1
EXHIBIT 1.1
--------------------------------------------------------------------------------
20,000,000 SHARES
AMRESCO CAPITAL TRUST
COMMON SHARES
UNDERWRITING AGREEMENT
DATED MAY __, 1998
PRUDENTIAL SECURITIES INCORPORATED
CREDIT SUISSE FIRST BOSTON
ABN AMRO INCORPORATED
X.X. XXXXXXXX & CO.
NATIONSBANC XXXXXXXXXX SECURITIES LLC
XXXXX XXXXXXX INC.
--------------------------------------------------------------------------------
2
AMRESCO Capital Trust
20,000,000 Shares(1)
Common Shares
UNDERWRITING AGREEMENT
May __, 1998
PRUDENTIAL SECURITIES INCORPORATED
CREDIT SUISSE FIRST BOSTON
ABN AMRO INCORPORATED
X.X. XXXXXXXX & CO.
NATIONSBANC XXXXXXXXXX SECURITIES LLC
XXXXX XXXXXXX INC.
As Representatives of the several Underwriters
c/o Prudential Securities Incorporated
Xxx Xxx Xxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
AMRESCO Capital Trust, a Texas real estate investment trust
(the "Company"), hereby confirms its agreement with the several underwriters
named in Schedule 1 hereto (the "Underwriters"), for whom you have been duly
authorized to act as representatives (in such capacities, the
"Representatives"), as set forth below. If you are the only Underwriters, all
references herein to the Representatives shall be deemed to be to the
Underwriters.
On or before the Firm Closing Date (as hereinafter defined),
the Company (i) will sell to AMREIT Holdings, Inc., a Nevada corporation
("Holdings"), a subsidiary of AMRESCO, INC., a Delaware corporation ("Amresco")
pursuant to a valid private placement (the "Private Placement") (A) 2,222,233
Common Shares (as hereinafter defined), and (B) up to an additional 333,334
Common Shares if the Underwriters' over-allotment is exercised in full, and
(ii) will enter into a management agreement (the "Management Agreement") with
AMREIT Managers, L.P., a Delaware limited partnership (the "Manager") whereby
the Manager will manage the assets of the Company.
----------------------------------
1 Plus an option to purchase from AMRESCO Capital Trust up to 3,000,000
additional shares to cover over- allotments.
3
For purposes of this Agreement, the term "Subsidiary," with
respect to the Company, refers to each of AMREIT I, Inc., a Delaware
corporation and AMREIT II, Inc., a Nevada corporation and all other
corporations, partnerships, associations, limited liability companies, joint
ventures or other business entities of which 50% or more of the total voting
power of shares of stock or other ownership interest entitled (without regard
to the occurrence of any contingency) to vote in the election of the person or
persons (whether directors, trust managers, partners, trustees or other persons
performing similar functions) having the power to direct or cause the direction
of the management and policies thereof is at the time owned or controlled,
directly or indirectly, by the Company or one or more of the other Subsidiaries
of the Company or a combination thereof.
The Company and the Manager (collectively, the "AMRESCO
Parties") hereby confirm their respective agreements with the Underwriters as
follows:
1. Securities. Subject to the terms and conditions
herein contained, the Company proposes to issue and sell to the several
Underwriters an aggregate of 20,000,000 (the "Firm Securities") of the
Company's Common Shares of Beneficial Interest, par value $0.01 per share
("Common Shares"). The Company also proposes to issue and sell to the several
Underwriters not more than 3,000,000 additional Common Shares if requested by
the Representatives as provided in Section 3 of this Agreement. Any and all
Common Shares to be purchased by the Underwriters pursuant to such option are
referred to herein as the "Option Securities," and the Firm Securities and any
Option Securities are collectively referred to herein as the "Securities."
2. Representations and Warranties of the Company and the
Manager.
A. The Company hereby represents and warrants to, and
agrees with, each of the several Underwriters that:
(a) A registration statement on Form S-11 (File No.
333-45543) with respect to the Securities, including a prospectus subject to
completion, has b,Meen filed by the Company with the Securities and Exchange
Commission (the "Commission") under the Securities Act of 1933, as amended (the
"Act"), and one or more amendments to such registration statement may have been
so filed. After the execution of this Agreement, the Company will file with
the Commission either (i) if such registration statement, as it may have been
amended, has been declared by the Commission to be effective under the Act,
either (A) if the Company relies on Rule 434 under the Act, a Term Sheet (as
hereinafter defined) relating to the Securities, that shall identify the
Preliminary Prospectus (as hereinafter defined) that it supplements containing
such information as is required or permitted by Rules 434, 430A and 424(b)
under the Act or (B) if the Company does not rely on Rule 434 under the Act, a
prospectus in the form most recently included in an amendment to such
registration statement (or, if no such amendment shall have been filed, in such
registration statement), with such changes or insertions as are required by
Rule 430A under the Act or permitted by Rule 424(b) under
2
4
the Act, and in the case of either clause (i)(A) or (i)(B) of this sentence as
have been provided to and approved by the Representatives prior to the
execution of this Agreement, or (ii) if such registration statement, as it may
have been amended, has not been declared by the Commission to be effective
under the Act, an amendment to such registration statement, including a form of
prospectus, a copy of which amendment has been furnished to and approved by the
Representatives prior to the execution of this Agreement. The Company may also
file a related registration statement with the Commission pursuant to Rule
462(b) under the Act for the purpose of registering certain additional
Securities, which registration shall be effective upon filing with the
Commission. As used in this Agreement, the term "Original Registration
Statement" means the registration statement initially filed relating to the
Securities, as amended at the time when it was or is declared effective,
including all financial schedules and exhibits thereto and including any
information omitted therefrom pursuant to Rule 430A under the Act and included
in the Prospectus (as hereinafter defined); the term "Rule 462(b) Registration
Statement" means any registration statement filed with the Commission pursuant
to Rule 462(b) under the Act (including the Registration Statement and any
Preliminary Prospectus or Prospectus incorporated therein at the time such
Registration Statement becomes effective); the term "Registration Statement"
includes both the Original Registration Statement and any Rule 462(b)
Registration Statement; the term "Preliminary Prospectus" means each prospectus
subject to completion filed with the Registration Statement (including the
prospectus subject to completion, if any, included in the Registration
Statement at the time it was or is declared effective); the term "Prospectus"
means:
(A) if the Company relies on Rule 434 under the Act, the Term
Sheet relating to the Securities that is first filed pursuant to Rule
424(b)(7) under the Act, together with the Preliminary Prospectus
identified therein that such Term Sheet supplements;
(B) if the Company does not rely on Rule 434 under the Act, the
prospectus first filed with the Commission pursuant to Rule 424(b)
under the Act; or
(C) if the Company does not rely on Rule 434 under the Act and if
no prospectus is required to be filed pursuant to Rule 424(b) under
the Act, the prospectus included in the Registration Statement;
and the term "Term Sheet" means any term sheet that satisfies the requirements
of Rule 434 under the Act. Any reference herein to the "date" of a Prospectus
that includes a Term Sheet shall mean the date of such Term Sheet.
(b) The Commission has not issued any order preventing or
suspending use of any Preliminary Prospectus. When any Preliminary Prospectus
was filed with the Commission it (i) contained all statements required to be
stated therein (except where information was intentionally left blank in any
filing and thereafter completed) in accordance with, and complied in all
material respects with the requirements of, the Act
3
5
and the rules and regulations of the Commission thereunder and (ii) did not
include any untrue statement of a material fact or omit to state any material
fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. When the
Registration Statement or any amendment thereto was or is declared effective,
it (i) contained or will contain all statements required to be stated therein
in accordance with, and complied or will comply in all material respects with
the requirements of, the Act and the rules and regulations of the Commission
thereunder and (ii) did not or will not include any untrue statement of a
material fact or omit to state any material fact necessary to make the
statements therein not misleading. When the Prospectus or any Term Sheet that
is a part thereof or any amendment or supplement to the Prospectus is filed
with the Commission pursuant to Rule 424(b) (or, if the Prospectus or part
thereof or such amendment or supplement is not required to be so filed, when
the Registration Statement or the amendment thereto containing such amendment
or supplement to the Prospectus was or is declared effective) and on the Firm
Closing Date and any Option Closing Date (both as hereinafter defined), the
Prospectus, as amended or supplemented at any such time, (i) contained or will
contain all statements required to be stated therein in accordance with, and
complied or will comply in all material respects with the requirements of, the
Act and the rules and regulations of the Commission thereunder and (ii) did not
or will not include any untrue statement of a material fact or omit to state
any material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading. The
foregoing provisions of this paragraph (b) do not apply to statements or
omissions made in any Preliminary Prospectus, the Registration Statement or any
amendment thereto or the Prospectus or any amendment or supplement thereto in
reliance upon and in conformity with written information furnished to the
Company by any Underwriter through the Representatives specifically for use
therein.
(c) If the Company has elected to rely on Rule 462(b) and
the Rule 462(b) Registration Statement has not been declared effective (i) the
Company has filed a Rule 462(b) Registration Statement in compliance with and
that is effective upon filing pursuant to Rule 462(b) and has received
confirmation of its receipt and (ii) the Company has given irrevocable
instructions for transmission of the applicable filing fee in connection with
the filing of the Rule 462(b) Registration Statement, in compliance with Rule
111 promulgated under the Act or the Commission has received payment of such
filing fee.
(d) The Company and each of its Subsidiaries have been
duly organized and are validly existing as real estate investment trusts or
corporations, as applicable, in good standing under the laws of their
respective jurisdictions of incorporation and are duly qualified to transact
business as foreign corporations and are in good standing under the laws of all
other jurisdictions where the ownership or leasing of their respective
properties or the conduct of their respective businesses requires such
qualification, except where the failure to be so qualified does not amount to a
material liability or disability to the Company and its Subsidiaries, taken as
a whole.
4
6
(e) The Company and each of its Subsidiaries have full
power (corporate and other) to own or lease their respective properties and
conduct their respective businesses as described in the Registration Statement
and the Prospectus or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus; and the Company has full power (corporate and other) to
enter into this Agreement and to carry out all the terms and provisions hereof
to be carried out by it.
(f) The issued shares of capital stock of each of the
Company's Subsidiaries have been duly authorized and validly issued, are fully
paid and nonassessable, have been issued in compliance with all federal and
state securities laws and, except for directors' qualifying shares and as
otherwise set forth in the Prospectus (including voting stock of AMREIT II,
Inc. held by the Manager) or, if the Prospectus is not in existence, the most
recent Preliminary Prospectus, are owned beneficially by the Company free and
clear of any security interests, liens, encumbrances, equities or claims.
(g) The Company has an authorized, issued and outstanding
capitalization as set forth in the Prospectus or, if the Prospectus is not in
existence, the most recent Preliminary Prospectus. All of the issued capital
shares of the Company have been duly authorized and validly issued and are
fully paid and nonassessable. The Firm Securities, the Option Securities and
the securities to be acquired in the Private Placement have been duly
authorized and at the Firm Closing Date or the related Option Closing Date (as
the case may be), after payment therefor in accordance herewith, will be
validly issued, fully paid and nonassessable. No holders of outstanding
capital shares of the Company are entitled as such to any preemptive or other
rights to subscribe for any of the Securities, and no holder of securities of
the Company has any right (by reason of the filing of the Registration
Statement or otherwise) which has not been fully exercised or waived to require
the Company to register the offer or sale of any securities owned by such
holder under the Act in the public offering contemplated by this Agreement.
(h) The capital shares of the Company conform to the
description thereof contained in the Prospectus or, if the Prospectus is not in
existence, the most recent Preliminary Prospectus.
(i) Except as disclosed in the Prospectus (or, if the
Prospectus is not in existence, the most recent Preliminary Prospectus), there
are no outstanding (A) securities or obligations of the Company or any of its
Subsidiaries convertible into or exchangeable for any capital stock of the
Company or any such Subsidiary, (B) warrants, rights or options to subscribe
for or purchase from the Company or any such Subsidiary any such capital stock
or any such convertible or exchangeable securities or obligations, or (C)
obligations of the Company or any such Subsidiary to issue any capital shares,
any such convertible or exchangeable securities or obligations, or any such
warrants, rights or options.
5
7
(j) Any consolidated financial statements and schedules
of the Company and its consolidated Subsidiaries included in the Registration
Statement and the Prospectus (or, if the Prospectus is not in existence, the
most recent Preliminary Prospectus) fairly present the financial position of
the Company and its consolidated Subsidiaries and the results of operations and
changes in financial condition as of the dates and periods therein specified.
Such financial statements and schedules have been prepared in accordance with
generally accepted accounting principles consistently applied throughout the
periods involved (except as otherwise noted therein). No other financial
statements or supporting schedules are required to be included in the
Registration Statement.
(k) Deloitte & Touche LLP, who have certified certain
financial statements of the Company and its consolidated Subsidiaries and
delivered their report with respect to the audited consolidated financial
statements and schedules included in the Registration Statement and the
Prospectus (or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus), are independent public accountants as required by the
Act and the applicable rules and regulations thereunder.
(l) The execution and delivery of this Agreement has been
duly authorized by the Company and this Agreement has been duly executed and
delivered by the Company, and is a valid and binding agreement of the Company,
enforceable against the Company in accordance with its terms.
(m) The execution and delivery of the Management
Agreement by the Company has been duly authorized by the Company and the
Management Agreement has been, or will be upon execution and delivery thereof,
duly executed and delivered by the Company. The Company has full legal right,
power and authority to enter into the Management Agreement and to consummate
the transactions contemplated therein. The Management Agreement constitutes a
valid and binding agreement of the Company and the Manager, enforceable in
accordance with its terms, except as the enforcement thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
relating to or affecting the rights and remedies of creditors or by general
equitable principles.
(n) The execution and delivery of the purchase agreement
between the Company and Holdings regarding the Private Placement (the "Purchase
Agreement") has been duly authorized by each party thereto and the Purchase
Agreement has been, or will be upon execution and delivery thereof, duly
executed and delivered by the Company and Holdings. The Company and Holdings
have full legal right, power and authority to enter into the Purchase Agreement
and to consummate the transactions contemplated therein. The Purchase
Agreement constitutes a valid and binding agreement of the Company and
Holdings, enforceable in accordance with its terms, except as the enforcement
thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or
other similar laws relating to or affecting the rights and remedies of
creditors or by general equitable principles.
6
8
(o) No legal or governmental proceedings are pending to
which the Company or any of its Subsidiaries, is a party or to which the
property of the Company, or any of its Subsidiaries is subject that are
required to be described in the Registration Statement or the Prospectus and
are not described therein (or, if the Prospectus is not in existence, the most
recent Preliminary Prospectus), and no such proceedings have been threatened
against the Company or any of its Subsidiaries or with respect to any of their
respective properties; and no contract or other document is required to be
described in the Registration Statement or the Prospectus or to be filed as an
exhibit to the Registration Statement that is not described therein (or, if the
Prospectus is not in existence, the most recent Preliminary Prospectus) or
filed as required.
(p) No default exists, and no event has occurred which,
with notice or lapse of time 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, lease or other agreement or instrument to which the
Company, or any Subsidiary is a party or by which any of them or any of their
respective properties is bound or may be affected in any material adverse
respect with regard to property, business or operations of the Company and its
subsidiaries.
(q) The execution, delivery and performance by the
Company, the Manager and each Subsidiary of this Agreement, and each Existing
Instrument, as applicable and consummation of the transactions contemplated
hereby and thereby and by the Prospectus (or, if the Prospectus is not in
existence, the most recent Preliminary Prospectus), including, without
limitation, the issuance, offering and sale of the Securities to the
Underwriters by the Company pursuant to this Agreement and the compliance by
the Company with the other provisions of this Agreement, do not (i) require the
consent, approval, authorization, registration or qualification of or with any
governmental authority, except such as have been obtained, such as may be
required under state securities or blue sky laws, and, if the Registration
Statement filed with respect to the Securities (as amended) is not effective
under the Act as of the time of execution hereof, such as may be required (and
shall be obtained as provided in this Agreement) under the Act, (ii) conflict
with or result in a breach or violation of any of the terms and provisions of,
or constitute a default under, or result in the creation or imposition of any
lien, charge or encumbrance upon any property or assets of the Company or any
of the Subsidiaries pursuant to, any indenture, mortgage, deed of trust, lease
or other agreement or instrument to which the Company, or any Subsidiary is a
party or by which any of them or any of their respective properties is bound
(each an "Existing Instrument"), or the charter documents or by-laws of the
Company, or any Subsidiary, or any statute or any judgment, decree, order, rule
or regulation of any court or other governmental authority or any arbitrator
applicable to the Company, or any of the Subsidiaries, or (iii) require the
consent of any other party to any Existing Instrument except for such consents
which have been obtained in writing (the "Written Consents") and except for
such consents the failure of which to obtain will not, individually or in the
aggregate, amount to a material liability or disability to the Company and its
Subsidiaries, taken as a whole.
7
9
(r) The issuance of Common Shares to Holdings, the
issuance of options to acquire Common Shares to the Manager, the exercise of
such options and the issuance of all of the capital shares of the Subsidiaries
to be issued on or before the Firm Closing Date are exempt from registration
under the Act. All of such shares are separate and distinct from the
Securities, and all of such issuances have been and will be conducted without
the involvement or participation of any of the Underwriters.
(s) Subsequent to the respective dates as of which
information is given in the Registration Statement and the Prospectus or, if
the Prospectus is not in existence, the most recent Preliminary Prospectus, (i)
none of the Company or its Subsidiaries has sustained any material loss or
interference with their respective businesses or properties from fire, flood,
hurricane, accident or other calamity, whether or not covered by insurance, or
from any labor dispute or any legal or governmental proceeding, and (ii) there
has not been any material adverse change, or any development involving a
prospective material adverse change, in the condition (financial or otherwise),
management, business prospects, net worth, or results of the operations of the
Company or any of its Subsidiaries, except in each case as described in or
contemplated by the Prospectus or, if the Prospectus is not in existence, the
most recent Preliminary Prospectus.
(t) None of the Company or any Subsidiary has, directly
or indirectly, (i) taken any action designed to cause or to result in, or that
has constituted or which might reasonably be expected to constitute, the
stabilization or manipulation of the price of any security of the Company to
facilitate the sale or resale of the Securities or (ii) since the filing of the
Registration Statement (A) sold, bid for, purchased, or paid anyone any
compensation for soliciting purchases of, the Securities or (B) paid or agreed
to pay to any person any compensation for soliciting another to purchase any
other securities of the Company.
(u) Neither the Company nor any Subsidiary has
distributed and, prior to the later of (i) the Firm Closing Date and (ii) the
completion of the distribution of the Securities, will not distribute any
offering material in connection with the offering and sale of the Securities
other than the Registration Statement or any amendment thereto, any Preliminary
Prospectus or the Prospectus or any amendment or supplement thereto, or other
materials, if any, permitted by the Act.
(v) Subsequent to the respective dates as of which
information is given in the Registration Statement and the Prospectus (or, if
the Prospectus is not in existence, the most recent Preliminary Prospectus),
(i) the Company and its Subsidiaries have not incurred any material liability
or obligation, direct or contingent, nor entered into any material transaction
not in the ordinary course of business, except as described in the Registration
Statement; (ii) the Company has not purchased any of its outstanding capital
shares, nor declared, paid or otherwise made any dividend or distribution of
any kind on its capital shares; and (iii) there has not been any material
change in the capital shares, short-term debt or long-term debt of the Company
and its consolidated Subsidiaries,
8
10
except in each case as described in or contemplated by the Prospectus (or, if
the Prospectus is not in existence, the most recent Preliminary Prospectus).
(w) The Company and each of its Subsidiaries have good
and marketable title in fee simple to all items of real property and marketable
title to all personal property owned by each of them, in each case free and
clear of any security interests, liens, encumbrances, equities, claims and
other defects, except such as do not materially and adversely affect the value
of such property and do not interfere with the use made or proposed to be made
of such property by the Company or such Subsidiary, and any real property and
buildings held under lease by the Company or any such Subsidiary are held under
valid, subsisting and enforceable leases, with such exceptions as are not
material and do not interfere with the use made or proposed to be made of such
property and buildings by the Company or such Subsidiary, in each case except
as described in or contemplated by the Prospectus (or, if the Prospectus is not
in existence, the most recent Preliminary Prospectus).
(x) No labor dispute with the employees of the Company,
or any of the Subsidiaries exists or is threatened or imminent that could
result in a material adverse change in the condition (financial or otherwise),
business prospects, net worth or results of operations of the Company and its
Subsidiaries, except as described in or contemplated by the Prospectus (or, if
the Prospectus is not in existence, the most recent Preliminary Prospectus).
(y) The Company, and the Subsidiaries own or possess, or
can acquire on reasonable terms, all material patents, patent applications,
trademarks, service marks, trade names, licenses, copyrights and proprietary or
other confidential information currently employed by them in connection with
their respective businesses, and neither of the Company, nor any such
Subsidiary has received any notice of infringement of or conflict with asserted
rights of any third party with respect to any of the foregoing which, singly or
in the aggregate, if the subject of an unfavorable decision, ruling or finding,
would result in a material adverse change in the condition (financial or
otherwise), business prospects, net worth or results of operations of the
Company and its Subsidiaries, taken as a whole, except as described in or
contemplated by the Prospectus (or, if the Prospectus is not in existence, the
most recent Preliminary Prospectus).
(z) Each of the Company, and each of the Subsidiaries are
insured by insurers of recognized financial responsibility against such losses
and risks and in such amounts as are prudent and customary in the businesses in
which they are engaged; none of the Company, or any Subsidiary has been refused
any insurance coverage sought or applied for, and the Company has no reason to
believe that any such entity 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 cost that
would not materially and adversely affect the condition (financial or
otherwise), business prospects, net worth or results of operations of the
Company, or
9
11
such Subsidiary, as applicable, except as described in or contemplated by the
Prospectus (or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus).
(aa) No Subsidiary of the Company is currently prohibited,
directly or indirectly, from paying any dividends to the Company, from making
any other distribution on such Subsidiary's capital stock, from repaying to the
Company any loans or advances to such Subsidiary from the Company or from
transferring any of such Subsidiary's property or assets to the Company or any
other Subsidiary of the Company, except as described in or contemplated by the
Prospectus (or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus).
(ab) The Company, and the Subsidiaries possess all
certificates, authorizations, licenses and permits issued by the appropriate
federal, state or foreign regulatory authorities necessary to conduct their
respective businesses, and neither the Company nor any Subsidiary has received
any notice of proceedings relating to the revocation or modification of any
such certificate, authorization, license or permit which, singly or in the
aggregate, if the subject of an unfavorable decision, ruling or finding, would
result in a material adverse change in the condition (financial or otherwise),
business prospects, net worth or results of operations of the Company and its
Subsidiaries, taken as a whole, except as described in or contemplated by the
Prospectus (or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus).
(ac) The Company, and each Subsidiary will use its
commercially reasonable efforts to conduct its operations in a manner that will
not subject it to registration as an investment company under the Investment
Company Act of 1940, as amended, and this transaction will not cause the
Company, or any Subsidiary to become an investment company subject to
registration under such Act.
(ad) Except for the shares of capital stock of each of the
Subsidiaries owned by the Company and such Subsidiaries, neither the Company
nor any such Subsidiary owns any shares of stock or any other equity securities
of any corporation or has any equity interest in any firm, partnership,
association or other entity, except as described in or contemplated by the
Prospectus (or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus). The Company does not own or control, directly or
indirectly, any corporation, association or other entity other than the
Subsidiaries listed in Exhibit 21 to the Registration Statement.
(ae) The Company, and each of the Subsidiaries maintains a
system of internal accounting controls sufficient to provide reasonable
assurance that (1) transactions are executed in accordance with management's
general or specific authorizations; (2) transactions are recorded as necessary
to permit preparation of financial statements in conformity with generally
accepted accounting principles and to maintain asset accountability; (3) access
to assets is permitted only in accordance with management's general or specific
authorization; and (4) the recorded accountability for
10
12
assets is compared with the existing assets at reasonable intervals and
appropriate action is taken with respect to any differences.
(af) Neither the Company, nor any of the Subsidiaries
nor, to the knowledge of the Company, any employee or agent of the Company, or
any Subsidiary, has (i) made any contribution or other payment to any official
of, or candidate for, any federal, state or foreign office in violation of any
law or of the character required to be disclosed in the Prospectus or (ii) made
any payment to any federal or state governmental officer or official, or other
person charged with similar public or quasi-public duties, other than payments
required or permitted by the laws of the United States or any jurisdiction
thereof.
(ag) There are no business relationships or related-party
transactions of the type described in Item 404 of Regulation S-K of the
Commission involving the Company which have not been described in the
Prospectus, except for such transactions that would be considered immaterial
under such Item 404. The descriptions in the Prospectus (or, if the Prospectus
is not in existence, the most recent Preliminary Prospectus) under the caption
"The Manager -- Certain Relationships; Conflicts of Interest" are complete and
accurate in all material respects.
(ah) Each of the Company, and each Subsidiary has filed
all foreign, federal, state and local tax returns that are required to be filed
or has requested extensions thereof (except in any case in which the failure so
to file would not have a material adverse effect on the Company and its
Subsidiaries, taken as a whole) and has paid all taxes required to be paid by
it and any other assessment, fine or penalty levied against it, to the extent
that any of the foregoing is due and payable, except (i) for any such
assessment, fine or penalty that is currently being contested in good faith and
for which adequate reserves have been taken in conformity with generally
accepted accounting principles and the nonpayment of which does not in any way
jeopardize the Company's status as a real estate investment trust ("REIT")
under Sections 856 through 860 of the Internal Revenue Code of 1986, as amended
(the "Tax Code"), and the rules and regulations thereunder (the "REIT
Provisions of the Tax Code"), as may be amended from time to time, or (ii) as
described in or contemplated by the Prospectus (or, if the Prospectus is not in
existence, the most recent Preliminary Prospectus). The Company has made
adequate charges, accruals and reserves in the applicable financial statements
referred to above in respect of all federal, state and foreign income and
franchise taxes for all periods as to which the tax liability of the Company or
any of its Subsidiaries has not been finally determined.
(ai) The Company intends to operate and will operate in
such a manner as to qualify as a REIT under the REIT Provisions of the Tax
Code; and the Company intends to elect to and will elect to be taxed as a REIT
under the Tax Code beginning with its taxable year ending December 31, 1998.
The Company does not know of any currently existing event or condition which
would cause or is reasonably likely to cause the Company to fail to qualify as
a REIT.
11
13
(aj) The Company has adopted operating policies and
guidelines (the "Guidelines") respecting the Company's (i) investments, (ii)
leveraging of its invested portfolio, (iii) management of the credit risk of
its invested portfolio, (iv) management of the interest rate risk of its
invested portfolio, including hedging, (v) its relationship with Amresco, and
(vi) its compliance with the REIT provisions of the Tax Code. Such policies
are currently in full force and effect, have not been amended, and copies have
been delivered to the Underwriters. The Company is not currently modifying,
waiving or amending any portion of the Guidelines, except as described in or
contemplated by the Prospectus (or, if the Prospectus is not in existence, the
most recent Preliminary Prospectus).
(ak) Neither the Company, nor any of the Subsidiaries is
in violation of any federal or state law or regulation relating to occupational
safety and health or to the storage, handling or transportation of hazardous or
toxic materials and each of them has received all permits, licenses or other
approvals required of it under applicable federal and state occupational safety
and health and environmental laws and regulations to conduct its respective
business, and the Company, and each Subsidiary is in compliance with all terms
and conditions of any such permit, license or approval, except for any such
violation of law or regulation, failure to receive required permits, licenses
or other approvals or failure to comply with the terms and conditions of such
permits, licenses or approvals which would not, singly or in the aggregate,
result in a material adverse change in the condition (financial or otherwise),
business prospects, net worth or results of operations of the Company and its
Subsidiaries, taken as a whole, except as described in or contemplated by the
Prospectus (or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus).
(al) The Company and its Subsidiaries and any "employee
benefit plan" (as defined under the Employee Retirement Income Security Act of
1974, as amended, and the regulations and published interpretations thereunder
(collectively, "ERISA")) established or maintained by the Company, its
Subsidiaries or their "ERISA Affiliates" (as defined below) are in compliance
in all material respects with ERISA. "ERISA Affiliate" means, with respect to
the Company or a Subsidiary, any member of any group of organizations described
in Sections 414(b),(c),(m) or (o) of the Tax Code, and the regulations and
published interpretations thereunder of which the Company or such Subsidiary is
a member. No "reportable event" (as defined under ERISA) has occurred or is
reasonably expected to occur with respect to any "employee benefit plan"
established or maintained by the Company, its Subsidiaries or any of their
ERISA Affiliates. No "employee benefit plan" established or maintained by the
Company, its Subsidiaries or any of their ERISA Affiliates, if such "employee
benefit plan" were terminated, would have any "amount of unfunded benefit
liabilities" (as defined under ERISA). Neither the Company, its Subsidiaries
nor any of their ERISA Affiliates has incurred or reasonably expects to incur
any liability under (i) Title IV of ERISA with respect to termination of, or
withdrawal from, any "employee benefit plan" or (ii) Sections 412, 4971, 4975
or 4980B of the Tax Code. Each "employee benefit plan" established or
maintained by the Company, its Subsidiaries or any of their ERISA
12
14
Affiliates that is intended to be qualified under Section 401(a) of the Tax
Code is so qualified and nothing has occurred, whether by action or failure to
act, which would cause the loss of such qualification.
(am) The Company, and each Subsidiary is conducting
business in compliance with all other applicable state, federal and foreign
laws, rules and regulations, except where failure to be in compliance, if the
subject of an unfavorable decision, ruling or finding, would not singly or in
the aggregate reasonably be expected to result in a material adverse change in
the condition (financial or otherwise), business prospects, net worth or
results of operations of the Company and its Subsidiaries, taken as a whole.
To the best of Company's knowledge the description of the laws and regulations
affecting the investment operations of Company, and the Subsidiaries in the
Prospectus is a true and accurate description thereof in all material respects
and does not omit any information relating to such laws and regulations
reasonably likely to be material to an investor in the Securities.
(an) Each certificate signed by any officer of the
Company, and delivered to the Representatives or counsel for the Underwriters
shall be deemed to be a representation and warranty by the Company, to each
Underwriter as to the matters covered thereby.
B. The Manager hereby represents and warrants to, and
agrees with, each of the several Underwriters that:
(a) The Manager has been duly formed and is validly
existing as a limited partnership in good standing under the laws of the State
of Delaware with full power and authority (partnership and other) to own and
lease its properties and conduct its business as described in the Prospectus
(or, if the Prospectus is not in existence, the most recent Preliminary
Prospectus) and to enter into and perform its obligations under this Agreement.
The Manager is duly qualified to do business and in good standing as a foreign
partnership in each jurisdiction in which the ownership or leasing of
properties or the conduct of its business requires such qualification, except
where the failure to be so qualified does not amount to a material liability or
disability or to the Manager. As of the Firm Closing Date, all of the
outstanding partnership interests in the Manager will be validly issued and
will be owned, directly or indirectly, by Amresco, except as described in the
Prospectus or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus. Except as described in the Prospectus, or, if the
Prospectus is not in existence, the most recent Preliminary Prospectus, there
are no outstanding options, warrants or other rights calling for the issuance
of, or any commitment, plan or arrangement to issue, any partnership interests
in the Manager or any security convertible into or exchangeable or exercisable
for, any partnership interests in the Manager.
(b) The execution and delivery of the Management
Agreement by the Manager has been duly authorized by the Manager and the
Management Agreement has been, or will be upon execution and delivery thereof,
duly executed and delivered by the
13
15
Manager. The Manager has full legal right, power and authority to enter into
the Management Agreement and to consummate the transactions contemplated
therein. The Management Agreement constitutes a valid and binding agreement of
the Manager, enforceable in accordance with its terms, except as the
enforcement thereof may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws relating to or affecting the rights and
remedies of creditors or by general equitable principles.
(c) No legal or governmental proceedings are pending to
which the Manager is a party or to which the property of the Manager is subject
that are required to be described in the Registration Statement or the
Prospectus and are not described therein (or, if the Prospectus is not in
existence, the most recent Preliminary Prospectus), and no such proceedings
have been threatened against the Manager with respect to any of its properties;
and no contract or other document to which the Manager is a party is required
to be described in the Registration Statement or the Prospectus or to be filed
as an exhibit to the Registration Statement that is not described therein (or,
if the Prospectus is not in existence, the most recent Preliminary Prospectus)
or filed as required.
(d) No default exists, and no event has occurred which,
with notice or lapse of time 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, lease or other agreement or instrument to which the
Manager is a party or by which the Manager or its properties is bound or may be
affected in any material adverse respect with regard to property, business or
operations of the Manager.
(e) The execution, delivery and performance by the
Manager of this Agreement, and each Company Agreement to which it is a party,
as applicable and consummation of the transactions contemplated hereby and
thereby and by the Prospectus (or, if the Prospectus is not in existence, the
most recent Preliminary Prospectus), and the compliance by the Manager with the
other provisions of this Agreement, do not (i) require the consent, approval,
authorization, registration or qualification of or with any governmental
authority, except such as have been obtained, (ii) conflict with or result in a
breach or violation of any of the terms and provisions of, or constitute a
default under, or result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Manager pursuant to, any
existing Instrument to which the Manager is a party or by which any of its
properties is bound or the charter documents or by-laws of the Manager or any
statute or any judgment, decree, order, rule or regulation of any court or
other governmental authority or any arbitrator applicable to the Manager or
(iii) require the consent of any other party to any Existing Instrument except
for such consents which have been obtained in writing and except for such
consents the failure of which to obtain will not, individually or in the
aggregate, amount to a material liability or disability to the Manager.
(f) Subsequent to the respective dates as of which
information is given in the Registration Statement and the Prospectus or, if
the Prospectus is not in existence,
14
16
the most recent Preliminary Prospectus, (i) the Manager has not sustained any
material loss or interference with its businesses or properties from fire,
flood, hurricane, accident or other calamity, whether or not covered by
insurance, or from any labor dispute or any legal or governmental proceeding,
and (ii) there has not been any material adverse change, or any development
involving a prospective material adverse change, in the condition (financial or
otherwise), management, business prospects, net worth, or results of the
operations of the Manager, except in each case as described in or contemplated
by the Prospectus or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus.
(g) No labor dispute with the employees of the Manager,
exists or is threatened or imminent that could result in a material adverse
change in the condition (financial or otherwise), business prospects, net worth
or results of operations of the Company and its Subsidiaries, except as
described in or contemplated by the Prospectus (or, if the Prospectus is not in
existence, the most recent Preliminary Prospectus).
(h) The Manager owns or possesses, or can acquire on
reasonable terms, all material patents, patent applications, trademarks,
service marks, trade names, licenses, copyrights and proprietary or other
confidential information currently employed by them in connection with their
respective businesses, and the Manager has received any notice of infringement
of or conflict with asserted rights of any third party with respect to any of
the foregoing which, singly or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, would result in a material adverse
change in the condition (financial or otherwise), business prospects, net worth
or results of operations of the Manager, except as described in or contemplated
by the Prospectus (or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus).
(i) The Manager 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 including ,
without limitation errors and omissions insurance; the Manager has not been
refused any insurance coverage sought or applied for, and the Company has no
reason to believe that any such entity 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 cost that would not materially and adversely affect the condition (financial
or otherwise), business prospects, net worth or results of operations of the
Manager, except as described in or contemplated by the Prospectus (or, if the
Prospectus is not in existence, the most recent Preliminary Prospectus).
(j) The Manager, possesses all certificates,
authorizations, licenses and permits issued by the appropriate federal, state
or foreign regulatory authorities necessary to conduct its business, and has
not received any notice of proceedings relating to the revocation or
modification of any such certificate, authorization, license or permit which,
singly or in the aggregate, if the subject of an unfavorable decision, ruling
or finding, would result in a material adverse change in the condition
(financial or otherwise),
15
17
business prospects, net worth or results of operations of the Manager, except
as described in or contemplated by the Prospectus (or, if the Prospectus is not
in existence, the most recent Preliminary Prospectus).
(k) The Manager will use its commercially reasonable
efforts to conduct its operations in a manner that will not subject it to
registration as an investment company under the Investment Company Act of 1940,
as amended, and this transaction will not cause the Manager to become an
investment company subject to registration under such Act.
(l) The Manager maintains a system of internal accounting
controls sufficient to provide reasonable assurance that (1) transactions are
executed in accordance with management's general or specific authorizations;
(2) transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles and to
maintain asset accountability; (3) access to assets is permitted only in
accordance with management's general or specific authorization; and (4) the
recorded accountability for assets is compared with the existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
3. Purchase, Sale and Delivery of the Securities.
(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 issue and sell to each of
the Underwriters, and each of the Underwriters, severally and not jointly,
agrees to purchase from the Company, at a purchase price of $[_____] per share,
the number of Firm Securities set forth opposite the name of such Underwriter
in Schedule 1 hereto; except as provided in Section 3(b), below. One or more
certificates in definitive form for the Firm Securities that the several
Underwriters have agreed to purchase hereunder, and in such denomination or
denominations and registered in such name or names as the Representatives
request upon notice to the Company at least 48 hours prior to the Firm Closing
Date, shall be delivered by or on behalf of the Company to the Representatives
for the respective accounts of the Underwriters, against payment by or on
behalf of the Underwriters of the purchase price therefor by wire transfer in
same-day funds (the "Wired Funds") to the account of the Company. Such
delivery of and payment for the Firm Securities shall be made at the offices of
O'Melveny & Xxxxx LLP; 000 Xxxxxxx Xxxxxx, Xxxxx 0000; Xxx Xxxxxxxxx, XX
00000-0000, at 9:30 A.M., New York time, on [_____], or at such other place,
time or date as the Representatives and the Company may agree upon or as the
Representatives may determine pursuant to Section 9 hereof, such time and date
of delivery against payment being herein referred to as the "Firm Closing
Date". The Company will make such certificate or certificates for the Firm
Securities available for checking and packaging by the Representatives at the
offices in New York, New York of the Company's transfer agent or registrar or
of Prudential Securities Incorporated at least 24 hours prior to the Firm
Closing Date.
16
18
(b) For the purpose of covering any over-allotments in
connection with the distribution and sale of the Firm Securities as
contemplated by the Prospectus, the Company hereby grants to the several
Underwriters an option to purchase, severally and not jointly, the Option
Securities. The purchase price to be paid for any Option Securities shall be
the same price per share as the price per share for the Firm Securities set
forth above in paragraph (a) of this Section 3. The option granted hereby may
be exercised as to all or any part of the Option Securities from time to time
within thirty (30) days after the date of the Prospectus (or, if such 30th day
shall be a Saturday or Sunday or a holiday, on the next business day thereafter
when the New York Stock Exchange is open for trading). The Underwriters shall
not be under any obligation to purchase any of the Option Securities prior to
the exercise of such option. The Representatives may from time to time
exercise the option granted hereby by giving notice in writing or by telephone
(confirmed in writing) to the Company setting forth the aggregate number of
Option Securities as to which the several Underwriters are then exercising the
option and the date and time for delivery of and payment for such Option
Securities. Any such date of delivery shall be determined by the
Representatives but shall not be earlier than two business days or later than
five business days after such exercise of the option and, in any event, shall
not be earlier than the Firm Closing Date. The time and date set forth in such
notice, or such other time on such other date as the Representatives and
Company may agree upon or as the Representatives may determine pursuant to
Section 9 hereof, is herein called the "Option Closing Date" with respect to
such Option Securities. Upon exercise of the option as provided herein, the
Company shall become obligated to sell to each of the several Underwriters,
and, subject to the terms and conditions herein set forth, each of the
Underwriters (severally and not jointly) shall become obligated to purchase
from the Company, the same percentage of the total number of the Option
Securities as to which the several Underwriters are then exercising the option
as such Underwriter is obligated to purchase of the aggregate number of Firm
Securities, as adjusted by the Representatives in such manner as they deem
advisable to avoid fractional shares. If the option is exercised as to all or
any portion of the Option Securities, one or more certificates in definitive
form for such Option Securities, and payment therefor, shall be delivered on
the related Option Closing Date in the manner, and upon the terms and
conditions, set forth in paragraph (a) of this Section 3, except that reference
therein to the Firm Securities and the Firm Closing Date shall be deemed, for
purposes of this paragraph (b), to refer to such Option Securities and Option
Closing Date, respectively.
(c) The Company hereby acknowledges that the wire
transfer by or on behalf of the Underwriters of the purchase price for any
Securities does not constitute closing of a purchase and sale of the
Securities. Only execution and delivery of a receipt for Securities by the
Underwriters indicates completion of the closing of a purchase of the
Securities from the Company. Furthermore, in the event that the Underwriters
wire funds to the Company prior to the completion of the closing of a purchase
of Securities, the Company hereby acknowledges that until the Underwriters
execute and deliver a receipt for the Securities, by facsimile or otherwise,
the Company will not be entitled to the wired funds and shall return the wired
funds to the Underwriters as soon as
17
19
practicable (by wire transfer of same-day funds) upon demand. In the event
that the closing of a purchase of Securities is not completed and the wired
funds are not returned by the Company to the Underwriters on the same day the
wired funds were received by the Company, the Company agrees to pay to the
Underwriters in respect of each day the wire funds are not returned by it, in
same-day funds, interest on the amount of such wire funds in an amount
representing the Underwriters' cost of financing as reasonably determined by
Prudential Securities Incorporated.
(d) It is understood that any of you, individually and
not as the Representatives, may (but shall not be obligated to) make payment on
behalf of any Underwriter or Underwriters for any of the Securities 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.
4. Offering by the Underwriters. Upon your
authorization of the release of the Firm Securities, the several Underwriters
propose to offer the Firm Securities for sale to the public upon the terms set
forth in the Prospectus.
5. Covenants of the Company. The Company further
covenants and agrees with each of the Underwriters that:
(a) The Company will use its best efforts to cause the
Registration Statement, if not effective at the time of execution of this
Agreement, and any amendments thereto to become effective as promptly as
possible. If required, the Company will file the Prospectus or any Term Sheet
that constitutes a part thereof and any amendment or supplement thereto with
the Commission in the manner and within the time period required by Rules 434
and 424(b) under the Act. During any time when a prospectus relating to the
Securities is required to be delivered under the Act, the Company (i) will
comply with all requirements imposed upon it by the Act and the rules and
regulations of the Commission thereunder to the extent necessary to permit the
continuance of sales of or dealings in the Securities in accordance with the
provisions hereof and of the Prospectus, as then amended or supplemented, and
(ii) will not file with the Commission the Prospectus, Term Sheet or the
amendment referred to in the second sentence of Section 2(a) hereof, any
amendment or supplement to such Prospectus, Term Sheet or any amendment to the
Registration Statement or any Rule 462(b) Registration Statement of which the
Representatives previously have been advised and furnished with a copy for a
reasonable period of time prior to the proposed filing and as to which filing
the Representatives shall not have given their consent. The Company will
prepare and file with the Commission, in accordance with the rules and
regulations of the Commission, promptly upon request by the Representatives or
counsel for the Underwriters, any amendments to the Registration Statement or
amendments or supplements to the Prospectus that may be necessary or advisable
in connection with the distribution of the Securities by the several
Underwriters, and will use its best efforts to cause any such amendment to the
Registration Statement to be declared effective by the Commission as promptly
as possible. The Company will advise the Representatives,
18
20
promptly after receiving notice thereof, of the time when the Registration
Statement or any amendment thereto has been filed or declared effective or the
Prospectus or any amendment or supplement thereto has been filed and will
provide evidence satisfactory to the Representatives of each such filing or
effectiveness.
(b) The Company will advise the Representatives, promptly
after receiving notice or obtaining knowledge thereof, of (i) the issuance by
the Commission of any stop order suspending the effectiveness of the Original
Registration Statement or any Rule 462(b) Registration Statement or any
amendment thereto or any order preventing or suspending the use of any
Preliminary Prospectus or the Prospectus or any amendment or supplement
thereto, (ii) the suspension of the qualification of the Securities for
offering or sale in any jurisdiction, (iii) the institution, threatening or
contemplation of any proceeding for any such purpose or (iv) any request made
by the Commission for amending the Original Registration Statement or any Rule
462(b) Registration Statement, for amending or supplementing the Prospectus or
for additional information. The Company will use its best efforts to prevent
the issuance of any such stop order and, if any such stop order is issued, to
obtain the withdrawal thereof as promptly as possible.
(c) The Company will cooperate with the Representatives
in arranging for the qualification of the Securities for offering and sale
under the securities or blue sky laws of such jurisdictions (whether domestic
or foreign) as the Representatives may designate and will use its best efforts
to continue such qualifications in effect for as long as may be necessary to
complete the distribution of the Securities, provided, however, that in
connection therewith the Company shall not be required to qualify as a foreign
corporation or to execute a general consent to service of process in any
jurisdiction.
(d) If, at any time prior to the later of (i) the final
date when a prospectus relating to the Securities is required to be delivered
under the Act or (ii) the Option Closing Date, any event occurs as a result of
which the Prospectus, as then amended or supplemented, would include any untrue
statement of a material fact or omit to state a material fact necessary in
order to make the statements therein, in the light of the circumstances under
which they were made, not misleading, or if for any other reason it is
necessary at any time to amend or supplement the Prospectus to comply with the
Act or the rules or regulations of the Commission thereunder, the Company will
promptly notify the Representatives thereof and, subject to Section 5(a)
hereof, will prepare and file with the Commission, at the Company's expense, an
amendment to the Registration Statement or an amendment or supplement to the
Prospectus that corrects such statement or omission or effects such compliance.
(e) The Company will, without charge, provide (i) to the
Representatives and to counsel for the Underwriters a signed copy of the
registration statement originally filed with respect to the Securities and each
amendment thereto (in each case including exhibits thereto), (ii) to each other
Underwriter, a conformed copy of such registration statement or any Rule 462(b)
Registration Statement and each amendment thereto (in each case without
exhibits thereto) and (iii) so long as a
19
21
prospectus relating to the Securities is required to be delivered under the
Act, as many copies of each Preliminary Prospectus or the Prospectus or any
amendment or supplement thereto as the Representatives may reasonably request;
without limiting the application of clause (iii) of this sentence, the Company,
not later than (A) 6:00 P.M., New York City time, on the date of determination
of the public offering price, if such determination occurred at or prior to
10:00 A.M., New York City time, on such date or (B) 2:00 P.M., New York City
time, on the business day following the date of determination of the public
offering price, if such determination occurred after 10:00 A.M., New York City
time, on such date, will deliver to the Underwriters, without charge, as many
copies of the Prospectus and any amendment or supplement thereto as the
Representatives may reasonably request for purposes of confirming orders that
are expected to settle on the Firm Closing Date.
(f) The Company, as soon as practicable, will make
generally available to its securityholders and to the Representatives a
consolidated earnings statement of the Company and its Subsidiaries that
satisfies the provisions of Section 11(a) of the Act and Rule 158 thereunder.
(g) The Company will apply the net proceeds from the sale
of the Securities as set forth under "Use of Proceeds" in the Prospectus,
including the acquisition of any initial assets described therein.
(h) The Company will not, and will cause each of the
Subsidiaries within its control not to, directly or indirectly, without the
prior written consent of Prudential Securities Incorporated, on behalf of the
Underwriters, offer, sell, offer to sell, contract to sell, pledge, grant any
option to purchase or otherwise sell or dispose (or announce any offer, sale,
offer of sale, contract of sale, pledge, grant of any option to purchase or
other sale or disposition) of any Common Shares or any securities convertible
into, or exchangeable or exercisable for, Common Shares for a period of 180
days after the date hereof, except (i) pursuant to this Agreement, (ii)
issuances pursuant to the exercise of employee share options outstanding on the
date hereof, (iii) grants made pursuant to the Company's employee share option
plan which are not exercisable for 180 days after the date hereof, (iv)
pursuant to the Company's dividend reinvestment plan or pursuant to the terms
of convertible securities of the Company outstanding on the date hereof, and
(v) pursuant to grants of operating partnership units convertible to Common
Shares in connection with the acquisition of assets by the Company (provided
the holders of such units shall be bound by the provisions of this Section 5(h)
for the balance of the lock-up period.
(i) The Company will not, directly or indirectly, (i)
take any action designed to cause or to result in, or that has constituted or
which might reasonably be expected to constitute, the stabilization or
manipulation of the price of any security of the Company to facilitate the sale
or resale of the Securities or (ii) (A) sell, bid for, purchase, or pay anyone
any compensation for soliciting purchases of, the Securities or
20
22
(B) pay or agree to pay to any person any compensation for soliciting another
to purchase any other securities of the Company.
(j) The Company will obtain the agreements described in
Section 7(h) hereof prior to the Firm Closing Date.
(k) The Company agrees that, if at any time during the
twenty-five (25) day period after the Registration Statement becomes effective,
any rumor, publication or event relating to or affecting any of the AMRESCO
Parties or the Subsidiaries shall occur as a result of which in the
Representatives' opinion the market price of the Securities has been or is
likely materially to be affected (regardless of whether such rumor, publication
or event necessitates a supplement to or amendment of the Prospectus), the
Company will, upon the request of the Representatives, promptly prepare,
consult with the Representatives concerning the substance of, and disseminate a
press release or other public statement, reasonably satisfactory to the
Representatives, responding to or commenting on such rumor, publication or
event.
(l) If the Company elects to rely on Rule 462(b), the
Company shall both file a Rule 462(b) Registration Statement with the
Commission in compliance with Rule 462(b) and pay the applicable fees in
accordance with Rule 111 promulgated under the Act by the earlier of (i) 10:00
P.M. Eastern time on the date of this Agreement and (ii) the time confirmations
are sent or given, as specified by Rule 462(b)(2).
(m) The Company will cause the Securities to be duly
included for quotation on The Nasdaq Stock Market's National Market (the
"Nasdaq National Market") prior to the Firm Closing Date. The Company will
thereafter comply with the requirements of the Nasdaq National Market to permit
the Common Shares to remain eligible for quotation unless and until the Company
elects to no longer be eligible for quotation on the Nasdaq National Market
(n) The Company shall initially operate so as to qualify
as a REIT in accordance with the requirements of Sections 856-860 of the Tax
Code, and shall elect to be taxed as a REIT beginning with its taxable year
ending December 31, 1998 and thereafter use commercially reasonable effort to
remain qualified as a REIT. The Company will use its best efforts to comply
with the representations made as support for the opinion letter rendered by the
Company's tax counsel under the REIT Provisions of the Tax Code, the form of
which opinion is filed as Exhibit 8.1 to the Registration Statement.
(o) The Company will engage and retain a "Big 6"
Accounting Firm as its qualified accountants and such tax experts at such
accounting firm with experience in advising REITs as are reasonably acceptable
to the Representatives to assist the Company in developing appropriate
accounting systems and testing procedures and to conduct quarterly compliance
reviews designed to determine compliance with the REIT
21
23
Provisions of the Tax Code and the maintenance of Company's exempt status under
the Investment Company Act.
(p) The Company will, and will cause each Subsidiary to,
in good faith expend reasonable efforts to enforce the terms of the Management
Agreement and Purchase Agreement.
(q) The Company will conduct its business, or require the
Manager to conduct its business, in accordance with the Guidelines, as the same
may be amended from time to time.
(r) The Company will deliver on or before the Firm
Closing Date an indemnification agreement (the "Indemnification Agreement")
from Amresco as to factual matters contained in the Registration Statement
concerning the AMRESCO Group (as such term is defined in the Registration
Statement), which term includes the Manager, in the form attached hereto as
Exhibit B.
(s) The Company will deliver, on or before the Firm
Closing Date, a form of loan purchase agreement (the "Loan Purchase Agreement")
in form and substance satisfactory to the Representatives and their counsel.
Each loan described in the Registration Statement which is to be acquired by
the Company from the AMRESCO Group shall be acquired by an agreement
substantially in the form of the Loan Purchase Agreement.
6. Expenses. The Company will pay all costs and
expenses incident to the performance of its obligations under this Agreement,
whether or not the transactions contemplated herein are consummated or this
Agreement is terminated pursuant to Section 11 hereof including all costs and
expenses incident to (i) the printing or other production of documents with
respect to the transactions, including any costs of printing the registration
statement originally filed with respect to the Securities and any amendment
thereto, any Rule 462(b) Registration Statement, any Preliminary Prospectus and
the Prospectus and any amendment or supplement thereto, this Agreement and any
blue sky memoranda, (ii) all arrangements relating to the delivery to the
Underwriters of copies of the foregoing documents, (iii) the fees and
disbursements of the counsel, the accountants and any other experts or advisors
retained by the Company, (iv) preparation, issuance and delivery to the
Underwriters of any certificates evidencing the Securities, including transfer
agent's and registrar's fees, (v) the qualification of the Securities under
state securities and blue sky laws, including filing fees and fees and
disbursements of counsel for the Underwriters relating thereto, (vi) the filing
fees of the Commission and the National Association of Securities Dealers, Inc.
(the "NASD") relating to the Securities, (vii) any listing of the Securities on
the Nasdaq National Market, (viii) any meetings with prospective investors in
the Securities (other than as shall have been specifically approved by the
Representatives to be paid for by the Underwriters) and (ix) advertising
relating to the offering of the Securities (other than one tombstone
22
24
announcement to be run in the Wall Street Journal, which will be paid for by
the Underwriters). If the sale of the Securities provided for herein is not
consummated because any condition to the obligations of the Underwriters set
forth in Section 7 hereof is not satisfied, because this Agreement is
terminated pursuant to Section II (a)(i) or II (a)(ii) hereof or because of any
failure, refusal or inability on the part of the Company to perform all
obligations and satisfy all conditions on its part to be performed or satisfied
hereunder other than by reason of a default by any of the Underwriters, the
Company will reimburse the Underwriters severally upon demand for all
out-of-pocket expenses (including counsel fees and disbursements) that shall
have been incurred by them in connection with the proposed purchase and sale of
the Securities. The Company shall not in any event be liable to any of the
Underwriters for the loss of anticipated profits from the transactions covered
by this Agreement.
7. Conditions of the Underwriters' Obligations. The
obligations of the several Underwriters to purchase and pay for the Firm
Securities shall be subject, in the Representatives' sole discretion, to the
accuracy in of the representations and warranties of the Company contained
herein as of the date hereof and as of the Firm Closing Date, as if made on and
as of the Firm 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 its covenants and agreements hereunder and to the following
additional conditions:
(a) If the Original Registration Statement or any
amendment thereto filed prior to the Firm Closing Date has not been declared
effective as of the time of execution hereof, the Original Registration
Statement or such amendment and, if the Company has elected to rely upon Rule
462(b), the Rule 462(b) Registration Statement shall have been declared
effective not later than the earlier of (A) 11:00 A.M., New York time, on the
date on which the amendment to the registration statement originally filed with
respect to the Securities or to the Registration Statement, as the case may be,
containing information regarding the initial public offering price of the
Securities has been filed with the Commission and (B) the time confirmations
are sent or given as specified by Rule 462(b)(2), or with respect to the
Original Registration Statement, or such later time and date as shall have been
consented to by the Representatives. If required, the Prospectus or any Term
Sheet that constitutes a part thereof and any amendment or supplement thereto
shall have been filed with the Commission in the manner and within the time
period required by Rules 434 and 424(b) under the Act. No stop order
suspending the effectiveness of the Registration Statement or any amendment
thereto 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
Representatives, shall be contemplated by the Commission; and the Company shall
have complied with any outstanding request of the Commission for additional
information (to be included in the Registration Statement or the Prospectus or
otherwise).
23
25
(b) The Representatives shall have received an opinion,
dated the Firm Closing Date, of Xxxxxxxx Xxxxxxxx & Xxxxxx P.C., counsel for
the Company, to the effect that:
(i) the Company, each of its subsidiaries listed in
Exhibit 21 to the Registration Statement (for purposes of this Section
7(b), the "Subsidiaries") and the Manager have been duly organized and
are validly existing as trusts, corporations, or limited partnerships
as the case may be, in good standing (except as to the Company, where
such good standing opinion is not applicable) under the laws of their
respective jurisdictions of formation or incorporation, as the case
may be, and are duly qualified to transact business as foreign trusts,
corporations or limited partnerships, as the case may be, and are in
good standing under the laws of all other jurisdictions where the
ownership or leasing of their respective properties or the conduct of
their respective businesses requires such qualification, except where
the failure to be so qualified will not have a material adverse effect
on the Company or the Subsidiaries, taken as a whole, or to the
Manager;
(ii) the Company, each of the Subsidiaries and the Manager
have trust, partnership or corporate power to own or lease their
respective properties and conduct their respective businesses as
described in the Registration Statement and the Prospectus, and the
Company and the Manager have power to enter into this Agreement, the
Management Agreement and the Purchase Agreement and to carry out all
the terms and provisions hereof and thereof to be carried out by it;
(iii) the issued shares of capital stock of each of the
Subsidiaries have been duly authorized and validly issued, are fully
paid and nonassessable and, except as otherwise set forth in the
Prospectus, are owned beneficially by the Company free and clear of
any perfected security interests or, to the knowledge of such counsel,
any other security interests, liens, encumbrances, equities or claims;
(iv) the Company has an authorized, issued and outstanding
capitalization as set forth in the Prospectus; all of the issued
capital shares of the Company have been duly authorized and validly
issued and are fully paid and nonassessable, have been issued in
compliance with all applicable federal and state securities laws and
were not issued in violation of or subject to any preemptive rights or
other rights to subscribe for or purchase securities; the Firm
Securities have been duly authorized by all necessary corporate action
of the Company and, when issued and delivered to and paid for by the
Underwriters pursuant to this Agreement, will be validly issued, fully
paid and nonassessable; the forms of certificates used to evidence the
Securities are in due and proper form and comply with all applicable
requirements of the charter and bylaws of the Company and the Texas
Real Estate Investment Trust Act; the Securities have been duly
included for trading on the Nasdaq National Market; no holders of
outstanding capital shares of the Company are entitled as such to any
preemptive
24
26
or other rights to subscribe for any of the Securities; and no holders
of securities of the Company are entitled to have such securities
registered under the Registration Statement;
(v) all of the outstanding shares of beneficial interest
in the Company to be acquired by Holdings, pursuant to the Private
Placement, and any options to acquire such shares will have been
issued in a valid private placement exempt from the registration
requirements of the Act and will not be integrated with the public
sale of the securities subject to the Registration Statement and will
otherwise have been issued in accordance with all state and federal
securities laws. Such securities have been duly authorized by all
necessary action of the Company and, when issued and delivered to and
paid for by Holdings will be validly issued, fully paid and
nonassessable;
(vi) all of the issued and outstanding capital stock,
membership interests or other equity interests of each Subsidiary (i)
has been duly authorized and validly issued and is fully paid and
non-assessable, (ii) except as otherwise disclosed in the Prospectus,
is beneficially owned by the Company or the Manager, directly or
through other Subsidiaries, in the respective amounts set forth in the
Prospectus, free and clear of any security interest, mortgage, pledge,
lien, encumbrance or, to the knowledge of such counsel, any pending or
threatened claim, and (iii) has been issued in compliance with all
state and federal securities laws;
(vii) the statements set forth under the heading
"Description of Shares of Beneficial Interest" in the Prospectus,
insofar as such statements purport to summarize certain provisions of
the capital shares of the Company, provide a fair summary of such
provisions; and the statements set forth (i) in the Prospectus under
the captions, "Shares Eligible for Future Sale," "Certain Provisions
of Texas Law and of the Declaration of Trust and Bylaws," and "Federal
Income Tax Consequences" and (ii) in Item 33 (Recent Sales of
Unregistered Securities) and Item 34 (Indemnification of Directors and
Officers) of the Registration Statement, insofar as such statements
constitute a summary of the legal matters, documents or proceedings
referred to therein, provide a fair summary of such legal matters,
documents and proceedings;
(viii) the descriptions of the law and the legal conclusions
contained in the Prospectus under the caption "ERISA Considerations"
are correct in all material respects, and the discussion thereunder
fairly summarizes the considerations that are likely to be material to
a fiduciary of a Plan (as defined in the Prospectus);
(ix) the execution and delivery of this Agreement, the
Management Agreement and each of the agreements filed as an exhibit to
the Registration Statement (collectively, the "Company Agreements")
have been duly authorized
25
27
by all necessary corporate action of the Company and each Company
Agreement has been duly executed and delivered by, and is a valid and
binding agreement of, the Company, enforceable in accordance with its
terms, except as the enforcement thereof may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws related
to or affecting creditors' rights generally or by general equitable
principles and, with respect to this Agreement, except as rights to
indemnification hereunder may be limited by applicable law;
(x) the execution and delivery by the Manager of each of
this Agreement and the Management Agreement (collectively, the
"Manager Agreements") have been duly authorized by all necessary
action of the Manager, and each Manager Agreement has been executed
and delivered by, and is a valid and binding agreement of, the
Manager, enforceable in accordance with its terms, except as the
enforcement thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws related to or
affecting creditors' rights generally or by general equitable
principles and, with respect to this Agreement, except as rights to
indemnification hereunder may be limited by applicable law;
(xi) the execution and delivery of the Indemnification
Agreement has been duly authorized by all necessary corporate action
of Amresco, and the Indemnification Agreement has been executed and
delivered by, and is a valid and binding agreement of, Amresco,
enforceable in accordance with its terms, except as the enforcement
thereof may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws related to or affecting creditors'
rights generally or by general equitable principles and except as
rights to indemnification thereunder may be limited by applicable law;
(xii) (A) to the knowledge of such counsel, no legal or
governmental proceedings are pending to which the Company, the Manager
or any of the Subsidiaries is a party or to which the property of the
Company or any of the Subsidiaries is subject that are required to be
described in the Registration Statement or the Prospectus and are not
described therein, and, to the knowledge of such counsel, no such
proceedings have been threatened against the Company, the Manager or
any of the Subsidiaries or with respect to any of their respective
properties and (B) to the knowledge of such counsel, no contract or
other document is required to be described in the Registration
Statement or the Prospectus or to be filed as an exhibit to the
Registration Statement that is not described therein or filed as
required;
(xiii) to the knowledge of such counsel, none of the
Company, the Manager or any Subsidiary is (i) in violation of its
charter, bylaws, partnership agreement, certificate of partnership or
other organizational documents, as applicable;
26
28
(xiv) to such counsel's knowledge, no default exists, and
no event has occurred which, with notice or lapse of time 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, lease or other agreement or instrument to which the Company,
the Manager, or any Subsidiary is a party or by which any of them or
any of their respective properties is bound or may be affected in any
material adverse respect with regard to property, business or
operations of the Company and its subsidiaries or of the Manager or of
Xxxxxxxx Xxxxxxxx;
(xv) the issuance, offering and sale of the Securities to
the Underwriters by the Company pursuant to this Agreement, the
compliance by the Company with the other provisions of this Agreement,
the consummation of the other transactions herein contemplated and the
Private Placement do not (A) require the consent, approval,
authorization, registration or qualification of or with any
governmental authority, except such as have been obtained and such as
may be required under state securities or blue sky laws, (B) to the
knowledge of such counsel, conflict with or result in a breach or
violation of any of the terms and provisions of, or constitute a
default under, any indenture, mortgage, deed of trust, lease or other
agreement or instrument known to such counsel, to which the Company,
the Manager or any of the Subsidiaries is a party or by which the
Company, the Manager or any of the Subsidiaries or any of their
respective properties are bound, or the charter documents or by-laws
of the Company or any of the Subsidiaries, or any statute or any
judgment, decree, order, rule or regulation of any court or other
governmental authority or any arbitrator known to such counsel and
applicable to the Company or Subsidiaries; or (C) require the consent
of any other party to any Company Agreement except for such consents
which have been obtained in writing and except for such consents as
the failure of which to obtain will not, individually or in the
aggregate, amount to a material liability or disability to the Company
and its Subsidiaries, taken as a whole, or to the Manager;
(xvi) the Registration Statement is effective under the
Act; any required filing of the Prospectus, or any Term Sheet that
constitutes a part thereof, pursuant to Rules 434 and 424(b) has been
made in the manner and within the time period required by Rules 434
and 424(b); and no stop order suspending the effectiveness of the
Registration Statement or any amendment thereto has been issued, and
no proceedings for that purpose have been instituted or threatened or,
to the knowledge of such counsel, are contemplated by the Commission;
and
(xvii) the Registration Statement originally filed with
respect to the Securities and each amendment thereto, any Rule 462(b)
Registration Statement and the Prospectus (in each case, other than
the financial statements and other financial information contained
therein, as to which such counsel need express no opinion) comply as
to form in all material respects with the applicable
27
29
requirements of the Act and the rules and regulations of the
Commission thereunder;
(xviii) the Company is organized in conformity with the
requirements for qualification as a real estate investment trust
("REIT") under Sections 856 through 860 of the Tax Code; and the
Company's proposed method of operation is sufficient to enable it to
meet the requirements for qualification and taxation as a REIT under
the Tax Code beginning with its taxable year ending December 31, 1998.
To such counsel's knowledge, there is no currently existing event or
condition which would cause or is likely to cause the Company to fail
to qualify as a REIT at any time after the Firm Closing Date; and
(xix) the issuance of the Securities and the Company's
proposed method of operation will not cause the Company, the Manager
or any Subsidiary to become an investment company subject to
registration under the Investment Company Act of 1940.
Such counsel shall also state that they have no reason to
believe that the Registration Statement, as of its effective date, contained
any untrue statement of a material fact or omitted to state any material fact
required to be stated therein or necessary to make the statements therein not
misleading or that the Prospectus, as of its date or the date of such opinion,
included or includes any untrue statement of a material fact or omitted or
omits to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading.
In rendering any such opinion, such counsel may rely, as to
matters of fact, to the extent such counsel deem proper, on certificates of
responsible officers of the Company and public officials. The foregoing
opinion shall also expressly authorize reliance upon such opinion by O'Melveny
& Xxxxx LLP, as counsel for the Underwriters, in connection with such firm's
opinion to be rendered pursuant to Section 7(c) of the Underwriting Agreement.
References to the Registration Statement and the Prospectus in
this paragraph (b) shall include any amendment or supplement thereto at the
date of such opinion.
(c) The Representatives shall have received an opinion,
dated the Firm Closing Date, of O'Melveny & Xxxxx LLP, counsel for the
Underwriters, with respect to the issuance and sale of the Firm Securities, the
Registration Statement and the Prospectus, and such other related matters as
the Representatives may reasonably 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. In rendering such opinion,
such counsel may rely as to all matters of Texas law upon the opinion of
Xxxxxxxx Xxxxxxxx & Xxxxxx P.C.
28
30
(d) The Representatives shall have received from Deloitte
& Touche LLP a letter or letters dated, respectively, the date hereof and the
Firm Closing Date, in form and substance satisfactory to the Representatives,
to the effect that:
(i) they are independent accountants with respect to the
Company and its consolidated Subsidiaries within the meaning of the
Act and the applicable rules and regulations thereunder;
(ii) in their opinion, the audited consolidated financial
statements and schedules and pro forma financial statements examined
by them and included in the Registration Statement and the Prospectus
comply in form in all material respects with the applicable accounting
requirements of the Act and the related published rules and
regulations; and
(iii) on the basis of carrying out certain specified
procedures (which do not constitute an examination made in accordance
with generally accepted auditing standards) that would not necessarily
reveal matters of significance with respect to the comments set forth
in this paragraph (iii), a reading of the minute books of the
shareholders, the board of directors and any committees thereof of the
Company and each of its consolidated Subsidiaries, and inquiries of
certain officials of the Company and its consolidated Subsidiaries who
have responsibility for financial and accounting matters, nothing came
to their attention that caused them to believe that:
(A) at a specific date not more than five business days
prior to the date of such letter, there were any changes in
the capital stock or long-term debt of the Company and its
consolidated Subsidiaries or any decreases in net current
assets or stockholders' equity of the Company and its
consolidated Subsidiaries, in each case compared with amounts
shown on the February 2, 1998 balance sheet included in the
Registration Statement and the Prospectus, except in all
instances for changes, decreases or increases set forth in
such letter; and
(iv) they have carried out certain specified procedures,
not constituting an audit, with respect to certain amounts,
percentages and financial information that are derived from the
general accounting records of the Company and its consolidated
Subsidiaries and the AMRESCO Group and are included in the
Registration Statement and the Prospectus under the captions
"Capitalization", and "The Manager" and in Exhibit 11 to the
Registration Statement, and have compared such amounts, percentages
and financial information with such records of the Company and its
consolidated subsidiaries and with information derived from such
records and have found them to be in agreement, excluding any
questions of legal interpretation.
29
31
In the event that the letters referred to above set forth any
such changes, decreases or increases, it shall be a further condition to the
obligations of the Underwriters that (A) such letters shall be accompanied by a
written explanation of the Company as to the significance thereof, unless the
Representatives deem such explanation unnecessary, and (B) such changes,
decreases or increases do not, in the sole judgment of the Representatives,
make it impractical or inadvisable to proceed with the purchase and delivery of
the Securities as contemplated by the Registration Statement, as amended as of
the date hereof.
References to the Registration Statement and the Prospectus in
this paragraph (d) with respect to either letter referred to above shall
include any amendment or supplement thereto at the date of such letter.
(e) The Representatives shall have received a
certificate, dated the Firm Closing Date, of the principal executive officer
and the principal financial or accounting officer of the Company certifying as
to such matters as the Representatives shall have reasonably requested,
including, without limitation, that:
(i) the representations and warranties of the Company in
this Agreement are true and correct as if made on and as of the Firm
Closing Date; the Registration Statement, as amended as of the Firm
Closing Date, does not include any untrue statement of a material fact
or omit to state any material fact necessary to make the statements
therein not misleading, and the Prospectus, as amended or supplemented
as of the Firm Closing Date, does not include any untrue statement of
a material fact or omit to state any material fact necessary in order
to make the statements therein, in the light of the circumstances
under which they were made, not misleading; and the Company has
performed all covenants and agreements and satisfied all conditions on
its part to be performed or satisfied at or prior to the Firm Closing
Date under this Agreement and each agreement to which it is a party;
(ii) no stop order suspending the effectiveness of the
Registration Statement or any amendment thereto has been issued, and
no proceedings for that purpose have been instituted or threatened or,
to the best of the Company's knowledge, are contemplated by the
Commission; and
(iii) subsequent to the respective dates as of which
information is given in the Registration Statement and the Prospectus,
neither the Company nor any of the Subsidiaries nor the Manager, has
sustained any material loss or interference with their respective
businesses or properties from fire, flood, hurricane, accident or
other calamity, whether or not covered by insurance, or from any labor
dispute or any legal or governmental proceeding, and there has not
been any material adverse change, or any development involving a
prospective material adverse change, in the condition (financial or
otherwise), management, business prospects, net worth or results of
operations of the
30
32
Company or any of its Subsidiaries, taken as a whole, or of the
Manager, except in each case as described in or contemplated by the
Prospectus (exclusive of any amendment or supplement thereto).
(f) The Representatives shall have received from Holdings
and each person who is a trust manager or named executive officer of the
Company an agreement, substantially in the form of Exhibit B to the effect that
such person will not, directly or indirectly, without the prior written consent
of Prudential Securities Incorporated, on behalf of the Underwriters, offer,
sell, offer to sell, contract to sell, pledge, grant any option to purchase or
otherwise sell or dispose (or announce any offer, sale, offer of sale, contract
of sale, pledge, grant of any option to purchase or other sale or disposition)
of any Common Shares or any securities convertible into, or exchangeable or
exercisable for, Common Shares for a period of 180 days after the date of this
Agreement. With respect to Holdings, for a period until the earlier to occur of
two years from the date hereof or the termination of the Management Agreement
or in connection with the pledge of any Common Shares acquired by Holdings in
the Private Placement to an institutional lender.
(g) On or before the Firm Closing Date, the
Representatives and counsel for the Underwriters shall have received such
further certificates, documents or other information as they may have
reasonably requested from the Company.
(h) On or before the Firm Closing Date, the
Representatives shall have received the Indemnification Agreement signed by
AMRESCO.
(i) On or before the Firm Closing Date Holdings shall
have acquired the Common Shares as contemplated by the Purchase Agreement.
(j) Prior to the commencement of the offering of the
Securities, the Securities shall have been listed for quotation on the Nasdaq
National Market.
All opinions, certificates, letters and documents delivered
pursuant to this Agreement will comply with the provisions hereof only if they
are reasonably satisfactory in all material respects to the Representatives and
counsel for the Underwriters. The Company shall furnish to the Representatives
such conformed copies of such opinions, certificates, letters and documents in
such quantities as the Representatives and counsel for the Underwriters shall
reasonably request.
The respective obligations of the several Underwriters to
purchase and pay for any Option Securities shall be subject, in their
discretion, to each of the foregoing conditions to purchase the Firm
Securities, except that all references to the Firm Securities and the Firm
Closing Date shall be deemed to refer to such Option Securities and the related
Option Closing Date, respectively.
31
33
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 Section 15 of the Act or Section 20 of the Securities Exchange
Act of 1934 (the "Exchange Act"), against any losses, claims, damages or
liabilities, joint or several, to which such Underwriter or such controlling
person may become subject under the Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or
are based upon:
(i) any untrue statement or alleged untrue statement in
Section 2 of this Agreement,
(ii) any untrue statement or alleged untrue statement of
any material fact contained in (A) the Registration Statement or any
amendment thereto, any Preliminary Prospectus or the Prospectus or any
amendment or supplement thereto or (B) any application or other
document, or any amendment or supplement thereto, executed by any
AMRESCO Party or based upon written information furnished by or on
behalf of any AMRESCO Party filed in any jurisdiction in order to
qualify the Securities under the securities or blue sky laws thereof
or filed with the Commission or any securities association or
securities exchange (each an "Application"),
(iii) the omission or alleged omission to state in the
Registration Statement or any amendment thereto, any Preliminary
Prospectus or the Prospectus or any amendment or supplement thereto,
or any Application a material fact required to be stated therein or
necessary to make the statements therein not misleading or
(iv) any untrue statement or alleged untrue statement of
any material fact contained in any audio or visual materials used in
connection with the marketing of the Securities, including without
limitation, slides, videos, films, tape recordings,
and will reimburse, as incurred, 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, defending against
or appearing as a third-party witness in connection with any such loss, claim,
damage, liability or action; provided, however, that the Company 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 such registration statement
or any amendment thereto, any Preliminary Prospectus, the Prospectus or any
amendment or supplement thereto or any Application in reliance upon and in
conformity with written information furnished to the Company by such
Underwriter through the Representatives specifically for use therein; and
provided, further, that the Company will
32
34
not be liable to any Underwriter or any person controlling such Underwriter
with respect to any such untrue statement or omission made in any Preliminary
Prospectus that is corrected in the Prospectus (or any amendment or supplement
thereto) if the person asserting any such loss, claim, damage or liability
purchased Securities from such Underwriter but was not sent or given a copy of
the Prospectus (as amended or supplemented) at or prior to the written
confirmation of the sale of such Securities to such person in any case where
such delivery of the Prospectus (as amended or supplemented) is required by the
Act, unless such failure to deliver the Prospectus (as amended or supplemented)
was a result of noncompliance by the Company with Section 5(d) and (e) of this
Agreement. This indemnity agreement will be in addition to any liability which
the Company may otherwise have. The Company shall not, without the prior
written consent of the Underwriter or Underwriters purchasing, in the
aggregate, more than fifty percent (50%) of the Securities, settle or
compromise or consent to the entry of any judgment in any pending or threatened
claim, action, suit or proceeding in respect of which indemnification may be
sought hereunder (whether or not any such Underwriter or any person who
controls any such Underwriter within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act is a party to such claim, action, suit or
proceeding), unless such settlement, compromise or consent includes an
unconditional release of all of the Underwriters and such controlling persons
from all liability arising out of such claim, action, suit or proceeding.
(b) Each Underwriter, severally and not jointly, will
indemnify and hold harmless the Amresco Parties, each of their respective trust
managers and directors, each of its officers who signed the Registration
Statement and each person, if any, who controls the Company within the meaning
of Section 15 of the Act or Section 20 of the Exchange Act against any losses,
claims, damages or liabilities to which the Company or any such director,
officer or controlling person may become subject under the Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon (i) any untrue statement or alleged
untrue statement of any material fact contained in the Registration Statement
or any amendment thereto, any Preliminary Prospectus or the Prospectus or any
amendment or supplement thereto, or any Application or (ii) the omission or the
alleged omission to state therein a material fact required to be stated in the
Registration Statement or any amendment thereto, any Preliminary Prospectus or
the Prospectus or any amendment or supplement thereto, or any Application 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 such
Underwriter through the Representatives specifically for use therein: and,
subject to the limitation set forth immediately preceding this clause, will
reimburse, as incurred, any legal or other expenses reasonably incurred by the
Company or any such director, officer or controlling person in connection with
investigating or defending any such loss, claim, damage, liability or any
action in respect thereof. This indemnity agreement will be in addition to any
liability which such Underwriter may otherwise have.
33
35
(c) Promptly after receipt by an indemnified party under
this Section 8 of notice of the commencement of any action, 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; provided, however, that if the
defendants in any such action include both the indemnified party and the
indemnifying party and the indemnified party shall have reasonably concluded
that there may be one or more legal defenses available to it and/or other
indemnified parties which are different from or additional to those available
to the indemnifying party, the indemnifying party shall not have the right to
direct the defense of such action on behalf of such indemnified party or
parties and such indemnified party or parties shall have the right to select
separate counsel to defend such action on behalf of such indemnified party or
parties. After notice from the indemnifying party to such indemnified party of
its election so to assume the defense thereof and approval by such indemnified
party of counsel appointed to defend such action, the indemnifying party will
not be liable to such indemnified party under this Section 8 for any legal or
other expenses, other than reasonable costs of investigation, subsequently
incurred by such indemnified party in connection with the defense thereof,
unless (i) the indemnified party shall have employed separate counsel in
accordance with the proviso to the next preceding sentence (it being
understood, however, that in connection with such action the indemnifying party
shall not be liable for the expenses of more than one separate counsel (in
addition to local counsel) in any one action or separate but substantially
similar actions in the same jurisdiction arising out of the same general
allegations or circumstances, designated by the Representatives in the case of
paragraph (a) of this Section 8, representing the indemnified parties under
such paragraph (a) who are parties to such action or actions) or (ii) the
indemnifying party does not promptly retain counsel satisfactory to the
indemnified party or (iii) the indemnifying party has authorized the employment
of counsel for the indemnified party at the expense of the indemnifying party.
After such notice from the indemnifying party to such indemnified party, the
indemnifying party will not be liable for the costs and expenses of any
settlement of such action effected by such indemnified party without the
consent of the indemnifying party.
(d) In circumstances in which the indemnity agreement
provided for in the preceding paragraphs of this Section 8 is unavailable or
insufficient, for any reason, to hold harmless an indemnified party in respect
of any losses, claims, damages or liabilities (or actions in respect thereof),
each indemnifying party, in order to provide for just and equitable
contribution, shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or liabilities
(or actions in respect thereof) in such proportion as is appropriate to reflect
(i) the relative benefits received by the indemnifying party or parties on the
one hand and the indemnified party
34
36
on the other from the offering of the Securities or (ii) if the allocation
provided by the foregoing clause (i) is not permitted by applicable law, not
only such relative benefits but also the relative fault of the indemnifying
party or parties on the one hand and the indemnified party on the other in
connection with the statements or omissions or alleged statements or omissions
that resulted in such losses, claims, damages or liabilities (or actions in
respect thereof), as well as any other relevant equitable considerations. The
relative benefits received by the Company on the one hand and the Underwriters
on the other shall be deemed to be in the same proportion as the total proceeds
from the offering (before deducting expenses) received by the Company bear to
the total underwriting discounts and commissions received by the Underwriters.
The relative fault of the parties 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, the parties' relative
intents, knowledge, access to information and opportunity to correct or prevent
such statement or omission, and any other equitable considerations appropriate
in 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) or by any other method of allocation that does not take into
account the equitable considerations referred to above in this paragraph (d).
Notwithstanding any other provision of this paragraph (d), no Underwriter shall
be obligated to make contributions hereunder that in the aggregate exceed the
total public offering price of the Securities purchased by such Underwriter
under this Agreement, less the aggregate amount of any damages that such
Underwriter has otherwise been required to pay in respect of the same or any
substantially similar claim, and 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 to contribute hereunder are
several in proportion to their respective underwriting obligations and not
joint, and contributions among Underwriters shall be governed by the provisions
of the Prudential Securities Incorporated Master Agreement Among Underwriters.
For purposes of this paragraph (d), each person, if any, who controls an
Underwriter within the meaning of Section 15 of the Act or Section 20 of the
Exchange 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 Act or Section 20 of the Exchange Act, shall
have the same rights to contribution as the Company.
9. Default of Underwriters. If one or more Underwriters
default in their obligations to purchase Firm Securities or Option Securities
hereunder and the aggregate number of such Securities that such defaulting
Underwriter or Underwriters agreed but failed to purchase is ten percent or
less of the aggregate number of Firm Securities or Option Securities to be
purchased by all of the Underwriters at such time hereunder, the other
Underwriters may make arrangements satisfactory to the Representatives for the
purchase of such Securities by other persons (who may include
35
37
one or more of the non-defaulting Underwriters, including the Representatives),
but if no such arrangements are made by the Firm Closing Date or the related
Option Closing Date, as the case may be, the other Underwriters shall be
obligated severally in proportion to their respective commitments hereunder to
purchase the Firm Securities or Option Securities that such defaulting
Underwriter or Underwriters agreed but failed to purchase. If one or more
Underwriters so default with respect to an aggregate number of Securities that
is more than ten percent of the aggregate number of Firm Securities or Option
Securities, as the case may be, to be purchased by all of the Underwriters at
such time hereunder, and if arrangements satisfactory to the Representatives
are not made within 36 hours after such default for the purchase by other
persons (who may include one or more of the non-defaulting Underwriters,
including the Representatives) of the Securities with respect to which such
default occurs, this Agreement will terminate without liability on the part of
any non-defaulting Underwriter or the Company other than as provided in Section
10 hereof. In the event of any default by one or more Underwriters as
described in this Section 9, the Representatives shall have the right to
postpone the Firm Closing Date or the Option Closing Date, as the case may be,
established as provided in Section 3 hereof for not more than seven business
days in order that any necessary changes may be made in the arrangements or
documents for the purchase and delivery of the Firm Securities or Option
Securities, as the case may be. As used in this Agreement, the term
"Underwriter" includes any person substituted for an Underwriter under this
Section 9. Nothing herein shall relieve any defaulting Underwriter from
liability for its default.
10. Survival. The respective representations,
warranties, agreements, covenants, indemnities and other statements of the
AMRESCO Parties, their officers and the several 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 AMRESCO Parties, any of their
officers, trust managers or directors, any Underwriter or any controlling
person referred to in Section 8 hereof and (ii) delivery of and payment for the
Securities. The respective agreements, covenants, indemnities and other
statements set forth in Sections 6 and 8 hereof shall remain in full force and
effect, regardless of any termination or cancellation of this Agreement.
11. Termination.
(a) This Agreement may be terminated with respect to the
Firm Securities or any Option Securities in the sole discretion of the
Representatives by notice to the Company given prior to the Firm Closing Date
or the related Option Closing Date, respectively, in the event that the Company
shall have failed, refused or been unable to perform all obligations and
satisfy all conditions on its part to be performed or satisfied hereunder at or
prior thereto or, if at or prior to the Firm Closing Date or such Option
Closing Date, respectively,
36
38
(i) the Company, the Manager, Amresco, Xxxxxxxx Xxxxxxxx,
or any of the Subsidiaries shall have, in the sole judgment of the
Representatives, sustained any material loss or interference with
their respective businesses or properties from fire, flood, hurricane,
accident or other calamity, whether or not covered by insurance, or
from any labor dispute or any legal or governmental proceeding or
there shall have been any material adverse change, or any development
involving a prospective material adverse change (including without
limitation a change in management or control of the Company, Amresco,
Xxxxxxxx Xxxxxxxx, or the Manager), in the condition (financial or
otherwise), business prospects, net worth or results of operations of
the Company and its Subsidiaries, taken as a whole, or Amresco,
Xxxxxxxx Xxxxxxxx or the Manager, except in each case as described in
or contemplated by the Prospectus (exclusive of any amendment or
supplement thereto);
(ii) trading in the Common Shares shall have been
suspended by the Commission or the Nasdaq National Market;
(iii) trading in securities generally on the New York Stock
Exchange or Nasdaq National Market shall have been suspended or
minimum or maximum prices shall have been established on either such
exchange;
(iv) a banking moratorium shall have been declared by New
York or United States authorities; or
(v) there shall have been (A) an outbreak or escalation
of hostilities between the United States and any foreign power, (B) an
outbreak or escalation of any other insurrection or armed conflict
involving the United States or (C) any other calamity or crisis or
material adverse change in general economic, political or financial
conditions having an effect on the U.S. financial markets that, in the
sole judgment of the Representatives, makes it impractical or
inadvisable to proceed with the public offering or the delivery of the
Securities as contemplated by the Registration Statement, as amended
as of the date hereof.
(b) Termination of this Agreement pursuant to this
Section 11 shall be without liability of any party to any other party except as
provided in Section 10 hereof.
12. Information Supplied by Underwriters. The statements
set forth in the last paragraph on the inside front cover page and under the
heading "Underwriting" in any Preliminary Prospectus or the Prospectus (to the
extent such statements relate to the Underwriters) constitute the only
information furnished by any Underwriter through the Representatives to the
Company for the purposes of Sections 2(A)(b) and 8 hereof. The Underwriters
confirm that such statements (to such extent) are correct.
37
39
13. Notices. All communications hereunder shall be in
writing and, shall be delivered or sent by mail, telex or facsimile
transmission and confirmed in writing as follows:
(a) If to the Representatives:
c/o Prudential Securities Incorporated
Xxx Xxx Xxxx Xxxxx
Xxx Xxxx, XX 00000
Facsimile: (000) 000-0000
Attention: Equity Transactions Group
with a copy to:
O'Melveny & Xxxxx LLP
Embarcadero Center West
000 Xxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000-0000
Facsimile: (000) 000-0000
Attention: Xxxxx X. Xxxxx, Esq.
(b) If to the Company:
AMRESCO Capital Trust
000 Xxxxx Xxxxx Xxxxxx
Xxxxx 0000
Xxxxxx, Xxxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxxxx XxXxx, Esq.
If to the Manager:
AMREIT Managers, L.P.
000 Xxxxx Xxxxx Xxxxxx
Xxxxx 0000
Xxxxxx, Xxxxx 00000
Facsimile: (000) 000-0000
Attention: L. Xxxxx Xxxxxxxxx, Esq.
38
40
In each case with a copy to:
Xxxxxxxx Xxxxxxxx & Xxxxxx P.C.
5400 Renaissance Tower
0000 Xxx Xxxxxx
Xxxxxx, Xxxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxxxxx X. Xxxxxxx, Esq.
14. Successors. This Agreement shall inure to the
benefit of and shall be binding upon the several Underwriters, the AMRESCO
Parties and their respective successors and legal representatives, and 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, or any provisions herein contained, this Agreement
and all conditions and provisions hereof being intended to be and being for the
sole and exclusive benefit of such persons and for the benefit of no other
person except that (i) the indemnities of the AMRESCO Parties contained in
Section 8 of this Agreement shall also be for the benefit of any person or
persons who control any Underwriter within the meaning of Section 15 of the Act
or Section 20 of the Exchange Act and (ii) the indemnities of the Underwriters
contained in Section 8 of this Agreement shall also be for the benefit of the
directors and trust managers of the Company, the officers of the Company who
have signed the Registration Statement and any person or persons who control
the Company within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act. No purchaser of Securities from any Underwriter shall be deemed
a successor because of such purchase.
15. Applicable Law. THE VALIDITY AND INTERPRETATION OF
THIS AGREEMENT, AND THE TERMS AND CONDITIONS SET FORTH HEREIN, SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK,
WITHOUT GIVING EFFECT TO ANY PROVISIONS RELATING TO CONFLICTS OF LAWS.
16. Consent to Jurisdiction and Service of Process. All
judicial proceedings arising out of or relating to this Agreement may be
brought in any state or federal court of competent jurisdiction in the State of
New York, and by execution and delivery of this Agreement, each AMRESCO Party
accepts for itself and in connection with its properties, generally and
unconditionally, the nonexclusive jurisdiction of the aforesaid courts and
waives any defense of forum non conveniens and irrevocably agrees to be bound
by any judgment rendered thereby in connection with this Agreement. Service of
any process, summons, notice or document by mail to such party's address set
forth above shall be effective service of process for any suit, action or other
proceeding brought in any such court and shall be binding in every respect.
Nothing herein shall affect the right to serve process in any other manner
permitted by law or shall limit the right of any Underwriter to bring
proceedings against any AMRESCO Party in the courts of any other jurisdiction.
39
41
17. Counterparts. 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.
[signature page follows]
40
42
If the foregoing correctly sets forth our understanding,
please indicate your acceptance thereof in the space provided below for that
purpose, whereupon this letter shall constitute an agreement binding the
Company, the Manager and each of the several Underwriters.
Very truly yours,
AMRESCO CAPITAL TRUST, the Company
By:
--------------------------------------
[name]
[title]
AMREIT MANAGERS, L.P., the Manager
By: AMREIT MANAGERS G.P., INC.
Its: General Partner
By:
--------------------------------------
[name]
[title]
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
PRUDENTIAL SECURITIES INCORPORATED
CREDIT SUISSE FIRST BOSTON
ABN AMRO INCORPORATED
X.X. XXXXXXXX & CO.
NATIONSBANC XXXXXXXXXX SECURITIES LLC
XXXXX XXXXXXX INC.
By: PRUDENTIAL SECURITIES INCORPORATED
By:
-----------------------------------------------
Xxxx-Xxxxxx Canfin
Managing Director
For itself and on behalf of the Representatives.
S - 1
43
SCHEDULE 1
UNDERWRITERS
Number of Firm
Underwriter Securities to
be Purchased
----------------------------------------------------------------------- ------------------
Prudential Securities Incorporated . . . . . . . . . . . . . . . . 000,000
Credit Suisse First Boston . . . . . . . . . . . . . . . . . . . . 000,000
ABN AMRO Incorporated . . . . . . . . . . . . . . . . . . . . . . . 000,000
X.X. Xxxxxxxx . . . . . . . . . . . . . . . . . . . . . . . . . . . 000,000
NationsBanc Xxxxxxxxxx Securities LLC . . . . . . . . . . . . . . . 000,000
Xxxxx Xxxxxxx Inc . . . . . . . . . . . . . . . . . . . . . . . . . 000,000
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 000,000
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 000,000
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 000,000
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 000,000
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 000,000
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 000,000
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 000,000
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 000,000
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 000,000
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 000,000
------------------
Total . . . . . . . . . . . . . . . . . . . . . . . . . . 20,000,000
==================
Schedule 1 - Page 1
44
EXHIBIT A
FORM OF TRUST MANAGERS, OFFICERS' AND HOLDINGS LOCK-UP AGREEMENT
[Pricing Date]
PRUDENTIAL SECURITIES INCORPORATED
CREDIT SUISSE FIRST BOSTON
ABN AMRO INCORPORATED
X.X. XXXXXXXX & CO.
NATIONSBANC XXXXXXXXXX SECURITIES LLC
XXXXX XXXXXXX INC.
As Representatives of the several Underwriters
c/o Prudential Securities Incorporated
Xxx Xxx Xxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re: AMRESCO Capital Trust (the "Company")
Gentlemen:
The undersigned understands that Amresco Capital Trust, a Texas real estate
investment trust (the "Company") has filed a Registration Statement on Form
S-11 (the "Registration Statement") with the Securities and Exchange Commission
(the "Commission") for the registration of approximately 23,000,000 Common
shares of beneficial interest (the "Common Shares") (including shares subject
to an over-allotment option) (the "Offering"). The undersigned further
understands that you are contemplating entering into an Underwriting Agreement
with the Company in connection with the Offering. All terms not otherwise
defined herein shall have the same meanings as in the Underwriting Agreement.
In order to induce the Company, you and the other Underwriters to enter into
the Underwriting Agreement and to proceed with the Offering, the undersigned
agrees, for the benefit of the Company, you and the other Underwriters, that
should the Offering be effected, the undersigned will not, without the prior
written consent of Prudential Securities Incorporated, on behalf of the
Underwriters, directly or indirectly, offer, sell, offer to sell, contract to
sell, pledge, grant any option to purchase or otherwise sell or dispose (or
announce any offer, sale, offer of sale, contract of sale, pledge, grant of any
option to purchase or other sale or disposition) of (i) any Common Shares (ii)
any other securities convertible into, or exchangeable or exercisable for,
Common Shares beneficially owned (within the meaning of Rule 13d-3 under the
Securities Exchange Act of 1934, as amended) by the undersigned on the date
hereof or hereafter acquired for a period of 180 days subsequent to the date of
the final Prospectus filed with the Securities and Exchange Commission pursuant
to Rule 424(b) of the Securities Act of 1933, as amended (the "Act")
promulgated by the Commission or if no filing under Rule 424(b)
Exhibit A - Page 1
45
Prudential Securities Incorporated
Page 2
[Date]
is made, the date of the final Prospectus included in the Registration
Statement when declared effective under the Act.
[With respect to Holdings, for a period until the earlier to occur of two years
from the date hereof or the termination of the Management Agreement or in
connection with the pledge of any Common Shares acquired by Holdings in the
Private Placement to an institutional lender.]
The undersigned, whether or not participating in the Offering, confirms that
he, she or it understands that the Underwriters and the Company will rely upon
the representations set forth in this agreement in proceeding with the
Offering. This agreement shall be binding on the undersigned and his, her or
its respective successors, heirs, personal representatives and assigns.
Very truly yours,
By: By:
-------------------------------- ----------------------------
[Print Stockholder's name] [Stockholder's signature]
Exhibit A - Page 2
46
EXHIBIT B
INDEMNIFICATION AGREEMENT
[TO BE ATTACHED]
Exhibit B - Page 1