX XXXXXX & COMPANY, INC.
c/o Xxxxx Xxxxxxx Inc.
Xxxxx Xxxxxxx Tower
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
Ladies and Gentlemen:
AMRESCO, INC., a Delaware corporation (the "Company"), proposes to issue
and sell to you (the "Underwriters") its __% Senior Subordinated Notes due 2003
in an aggregate principal amount of $50,000,000 (the "Firm Notes"). The Company
has also granted to the Underwriters an option to purchase up to an additional
$7,500,000 in aggregate principal amount of its __% Senior Subordinated Notes
due 2003 on the terms and for the purposes set forth in Section 3(b) hereof.
Such additional __% Senior Subordinated Notes due 2003 are referred to in this
Agreement as the "Option Notes," and the Firm Notes and the Option Notes, if
purchased, are hereinafter referred to as the "Notes" or the "Securities." The
Notes shall be issued under an indenture, dated as of January 15, 1996 (the
"Indenture"), between the Company and Bank One, Columbus, N.A., as trustee (the
"Trustee").
The Company hereby confirms its agreement with respect to the sale of the
Securities to the Underwriters.
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(1)Plus an option to purchase up to an additional $7,500,000 aggregate
principal amount of Notes to cover over-allotments.
1. REGISTRATION STATEMENT. A registration statement on Form S-3 (File
No. 33-65329) with respect to the Securities, including a preliminary form of
prospectus, has been prepared by the Company in conformity with the requirements
of the Securities Act of 1933, as amended (the "Act"), the Trust Indenture Act
of 1939, as amended (the "Trust Indenture Act"), and the rules and regulations
("Rules and Regulations") of the Securities and Exchange Commission (the
"Commission") under those acts, and has been filed with the Commission. One or
more amendments to such registration statement have also been so prepared and
have been, or will be, so filed. Copies of such registration statement and
amendments and each related preliminary prospectus have been delivered to the
Underwriters.
If the Company has elected not to rely upon Rule 430A of the Rules and
Regulations, the Company has prepared and will promptly file an amendment to the
registration statement and an amended prospectus. If the Company has elected to
rely upon Rule 430A of the Rules and Regulations, it will prepare and file a
prospectus pursuant to Rule 424(b) that discloses the information previously
omitted from the prospectus in reliance upon Rule 430A. Such registration
statement as amended at the time it is or was declared effective by the
Commission and, in the event of any amendment thereto after the effective date
and prior to the First Closing Date (as hereinafter defined), but only from and
after the effectiveness of such amendment, including all financial statements,
schedules and exhibits thereto, all documents incorporated by reference therein
filed under the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and any information deemed to be part of the registration statement at
the time of effectiveness pursuant to Rule 430A(b), if applicable, is
hereinafter called the "Registration Statement." The prospectus included in the
Registration Statement at the time it is or was declared effective by the
Commission is hereinafter called the "Prospectus," except that if any prospectus
filed by the Company with the Commission pursuant to Rule 424(b) of the Rules
and Regulations or any other prospectus provided to the Underwriters by the
Company for use in connection with the offering of the Securities (whether or
not required to be filed by the Company with the Commission pursuant to Rule
424(b) of the Rules and Regulations) differs from the prospectus on file at the
time the Registration Statement is or was declared effective by the Commission,
the term "Prospectus" shall refer to such differing prospectus from and after
the time such prospectus is filed with the Commission or transmitted to the
Commission for filing pursuant to such Rule 424(b) or from and after the time it
is first provided to the Underwriters by the Company for such use. The term
"Preliminary Prospectus" as used herein means any preliminary prospectus
included in the Registration Statement prior to the time it becomes or became
effective under the Act and any prospectus subject to completion as described in
Rule 430A of the Rules and Regulations. Reference made herein to any
Preliminary Prospectus or Prospectus, as amended or supplemented, shall include
all documents incorporated by reference therein.
2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company represents
and warrants to, and agrees with, the Underwriters as follows:
(a) No order preventing or suspending the use of any Preliminary
Prospectus has been issued by the Commission or the securities authority of
any state or other jurisdiction
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in which the Notes are to be offered and sold and each Preliminary
Prospectus, at the time of filing thereof, did 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 light of
the circumstances under which they were made, not misleading. The
foregoing shall not apply to statements in or omissions from any
Preliminary Prospectus in reliance upon, and in conformity with, written
information furnished to the Company by any Underwriter specifically for
use in the preparation thereof.
(b) As of the time the Registration Statement (or any post-effective
amendment thereto) is or was declared effective by the Commission, upon the
filing or first delivery to the Underwriters of the Prospectus (or any
supplement to the Prospectus) and at the First Closing Date and Option
Notes Closing Date (as hereinafter defined), (i) the Registration Statement
and Prospectus (in each case, as so amended and/or supplemented) will
conform in all material respects to the applicable requirements of the Act,
the Trust Indenture Act and the Rules and Regulations, (ii) the
Registration Statement (as so amended) will not or did not include an
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein
not misleading, and (iii) the Prospectus (as so supplemented) will not or
did not include 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 light of the circumstances in which they are or were
made, not misleading; except that the foregoing clauses (i), (ii) and (iii)
shall not apply to statements in or omissions from any such document in
reliance upon, and in conformity with, written information furnished to the
Company by any Underwriter specifically for use in the preparation thereof.
The documents incorporated by reference in the Registration Statement, the
Prospectus, and any Preliminary Prospectus pursuant to Item 12 of Form S-3,
as of the date they were or are filed with the Commission, conformed or
will confirm in all material respects to the requirements of the Exchange
Act, and, as of the date of filing, none of such documents contained or
will contain an untrue statement of a material fact or omitted or will omit
to state a material fact required to be stated therein or necessary to make
the statements therein not misleading.
(c) The consolidated financial statements of the Company, together
with the related notes thereto, set forth or otherwise included in the
Registration Statement and Prospectus comply in all material respects with
the requirements of the Act and fairly present the financial condition and
the results of operations and changes in cash flows of the Company and its
Subsidiaries (as hereinafter defined) or its predecessor or acquired
businesses, as the case may be, at the date and for the periods therein
specified in conformity with generally accepted accounting principles
consistently applied throughout the periods involved (except as otherwise
stated therein), and the independent public accountants whose reports are
contained therein are independent public accountants as required by the
Act, The Exchange Act and the Rules and Regulations. The financial
statement schedules, if any, included in the Registration Statement or
incorporated by reference therein, or in any post-effective amendment
thereto, and the other financial and statistical information included in
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the Prospectus under the captions "Prospectus Summary " and "Summary
Financial and Other Data," present fairly in all material respects and on a
basis consistent with the books and records of the Company the information
stated therein. The terms "Subsidiary" and "Material Subsidiary" shall
have the meanings assigned thereto in the Indenture.
(d) The Company has all requisite corporate power and authority to
execute, deliver and perform its obligations under this Agreement. This
Agreement has been duly authorized, executed and delivered by the Company,
and constitutes a valid, legal and binding obligation of the Company,
enforceable in accordance with its terms, except as rights to indemnity
hereunder may be limited by federal or state securities laws and 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.
(e) The Company has all requisite corporate power and authority to
execute, deliver and perform its obligations under the Indenture and the
Notes. The Indenture has been duly and validly authorized by the Company
and, when the Indenture has been executed and delivered, will be a valid
and binding obligation 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. The Notes sold hereunder have been duly
and validly authorized by the Company and, when the Notes have been
executed and authenticated in the manner set forth in the Indenture and
issued, sold, and delivered in the manner set forth in the Prospectus, will
be the valid and binding obligations of the Company, enforceable against
the Company in accordance with their terms and the terms of the Indenture,
subject, as to enforcement, to applicable bankruptcy, insolvency,
reorganization and moratorium laws affecting the enforcement of creditors'
rights generally and to general equitable principles. The Indenture will
have been duly qualified under the Trust Indenture Act upon effectiveness
of the Registration Statement. The Indenture will be substantially in the
form filed as an exhibit to the Registration Statement and will comply with
the Trust Indenture Act and the regulations thereunder. The Indenture and
the Notes conform in all material respects to the descriptions thereof
contained in the Registration Statement and the Prospectus.
(f) The authorized capital stock of the Company is as set forth under
the caption "Capitalization" in the Prospectus. All of the outstanding
shares of capital stock have been duly authorized, validly issued and are
fully paid and non-assessable. All offers and sales of the Company's
capital stock or other securities prior to the date hereof were at all
relevant times duly registered under the Act or exempt from the
registration requirements of the Act by reason of Sections 3(b), 4(2) or
4(6) thereof and were duly registered or the subject of an available
exemption from the registration requirements of the applicable state
securities or Blue Sky laws. 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 pre-emptive
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rights of shareholders, and no preemptive rights or similar rights of any
security holders of the Company exist with respect to the Notes. The
Company has no agreement with any security holder as to which the Company
has not obtained waiver which gives such security holder the right to
require the Company to register under the Act any securities of any nature
owned or held by such person in connection with the transactions
contemplated by this Agreement.
(g) The execution, delivery and performance of this Agreement, the
Indenture and the Securities, the issuance and delivery of the Securities,
and the consummation of the transactions herein and therein contemplated
will not conflict with, or result in a breach or violation of any of the
terms and provisions of, or constitute a default under, (i) any statute,
(ii) any material agreement or instrument to which the Company or any of
its Subsidiaries is a party or by which either the Company or any
Subsidiary is bound or to which any of their property is subject, (iii) the
Company's or any Subsidiary's charter or (iv) by-laws, or any order, rule,
regulation or decree of any court or governmental agency or body having
jurisdiction over the Company, any Subsidiary or any of their respective
properties, which breach, violation or default reasonably could or might be
expected, individually or in the aggregate with other such breaches,
violations or defaults, to result in a material adverse effect on the
financial condition, results of operations or business of the Company and
its Subsidiaries, taken as a whole. Other than those already obtained or
waivers from which have been obtained, no consent, approval, authorization
or order of, or filing with, any court or governmental agency or body is
required by the Company or any Subsidiary for the execution, delivery and
performance of this Agreement, the Indenture or the Securities or for the
consummation of the transactions contemplated hereby and thereby, including
the issuance, sale and delivery of the Securities by the Company, except
such as may be required under the Act, the Trust Indenture Act or state
securities or blue sky laws.
(h) Neither the Company nor any Subsidiary is (i) in violation of its
respective certificate of incorporation or charter or its respective by-
laws or other organizational documents, (ii) in default (nor has an event
occurred which with notice or passage of time or both would constitute such
a default) under any bond, indenture, mortgage, deed of trust, note, loan
or credit agreement or other material agreement or instrument to which any
of them is a party or by which any of them or any of their properties or
assets may be bound or affected, (iii) in violation of any order of any
court, arbitrator or governmental body or (iv) except as disclosed in the
Registration Statement and the Prospectus, in violation of or has violated
any franchise, grant, authorization, license, permit, judgment, decree,
order, statute, rule or regulation, which, in the case of clauses (i)-(iv)
of this sentence, would (individually or in the aggregate) (x) adversely
affect the legality, validity or enforceability of this Agreement, the
Indenture or the Securities, or any document related hereto or thereto or
(y) have a material adverse effect on the financial condition, results of
operations or business of the Company and the Subsidiaries, taken as a
whole, or (z) materially impair the Company's ability to perform fully on a
timely basis any obligations which it has under this Agreement, the
Indenture or the Securities. The Company or the Subsidiaries hold all
franchises, grants,
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authorizations, licenses, permits, easements, consents, certificates and
orders of any governmental or self-regulatory body required for the conduct
of their respective businesses, except where any such failure to hold will
not have a material adverse effect on the Company and its Subsidiaries,
taken as a whole. The descriptions in the Registration Statement and the
Prospectus of statutes, legal and governmental proceedings or contracts and
other documents are accurate in all material respects and fairly present
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.
(i) Each of the Company and the Material Subsidiaries has been duly
incorporated and is validly existing as a corporation in good standing
under the laws of its jurisdiction of incorporation with full corporate
power and authority to own or lease its properties and conduct its business
as currently being carried on and as described in the Registration
Statement and Prospectus; and is duly qualified to do business as a foreign
corporation and is in good standing in each other jurisdiction in which it
owns or leases real property of a nature, or transacts business of a type,
that would make such qualification necessary and in which the failure to so
qualify would have a material adverse effect on the financial condition,
results of operations or business of the Company and the Subsidiaries,
taken as a whole. Each of the Company and the Subsidiaries is in compliance
with the rules, regulations or other lawful directives established by each
regulatory authority having jurisdiction over the Company's or the
Subsidiary's respective business, conduct and affairs, including without
limitation the timely and accurate filing of all reports, statements,
documents, registrations, filings or submissions required to be filed by it
with any such regulatory authority, where the failure to comply with such
rules, regulations or other lawful directives reasonably could or might be
expected to result in a material adverse effect on the financial condition,
results of operations or business of the Company and its Subsidiaries,
taken as a whole.
(j) Except as disclosed in the Registration Statement and the
Prospectus, there is no action, suit, investigation or proceeding,
governmental or otherwise, pending or overtly threatened, to which the
Company or any Subsidiary is or may be a party or of which the business or
property of the Company or any Subsidiary is or may be the subject which,
in each case, is material to the Company and the Subsidiaries, taken as a
whole, or which seeks to restrain, enjoin, prevent the consummation of or
otherwise challenge the issuance of the Securities or any of the other
transactions contemplated hereby or by the Indenture, or which questions
the legality or validity of any such transactions or which seeks to recover
damages or obtain other relief in connection with any of such transactions;
and there is no contract or document of a character required to be
described in the Registration Statement or the Prospectus or to be filed as
an exhibit to the Registration Statement which is not described or filed as
required.
(k) All of the outstanding capital stock of each Subsidiary has been
duly authorized, validly issued and is fully paid and non-assessable, and
except as otherwise noted
6
in the Prospectus, is owned directly or indirectly by the Company free and
clear of any security interest, claim, lien or other encumbrance.
(l) 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.
(m) The Company and each of its Subsidiaries have filed all necessary
foreign, federal and state and local income and franchise tax returns and,
other than taxes the Company or its Subsidiaries are consisting in good
faith and for which the Company has established adequate reserves, paid all
taxes shown as due thereon. Except as is otherwise expressly stated in the
Registration Statement or Prospectus, the Company has no knowledge of any
tax deficiency which might be asserted against it which would materially
and adversely affect the financial condition, results of operations or
business of the Company and its Subsidiaries, taken as a whole.
(n) Since the date of the most recent audited financial statements
included in the prospectus, neither the Company nor any of the Subsidiaries
has sustained any 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, other than as disclosed in or contemplated by the
Prospectus.
(o) Since the respective dates as of which information is given in the
Registration Statement and the Prospectus, (i) neither the Company nor any
of the 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 the Subsidiaries taken as a
whole, (ii) 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, (iii) 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 the
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 the Subsidiaries and (iv) there has not been any material adverse
change, or any development involving a
7
prospective material adverse change, in or affecting the financial
condition, results of operations or business of the Company and the
Subsidiaries taken as a whole, in each case other than as disclosed in or
contemplated by the Prospectus.
(p) Neither the Company nor any of its officers, directors or
affiliates has 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 of the Notes.
(q) Neither the Company nor any of the 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
(i) used any corporate funds for unlawful contributions, gifts,
entertainment or other unlawful expenses related to political activity,
(ii) made any unlawful payment to foreign or domestic government officials
or employees or to foreign or domestic political parties or campaigns from
corporate funds, (iii) violated any provisions of the Foreign Corrupt
Practices Act of 1977, as amended, or (iv) made any bride, rebate, payoff,
influence payment, kick back or other unlawful payment.
(r) 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, contaminate, petroleum product,
natural gas, liquefied gas or synthetic gas defined in 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 (i)
alleges a violation of any Laws by the Company or any Subsidiary; (ii)
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; (iii) alleges
possible contamination of the environment by the Company or any Subsidiary
or (iv) 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
8
adverse effect on the Company's and Subsidiaries' business or results of
operations taken as a whole.
(s) 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.
(t) 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 business 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 similar coverage from similar insurers as may be necessary to
continue its business at a comparable cost, except as disclosed in the
Prospectus.
(u) 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 (i) transactions are executed in accordance with
management's general and specific authorization, (ii) 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,
(iii) 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 (iv) 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.
(v) No Subsidiary 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, except as disclosed in the Prospectus.
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(w) The Company is not, will not become as a result of the
transactions contemplated hereby, and does not intend to conduct its
business in any 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.
(x) The Company's common stock, par value $0.05 per share (the "Common
Stock") is registered pursuant to Section 12(g) of 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 Nasdaq Stock Market, Inc. is contemplating terminating
such registration or qualification.
(y) The Company has not distributed and will not distribute any
prospectus or other offering material in connection with the offering and
sale of the Securities other than any Preliminary Prospectus or the
Prospectus or other materials permitted by the Act to be distributed by the
Company.
(z) The Company is in compliance with all provisions of Florida
Statutes Section 517.075 (Chapter 92-198, laws of Florida). The Company
does not do any business, directly or indirectly, with the government of
Cuba, to the Company's knowledge, or with any person or entity located in
Cuba.
(aa) 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.
(bb) Any certificate signed by any officer of the Company and
delivered to the Underwriters or to counsel for the Underwriters shall be
deemed a representation and warranty by the Company to each Underwriter as
to the matters covered thereby.
(cc) Other than as contemplated herein, the Company has not 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.
3. PURCHASE, SALE AND DELIVERY OF SECURITIES.
(a) On the basis of the representations, warranties and agreements
herein contained, but subject to the terms and conditions herein set forth,
the Company agrees to issue and sell the Firm Notes to the Underwriters,
and the Underwriters agree to purchase the respective principal amounts of
Firm Notes set forth opposite each Underwriter's name in Schedule I hereto.
The purchase price for each Firm Note shall be ____% of the principal
10
amount thereof, which shall reflect an Underwriting Discount of ____% of
the principal amount of the Firm Notes payable to the Underwriters. The
obligation of each Underwriter to the Company shall be to purchase from the
Company that principal amount of Firm Notes set forth opposite the name of
such Underwriter in Schedule I hereof. In making this Agreement, each
Underwriter is contracting severally and not jointly. Except as provided
in paragraph (c) of this Section 3 and in Section 8 hereof, the agreement
of each Underwriter is to purchase only its respective principal amount of
Firm Notes as specified in Schedule I.
The Firm Notes will be delivered by the Company to Xxxxx Xxxxxxx Inc.
for each Underwriter's account against payment of the purchase price
therefor by wire transfer of same day funds to the account designated by
the Company, at the offices of Xxxxx Xxxxxxx Inc., Xxxxx Xxxxxxx Tower, 000
Xxxxx Xxxxx Xxxxxx, Xxxxxxxxxxx, Xxxxxxxxx, or such other location as may
be mutually acceptable, at 9:00 a.m., Minneapolis time, on the third (or,
if the Notes 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 following the date hereof, or at such other time
as the Underwriters and the Company determine, such time and date of
delivery being herein referred to as the "First Closing Date."
Certificates for the Firm Notes, each in definitive form and in such
denominations and registered in such names as the Underwriters may request
upon at least two business days' prior notice to the Company, will be made
available for checking and packaging at the offices of Xxxxx Xxxxxxx Inc.,
Xxxxx Xxxxxxx Tower, 000 Xxxxx Xxxxx Xxxxxx, Xxxxxxxxxxx, Xxxxxxxxx, or
such other location as may be mutually acceptable, at least one business
day prior to the First Closing Date.
(b) On the basis of the representations, warranties and agreements
herein contained, but subject to the terms and conditions herein set forth,
the Company hereby grants to the Underwriters an option to purchase up to
$7,500,000 principal amount of Option Notes, at the same purchase price as
the Firm Notes, for use solely in covering any over-allotments made by the
Underwriters in the sale and distribution of the Securities. The option
granted hereunder may be exercised at any time (but not more than once)
within 30 days after the effective date of this Agreement upon notice
(confirmed in writing) by the Underwriters to the Company setting forth the
aggregate principal amount of Option Notes as to which the Underwriters are
exercising the option, the names and denominations in which the Option
Notes are to be registered and the date and time, as determined by the
Underwriters, when the Option Notes are to be delivered, such time and date
of purchase of the Option Notes being herein referred to as the "Option
Notes Closing" and "Option Notes Closing Date," respectively; provided,
however, that the Option Notes Closing Date shall not be earlier than the
First Closing Date nor earlier than the third business day after the date
on which the option shall have been exercised. The First Closing Date and
the Option Notes Closing Date are sometimes herein individually called the
"Closing Date" and collectively called the "Closing Dates." The principal
amount of Option Notes to be sold by the Company to the Underwriters and
purchased by the Underwriters from the Company shall
11
be determined by the Underwriters. The option granted hereby may be
canceled by the Underwriters as to the Option Notes for which the options
are unexercised, at any time prior to the expiration of the 30-day period,
upon notice to the Company. No Option Notes shall be sold and delivered
unless the Firm Notes previously have been, or simultaneously are, sold and
delivered.
The Option Notes will be delivered by the Company to Xxxxx Xxxxxxx
Inc. for each Underwriter's account against payment of the purchase price
therefor by wire transfer of same day funds to the account designated by
the Company, at the offices of Xxxxx Xxxxxxx Inc., Xxxxx Xxxxxxx Tower, 000
Xxxxx Xxxxx Xxxxxx, Xxxxxxxxxxx, Xxxxxxxxx, or such other location as may
be mutually acceptable at 9:00 a.m., Minneapolis time, on the Option Notes
Closing Date. The Option Notes in definitive form and in such
denominations and registered in such names as the Underwriters have set
forth in the notice of option exercise, will be made available for checking
and packaging at the office of Xxxxx Xxxxxxx Inc., Xxxxx Xxxxxxx Tower, 000
Xxxxx Xxxxx Xxxxxx, Xxxxxxxxxxx, Xxxxxxxxx, or such other location as may
be mutually acceptable, at least one business day prior to the Option Notes
Closing Date.
(c) It is understood that each Underwriter may (but shall not be
obligated to) make payment to the Company on behalf of another Underwriter
for the Securities to be purchased by such Underwriter. Nothing herein
contained shall constitute any of the Underwriters an unincorporated
association or partner with the Company or with each other.
(d) The Underwriters propose to make a public offering of the Notes
directly to the public (which may include selected dealers and special
purchasers) as soon as the Underwriters deem practicable after the
Registration Statement becomes effective, at the initial public offering
price as set forth on the cover page of the Prospectus, subject to the
terms and conditions of this Agreement and in accordance with the
Prospectus. Such concessions from the public offering price may be allowed
to selected dealers and other members of the National Association of
Securities Dealers, Inc. as the Underwriters may determine, and the
Underwriters will furnish the Company with such information about the
distribution arrangements as may be necessary for inclusion in the
Registration Statement. It is understood that the public offering price
and concessions may vary after the initial public offering.
4. COVENANTS. The Company covenants and agrees with the Underwriters as
follows:
(a) If the Registration Statement has not already been declared
effective by the Commission, the Company will use its best efforts to cause
the Registration Statement or any post-effective amendments thereto to
become effective as promptly as possible; the Company will notify the
Underwriters promptly of the time when the Registration Statement or any
post-effective amendment to the Registration Statement has become effective
or any supplement to the Prospectus has been filed and of any request by
the Commission for any amendment or supplement to the Registration
Statement or Prospectus or additional
12
information; if the Company has elected to rely on Rule 430A of the Rules
and Regulations, the Company will file a Prospectus containing the
information omitted therefrom pursuant to such Rule 430A with the
Commission within the time period required by, and otherwise in accordance
with the provisions of, Rules 424(b) and 430A of the Rules and Regulations;
the Company will prepare and file with the Commission, promptly upon the
request of the Underwriters, any amendments or supplements to the
Registration Statement or Prospectus that, in the Underwriters' reasonable
opinion, may be necessary or advisable in connection with the distribution
of the Securities by the Underwriters; and the Company will not file any
amendment or supplement to the Registration Statement or Prospectus to
which the Underwriters shall reasonably object by notice to the Company
after having been furnished a copy a reasonable time prior to the filing.
(b) The Company will advise the Underwriters, promptly after it shall
receive notice or obtain knowledge thereof, of the issuance by the
Commission of any stop order suspending the effectiveness of the
Registration Statement, of the suspension of the qualification of the
Securities for offering or sale in any jurisdiction, or of the initiation
or threatening of any proceeding for any such purpose; and the Company will
promptly use its best efforts to prevent the issuance of any stop order or
to obtain its withdrawal if such a stop order should be issued.
(c) Within the time during which a prospectus relating to the
Securities is required to be delivered under the Act, the Company will
comply as far as it is able with all requirements imposed upon it by the
Act, as now and hereafter amended, and by the Rules and Regulations, as
from time to time in force, so far as necessary to permit the continuance
of sales of or dealings in the Securities as contemplated by the provisions
hereof and the Prospectus. If during such period any event occurs as a
result of which the Prospectus would include an untrue statement of a
material fact or omit to state a material fact necessary to make the
statements therein, in the light of the circumstances then existing, not
misleading, or if during such period it is necessary to amend the
Registration Statement or supplement the Prospectus to comply with the Act,
the Company will promptly notify the Underwriters and will amend the
Registration Statement or supplement the Prospectus (at the expense of the
Company) so as to correct such statement or omission or effect such
compliance.
(d) The Company will use its best efforts to qualify the Securities
for sale under the securities laws of such jurisdictions as the
Underwriters may reasonably designate and to continue such qualifications
in effect so long as required for the distribution of the Securities,
except that the Company shall not be required in connection therewith to
qualify as a foreign corporation or to execute a general consent to service
of process in any state. In each jurisdiction in which the Notes shall
have been qualified as above provided, the Company will make and file such
statements and reports as may be identified as requiring post-sale filings
in any blue sky memoranda delivered in connection with the offer and sale
of the Notes contemplated hereby or as otherwise reasonably requested by
the Underwriters or officials of such jurisdictions.
13
(e) The Company will furnish to the Underwriters copies of the
Registration Statement (two of which will be manually signed and will
include all exhibits), the Indenture, each Preliminary Prospectus, the
Prospectus, and all amendments and supplements to such documents, in each
case as soon as available and in such quantities as each Underwriter may
from time to time reasonably request.
(f) During a period of five years commencing with the date hereof,
the Company will furnish to each Underwriter who may so request in writing,
copies, without charge, of (i) all periodic and special reports furnished
to the securities holders of the Company, (ii) all information, documents
and reports filed with the Commission or any national securities exchange.
(g) The Company will make generally available to its security holders
as soon as practicable, but in any event not later than 15 months after the
end of the Company's current fiscal quarter, an earnings statement (which
need not be audited) covering a 12-month period beginning after the
effective date of the Registration Statement that shall satisfy the
provisions of Section 11(a) of the Act and Rule 158 of the Rules and
Regulations.
(h) The Company, whether or not the transactions contemplated
hereunder are consummated or this Agreement is prevented from becoming
effective under the provisions of Section 9(a) hereof or is terminated,
will pay or cause to be paid (i) all expenses (including transfer taxes
allocated to the respective transferees) incurred in connection with the
delivery to the Underwriters of the Securities, (ii) all expenses and fees
(including, without limitation, fees and expenses of the Company's
accountants and counsel but, except as otherwise provided below, not
including fees and expenses of the Underwriters' counsel) in connection
with the preparation, printing, filing, delivery, and shipping of the
Registration Statement (including the financial statements therein and all
amendments, schedules and exhibits thereto), the Securities, the Indenture,
each Preliminary Prospectus, the Prospectus, and any amendment thereof or
supplement thereto, and underwriting documents, including Blue Sky
Memoranda, (iii) all filing fees and reasonable fees and disbursements of
the Underwriters' counsel incurred in connection with the qualification of
the Securities for offering and sale by the Underwriters or by dealers
under the securities or blue sky laws of the states and other jurisdictions
which the Underwriters shall designate in accordance with Section 4(d)
hereof, (iv) the fees and expenses of the Trustee and counsel for the
Trustee, (v) the filing fees incident to any required review by the
National Association of Securities Dealers, Inc. of the terms of the sale
of the Securities, (vi) listing fees, if any, (vii) fees or expenses, if
any, of Underwriters' counsel incurred in connection with investigating the
legality of an investment in the Securities by certain purchasers in
certain jurisdictions and the preparation of memoranda relating thereto,
and (viii) all other reasonable costs and expenses incident to the
performance of its obligations hereunder that are not otherwise
specifically provided for herein. If the sale of the Securities provided
for herein is not consummated by reason of action by the Company pursuant
to Section 9(a) hereof which prevents this Agreement from becoming
effective, or by reason of any failure, refusal or inability on the part of
the
14
Company to perform any material agreement on its part to be performed, or
because any other material condition of the Underwriters' obligations
hereunder required to be fulfilled by the Company is not fulfilled, the
Company will reimburse the Underwriters for all reasonable out-of-pocket
disbursements (including fees and disbursements of counsel) incurred by the
Underwriters in connection with their investigation, preparing to market
and marketing the Securities or in contemplation of performing their
obligations hereunder. The Company shall not in any event be liable to
either Underwriter for loss of anticipated profits from the transactions
covered by this Agreement.
(i) The Company will apply the net proceeds from the sale of the
Securities to be sold by it hereunder for the purposes set forth in the
Prospectus.
(j) The Company has not taken and will not take, directly or
indirectly, any action designed to or which might reasonably be expected to
cause or result in, or which has constituted, the stabilization or
manipulation of the price of any security of the Company to facilitate the
sale or resale of the Securities.
(k) For so long as the delivery of a prospectus is required in
connection with the offering, sale and distribution of the Notes, the
Company will file on a timely basis such registration statements and other
filings and take such other action as is required pursuant to the
Securities Exchange Act of 1934 and the rules and regulations promulgated
thereunder.
(l) So long as any of the Notes are outstanding, the Company will
furnish to each of you the reports required to be filed with the Trustee
pursuant to the Indenture, concurrently with such filing.
(m) The Company will use its best efforts to cause the Notes to be
listed on the New York Stock Exchange, Inc. upon issuance of the Notes and
will use its best efforts to cause the Notes to be so listed as long as the
Notes remain outstanding.
5. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The obligations of the
Underwriters hereunder are subject to the accuracy, as of the date hereof and at
each of the First Closing Date and the Option Notes Closing Date (as if made at
such Closing Date), of and compliance with all representations, warranties and
agreements of the Company contained herein, to the performance by the Company of
its obligations hereunder and to the following additional conditions:
(a) The Registration Statement shall have become effective not later
than 5:00 p.m., Minneapolis time, on the date of this Agreement, or at such
later time and date as the Underwriters shall approve and all filings
required by Rule 424 and Rule 430A of the Rules and Regulations shall have
been timely made; no stop order suspending the effectiveness of the
Registration Statement or any amendment thereof shall have been issued; no
proceedings for the issuance of such an order shall be pending or
threatened; and any request of the
15
Commission for additional information (to be included in the Registration
Statement or the Prospectus or otherwise) shall have been complied with to
the Underwriters' satisfaction.
(b) Except as contemplated in the Prospectus, subsequent to the
respective dates as of which information is given in the Registration
Statement and the Prospectus, neither the Company nor any Subsidiary shall
have incurred any material liabilities or obligations, direct or
contingent, or entered into any material transactions not in the ordinary
course of business; and there shall not have been any change in the capital
stock (other than capital stock issued upon exercise of outstanding stock
options or upon conversion of convertible debentures), or any material
change in the short-term or long-term debt of the Company, or any material
adverse change, or any development involving a prospective material adverse
change, in the general affairs, condition (financial or otherwise),
business, key personnel, property, prospects, net worth or results of
operations of the Company and the Subsidiaries, considered as a whole,
that, in your judgment, makes it unpractical or inadvisable to offer or
deliver the Securities on the terms and in the manner contemplated in the
Prospectus.
(c) On each Closing Date, there shall have been furnished to the
Underwriters, the opinion of Xxxxxx and Xxxxx, L.L.P., counsel for the
Company, dated such Closing Date and addressed to the Underwriters, to the
effect that:
(i) The Company has all requisite corporate power to execute,
deliver and perform this Agreement and this Agreement has been duly
authorized by all requisite corporate action, duly executed and
delivered by the Company and constitutes the valid and binding
obligation of the Company enforceable in accordance with its terms
except as rights to indemnity hereunder may be limited by federal or
state securities laws and except as such enforceability may be limited
by bankruptcy, insolvency, reorganization or similar laws affecting
the rights of creditors generally and subject to general principals of
equity.
(ii) The Company has all requisite corporate power to execute,
deliver and perform its obligations under the Indenture. The
Indenture has been duly authorized by all requisite corporate action,
duly executed and delivered by the Company and constitutes a valid
and binding instrument of the Company, enforceable against the Company
in accordance with its terms except as such enforceability may be
limited by bankruptcy, insolvency, reorganization or similar laws
affecting the rights of creditors generally and subject to general
principals of equity. The Notes being delivered on the Closing Date
have been duly authorized, and, when executed, authenticated, issued
and delivered in accordance with the terms of the Indenture, will
constitute valid and binding obligations of the Company, enforceable
against the Company in accordance with their terms and entitled to the
benefits of the Indenture, except as such enforceability may be
limited by bankruptcy, insolvency, reorganization or similar laws
affecting the rights of creditors generally and subject to general
principles of equity. The Notes and the Indenture conform in all
material
16
respects, as to legal matters, to the descriptions thereof contained
in the Registration Statement and the Prospectus. The Indenture
complies in all respects with the Trust Indenture Act. The Notes have
been listed for trading on the New York Stock Exchange, Inc.
(iii) The execution and delivery by the Company of, and
performance of its obligations in, this Agreement, the Indenture and
the Notes do not (a) violate the Company's or any Material
Subsidiary's Certificate or Articles of Incorporation and Bylaws, (b)
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 (c) violate
applicable provisions of statutory law or regulation. Except for
permits and similar authorizations required under the Act, the Trust
Indenture Act and the securities or Blue Sky laws of certain
jurisdictions and except for permits and authorizations which have
been obtained and registrations which have been effected, no consent,
approval, authorization, registration or order of, or filing with, any
court or governmental agency or body is required by the Company or any
Subsidiary for the execution, delivery and performance of this
Agreement, the Indenture or the Securities or for the consummation of
the transactions contemplated hereby and thereby, including the
issuance or sale of the Securities by the Company.
(iv) 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 and are fully paid and non-assessable. No statutory preemptive
rights or registration rights, or, to such counsel's actual knowledge,
except as disclosed in the Prospectus, any contractual or other
preemptive rights or registration rights, of security holders of the
Company exist with respect to the issuance or sale of the Securities
by the Company pursuant to this Agreement and, to such counsel's
actual knowledge, there are no contracts, agreements or understandings
between the Company and any person granting such person the right to
require registration of shares of Common Stock or other securities of
the Company because of the filing of the Registration Statement
(except such rights as to which adequate waiver has been obtained).
All of the shares of capital stock of each Material Subsidiary have
been duly authorized and validly issued, are fully paid and non-
assessable, 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 the Material Subsidiaries granted by the
Company pursuant to the Revolving Loan Agreement dated as of September
29, 1995, among the Company, NationsBank of Texas, N.A. as agent and
the banks which are parties thereto from time to time. Except as set
forth in the Prospectus, the Company or another Subsidiary is the
registered holder of all the outstanding shares of capital stock of
17
each Subsidiary, and such shares are not subject to any liens, pledges
or other encumbrances.
(v) 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 Fourth
Quarter 1995, and all attachments thereto. The statements contained
in the Prospectus under the captions "Recent Developments,"
"Management's Discussion and Analysis of Financial Condition and
Results of Operations -- Liquidity and Capital Resources,"
"Description of the Notes" and "Description of Other Indebtedness,"
insofar as they purport to summarize the provisions of statutes, legal
and governmental proceedings or contracts or other documents are
materially accurate and fairly present in all material respects the
information required to be shown.
(vi) The Registration Statement has become effective under the
Act and the Indenture has been qualified under the Trust Indenture
Act, and, to such counsel's Knowledge, no stop order suspending the
effectiveness of the Registration Statement has been issued and no
proceeding for that purpose has been instituted or threatened by the
Commission.
(vii) Each of the Company and the Material Subsidiaries has been
duly incorporated and is existing as a corporation in good standing
under the laws of its jurisdiction of incorporation with full
corporate power to own, lease and operate its properties and conduct
its business as described in the Registration Statement and
Prospectus.
(viii) The Registration Statement and the Prospectus and any
further amendments and supplements thereto made by the Company (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 requirements of the Act, the Rules and Regulations,
the Exchange Act and the rules and regulations promulgated thereunder.
(ix) The Company is not, and immediately after the applicable
Closing Date 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.
In rendering such opinion such counsel may rely as to matters of fact
upon certificates of officers of the Company or any Subsidiary, as
appropriate, provided that the
18
extent of such reliance is specified in such opinion and such certificates
are attached to the opinion delivered to the Underwriters.
Such counsel shall also advise the Underwriters that although they do
not assume any responsibility for, and cannot guarantee the accuracy,
completeness or fairness of, the statements contained in the Registration
Statement or the Prospectus, on the basis of the information such counsel
developed 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 an examination of documents referred to or incorporated by reference in
the Registration Statement and Prospectus, and as a result of such
counsel's participation in such conferences and review of such documents,
but otherwise without independent check or verification except as
specified, such counsel has no reason to believe that the Registration
Statement or any further amendment thereto (other than the financial
statements and related schedules therein, as to which such counsel need
express no comment), contained or contains an untrue statement of a
material fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein not misleading or that
the Prospectus or any further amendment or supplement thereto (other than
the financial statements and related schedules therein, as to which such
counsel need express no comment) contained or contains an untrue statement
of a material fact or omits or omitted to state a material fact necessary
to make the statements therein, in the light of the circumstances in which
they were made, not misleading.
(d) On each Closing Date, there shall have been furnished to the
Underwriters, the opinion of X. Xxxxx Xxxxxxxxx, Esq., General Counsel for
the Company, dated such Closing Date and addressed to the Underwriters, to
the effect that
(i) the Company is duly qualified to transact business as a
foreign corporation and 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.
19
(iii) Each sale of the Company's capital stock during the period
from December 13, 1992 through each Closing Date was, at the time of
each 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 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 or any Material Subsidiary is a party,
in either case where such breach or violation would have a material
adverse effect on the financial position of the Company and its
Subsidiaries, taken as a whole.
(vi) Except as disclosed in the Registration Statement and the
Prospectus, such counsel knows of no action, suit, investigation or
proceeding, governmental or otherwise, pending or overtly threatened
against the Company or any Subsidiary, or involving the business or
properties of the Company or any Subsidiary with respect to the
issuance and sale of the Securities pursuant to this Agreement and the
Indenture or which is required to be described in the Registration
Statement or Prospectus that is not disclosed as required. The
contracts listed on an exhibit to the opinion of Xxxxxx and Xxxxx,
L.L.P. referenced in Section 5(c)(iii) hereof constitute all material
contracts to which the Company or any of its Subsidiaries is a party
which could be breached or violated in connection with the execution
and delivery by the Company of, and performance of its obligations in,
this Agreement, the Indenture and the Notes and the consummation of
the transactions herein and therein contemplated. Such counsel does
not know of any contracts or documents of a character required to be
described in the Registration Statement or the Prospectus or to be
filed as an exhibit to the Registration Statement which are not
described or filed as required. The descriptions contained in the
Registration Statement and Prospectus of contracts and other documents
are accurate and fairly present the information required to be shown.
The statements contained in the Registration Statement or the
Prospectus to the extent such statements relate to matters of law,
descriptions of statutes, legal or governmental proceedings,
regulatory matters or other legal matters or conclusions of law,
fairly summarize such matters.
20
(e) On each Closing Date, there shall have been furnished to the
Underwriters, such opinion or opinions from Xxxxxxxxx & Xxxxxx P.L.L.P.,
counsel for the Underwriters, dated such Closing Date and addressed to the
Underwriters, with respect to the formation of the Company, the validity of
the Securities, the Registration Statement, the Prospectus and other
related matters as the Underwriters reasonably may request, and such
counsel shall have received such papers and information as they request to
enable them to pass upon such matters.
(f) On each Closing Date the Underwriters shall have received letters
from Deloitte & Touche, LLP, dated such Closing Date and addressed to the
Underwriters, confirming that they are independent public accountants
within the meaning of the Act and are in compliance with the applicable
requirements relating to the qualifications of accountants under Rule 2-01
of Regulation S-X of the Commission, and stating, as of the date of such
letter (or, with respect to matters involving changes or developments since
the respective dates as of which specified financial information is given
in the Prospectus, as of a date not more than five days prior to the date
of such letter), the conclusions and findings of said firm with respect to
the financial information and other matters covered by its letter (as
provided in Exhibit A hereto) delivered to the Underwriters concurrently
with the execution of this Agreement, and the effect of the letter so to be
delivered on such Closing Date shall be to confirm the conclusions and
findings set forth in such prior letter.
(g) On each Closing Date, there shall have been furnished to the
Underwriters a certificate, dated such Closing Date and addressed to the
Underwriters, signed by the Chief Executive Officer and by the Chief
Financial Officer of the Company, to the effect that:
(i) The representations and warranties of the Company in this
Agreement are true and correct, in all material respects, as if made
at and as of such Closing Date, 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;
(ii) To the best of their knowledge, no stop order or other
order suspending the effectiveness of the Registration Statement or
any amendment thereof or the qualification of the Securities for
offering or sale has been issued, and, to the best of their knowledge,
no proceeding for that purpose has been instituted or is contemplated
by the Commission or any state or regulatory body; and
(iii) The signers of said certificate have carefully examined
the Registration Statement and the Prospectus, and any amendments
thereof or supplements thereto, and (A) such documents contain all
statements and information required to be included therein, the
Registration Statement, or any amendment thereof, does not contain any
untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements
therein not misleading, and the Prospectus, as amended or
supplemented, does not include any
21
untrue statement of material fact or omit to state a material fact
necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, (B) since
the effective date of the Registration Statement, there has occurred
no event required to be set forth in an amended or supplemented
prospectus which has not been so set forth, (C) except as disclosed in
the Prospectus, subsequent to the respective dates as of which
information is given in the Registration Statement and the Prospectus,
neither the Company nor any Subsidiary has incurred any material
liabilities or obligations, direct or contingent, or entered into any
material transactions not in the ordinary course of business, or
declared or paid any dividends or made any distribution of any kind
with respect to its capital stock, and except as disclosed in the
Prospectus, there has not been any change in the capital stock, or any
material change in the short-term or long-term debt, or any issuance
of options, warrants, convertible securities or other rights to
purchase the capital stock of the Company or any Subsidiary, or any
material adverse change, or any development involving a prospective
material adverse change, in the general affairs, condition (financial
or otherwise), business, key personnel, property, prospects, net worth
or results of operations of the Company and the Subsidiaries,
considered as a whole, and (D) except as stated in the Registration
Statement and the Prospectus, there is not pending, or, to the
knowledge of the Company, threatened or contemplated, any action, suit
or proceeding to which the Company or any Subsidiary is a party before
or by any court or governmental agency, authority or body, or any
arbitrator, which might result in any material adverse change in the
condition (financial or otherwise), business, prospects or results of
operations of the Company and the Subsidiaries, considered as a whole.
(h) The Company shall have furnished to the Underwriters and their
counsel such additional documents, certificates and evidence as the
Underwriters or their counsel may have reasonably requested.
All such opinions, certificates, letters and other documents will be
in compliance with the provisions hereof only if they are reasonably
satisfactory in form and substance to the Underwriters and counsel for the
Underwriters. The Company will furnish the Underwriters with such
conformed copies of such opinions, certificates, letters and other
documents as the Underwriters shall reasonably request.
6. 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 (including in settlement of any litigation if such settlement is
effected with the written consent of the Company), insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of
or are based upon an untrue statement or alleged untrue statement of a
material fact contained in the Registration
22
Statement or incorporated therein by reference, including the information
deemed to be a part of the Registration Statement at the time of
effectiveness pursuant to Rule 430A, if applicable, any Preliminary
Prospectus, the Prospectus, or any amendment or supplement thereto, 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 not misleading, and will reimburse each Underwriter
for any legal or other expenses reasonably incurred by it in connection
with investigating or defending against such loss, claim, damage, liability
or action; provided, however, that neither the Company nor any Subsidiary
shall 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
alleged untrue statement or omission or alleged omission made in the
Registration Statement, any Preliminary Prospectus, the Prospectus, or any
such amendment or supplement, in reliance upon and in conformity with
written information furnished to the Company by the Underwriters
specifically for use in the preparation thereof; provided further, however,
that the Company shall not be liable to any Underwriter in respect of any
untrue statement or alleged untrue statement contained in, or omission or
alleged omission from, any Preliminary Prospectus to the extent that (i)
the Prospectus did not contain such 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 Notes in question at or prior to the time at which the
written confirmation of the sale of Notes was sent or given to such person,
and (iii) the failure to deliver such Prospectus was not the result of the
Company's non-compliance with its obligations under Section 4(e) hereof.
(b) Each Underwriter will indemnify and hold harmless the Company
against any losses, claims, damages or liabilities to which the Company may
become subject, under the Act or otherwise (including in settlement of any
litigation, if such settlement is effected with the written consent of such
Underwriter), insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon an untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement, any Preliminary Prospectus, the Prospectus, or any
amendment or supplement thereto, 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 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 the Registration Statement, any Preliminary
Prospectus, the Prospectus, or any such amendment or supplement thereto, in
reliance upon and in conformity with written information furnished to the
Company by such Underwriter, specifically for use in the preparation
thereof, and will reimburse the Company for any legal or other expenses
reasonably incurred by the Company in connection with investigating or
defending against any such loss, claim, damage, liability or action.
(c) Promptly after receipt by an indemnified party under subsection
(a) or (b) 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
23
the indemnifying party in writing of the commencement thereof; but the
omission so to notify the indemnifying party shall not relieve the
indemnifying party from any liability that it may have to any indemnified
party except to the extent that the indemnifying party is substantially
prejudiced thereby. 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 in, and, to the extent that it shall wish, jointly with any
other indemnifying party similarly notified, to assume the defense thereof,
with counsel satisfactory to such indemnified party, and after notice from
the indemnifying party to such indemnified party of the indemnifying
party's election so to assume the defense thereof, the indemnifying party
shall not be liable to such indemnified party under such subsection for any
legal or other expenses subsequently incurred by such indemnified party in
connection with the defense thereof other than reasonable costs of
investigation; provided, however, that if, in the sole judgment of the
Underwriters, it is advisable for the Underwriters to be represented as a
group by separate counsel, the Underwriters shall have the right to employ
a single counsel to represent all Underwriters who may be subject to a
liability arising from any claim in respect of which indemnity may be
sought by the Underwriters under paragraph (a) of this Section 6, in which
event the reasonable fees and expenses of such separate counsel shall be
borne by the indemnifying party or parties and remitted to the Underwriters
for payment to such counsel as such fees and expenses are incurred. An
indemnifying party shall not be obligated under any settlement agreement
relating to any action under this Section 6 to which it has not agreed in
writing.
(d) If the indemnification provided for in this Section 6 is
unavailable or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above, then each indemnifying party shall contribute
to the amount paid or payable by such indemnified party as a result of the
losses, claims, damages or liabilities referred to in subsection (a) or (b)
above, (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company on the one hand and the Underwriters on
the other from the offering of the Securities or (ii) if the allocation
provided by 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 Company
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, as well as any other relevant equitable considerations. The
relative benefits received by the Company 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 bear to the total underwriting discounts and
commissions received by the Underwriters, in each case as set forth in the
table on the cover page of the Prospectus. 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 Underwriters and the parties' relevant intent, knowledge,
access to information and opportunity to correct or prevent such untrue
statement or omission. The Company and the Underwriters agree that it
would not be just and
24
equitable if contributions pursuant to this subsection (d) were to be
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 in the
first sentence of this subsection (d). The amount paid by an indemnified
party as a result of the losses, claims, damages or liabilities referred to
in the first sentence of this subsection (d) shall be deemed to include any
legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending against any action or claim
which is the subject of this subsection (d). Notwithstanding the
provisions of this subsection (d), no Underwriter shall be required to
contribute any amount in excess of the amount by which the total price at
which the Securities underwritten by it and distributed to the public were
offered to the public exceeds the amount of any damages that 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 (d) to contribute are several in proportion to their
respective underwriting obligations and not joint.
(e) The obligations of the Company or any Subsidiary under this
Section 6 shall be in addition to any liability which the Company or any
Subsidiary 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 6 shall be in addition to any liability that the respective
Underwriters may otherwise have and shall extend, upon the same terms and
conditions, to each director of the Company (including any person who, with
his consent, is named in the Registration Statement as about to become a
director of the Company), to each officer of the Company who has signed the
Registration Statement and to each person, if any, who controls the Company
within the meaning of the Act.
7. REPRESENTATIONS AND AGREEMENTS TO SURVIVE DELIVERY. All
representations, warranties, and agreements of the Company herein or in
certificates delivered pursuant hereto, and the agreements of the Underwriters
and the Company (and any Subsidiary) contained in Section 6 hereof, shall remain
operative and in full force and effect regardless of any investigation made by
or on behalf of any Underwriter or any controlling person thereof, or the
Company or any of its officers, directors, or controlling persons and shall
survive delivery of, and payment for, the Securities to and by the Underwriters
hereunder.
8. SUBSTITUTION OF UNDERWRITERS.
(a) If any Underwriter shall fail to take up and pay for the principal
amount of Firm Notes agreed by such Underwriter to be purchased hereunder,
upon tender of such Firm Notes in accordance with the terms hereof, and the
principal amount of Firm Notes not purchased does not in either case
aggregate more than 10% of the aggregate principal amount
25
of Firm Notes set forth in Schedule I hereto, the remaining Underwriters
shall be obligated, severally, in proportion to the respective principal
amount of Firm Notes which they are obligated to purchase hereunder, to
take up and pay for the principal amount of Firm Notes that the withdrawing
or defaulting Underwriter agreed but failed to purchase.
(b) If any Underwriter shall fail to take up and pay for the
principal amount of Firm Notes agreed by such Underwriter to be purchased
hereunder, upon tender of such Firm Notes in accordance with the terms
hereof, and the principal amount of Firm Notes not purchased aggregates
more than 10% of the aggregate principal amount of Firm Notes set forth in
Schedule I hereto, and arrangements for the purchase of such Firm Notes by
other persons reasonably satisfactory to the Company are not made within 36
hours thereafter, this Agreement shall terminate. In the event of any such
termination the Company shall not be under any liability to any Underwriter
(except to the extent provided in Section 4(h) and Section 6 hereof) nor
shall any Underwriter (other than an Underwriter who shall have failed,
otherwise than for some material reason permitted under this Agreement, to
purchase the principal amount of Firm Notes agreed by such Underwriter to
be purchased hereunder) be under any liability to the Company (except to
the extent provided in Section 6 hereof). Nothing contained herein shall
relieve a defaulting Underwriter from liability for its default.
If Firm Notes to which a default relates are to be purchased by non-
defaulting Underwriters or by any other party or parties, the non-
defaulting Underwriters or the Company shall have the right to postpone the
First Closing Date for not more than seven business days in order that the
necessary changes in the Registration Statement, Prospectus and any other
documents, as well as any other arrangements, may be effected. As used
herein, the term "Underwriter" includes any person substituted for an
Underwriter under this Section 8.
9. EFFECTIVE DATE OF THIS AGREEMENT AND TERMINATION.
(a) This Agreement shall become effective at 10:00 a.m., Minneapolis
time, on the first business day following the date hereof, or at such
earlier time after the effective date of the Registration Statement as the
Underwriters in their discretion shall first release the Securities for
sale to the public. For the purpose of this Section, the Securities shall
be deemed to have been released for sale to the public upon release by the
Underwriters of the publication of a newspaper advertisement relating
thereto or upon release by the Underwriters of telexes offering the
Securities for sale to securities dealers, whichever shall first occur. By
giving notice as hereinafter specified before the time this Agreement
becomes effective, the Underwriters or the Company may prevent this
Agreement from becoming effective without liability of any party to any
other party, except that the provisions of Section 4(h) and Section 6
hereof shall at all times be effective.
(b) The Underwriters shall have the right to terminate this Agreement
by giving notice as hereinafter specified at any time at or prior to the
First Closing Date, and the option
26
referred to in Section 3(b), if exercised, may be canceled at any time
prior to the First Closing Date, if (i) the Company shall have failed,
refused or been unable, at or prior to such Closing Date, to perform any
agreement on its part to be performed hereunder, (ii) any other condition
of the Underwriters' obligations hereunder is not fulfilled, (iii) trading
on the New York Stock Exchange or the American Stock Exchange shall have
been wholly suspended, (iv) minimum or maximum prices for trading shall
have been fixed, or maximum ranges for prices for securities shall have
been required, on the New York Stock Exchange or the American Stock
Exchange, by such Exchange or by order of the Commission or any other
governmental authority having jurisdiction, (v) a banking moratorium shall
have been declared by Federal, New York, Texas or Minnesota authorities, or
(vi) there has occurred any material adverse change in the financial
markets in the United States or an outbreak of major hostilities (or an
escalation thereof) in which the United States is involved, a declaration
of war by Congress, any other substantial national or international
calamity or any other event or occurrence of a similar character shall have
occurred since the execution of this Agreement that, in the Underwriters'
judgment, makes it impractical or inadvisable to proceed with the
completion of the sale of and payment for the Securities. Any such
termination shall be without liability of any party to any other party
except that the provisions of Section 4(h) and Section 6 hereof shall at
all times be effective.
(c) If the Underwriters elect to prevent this Agreement from becoming
effective or to terminate this Agreement as provided in this Section, the
Company shall be notified promptly by the Underwriters by telephone or
telegram, confirmed by letter. If the Company elects to prevent this
Agreement from becoming effective, the Underwriters shall be notified by
the Company by telephone or telegram, confirmed by letter.
10. INFORMATION FURNISHED BY UNDERWRITERS. The statements set forth in the
last paragraph of the cover page, in the last paragraph of page 3, and under the
caption "Underwriting" in any Preliminary Prospectus and in the Prospectus
constitute the written information furnished by or on behalf of the Underwriters
referred to in Section 2 and Section 6 hereof.
11. NOTICES. Except as otherwise provided herein, all communications
hereunder shall be in writing or by telegraph and, if to the Underwriters, shall
be mailed, telegraphed or delivered to the Underwriters c/o Xxxxx Xxxxxxx Inc.,
Xxxxx Xxxxxxx Tower, 000 Xxxxx Xxxxx Xxxxxx, Xxxxxxxxxxx, Xxxxxxxxx 00000, with
a copy to Xxxxxxx Xxxxxxx, Esq., Xxxxxxxxx & Xxxxxx P.L.L.P., 4200 IDS Xxxxxx,
Xxxxxxxxxxx, XX 00000, except that notices given to an Underwriter pursuant to
Section 6 hereof shall be sent to such Underwriter at the addresses of such
Underwriters appearing in the Agreement Among Underwriters entered into in
connection with the offer and sale of the Notes; if to the Company, shall be
mailed, telegraphed or delivered to it at 0000 Xxxxxxx Xxxxxxx Xxxxxxx, Xxxxxx,
Xxxxx 00000 Attention: Chief Executive Officer, with a copy to Xxxxxxx X. Xxxxx,
Esq., Xxxxxx and Xxxxx, L.L.P., 3100 NationsBank Plaza, 000 Xxxx Xxxxxx, Xxxxxx,
Xxxxx 00000. All notices given by telegram shall be promptly confirmed by
letter. Any party to this Agreement may change such address for notices by
sending to the parties to this Agreement written notice of a new address for
such purpose.
27
12. PERSONS ENTITLED TO BENEFIT OF AGREEMENT. This Agreement shall inure
to the benefit of and be binding upon the parties hereto and their respective
successors and assigns and the controlling persons, officers and directors
referred to in Section 6. Nothing in this Agreement is intended or shall be
construed to give to any other person, firm or corporation any legal or
equitable remedy or claim under or in respect of this Agreement or any provision
herein contained. The term "successors and assigns" as herein used shall not
include any purchaser, as such purchaser, of any of the Securities from any of
the Underwriters.
13. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Minnesota.
Please sign and return to the Company the enclosed duplicates of this
letter whereupon this letter will become a binding agreement between the Company
and the Underwriters in accordance with its terms.
Very truly yours,
AMRESCO, INC.
By
----------------------------------
Its
------------------------------
CONFIRMED
as of the date first
above mentioned
By: XXXXX XXXXXXX INC.
By
----------------------------
Managing Director
Acting on behalf of itself
and the other Underwriters
SCHEDULE I
Principal Amount
Underwriter of Firm Notes(1)
----------- ----------------
Xxxxx Xxxxxxx Inc. . . . . . . . . . $
X. X. Xxxxxxxx & Co. . . . . . . . .
Xxxxxx Xxxxxx & Company, Inc.. . . .
--------------
Total. . . . . . . . $50,000,000
-----------
-----------
------------
(1) The Underwriters may purchase up to an additional $7,500,000 in aggregate
principal amount of Notes, to the extent the option to purchase Option
Notes described in Section 3(b) of the Agreement is exercised, in the
proportions and in the manner described in the Agreement.
EXHIBIT A
ACCOUNTANTS' LETTERS
1. A letter from Deloitte & Touche, LLP dated and delivered on the date
this Agreement is executed and a similar certificate or letter dated and
delivered on each Closing Date, confirming that they are independent public
accountants within the meaning of the Act and the published rules and
regulations thereunder, shall be issued to the Underwriters stating that:
(a) 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; the financial statements of the Company
as and for the ____ month period ended ______________ [THE LATEST UNAUDITED
FINANCIAL STATEMENTS INCLUDED IN OR INCORPORATED BY REFERENCE INTO THE
PROSPECTUS] (the "Latest Balance Sheet Date") 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;
(c) on the basis of a limited review of unaudited consolidated
financial statements, including a reading of the latest available financial
statements, a reading of the minutes of the meetings of the Board of
Directors of the Company, and discussions with officials of the Company
responsible for financial and accounting matters as to transactions and
events subsequent to the Latest Balance Sheet Date, and such other
inquiries and procedures as they may specify, nothing has come to their
attention which, in their judgment, would indicate,
(i) that the unaudited consolidated financial statements of the
Company included or incorporated by reference in the Registration
Statement and Prospectus do not comply in form in all material
respects with the applicable accounting requirements of the Act and of
the related published rules and regulations, or that such unaudited
consolidated financial information contained or incorporated by
reference in the Registration Statement was not prepared in conformity
with generally accepted accounting principles applied on a basis
substantially consistent, in all material respects, with those
followed in the preparation of the audited financial statements of the
Company included therein;
(ii) at the date of the latest balance sheet read by them and at
a subsequent specified date not more than five business days prior to
the date of such letter there was any decrease in the common stock or
increase in long-term debt of the Company as compared with amounts
shown in the unaudited consolidated balance sheet dated as of the
Latest Balance Sheet Date, included in the Registration Statement,
except for changes which the Registration Statement discloses have
occurred or may occur;
(iii) at the date of the latest balance sheet read by them and
at a subsequent specified date not more than five business days prior
to the date of such letter there were any decreases, as compared with
amounts shown in the balance sheet dated as of the Latest Balance
Sheet Date included in the Registration Statement, in total assets,
stockholders' equity of the Company, except for decreases which the
Registration Statement discloses have occurred or may occur or which
are described in such letter;
(iv) for the period from the Latest Balance Sheet Date to the
date of the latest statement of operations read by them there were any
decreases, as compared with the corresponding period of the preceding
year, in revenues or the total or per share amounts of net income of
the Company, except for decreases which the Registration Statement
discloses have occurred or may occur or which are described in such
letter;
(v) for the period from the date of the latest statement of
operations to a subsequent specified date not more than five business
days prior to the date of such letter, that certain conclusions
described in such letter were not correct, except as otherwise
described in the Registration Statement or such letter; and
(d) they have compared specific dollar amounts, numbers of shares,
and other financial information pertaining to the Company set forth in the
Registration Statement, which have been specified by the Underwriters prior
to the date of this Agreement, to the extent that such amounts, numbers and
information may be derived from the general accounting records of the
Company, and excluding any questions requiring any interpretation by legal
counsel, with the results obtained from the application of specified
readings, inquiries and other appropriate procedures (which procedures do
not constitute an audit in accordance with generally accepted auditing
standards) set forth in the letter, and found them to be in agreement.
