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EXHIBIT 10.48
FIRST MERCHANTS ACCEPTANCE CORPORATION
$45,000,000
Subordinated Reset Notes Due 2006
UNDERWRITING AGREEMENT
October 29, 1996
▇.▇. ▇▇▇▇▇▇▇▇ & CO.
▇▇▇▇▇ ▇▇▇▇▇▇▇ INC.
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, INC.
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & COMPANY, INCORPORATED
As Representatives of the Several Underwriters
c/o ▇.▇. ▇▇▇▇▇▇▇▇ & Co.
▇.▇. ▇▇▇▇▇▇▇▇ Financial Center
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
First Merchants Acceptance Corporation, a Delaware corporation (the
"Company"), proposes to sell to the underwriters named in Schedule I hereto
(the "Underwriters") for whom you are acting as the representatives (the
"Representatives") an aggregate $45,000,000 principal amount of its
Subordinated Reset Notes Due 2006 (the "Firm Notes"). The Firm Notes are to be
sold to the Underwriters, acting severally and not jointly, in such amounts as
are set forth in Schedule I hereto opposite the name of such Underwriter. The
Company also proposes to grant to the Underwriters an option to purchase up to
$6,750,000 in principal amount of Subordinated Reset Notes Due 2006 of the
Company as provided for in Section 2 of this Agreement (the "Option Notes").
The Firm Notes and the Option Notes purchased pursuant to this Agreement are
herein called the "Notes." The Notes are to be issued pursuant to an
Indenture, to be dated as of October 15, 1996, between the Company and LaSalle
National Bank, Chicago, Illinois, as trustee (the "Trustee"). Such Indenture,
as amended and supplemented, is herein referred to as the "Indenture."
1. Representations and Warranties of the Company. The Company
represents and warrants to, and agrees with, each of the Underwriters that:
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(a) The Company meets the requirements for use of, and
has filed with the Securities and Exchange Commission (the
"Commission") under the Securities Act of 1933, as amended (the
"Securities Act"), a registration statement on Form S-3 (Registration
No. 333-14019), including the related preliminary prospectus and a
Statement of Eligibility on Form T-1 with respect to the Trustee
pursuant to the Trust Indenture Act of 1939, as amended (the "Trust
Indenture Act"), has filed such amendments thereto, if any, and such
amended preliminary prospectuses as may have been required to the date
hereof, and will file such additional amendments thereto and such
amended prospectuses as may hereafter be required, relating to the
Notes. Copies of such registration statement and any amendments,
including any post-effective amendments, and all forms of the related
prospectuses contained therein and any supplements thereto, have been
delivered to you. Such registration statement, including the
prospectus, Part II, the information incorporated by reference, all
financial schedules and exhibits thereto, and all information deemed
to be a part of such registration statement pursuant to Rule 430A
under the Securities Act, as amended at the time when it shall become
effective, together with any registration statement filed by the
Company pursuant to Rule 462(b) of the Securities Act, is herein
referred to as the "Registration Statement," and the prospectus
included as part of the Registration Statement on file with the
Commission that discloses all the information that was omitted from
the prospectus on the effective date pursuant to Rule 430A of the
Rules and Regulations (as defined below) and in the form filed
pursuant to Rule 424(b) under the Securities Act is herein referred to
as the "Final Prospectus." The prospectus included as part of the
Registration Statement on the date when the Registration Statement
becomes effective is referred to herein as the "Effective Prospectus."
Any prospectus included in the Registration Statement and in any
amendment thereto prior to the effective date of the Registration
Statement is referred to herein as a "Preliminary Prospectus." For
purposes of this Agreement, "Rules and Regulations" mean the rules and
regulations promulgated by the Commission under either the Securities
Act, or the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), or the Trust Indenture Act, as applicable.
(b) The Commission has not issued any order preventing or
suspending the use of any Preliminary Prospectus, and each Preliminary
Prospectus, at the time of filing thereof, complied with the
requirements of the Securities Act and the Rules and Regulations, and
did not include 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, in the light of the circumstances under
which they were made, not misleading; except that the foregoing does
not apply to statements or omissions made in reliance upon and in
conformity with written information furnished to the Company by any
Underwriter specifically for use therein (it being understood that the
only information so provided is the information included in the last
paragraph on the cover page and under the caption "Underwriting" in
the Final Prospectus). When the Registration Statement becomes
effective and at all times subsequent thereto up to and including the
First Closing Date (as hereinafter defined), (i) the Registration
Statement, the Effective Prospectus and Final
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Prospectus and any amendments or supplements thereto will contain all
statements which are required to be stated therein in accordance with
the Securities Act, the Exchange Act, the Trust Indenture Act and the
Rules and Regulations and will comply with the requirements of the
Securities Act, the Exchange Act, the Trust Indenture Act and the
Rules and Regulations, and (ii) neither the Registration Statement,
the Effective Prospectus nor the Final Prospectus nor any amendment or
supplement thereto will include 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, in light of the
circumstances in which they are made, not misleading; except that the
foregoing does not apply to statements or omissions made in reliance
upon and in conformity with written information furnished to the
Company by any Underwriter specifically for use therein (it being
understood that the only information so provided is the information
included in the last paragraph on the cover page and in the first,
third, fourth and sixth paragraphs under the caption "Underwriting"
in the Final Prospectus).
(c) The documents which are incorporated by reference in
any Preliminary, Effective and Final Prospectus or from which
information is so incorporated by reference, were timely filed and
(after giving effect to any amendments filed prior to the date hereof)
complied in all material respects with the requirements of the
Securities Act or the Exchange Act, as applicable, and the Rules and
Regulations, and any documents so filed prior to the termination of
this offering and incorporated by reference subsequent to the
effective date of the Registration Statement shall, when they are
filed with the Commission, conform in all material respects with the
requirements of the Securities Act and the Exchange Act, as
applicable, and the Rules and Regulations.
(d) Except for First Merchants Auto Receivables
Corporation, a Delaware corporation, and First Merchants Auto
Receivables Corporation II, a Delaware corporation which are
wholly-owned by the Company and were formed solely for the purpose of
facilitating the securitization of the Company's finance receivables,
the Company has no subsidiaries in any form, either directly or
indirectly, wholly-owned or other than wholly-owned. As used herein,
the term "subsidiary" includes any corporation, joint venture or
partnership in which the Company or any subsidiary of the Company has
an ownership interest.
(e) The Company and each subsidiary of the Company is
duly organized and validly existing and in good standing under the
laws of the respective jurisdictions of their organization or
incorporation, as the case may be, with full power and authority
(corporate, partnership and other, as the case may be) to own their
properties and conduct their business as now conducted and are duly
qualified or authorized to do business and are in good standing in all
jurisdictions wherein the nature of their business or the character of
property owned or leased may require them to be qualified or
authorized to do business, except for jurisdictions in which the
failure to so qualify would not have a material adverse effect on the
Company and its subsidiaries taken as a whole. The
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Company and its subsidiaries hold all licenses, consents and
approvals, and have satisfied all eligibility and other similar
requirements imposed by federal and state regulatory bodies,
administrative agencies or other governmental bodies, agencies or
officials, in each jurisdiction in which the Company or one of its
subsidiaries has an office and any other jurisdiction in which such
license, permit, consent, appraisal or requirement is material to the
conduct of the respective businesses in which they are engaged as
described in the Effective Prospectus and the Final Prospectus.
(f) The outstanding stock of each of the Company's
corporate subsidiaries is duly authorized, validly issued, fully paid
and nonassessable. All of the outstanding stock of each of the
Company's corporate subsidiaries is owned by the Company, and, except
for security interests in the stock of such subsidiaries securing the
Company's obligations under the Company's Senior Revolving Credit
Facility and Temporary Credit Facility (as those terms are defined in
the Registration Statement), is owned free and clear of any lien,
encumbrance, pledge, equity or claim of any kind. Neither the Company
nor any of its subsidiaries is a partner or joint venturer in any
partnership or joint venture.
(g) The capitalization of the Company as of June 30, 1996
is as set forth under the caption "Capitalization" in the Effective
Prospectus and the Final Prospectus, and the Company's capital stock
conforms to the description thereof contained or incorporated by
reference in the Effective Prospectus and the Final Prospectus. All
the issued shares of capital stock of the Company have been duly
authorized and validly issued, are fully paid and nonassessable. None
of the issued shares of capital stock of the Company have been issued
in violation of any preemptive or similar rights. The Notes have been
duly and validly authorized and, when executed, authenticated and
delivered in accordance with the Indenture and paid for by the
Underwriters pursuant to this Agreement and the Indenture, will
constitute legal and binding obligations of the Company entitled to
the benefits of the Indenture and will conform in all material
respects to the description thereof contained in the Effective
Prospectus and the Final Prospectus. Upon the effective date of the
offering of the Notes, there will be no preemptive rights or other
rights to subscribe for or to purchase, or any restriction upon the
transfer of, any shares of capital stock of the Company pursuant to
the Company's certificate of incorporation, by-laws or other governing
documents or any agreement or other instrument to which the Company is
a party or by which it may be bound, except as described in the
Effective Prospectus and the Final Prospectus and except for
restrictions imposed under applicable securities laws. Neither the
filing of the Registration Statement nor the offer or sale of the
Notes as contemplated by this Agreement gives rise to any rights,
other than those which have been waived or satisfied, for or relating
to the registration of any shares of capital stock of the Company or
any other securities of the Company. The Underwriters will receive
good and marketable title to the Notes to be issued and delivered
hereunder, free and clear of all liens, encumbrances, claims, security
interests, restrictions, shareholders' agreements and voting trusts
whatsoever.
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(h) All offers and sales of the Company's securities
prior to the date hereof were at all relevant times duly registered or
the subject of an available exemption from the registration
requirements of the Securities Act, and were duly registered or the
subject of an available exemption from the registration requirements
of the applicable state securities or Blue Sky laws.
(i) The Company has full legal right, power and authority
to enter into this Agreement and the Indenture and to sell and deliver
the Notes to the Underwriters as provided herein, and this Agreement
and the Indenture have been duly authorized, executed and delivered by
the Company and constitute valid and binding agreements of the Company
enforceable against the Company in accordance with their terms,
subject to applicable bankruptcy, insolvency, reorganization,
moratorium, fraudulent transfer, fraudulent conveyance and similar
laws affecting creditors' rights and subject, as to enforceability, to
general principles of equity (regardless of whether enforcement is
sought in a proceeding in equity or at law) and to the application of
principles of public policy. No consent, approval, authorization or
order of any court or governmental agency or body or third party is
required for the performance of this Agreement or the Indenture by the
Company or the consummation by the Company of the transactions
contemplated hereby or thereby, except such as have been obtained and
such as may be required by the National Association of Securities
Dealers, Inc. ("NASD") or under the Securities Act, the Trust
Indenture Act or state securities or Blue Sky laws in connection with
the purchase and distribution of the Notes by the Underwriters. The
issue and sale of the Notes by the Company, the Company's performance
of this Agreement and the Indenture and the consummation of the
transactions contemplated hereby and thereby will not result in a
breach or violation of, or conflict with, any of the terms and
provisions of, or constitute a default by the Company under, any
indenture, mortgage, deed of trust, loan agreement, lease or other
agreement or instrument to which the Company is a party or to which
the Company or any of its properties is subject, the certificate of
incorporation, by-laws or other governing instruments of the Company
or any statute or any judgment, decree, order, rule or regulation of
any court or governmental agency or body applicable to the Company or
any of its properties. The Company is not in violation of its
certificate of incorporation, by-laws or other governing instruments
or any law, administrative rule or regulation or arbitrators' or
administrative or court decree, judgment or order or in violation or
default (there being no existing state of facts which with notice or
lapse of time or both would constitute a default) in the performance
or observance of any obligation, agreement, covenant or condition
contained in any contract, indenture, deed of trust, mortgage, loan
agreement, note, lease, agreement or other instrument or permit to
which it is a party or by which it or any of its properties is or may
be bound.
(j) The financial statements and the related notes of the
Company included or incorporated by reference in the Registration
Statement, the Effective Prospectus and the Final Prospectus present
fairly the financial position, results of operations and changes in
financial position and cash flow of the Company at the dates and for
the periods to which
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they relate, and have been prepared in accordance with generally
accepted accounting principles applied on a consistent basis
throughout the periods indicated. The other financial statements and
schedules included or incorporated by reference in or attached as
schedules to the Registration Statement and the Prospectus conform to
the requirements of the Securities Act, the Exchange Act, the Trust
Indenture Act and the Rules and Regulations and present fairly the
information presented therein for the periods shown. The financial
and statistical data set forth in the Effective Prospectus and the
Final Prospectus under the captions "Prospectus Summary," "Use of
Proceeds," "Capitalization," "Selected Financial Data," "Management's
Discussion and Analysis of Financial Condition and Results of
Operations" and "Business" fairly presents the information set forth
therein on the basis stated in the Effective Prospectus and the Final
Prospectus. Deloitte & Touche LLP, whose report appears in the
Effective Prospectus and the Final Prospectus, are independent
accountants as required by the Securities Act and the Rules and
Regulations.
(k) Subsequent to December 31, 1995, neither the Company
nor any subsidiary has sustained any material loss or interference
with its business or properties from fire, flood, hurricane,
earthquake, accident or other calamity, whether or not covered by
insurance, or from any labor dispute or court or governmental action,
order or decree, which is not disclosed in the Effective Prospectus
and the Final Prospectus and which is material to the Company and its
subsidiaries taken as a whole; and subsequent to the respective dates
as of which information is given in the Registration Statement, the
Effective Prospectus and the Final Prospectus, (i) neither the Company
nor any of its subsidiaries has incurred any material liabilities or
obligations, direct or contingent, or entered into any material
transactions not in the ordinary course of business, and (ii) there
has not been any change in the capital stock, long-term debt,
obligations under capital leases or short-term borrowings of the
Company or its subsidiaries or any issuance of options, warrants or
rights to purchase the capital stock of the Company or any of its
subsidiaries, or any material adverse change, or any development
involving a prospective material adverse change, in the general
affairs, management, business, prospects, financial position, net
worth or results of operations of the Company and its subsidiaries
taken as a whole, except in each case as described in or contemplated
by the Effective Prospectus and the Final Prospectus.
(l) Except as described in the Effective Prospectus and
the Final Prospectus, there is not pending, or to the knowledge of the
Company threatened, any legal or governmental action, suit, claim,
proceeding, inquiry or investigation, to which the Company, any of its
subsidiaries or any of their respective officers or directors is a
party, or to which the property of the Company or any subsidiary is
subject, before or brought by any court or governmental agency or
body, wherein an unfavorable decision, ruling or finding could prevent
or materially hinder the consummation of this Agreement or result in a
material adverse change in the business condition (financial or
other), prospects,
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financial position, net worth or results of operations of the Company
and its subsidiaries taken as a whole.
(m) There are no contracts or other documents required by
the Securities Act or by the Rules and Regulations to be described in
the Registration Statement, the Effective Prospectus or the Final
Prospectus or to be filed or incorporated by reference as exhibits to
the Registration Statement which have not been described, filed or
incorporated by reference as required. All such contracts to which
the Company or any of its subsidiaries is a party have been duly
authorized, executed and delivered by the Company or any of its
subsidiaries, as the case may be, constitute valid and binding
agreements of the Company or its subsidiary and are enforceable
against the Company or its subsidiary in accordance with the terms
thereof. Each of the Company and its subsidiaries has performed all
its obligations required to be performed by it, and is neither in
default nor has it received notice of default, under any such contract
or other material instrument to which it is a party or by which its
property is bound or affected. To the best knowledge of the Company,
no other party under any such contract or other material instrument to
which it or any of its subsidiaries is a party is in default in any
material respect thereunder.
(n) Except as described in the Effective Prospectus and
the Final Prospectus, the Company and each of its subsidiaries have
good and marketable title to all real and material personal property
owned by them, free and clear of all liens, charges, encumbrances or
defects, except those reflected in the financial statements
hereinabove described. The real and personal property and buildings
referred to in the Effective Prospectus and the Final Prospectus which
are leased from others by the Company or any of its subsidiaries are
held under valid, subsisting and enforceable leases. The Company and
its subsidiaries own or lease all such properties as are necessary to
their respective operations as now conducted.
(o) The Company's system of internal accounting controls
taken as a whole is sufficient to meet the broad objectives of
internal accounting control insofar as those objectives pertain to the
prevention or detection of errors or irregularities in amounts that
would be material in relation to the Company's financial statements.
Neither the Company nor any of its subsidiaries nor any director,
officer, agent, employee or other person acting on behalf of the
Company or any of its subsidiaries has, directly or indirectly used,
or authorized the use of, any corporate or other funds for unlawful
contributions, gifts, entertainment or other unlawful expenses
relating to political activity; made any unlawful payment to foreign
or domestic government officials or employees or to foreign or
domestic political parties or campaigns from corporate funds; violated
any provision of the Foreign Corrupt Practices Act of 1977, as
amended; made any bribe, rebate, payoff, influence payment kickback or
other unlawful payment; or received or retained any funds in violation
of any law, rule or regulation.
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(p) The Company and its subsidiaries have filed all
foreign, federal, state and all material local income, excise and
franchise tax returns required to be filed through the date hereof and
have paid all taxes shown as due therefrom to the extent such taxes
have become due and are not being contested in good faith; and there
is no tax deficiency that has been, nor does the Company or any of its
subsidiaries have knowledge of any tax deficiency which is likely to
be, asserted against the Company or any of its subsidiaries, which if
determined adversely could materially and adversely affect the
earnings, assets, affairs, business prospects or condition (financial
or other) of the Company or its subsidiaries taken as a whole.
(q) The Company and its subsidiaries operate their
business in conformity in all material respects with all applicable
statutes, common laws, ordinances, decrees, orders, rules and
regulations of governmental bodies. The Company and its subsidiaries
have all licenses, permits, approvals or consents to operate its
business in all locations in which such business is currently being
operated, and the Company and its subsidiaries are not aware of any
existing or imminent statutory, regulatory or administrative matter
which may adversely impact its operations or business prospects other
than as specifically disclosed in the Effective Prospectus and the
Final Prospectus. Neither the Company nor any of its subsidiaries has
engaged in any activity, whether alone or in concert with one of its
customers, creating the potential for exposure to material civil or
criminal monetary liability or other material sanctions under federal
or state laws regulating consumer credit transactions or debt
collection practices.
(r) Neither the Company nor any of its subsidiaries has
failed to file with the applicable regulatory authorities any
statement, report, information or form required by any applicable law,
regulation or order where the failure to file the same would have a
material adverse effect on the Company and its subsidiaries taken as a
whole or on its ability to conduct business in any state; all such
filings or submissions were in material compliance with applicable
laws when filed, and no deficiencies have been asserted by any
regulatory commission, agency or authority with respect to such
filings or submissions. Neither the Company nor any of its
subsidiaries failed to maintain in full force and effect any license,
certification, registration or permit necessary or proper for the
conduct of their business, or received any notification that any
revocation or limitation thereof is threatened or pending, and, except
as disclosed in the Effective Prospectus and the Final Prospectus,
there is not pending any change under any law, regulation, license or
permit which could materially adversely affect its business,
operations, property or business prospects. Neither the Company nor
any of its subsidiaries has received any notice of violation of or
been threatened with a charge of violating and is not, to the best of
its knowledge, under investigation with respect to a possible
violation of any provision of any law, regulation or order.
(s) No labor dispute exists or is imminent with the
Company's employees or with employees of its subsidiaries which could
materially adversely affect the Company
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or any of its subsidiaries. The Company is not aware of any existing
or imminent labor disturbance by its employees or by any employees of
its subsidiaries which could be expected to materially adversely
effect the condition (financial or otherwise), results of operations,
properties, affairs, management, business affairs or business
prospects of the Company or any of its subsidiaries.
(t) Except as disclosed in the Effective Prospectus and
the Final Prospectus, each of the Company and its subsidiaries owns or
possesses, or can acquire on reasonable terms, the patents, licenses,
copyrights, trademarks, service marks and trade names presently
employed by it in connection with the businesses now operated by it,
and neither the Company nor any of its subsidiaries has received any
notice of infringement of or conflict with asserted rights of others
with respect to any of the foregoing which, alone or in the aggregate,
if the subject of an unfavorable decision, ruling or finding, would
result in any material adverse change in the condition, financial or
otherwise, or in the earnings, business affairs or business prospects
of the Company or its subsidiaries.
(u) Neither the Company nor any of its subsidiaries nor
any of the directors, officers, employees or agents of the Company and
its subsidiaries has taken and will not take, directly or indirectly,
any action designed to cause or result in, or which has constituted or
which might be expected to constitute, stabilization or manipulation
of the price of the capital stock of the Company.
(v) Each of the Company and its subsidiaries is insured
by insurers of recognized financial responsibility against such losses
and risks and in such amounts as are prudent and customary in the
businesses in which it is engaged; and neither the Company nor any of
its subsidiaries has 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.
(w) Neither the Company nor any of its subsidiaries is,
will not become as a result of the transactions contemplated hereby,
and does not intend to conduct its business in a manner that would
cause it to become, an "investment company" or a company "controlled"
by an "investment company" within the meaning of the Investment
Company Act of 1940.
(x) The Company has filed with the Commission and the NASD
all reports, documents and statements required to be filed by the
Company pursuant to the Securities Act, the Exchange Act, the Rules
and Regulations and all the rules and regulations of the NASD relating
to the Company's capital stock, and each of such reports, documents
and statements, at the time that they were filed, complied in all
material respects with the requirements of the Securities Act, the
Exchange Act and the Rules and Regulations.
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2. Purchase, Sale and Delivery of the Notes.
(a) On the basis of the representations, warranties,
agreements and covenants herein contained and subject to the terms and
conditions herein set forth, the Company agrees to sell to each of the
Underwriters, and each of the Underwriters, severally and not jointly,
agrees to purchase at a purchase price of $960 per $1,000 principal
amount, the number of Firm Notes set forth opposite such Underwriter's
name in Schedule I hereto.
(b) The Company also grants to the Underwriters an option
to purchase, solely for the purpose of covering over-allotments in the
sale of Firm Notes, all or any portion of the Option Notes at the
purchase price set forth above plus accrued interest. The option
granted hereby may be exercised as to all or any part of the Option
Notes at any time (but only once) within 30 days after the date of the
Final Prospectus. The Underwriters shall not be under any obligation
to purchase any Option Notes prior to the exercise of such option.
The option granted hereby may be exercised by the Underwriters by the
Representatives giving written notice to the Company setting forth the
amount of Option Notes to be purchased and the date and time for
delivery of and payment for such Option Notes and stating that the
Option Notes referred to therein are to be used for the purpose of
covering over-allotments in connection with the distribution and sale
of the Firm Notes. If such notice is given prior to the First Closing
Date (as defined herein), the date set forth therein for such delivery
and payment shall not be earlier than two full business days
thereafter or the First Closing Date, whichever occurs later. If such
notice is given on or after the First Closing Date, the date set forth
therein for such delivery and payment shall not be earlier than three
full business days thereafter. In either event, the date so set forth
shall not be more than 15 full business days after the date of such
notice. The date and time set forth in such notice is herein called
the "Option Closing Date." Upon exercise of the option, the Company
shall become obligated to sell to the Underwriters, and, subject to
the terms and conditions herein set forth, the Underwriters shall
become obligated to purchase, for the account of each Underwriter,
from the Company, severally and not jointly, the amount of Option
Notes specified in such notice. Option Notes shall be purchased for
the accounts of the Underwriters in proportion to the amount of Firm
Notes set forth opposite such Underwriter's name in Schedule I hereto,
except that the respective purchase obligations of each Underwriter
shall be adjusted so that no Underwriter shall be obligated to
purchase fractional Option Notes.
(c) Certificates in definitive form for the Firm Notes
which each Underwriter has agreed to purchase hereunder shall be
delivered by or on behalf of the Company to the Underwriters for the
account of such Underwriter against payment by such Underwriter or on
its behalf of the purchase price therefor by certified or official
bank check payable in next day funds to the order of the Company at
the offices of ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, or at such other place as may be agreed upon
by ▇.▇. ▇▇▇▇▇▇▇▇ & Co. ("Bradford") and the Company, at 10:00 A.M.,
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Chicago time, on the third full business day after this Agreement
becomes effective, or at the election of the Representatives, on the
fourth full business day after this Agreement becomes effective, if it
becomes effective after 4:30 P.M. eastern time, or at such other time
not later than the seventh full business day thereafter as the
Representatives and the Company may determine, such time of delivery
against payment being herein referred to as the "First Closing Date."
The First Closing Date and the Option Closing Date are herein
individually referred to as the "Closing Date" and collectively
referred to as the "Closing Dates." Certificates in definitive form
for the Option Notes which each Underwriter shall have agreed to
purchase hereunder shall be similarly delivered by or on behalf of the
Company on the Option Closing Date. The certificates in definitive
form for the Notes to be delivered will be in good delivery form and
in such denominations and registered in such names as ▇▇▇▇▇▇▇▇ ▇▇▇
request not less than 48 hours prior to the First Closing Date or the
Option Closing Date, as the case may be. Such certificates will be
made available for checking and packaging at a location in New York,
New York as may be designated by you, at least 24 hours prior to the
First Closing Date or the Option Closing Date, as the case may be. It
is understood that you may (but shall not be obligated to) make
payment on behalf of any Underwriter or Underwriters for the Notes to
be purchased by such Underwriter or Underwriters. No such payment
shall relieve such Underwriter or Underwriters from any of its or
their obligations hereunder.
3. Offering by the Underwriters. After the Registration
Statement becomes effective, the several Underwriters propose to offer for sale
to the public the Firm Notes and any Option Notes which may be sold at the
price and upon the terms set forth in the Final Prospectus.
4. Covenants of the Company. The Company covenants and agrees
with each of the Underwriters that:
(a) The Company shall comply with the provisions of and
make all requisite filings with the Commission pursuant to Rules 424
and 430A of the Rules and Regulations and shall notify you promptly
(in writing, if requested) of all such filings. The Company shall
notify you promptly of any request by the Commission for any amendment
of or supplement to the Registration Statement, the Effective
Prospectus or the Final Prospectus or for additional information; the
Company shall prepare and file with the Commission, promptly upon your
request, any amendments of or supplements to the Registration
Statement, the Effective Prospectus or the Final Prospectus which, in
your opinion, may be necessary or advisable in connection with the
distribution of the Notes; and the Company shall not file any
amendment of or supplement to the Registration Statement, the
Effective Prospectus or the Final Prospectus which is not approved by
you after reasonable notice thereof. The Company shall advise you
promptly of the issuance by the Commission or any jurisdiction or
other regulatory body of any stop order or other order suspending the
effectiveness of the Registration Statement, suspending or preventing
the use of any Preliminary Prospectus, the Effective Prospectus or the
Final Prospectus or suspending the qualification of the Notes for
offering or sale in any jurisdiction, or of the
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institution of any proceedings for any such purpose; and the Company
shall use its best efforts to prevent the issuance of any stop order
or other such order and, should a stop order or other such order be
issued, to obtain as soon as possible the lifting thereof.
(b) The Company will take or cause to be taken all
necessary action and furnish to whomever you direct such information
as may be reasonably required in qualifying the Notes for offer and
sale under the securities or Blue Sky laws of such jurisdictions as
the Underwriters may designate and will continue such qualifications
in effect for as long as may be reasonably necessary to complete the
distribution of the Notes.
(c) Within the time during which a Final Prospectus
relating to the Notes is required to be delivered under the Securities
Act, the Company shall comply with all requirements imposed upon it by
the Securities Act, as now and hereafter amended, and by the Rules and
Regulations, as from time to time in force, so far as is necessary to
permit the continuance of sales of or dealings in the Notes as
contemplated by the provisions hereof and the Final Prospectus. If
during such period any event occurs as a result of which the Final
Prospectus as then amended or supplemented 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
Final Prospectus to comply with the Securities Act, the Company shall
promptly notify you and shall amend the Registration Statement or
supplement the Final Prospectus (at the expense of the Company) so as
to correct such statement or omission or effect such compliance.
(d) The Company will furnish without charge to the
Representatives and make available to the Underwriters copies of the
Registration Statement (four of which shall be signed and shall be
accompanied by all exhibits, including any which are incorporated by
reference, which have not previously been furnished), each Preliminary
Prospectus, the Effective Prospectus and the Final Prospectus, and all
amendments and supplements thereto, including any prospectus or
supplement prepared after the effective date of the Registration
Statement, in each case as soon as available and in such quantities as
the Underwriters may reasonably request.
(e) The Company will (i) deliver to you at such office or
offices as you may designate as many copies of the Preliminary
Prospectus and Final Prospectus as you may reasonably request, and
(ii) for a period of not more than nine months after the Registration
Statement becomes effective, send to the Underwriters as many
additional copies of the Final Prospectus and any supplement thereto
as you may reasonably request.
(f) The Company shall make generally available to its
security holders, in the manner contemplated by Rule 158(b) under the
Securities Act as promptly as practicable and in any event no later
than 45 days after the end of its fiscal quarter in which the first
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anniversary of the effective date of the Registration Statement
occurs, an earning statement satisfying the provisions of Section
11(a) of the Securities Act covering a period of at least 12
consecutive months beginning after the effective date of the
Registration Statement.
(g) The Company will apply the net proceeds from the sale
of the Notes as set forth under the caption "Use of Proceeds" in the
Final Prospectus.
(h) During a period of five years from the effective date
of the Registration Statement the Company will furnish to the
Representatives copies of all reports and other communications
(financial or other) furnished by the Company to its stockholders and,
as soon as available, copies of any reports or financial statements
furnished or filed by the Company to or with the Commission or any
national securities exchange on which any class of securities of the
Company may be listed.
(i) The Company will, from time to time, after the
effective date of the Registration Statement file with the Commission
such reports as are required by the Securities Act, the Exchange Act
and the Rules and Regulations, and shall also file with foreign, state
and other governmental securities commissions in jurisdictions where
the Notes have been sold by you (as you shall have advised us in
writing) such reports as are required to be filed by the securities
acts and the regulations of those foreign jurisdictions or states.
(j) If at any time during the 25 day period after the
Registration Statement is declared effective, any rumor, publication
or event relating to or affecting the Company shall occur as a result
of which, in your opinion, the market price for the Notes has been or
is likely to be materially affected (regardless of whether such rumor,
publication or event necessitates a supplement to or amendment of the
Final Prospectus), the Company will, after written notice from you
advising it as to the effect set forth above, prepare, consult with
you concerning the substance of and disseminate a press release or
other public statement, reasonably satisfactory to you, responding to
or commenting on such rumor, publication or event.
(k) The Company will not take, directly or indirectly, any
action designed to cause or result in, or which might constitute or be
expected to constitute, stabilization or manipulation of the price of
the Notes and the Company will use its best efforts to assure that its
officers, directors and affiliates take no such action.
(l) Within the time during which a Final Prospectus
relating to the Notes is required to be delivered under the Securities
Act in connection with the sale of the Notes, the Company will conduct
its business and operations as described in the Final Prospectus or,
if the Company or any of its subsidiaries makes any material change to
its business or operations as so conducted, promptly disclose such
change generally to the Representatives and, if appropriate or
necessary, to the Company's security holders.
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5. Expenses. The Company agrees with the Underwriters that (a)
whether or not the transactions contemplated by this Agreement are consummated
or this Agreement becomes effective or is terminated, the Company will pay all
fees and expenses incident to the performance of the obligations of the Company
hereunder, including, but not limited to, (i) the Commission's registration
fee, (ii) the expenses of printing (or reproduction) and distributing the
Registration Statement (including the financial statements therein and all
amendments and exhibits thereto), each Preliminary Prospectus, the Effective
Prospectus, the Final Prospectus, any amendments or supplements thereto, any
audio or visual materials supplied by the Company expressly for use in
connection with the marketing of the Notes, including without limitation,
slides, videos, films and tape recordings, the Indenture and this Agreement and
other underwriting documents, including Underwriter's Questionnaires,
Underwriter's Powers of Attorney, Blue Sky Memoranda, Selected Dealer
Agreements and Agreements Among Underwriters, (iii) fees and expenses of
accountants and counsel for the Company, (iv) expenses of registration or
qualification of the Notes under state Blue Sky and securities laws, including
the fees and disbursements of counsel to the Underwriters in connection
therewith, (v) filing fees paid or incurred by the Underwriters and related
fees and expenses of counsel to the Underwriters in connection with filings
with the NASD, (vi) all travel, lodging and reasonable living expenses incurred
by the Company in connection with marketing, dealer and other meetings attended
by the Company and the Underwriters in marketing the Notes, (vii) the costs and
charges of the Company's transfer agent and registrar and the cost of preparing
the certificates for the Notes, (viii) the fees and expenses of the Trustee in
connection with the Indenture and the Notes and (ix) all other costs and
expenses incident to the performance of the Company's obligations hereunder not
otherwise provided for in this Section; and (b) all out-of- pocket expenses,
including counsel fees, disbursements and expenses, incurred by the
Underwriters in connection with investigating, preparing to market and
marketing the Notes and proposing to purchase and purchasing the Notes under
this Agreement, will be borne and paid by the Company if the sale of the Notes
provided for herein is not consummated by reason of (i) the termination of this
Agreement by the Company pursuant to Section 12(a)(i), (ii) by reason of
termination of this Agreement by the Underwriters pursuant to Sections
12(b)(iii), 12(b)(iv) or 12(b)(v), or (iii) because of any failure or refusal
on the part of the Company to comply with the terms or fulfill any of the
conditions of this Agreement.
6. Conditions of the Underwriters' Obligations. The respective
obligations of the Underwriters to purchase and pay for the Firm Notes shall be
subject, in their discretion, to the accuracy of the representations and
warranties of the Company herein as of the date hereof and as of the Closing
Date as if made on and as of the Closing Date, to the accuracy of the
statements of the Company's officers made pursuant to the provisions hereof, to
the performance by the Company of all of its covenants and agreements hereunder
and to the following additional conditions:
(a) The Registration Statement and all post-effective
amendments thereto shall have become effective not later than 5:30
P.M., Washington, D.C. time, on the day following the date of this
Agreement, or such later time and date as shall have been consented to
by the Representatives and all filings required by Rule 424 and Rule
430A
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of the Rules and Regulations shall have been made; no stop order
suspending the effectiveness of the Registration Statement shall have
been issued and no proceedings for that purpose shall have been
instituted or threatened or, to the knowledge of the Company or the
Underwriters, shall be contemplated by the Commission; any request of
the Commission for additional information (to be included in the
Registration Statement or the Final Prospectus or otherwise) shall
have been complied with to your satisfaction; and the NASD, upon
review of the terms of the public offering of the Notes, shall not
have objected to such offering, such terms or the Underwriters'
participation in the same.
(b) No Underwriter shall have advised the Company that
the Registration Statement, Preliminary Prospectus, the Effective
Prospectus or Final Prospectus, or any amendment or any supplement
thereto, contains an untrue statement of fact which, in your judgment,
is material, or omits to state a fact which, in your judgment, is
material and is required to be stated therein or necessary to make the
statements therein not misleading and the Company shall not have cured
such untrue statement of fact or stated a statement of fact required
to be stated therein.
(c) The Representatives shall have received an opinion,
dated the Closing Date, from ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, counsel
for the Company, to the effect that:
(i) The Company has been duly organized and is
validly existing in good standing as a corporation under the
laws of the State of Delaware, with corporate power and
authority to own its properties and conduct its business as
now conducted, and is duly qualified to do business as a
foreign corporation in good standing in all other
jurisdictions where the failure to so qualify would have a
material adverse effect upon the Company. To such counsel's
knowledge, the Company holds all licenses, certificates,
permits, franchises and authorizations from governmental
authorities which are material to the conduct of its business
in all locations known to such counsel after reasonable
investigation in which such business is currently being
conducted.
(ii) As of the dates specified therein, the
Company had authorized and issued capital stock as set forth
under the caption "Capitalization" in the Final Prospectus.
All of the outstanding shares of the capital stock of the
Company have been duly authorized and are validly issued,
fully paid and nonassessable, and none of the issued shares
have been issued in violation of or subject to any preemptive
rights provided for by law or by the Company's certificate of
incorporation. The Notes have been duly and validly
authorized and, when executed, authenticated and delivered in
accordance with the Indenture, will constitute legal and
binding obligations of the Company entitled to the benefits of
the Indenture. There are no preemptive rights or other rights
to subscribe for or to purchase, or any restriction upon the
transfer of, the Notes that have not been waived pursuant to
the Company's certificate of incorporation, by-laws or other
governing documents or
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any agreement or other instrument to which the Company is a
party or by which it may be bound, except as described in the
Effective Prospectus and Final Prospectus and except for
restrictions on transfer imposed under applicable securities
laws. Neither the filing of the Registration Statement nor the
offer or sale of the Notes as contemplated by this Agreement
and the Indenture gives rise to any rights, other than those
which have been waived or satisfied, for or relating to the
registration of any shares of capital stock of the Company or
any other securities of the Company. Upon issuance and
delivery thereof and payment therefor as provided in the
Underwriting Agreement, the Underwriters will receive good and
marketable title to the Notes to be issued and delivered
pursuant to this Agreement, free and clear of all liens,
encumbrances, claims, security interests, restrictions,
shareholders agreements and voting trusts whatsoever. The Notes
conform to the description thereof contained in the Final
Prospectus. All offers and sales of the Company's securities
prior to the date hereof were at all relevant times duly
registered or exempt from the registration requirements of the
Securities Act and were duly registered or the subject of an
exemption from the registration requirements of applicable
state securities or Blue Sky laws.
(iii) The Company has full legal right, power and
authority to enter into this Agreement and the Indenture and
to issue, sell and deliver the Notes to be sold by it to the
Underwriters as provided herein, and this Agreement and the
Indenture have been duly authorized, executed and delivered by
the Company and each constitutes the valid and legally binding
obligation of the Company enforceable against the Company in
accordance with its terms, except as enforceability may be
limited by general equitable principles, bankruptcy,
insolvency, reorganization, moratorium, fraudulent transfer,
fraudulent conveyance or other laws affecting creditors'
rights generally and public policy restrictions on the
enforceability of indemnification provisions. The Indenture
has been qualified under the Trust Indenture Act.
(iv) To such counsel's knowledge, no consent,
approval, authorization or order of any court or governmental
or regulatory agency or body or third party is required for
the performance of this Agreement and the Indenture by the
Company or the consummation by the Company of the transactions
contemplated hereby and thereby, except such as have been
obtained under the Securities Act and such as may be required
by the NASD and under state securities or Blue Sky laws in
connection with the purchase and distribution of the Notes by
the several Underwriters, as to which such counsel expresses
no opinion. The performance of this Agreement and the
Indenture by the Company and the consummation by the Company
of the transactions contemplated hereby and thereby will not
conflict with or result in a breach or violation by the
Company of any of the terms or provisions of, or constitute a
default by the Company under, any indenture, mortgage, deed of
trust, loan agreement, lease or other agreement or instrument,
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known to such counsel, to which the Company is a party or to which the
Company or its properties is subject, the certificate of incorporation
or by-laws of the Company, any statute, or any judgment, decree,
order, rule or regulation of any court or governmental agency or body
(other than state securities or blue sky laws, as to which such
counsel expresses no opinion) known to such counsel to be applicable
to the Company or its properties.
In addition to the matters set forth above, such opinion shall also
include a statement to the effect that nothing has come to the attention of
such counsel which leads them to believe that the Registration Statement, the
Effective Prospectus and the Final Prospectus or any amendment or supplement
thereto contains an untrue statement of a material fact or omits to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading (except that such counsel need express no view as to
financial statements, schedules and other financial or statistical information
included or incorporated by reference therein).
The opinions to be rendered pursuant to paragraph (c) may be limited
to federal law, and as to state law matters, to the laws of the states in which
such counsel is admitted to practice. Such counsel may also rely on opinion of
other counsel as to matters of local law provided that such counsel shall state
that they believe both they and you are justified in relying on such opinion.
(d) The Representatives shall have received an opinion,
dated the Closing Date, from ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Vice President,
Secretary and General Counsel of the Company, to the effect that:
(i) Except for First Merchants Auto Receivables
Corporation, a Delaware corporation and First Merchants Auto
Receivables Corporation II, a Delaware corporation, which were
formed solely for the purpose of facilitating the
securitization of the Company's finance receivables, the
Company has no subsidiaries in any form, whether directly or
indirectly, wholly-owned or other than wholly-owned. Each of
the Company's subsidiaries is validly existing and in good
standing under the laws of the state of its incorporation or
organization, as the case may be, with power and authority to
own its properties and conduct its business as now conducted,
and is duly qualified or authorized to do business and is in
good standing in all other jurisdictions where the failure to
so qualify would have a material adverse effect upon the
business of the Company and its subsidiaries taken as a whole.
The outstanding stock of each of the Company's subsidiaries is
duly authorized, validly issued, fully paid and nonassessable.
All of the outstanding stock of each of the corporate
subsidiaries is owned beneficially and of record by the
Company, and, except for security interests in the stock of
such subsidiaries securing the Company's obligations under
the Company's Senior Revolving Credit Facility and Temporary
Credit Facility (as those terms are defined in the
Registration Statement), is owned free and clear of all liens,
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encumbrances, equities and claims. No options or warrants or
other rights to purchase, agreements or other obligations to
issue or other rights to convert any obligations into any
shares of capital stock or of ownership interests in any of the
Company's subsidiaries are outstanding. Each of the Company's
subsidiaries holds all licenses, certificates, permits,
franchises and authorizations from governmental authorities
which are material to the conduct of its business in all
locations in which such business is currently being conducted.
(ii) Except as described in the Final Prospectus,
there is not pending, or, to such counsel's knowledge,
threatened, any action, suit, proceeding, inquiry or
investigation, to which the Company is a party, or to which
the property of the Company is subject, before or brought by
any court or governmental agency or body, which, if determined
adversely to the Company, could result in any material adverse
change in the business, financial position, net worth or
results of operations, or could materially adversely affect
the properties or assets, of the Company.
(iii) To such counsel's knowledge, no default
exists, and no event has occurred which with notice or after
the lapse of time to cure or both, would constitute a default,
in the due performance and observance of any term, covenant or
condition of any indenture, mortgage, deed of trust, loan
agreement, lease or other agreement or instrument to which the
Company is a party or to which it or its properties is
subject, or of the certificate of incorporation or by-laws of
the Company which could result in any material adverse change
in the business, financial condition, net worth or results of
operations, or could materially adversely affect the
properties or assets of the Company.
(iv) Neither the Company nor any of its
subsidiaries is in violation of any law, ordinance,
administrative or governmental rule or regulation applicable
to the Company or any of its subsidiaries and material to the
Company and its subsidiaries taken as a whole or any decree of
any court or governmental agency or body having jurisdiction
over the Company or any of its subsidiaries (other than
violations of state securities or blue sky laws, as to which
such counsel expresses no opinion).
(v) The Registration Statement and all
post-effective amendments thereto have become effective under
the Securities Act, and, to the knowledge of such counsel, no
stop order suspending the effectiveness of the Registration
Statement has been issued and no proceedings for that purpose
have been instituted or are threatened, pending or
contemplated by the Commission. All filings required by Rule
424 and Rule 430A of the Rules and Regulations have been made;
the Registration Statement, the Effective Prospectus and Final
▇▇▇▇▇▇▇▇▇▇,
▇▇
▇▇
and any amendments or supplements thereto (except for the
financial statements and schedules included or incorporated by
reference 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 Securities Act and the Rules and
Regulations; the descriptions in the Registration Statement,
the Effective Prospectus and the Final Prospectus of statutes,
regulations, legal and governmental proceedings, and contracts
and other documents are accurate in all material respects and
present fairly the information required to be stated; and such
counsel does not know of any pending or threatened legal or
governmental proceedings, statutes or regulations required to
be described in the Final Prospectus which are not described as
required nor of any contracts or documents of a character
required to be described in the Registration Statement or the
Final Prospectus or to be filed as exhibits to the Registration
Statement which are not described and filed as required.
(vi) The Company is not, and will not be as a
result of the consummation of the transactions contemplated by
this Agreement, an "investment company" within the meaning of
the Investment Company Act of 1940, as amended.
In addition to the matters set forth above, such opinion shall also
include a statement to the effect that nothing has come to the attention of
such counsel which leads them to believe that the Registration Statement, the
Effective Prospectus and the Final Prospectus or any amendment or supplement
thereto contains an untrue statement of a material fact or omits to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading (except that such counsel need express no view as to
financial statements, schedules and other financial or statistical information
included or incorporated by reference therein).
The opinions to be rendered pursuant to paragraph (d) may be limited
to federal law, and as to state law matters, to the laws of the states in which
such counsel is admitted to practice. Such counsel may also rely on opinion of
other counsel as to matters of local law provided that such counsel shall state
that he believes both he and you are justified in relying on such opinion.
(e) The Underwriters shall have received an opinion or
opinions, dated the Closing Date, of Bass, ▇▇▇▇▇ & ▇▇▇▇ PLC, counsel
for the Underwriters, with respect to the Registration Statement and
the Final Prospectus, and such other related matters as the
Underwriters may require, and the Company shall have furnished to such
counsel such documents as they may reasonably request for the purpose
of enabling them to pass upon such matters.
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(f) The Representatives shall have received from Deloitte
& Touche LLP, a letter dated the date hereof and, at the Closing Date,
a second letter dated the Closing Date, in form and substance
satisfactory to the Representatives, stating that they are independent
public accountants with respect to the Company within the meaning of
the Securities Act and the applicable Rules and Regulations, and to
the effect that:
(i) In their opinion, the audited financial
statements and schedules examined by them and included or
incorporated by reference in the Registration Statement comply
as to form in all material respects with the applicable
accounting requirements of the Securities Act and the
published Rules and Regulations and are presented in
accordance with generally accepted accounting principles
consistently applied; and the selected financial data, and/or
condensed financial statements are derived from audited
financial statements of the Company;
(ii) The unaudited selected financial information
included in the Preliminary Prospectus and the Final
Prospectus under the captions "SUMMARY FINANCIAL DATA,"
"SELECTED FINANCIAL AND OPERATING DATA" and "SUPPLEMENTAL
FINANCIAL DATA" for each of the fiscal years ended December
31, 1993, 1994 and 1995, agrees with the corresponding amounts
in the audited financial statements included or incorporated
by reference in the Final Prospectus or previously reported on
by them;
(iii) On the basis of a reading of the latest
available interim financial statements (unaudited) of the
Company and its subsidiaries, if any, a reading of the minute
books of the Company and its subsidiaries, inquiries of
officials of the Company responsible for financial and
accounting matters and other specified procedures, all of
which have been agreed to by the Representatives, nothing came
to their attention that caused them to believe that:
(A) Any unaudited interim financial
statements included in the Final Prospectus do not
comply as to form in all material respects with the
applicable accounting requirements of the federal
securities laws and the published rules and
regulations thereunder or are not in conformity with
generally accepted accounting principles applied on a
basis substantially consistent with the basis for the
audited financial statements contained or
incorporated by reference in the Registration
Statement;
(B) at a specified date not more than
five days prior to the date of delivery of such
respective letter, there was any change in the
capital stock, decline in stockholders' equity or
increase in long-term debt of the Company or any of
its subsidiaries, or other items specified by the
Underwriters in each case as compared with amounts
shown in the latest
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balance sheets included in the Final Prospectus,
except in each case for changes, decreases or
increases which the Final Prospectus discloses have
occurred or may occur or which are described in such
letters; and
(C) for the period from the closing date
of the latest statements of income included in the
Effective Prospectus and the Final Prospectus to a
specified date not more than five days prior to the
date of delivery of such respective letter, there
were any decreases in total revenues or net income of
the Company, or other items specified by the
Underwriters, or any increases in any items specified
by the Underwriters, in each case as compared with
the corresponding period of the preceding year,
except in each case for decreases which the Final
Prospectus discloses have occurred or may occur or
which are described in such letter.
(iv) They have carried out certain specified
procedures, not constituting an audit, with respect to certain
amounts, percentages and financial information specified by
you which are derived from the general accounting records of
the Company, which appear in the Effective Prospectus and the
Final Prospectus and have compared and agreed such amounts,
percentages and financial information with the accounting
records of the Company and its subsidiaries or to analyses and
schedules prepared by the Company and its subsidiaries from
its detailed accounting records.
In the event that the letters to be delivered referred to above set
forth any such changes, decreases or increases, it shall be a further
condition to the obligations of the Underwriters that the Underwriters
shall have determined, after discussions with officers of the Company
responsible for financial and accounting matters that such changes,
decreases or increases as are set forth in such letters do not reflect
a material adverse change in the stockholders' equity or long-term
debt of the Company as compared with the amounts shown in the latest
balance sheets of the Company included in the Final Prospectus, or a
material adverse change in total net revenues or net income of the
Company, in each case as compared with the corresponding period of the
prior year.
(g) There shall have been furnished to the
Representatives a certificate, dated the Closing Date and addressed to
you, 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 Section 1 of this Agreement are true and correct,
as if made at and as of the 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 the Closing Date;
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(ii) no stop order suspending the effectiveness of
the Registration Statement has been issued, and no proceedings
for that purpose have been initiated or are pending, or to
their knowledge, threatened under the Securities Act;
(iii) all filings required by Rule 424 and Rule 430A
of the Rules and Regulations have been made;
(iv) they have carefully examined the Registration
Statement, the Effective Prospectus and the Final Prospectus,
and any amendments or supplements thereto, and such documents
do not include 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
(v) since the effective date of the Registration
Statement, there has occurred no event required to be set
forth in an amendment or supplement to the Registration
Statement, the Effective Prospectus or the Final Prospectus
which has not been so set forth.
(h) Subsequent to the respective dates as of which
information is given in the Registration Statement and the Final
Prospectus, and except as stated therein, neither the Company nor any
of its subsidiaries has sustained any material loss or interference
with its business or properties from fire, flood, hurricane,
earthquake, accident or other calamity, whether or not covered by
insurance, or from any labor dispute or any court or governmental
action, order or decree, or become a party to or the subject of any
litigation which is material to the Company or its subsidiaries taken
as a whole, nor shall there have been any material adverse change, or
any development involving a prospective material adverse change, in
the business, properties, key personnel, capitalization, net worth,
results of operations or condition (financial or other) of the Company
and its subsidiaries taken as a whole, which loss, interference,
litigation or change, in your judgment shall render it unadvisable to
commence or continue the offering of the Notes at the offering price
to the public set forth on the cover page of the Prospectus or to
proceed with the delivery of the Notes.
All such opinions, certificates, letters and documents delivered
pursuant to this Agreement will comply with the provisions hereof only if they
are reasonably satisfactory to the Representatives and their counsel. The
Company shall furnish to the Representatives such conformed copies of such
opinions, certificates, letters and documents in such quantities as the
Representatives shall reasonably request.
The respective obligations of the Underwriters to purchase and pay for
the Option Notes shall be subject, in their discretion, to each of the
foregoing conditions to purchase the Firm
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Notes, except that all references to the "Closing Date" shall be deemed to
refer to the Option Closing Date, if it shall be a date other than the Closing
Date.
7. Condition of the Company's Obligations. The obligations
hereunder of the Company are subject to the condition set forth in Section 6(a)
hereof.
8. Indemnification and Contribution.
(a) The Company agrees to indemnify and hold harmless
each Underwriter, and each person, if any, who controls any
Underwriter within the meaning of the Securities Act, against any
losses, claims, damages or liabilities, joint or several, to which
such Underwriter or controlling person may become subject under the
Securities Act or otherwise, insofar as such losses, claims, damages
or liabilities (or actions in respect thereof) arise out of or are
based in whole or in part upon: (i) any inaccuracy in the
representations and warranties of the Company contained herein; (ii)
any failure of the Company to perform its obligations hereunder or
under law; (iii) any untrue statement or alleged untrue statement of
any material fact contained in (A) the Registration Statement, any
Preliminary Prospectus, the Effective Prospectus or Final Prospectus,
or any amendment or supplement thereto or (B) in any Blue Sky
application or other written information furnished by the Company
filed in any state or other jurisdiction in order to qualify any or
all of the Notes under the securities laws thereof (a "Blue Sky
Application"); or (iv) the omission or alleged omission to state in
the Registration Statement, any Preliminary Prospectus, the Effective
Prospectus or Final Prospectus or any amendment or supplement thereto,
or any Blue Sky Application a material fact required to be stated
therein or necessary to make the statements therein not misleading,
and will reimburse each Underwriter and each such controlling person
for any legal or other expenses reasonably incurred by such
Underwriter or such controlling person in connection with
investigating or defending any such loss, claim, damage, liability or
action as such expenses are incurred; provided, however, that the
Company will not be liable in any such case to the extent that any
such loss, claim, damage, or liability arises out of or is based upon
any untrue statement or alleged untrue statement or omission or
alleged omission made in the Registration Statement, the Preliminary
Prospectus, the Effective Prospectus or Final Prospectus or such
amendment or such supplement thereto, or any Blue Sky Application in
reliance upon and in conformity with written information furnished to
the Company by any Underwriter specifically for use therein (it being
understood that the only information so provided by the Underwriters
is the information included in the last paragraph on the cover page
and under the caption "Underwriting" in any Preliminary Prospectus and
the Final Prospectus and the Effective Prospectus).
(b) Each Underwriter will indemnify and hold harmless the
Company, each of its directors, each of its officers who signed the
Registration Statement and each person, if any, who controls the
Company within the meaning of the Securities Act against any
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losses, claims, damages or liabilities to which the Company or any
such director, officer or controlling person may become subject, under
the Securities Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or
are based upon any untrue statement or alleged untrue statement of any
material fact contained in the Registration Statement, any Preliminary
Prospectus, the Effective Prospectus or Final Prospectus, or any
amendment or supplement thereto, or any Blue Sky Application, or arise
out of or are based upon the omission or the alleged omission to state
in the Registration Statement, any Preliminary Prospectus, the
Effective Prospectus or Final Prospectus or any amendment or
supplement thereto or any Blue Sky Application 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 reliance upon and in
conformity with written information furnished to the Company by any
Underwriter specifically for use therein (it being understood that the
only information so provided is the information included in the last
paragraph on the cover page and under the caption "Underwriting" in
any Preliminary Prospectus and in the Effective Prospectus and the
Final Prospectus);
(c) Promptly after receipt by an indemnified party under
this Section 8 of notice of the commencement of any action, including
governmental proceedings, such indemnified party will, if a claim in
respect thereof is to be made against the indemnifying party under
this Section 8 notify the indemnifying party of the commencement
thereof; but the omission so to notify the indemnifying party will not
relieve it from any liability which it may have to any indemnified
party otherwise than under this Section 8. In case any such action is
brought against any indemnified party, and it notifies the
indemnifying party of the commencement thereof, the indemnifying party
will be entitled to participate therein, and to the extent that it may
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 its election to so assume the defense
thereof, the indemnifying party will not be liable to such indemnified
party under this Section 8 for any legal or other expenses
subsequently incurred by such indemnified party in connection with the
defense thereof other than reasonable costs of investigation except
that the indemnified party shall have the right to employ separate
counsel if, in the indemnified party's reasonable judgment, it is
advisable for the indemnified party and any other Underwriter to be
represented by separate counsel, and in that event the fees and
expenses of separate counsel shall be paid by the indemnifying party.
The Company will not, without prior written consent of each
Representative, settle or compromise or consent to the entry of any
judgment in any pending or threatened claim, action, suit or
proceeding (or related cause of action or portion thereof) in respect
of which indemnification may be sought hereunder (whether or not such
Underwriter is
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a party to such claim, action, suit or proceeding), unless such
settlement, compromise or consent includes an unconditional release of
such Underwriter from all liability arising out of such claim, action,
suit or proceeding (or related cause of action or portion thereof).
(d) In order to provide for just and equitable
contribution in circumstances in which the indemnity agreement
provided for in the preceding part of this Section 8 is for any reason
held to be unavailable to the Underwriters, or the Company or is
insufficient to hold harmless an indemnified party, then the Company
shall contribute to the damages paid by the Underwriters, and the
Underwriters shall contribute to the damages paid by the Company
provided, however, that no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who
was not guilty of such fraudulent misrepresentation. In determining
the amount of contribution to which the respective parties are
entitled, there shall be considered the relative benefits received by
each party from the offering of the Notes (taking into account the
portion of the proceeds of the offering realized by each), the
parties' relative knowledge and access to information concerning the
matter with respect to which the claim was asserted, the opportunity
to correct and prevent any statement or omission, and any other
equitable considerations appropriate under the circumstances. The
Company and the Underwriters agree that it would not be equitable if
the amount of such contribution were determined by pro rata or per
capita allocation (even if the Underwriters were treated as one entity
for such purpose). No Underwriter or person controlling such
Underwriter shall be obligated to make contribution hereunder which in
the aggregate exceeds the underwriting discount applicable to the
Notes purchased by such Underwriter under this Agreement, less the
aggregate amount of any damages which such Underwriter and its
controlling persons have otherwise been required to pay in respect of
the same or any similar claim. The Underwriters' obligations to
contribute hereunder are several in proportion to their respective
underwriting obligations and not joint. For purposes of this Section,
each person, if any, who controls an Underwriter within the meaning of
Section 15 of the Securities Act shall have the same rights to
contribution as such Underwriter, and each director of the Company,
each officer of the Company who signed the Registration Statement, and
each person, if any, who controls the Company within the meaning of
Section 15 of the Securities Act, shall have the same rights to
contribution as the Company.
(e) The obligations of the Company under this Section 8
shall be in addition to any liability which the Company 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
Securities Act; and the obligations of the Underwriters under this
Section 8 shall be in addition to any liability which the respective
Underwriters may otherwise have and shall extend, upon the same terms
and conditions, to each officer and director of the Company and to
each person, if any, who controls the Company within the meaning of
the Securities Act.
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9. Default of Underwriters. If any Underwriter defaults in its
obligation to purchase Notes hereunder and if the total amount of Notes which
such defaulting Underwriter agreed but failed to purchase is ten percent or
less of the total amount of Notes to be sold hereunder, the non-defaulting
Underwriters shall be obligated severally to purchase (in the respective
proportions which the amount of Notes set forth opposite the name of each
non-defaulting Underwriter in Schedule I hereto bears to the total amount of
Notes set forth opposite the names of all the non-defaulting Underwriters), the
Notes which such defaulting Underwriter or Underwriters agreed but failed to
purchase. If any Underwriter so defaults and the total number of Notes with
respect to which such default or defaults occur is more than ten percent of the
total amount of Notes to be sold hereunder, and arrangements satisfactory to
the other Underwriters and the Company for the purchase of such Notes by other
persons (who may include the non-defaulting Underwriters) are not made within
36 hours after such default, this Agreement, insofar as it relates to the sale
of the Notes, will terminate without liability on the part of the
non-defaulting Underwriters or the Company except for (i) the provisions of
Section 8 hereof, and (ii) the expenses to be paid or reimbursed by the Company
pursuant to Section 5. As used in this Agreement, the term "Underwriter"
includes any person substituted for an Underwriter under this Section 9.
Nothing herein shall relieve a defaulting Underwriter from liability for its
default.
10. Survival Clause. The respective representations, warranties,
agreements, covenants, indemnities and other statements of the Company, its
officers and the Underwriters set forth in this Agreement or made by or on
behalf of them, respectively, pursuant to this Agreement shall remain in full
force and effect, regardless of (i) any investigation made by or on behalf of
the Company, any of its officers or directors, any Underwriter or any
controlling person, (ii) any termination of this Agreement and (iii) delivery
of and payment for the Notes.
11. Effective Date. This Agreement shall become effective at
whichever of the following times shall first occur: (i) at 11:30 A.M., eastern
time, on the next full business day following the date on which the
Registration Statement becomes effective or (ii) at such time after the
Registration Statement has become effective as the Representatives shall
release the Firm Notes for sale to the public; provided, however, that the
provisions of Sections 5, 8, 10, and 11 hereof shall at all times be effective.
For purposes of this Section 11, the Firm Notes shall be deemed to have been so
released upon the release by the Representatives for publication, at any time
after the Registration Statement has become effective, of any newspaper
advertisement relating to the Firm Notes or upon the release by the
Representatives of telegrams offering the Firm Notes for sale to securities
dealers, whichever may occur first.
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12. Termination.
(a) The Company's obligations under this Agreement may be
terminated by the Company by notice to the Representatives (i) at any
time before it becomes effective in accordance with Section 11 hereof,
or (ii) in the event that the condition set forth in Section 7 shall
not have been satisfied at or prior to the First Closing Date.
(b) This Agreement may be terminated by the
Representatives by notice to the Company (i) at any time before it
becomes effective in accordance with Section 11 hereof; (ii) in the
event that at or prior to the First Closing Date the Company shall
have failed, refused or been unable to perform any agreement on the
part of the Company to be performed hereunder or any other condition
to the obligations of the Underwriters hereunder is not fulfilled;
(iii) if at or prior to the Closing Date trading in securities on the
New York Stock Exchange, the American Stock Exchange or the
over-the-counter market shall have been suspended or materially
limited or minimum or maximum prices shall have been established on
either of such exchanges or such market, or a banking moratorium shall
have been declared by Federal or state authorities; (iv) if at or
prior to the Closing Date trading in securities of the Company shall
have been suspended; or (v) if there shall have been such a material
change in general economic, political or financial conditions or if
the effect of international conditions on the financial markets in the
United States shall be such as, in your reasonable judgment, makes it
inadvisable to commence or continue the offering of the Notes at the
offering price to the public set forth on the cover page of the
Prospectus or to proceed with the delivery of the Notes.
(c) Termination of this Agreement pursuant to this
Section 12 shall be without liability of any party to any other party
other than as provided in Sections 5 and 8 hereof.
13. Notices. All communications hereunder shall be in writing
and, if sent to any of the Underwriters, shall be mailed or delivered or
telegraphed and confirmed in writing to the Representatives in care of ▇.▇.
▇▇▇▇▇▇▇▇ & Co., ▇.▇. ▇▇▇▇▇▇▇▇ Financial Center, ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, or if sent to the Company shall
be mailed, delivered or telegraphed and confirmed in writing to the Company at
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇▇▇ ▇.
▇▇▇▇.
14. Miscellaneous. This Agreement shall inure to the benefit of
and be binding upon the several Underwriters and, the Company and their
respective successors and legal representatives. Nothing expressed or
mentioned in this Agreement is intended or shall be construed to give any other
person any legal or equitable right, remedy or claim under or in respect of
this Agreement. This Agreement and all conditions and provisions hereof are
intended to be for the sole and exclusive benefit of the Company and the
several Underwriters and for the benefit of no other person except that (i) the
representations and warranties of the Company contained in this Agreement shall
also be for the benefit of any person or persons who control any
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28
Underwriter within the meaning of Section 15 of the Securities Act,
and (ii) the indemnities by the Underwriters shall also be for the
benefit of the directors of the Company, officers of the Company who
have signed the Registration Statement, any person or persons who
control the Company within the meaning of Section 15 of the Securities
Act. No purchaser of Notes from any Underwriter will be deemed a
successor because of such purchase. The validity and interpretation
of this Agreement shall be governed by the laws of the State of
Tennessee. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument. You
hereby represent and warrant to the Company that you have authority to
act hereunder on behalf of the several Underwriters, and any action
hereunder taken by you will be binding upon all the Underwriters.
[SIGNATURES ON THE FOLLOWING PAGE]
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If the foregoing is in accordance with your understanding of
our agreement, please indicate your acceptance thereof in the space provided
below for that purpose, whereupon this letter shall constitute a binding
agreement between the Company and each of the several Underwriters.
Very truly yours,
FIRST MERCHANTS ACCEPTANCE CORPORATION
By:_________________________________
Title: _____________________________
Confirmed and accepted as of the
date first above written.
▇.▇. ▇▇▇▇▇▇▇▇ & CO.
▇▇▇▇▇ ▇▇▇▇▇▇▇ INC.
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, INC.
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & COMPANY, INCORPORATED
For themselves and as Representatives
of the several Underwriters
▇.▇. ▇▇▇▇▇▇▇▇ & CO.
By:________________________________
Title:_____________________________
▇▇▇▇▇ ▇▇▇▇▇▇▇ INC.
By:________________________________
Title:______________________________
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, INC.
By:__________________________________
Title:________________________________
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & COMPANY, INCORPORATED
By:________________________________
Title:_____________________________
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SCHEDULE I
UNDERWRITERS
Principal Amount of Firm
Underwriter Notes to Be Purchased
▇.▇. ▇▇▇▇▇▇▇▇ & Co. . . . . . . . . . . . . . . . . . . . . . $11,250,000
▇▇▇▇▇ ▇▇▇▇▇▇▇ Inc. . . . . . . . . . . . . . . . . . . . . . $11,250,000
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & Company, Incorporated . . . . . . . . . . $11,250,000
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, Inc. . . . . . . . . . . . . . . . . $11,250,000
-----------
TOTAL $45,000,000
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