EXHIBIT 1.1
$50,000,000 PRINCIPAL AMOUNT OF __% SENIOR SUBORDINATED NOTES
DUE 2003(1)
AMRESCO, INC.
PURCHASE AGREEMENT
______________, 1996
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
_____________, 1996 (the "Indenture"), between the Company and
_______________, as trustee (the "Trustee").
The Company hereby confirms its agreement with respect to the sale
of the Securities to the Underwriters.
1. REGISTRATION STATEMENT. A registration statement on Form S-3
(File No. 33-_____) 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
_____________________
(1) Plus an option to purchase up to an additional $7,500,000 aggregate
principal amount of Notes to cover over-allotments.
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 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
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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, the
Exchange Act (and its applicable rules and regulations) 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 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.
(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 the Prospectus under
the captions "Prospectus Summary" and "Summary Financial and Other
Data," present fairly and on a basis consistent with the books and
records of the Company the information stated therein.
(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 except as such enforceability may be limited by considerations of
public policy, bankruptcy, insolvency,
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reorganization or similar laws affecting the rights of creditors
generally and subject to general principles of equity.
(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, 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 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, 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
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 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 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,
any statute, any agreement or instrument to which the Company or any of
its subsidiaries listed in Exhibit 21
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to the Registration Statement (collectively, the "Subsidiaries" or each
individually, a "Subsidiary") is a party or by which either the Company
or any Subsidiary is bound or to which any of their property is subject,
the Company's or any Subsidiary's charter or 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 materially adverse
effect on the financial condition, assets, operations or prospects 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 condition (financial or otherwise),
properties, assets, business, prospects or results of operations of the
Company and the Subsidiaries, considered 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, authorizations, licenses, permits, easements, consents,
certificates and orders of any governmental or self-regulatory body
required for the conduct of their respective businesses. The
descriptions in the Registration Statement and the Prospectus of
statutes, legal and governmental proceedings or contracts and other
documents are accurate and fairly present 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 its material Subsidiaries (which
consist of Xxxxxxxx Fengolio, Inc., AMRESCO Management, Inc., AMRESCO
Residential Credit Corporation, AMRESCO Capital Corporation, AMRESCO New
England, Inc. and Oak Cliff Financial,
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Inc. (the "Material Subsidiaries")) has been duly organized and is
validly existing as a corporation in good standing under the laws of its
jurisdiction of incorporation or organization with full corporate power
and authority to own, lease and operate 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 condition (financial or otherwise), properties,
assets, business, prospects or results of operation of the Company and
the Subsidiaries, considered as a whole. The Company and each of the
Subsidiaries have at all times maintained and continue to maintain all
licenses, permits or other authorizations required for the conduct of
its business, where the failure to maintain such licenses, permits or
other authorizations reasonably could or might be expected to result in
a materially adverse effect on the financial condition, assets,
operations or prospects of the Company and its Subsidiaries, taken as a
whole, and 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 materially adverse effect on the
financial condition, assets, operations or prospects 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 to the best knowledge of the
Company, 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, considered 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 in the Prospectus, is
owned directly by the Company free and clear of any security interest,
claim, lien or other encumbrance. The Company and the Subsidiaries have
no subsidiaries other than those listed in Exhibit 21 to the
Registration Statement.
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(l) Each of the Company and the Subsidiaries, as the case may be,
has good and marketable title to the real or personal property described
in the Registration Statement or Prospectus as being owned by the
Company or a Subsidiary, respectively, in each case free and clear of
any liens, claims, security interests or other encumbrances except such
as are described in the Registration Statement and the Prospectus; the
property held under lease by the Company or any Subsidiary, as the case
may be, is held by them under valid and binding leases with only such
exceptions with respect to any particular lease as do not interfere in
any material respect with the conduct of the business of the Company or
the applicable Subsidiary.
(m) Other than its ownership interest in the Subsidiaries, the
Company owns no capital stock or other equity or ownership or
proprietary interest in any corporation, partnership, association, trust
or other entity.
(n) The Company and each of its Subsidiaries have filed all
necessary foreign, federal and state and local income and franchise tax
returns and 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 Company's
business or properties.
(o) 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 material loss or interference with its
business 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.
(p) 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 prospective material adverse change, in or affecting the
financial position, 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.
(q) Neither the Company nor any of its officers, directors of
affiliates has taken, directly or indirectly, any action designed to
cause or result in, or that has constituted or
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might reasonably be expected to constitute, the stabilization or
manipulation of the price of any security of the Company.
(r) 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.
(s) 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; 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 material 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.
(t) 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
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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.
(u) 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.
(v) 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.
(w) 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.
(x) 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.
(y) 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 NASD is contemplating
terminating such registration or qualification.
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(z) 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.
(aa) 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 or with any person or entity located in Cuba.
(bb) 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.
(cc) 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.
(dd) 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 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 number 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 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 certified or official bank check or checks in next day
funds payable to the order of 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 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
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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 second 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 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 certified or official bank check or checks in
next day funds payable to the order of 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.
11
(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 initial public offering
prices 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 prices 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 prices 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 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' 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
12
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 in each year as are or
may be reasonably required by the laws of such jurisdiction to permit
secondary trading of the same.
(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 and (iii)
such additional information concerning the business and financial
condition of the Company and its Subsidiaries, if any, as each such
Underwriter may reasonably request.
(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.
13
(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 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 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, 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 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 and will file such reports with the Commission with respect
to sale of the Securities and the application of the proceeds therefrom
as required in accordance with Rule 463 under the Act or successor rules
or regulations.
(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, whether to
facilitate the sale or resale of the Securities or otherwise.
14
(k) 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 under are subject to the accuracy, as of the date hereof
and at each of the First Closing Date and 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 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 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, 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 & Xxxxx, L.L.P., counsel for the
Company, dated such Closing Date and addressed to the Underwriters, to
the effect that:
15
(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 duly
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 principles 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 and validly authorized by all requisite corporate action,
duly executed and duly 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
principles of equity; the Notes being delivered on the Closing Date have
been duly and validly 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, 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 duly and properly listed for trading
on the New York Stock Exchange, Inc.
(iii) The execution, delivery and performance of this Agreement,
the Indenture and the Securities and the consummation of the
transactions herein and therein contemplated will not result in a breach
or violation of any of the terms and provisions of, or constitute a
default under, (a) any agreement or instrument known to such counsel to
which the Company or any Subsidiary is a party or by which any such
entity is bound or to which any of their property is subject, (b) the
Company's or any Subsidiary's charter or by-laws, or (c) any law of the
United States, any law of any state having jurisdiction over the Company
or any Subsidiary or their properties or the General Corporation Law of
the State of Delaware, and rules or regulations of the United States or
any state having jurisdiction over the Company or any Subsidiary or any
of their properties, which laws, rules or regulations generally apply to
transactions of this nature, or any order or decree known to such
counsel of any court or governmental agency or body having jurisdiction
over the Company, any Subsidiary or any of their respective properties
(except for federal and state securities laws which are not covered by
the opinions expressed in this paragraph (iii)), which breach,
16
violation or default would have a material adverse effect on the condition
(financial or otherwise), properties, assets, business, prospects or
results of operations of the Company and the Subsidiaries, considered as
a whole; and 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 or sale of the Securities by the Company, except as may be
required under the Act, the Trust Indenture Act or state securities laws.
(iv) 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 of the Company are duly authorized,
validly issued and fully paid and non-assessable and have been issued in
compliance with applicable federal and state securities laws and
regulations. No statutory preemptive rights or registration rights, or,
to such counsel's knowledge, 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 knowledge, there are
no outstanding rights 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 outstanding capital stock of each
Subsidiary has been duly authorized, validly issued and is fully paid
and non-assessable. 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 each Subsidiary, and such shares are not
subject to any liens, pledges or other encumbrances.
(v) 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. 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.
17
(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 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) comply as to form in all material
respects with the requirements of the Act and the Rules and Regulations.
All documents filed pursuant to the Exchange Act and incorporated by
reference in the Registration Statement, any Preliminary Prospectus or
the Prospectus, or in any further amendments or supplements thereto,
comply as to form in all material respects with the requirements of the
Exchange Act and the rules and regulations promulgated thereunder.
(ix) The Company is not, and upon 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 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 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 conferences with officers of the
Company and the Subsidiaries, examination of documents referred to or
incorporated by reference in the Registration Statement and Prospectus and
other procedures as such counsel deemed appropriate, nothing has come to the
attention of such counsel that causes such counsel 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
18
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.
(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 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 knowledge, (a) neither the Company nor any of
the Subsidiaries has violated its Certificate of Incorporation or Bylaws
and (b) neither the Company nor any of the Subsidiaries has breached or
otherwise violated any existing obligation under any material agreement
to which the Company or any 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.
19
(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
20
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 and each Subsidiary, jointly and severally, 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
21
material fact contained in the Registration 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.
(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 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 otherwise than under such
subsection. 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
22
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 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
23
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 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
24
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 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
25
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 your 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 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 Center, Xxxxxxxxxxx, XX 00000, except that notices given
to an Underwriter pursuant to Section 6 hereof shall be sent to such
Underwriter at the address stated in the Underwriters' Questionnaire
furnished by such Underwriter in connection with this offering; 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 & Xxxxx, 0000 XxxxxxxXxxx Xxxxx,
00xx Xxxxx, 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.
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.
26
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. .................................. $
-----------
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.
