EXHIBIT 1.1
$_________
_____% NOTES DUE __________, ____
CREDIT ACCEPTANCE CORPORATION
UNDERWRITING AGREEMENT
[______________, 1997]
▇▇▇▇▇▇▇ ▇▇▇▇▇ & Company, L.L.C.
First Chicago Capital Markets, Inc.
NationsBanc Capital Markets, Inc.
As Representatives of the Several
Underwriters Named in Schedule A
c/o ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Company, L.L.C.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
SECTION 1. INTRODUCTORY. Credit Acceptance Corporation (the
"COMPANY"), a Michigan corporation, subject to the terms and conditions stated
herein, proposes to issue and sell to the several underwriters named in SCHEDULE
A ("Underwriters"), who are acting severally and not jointly, $________
aggregate principal amount of its [___________________] (the "Notes"). The
Notes shall be issued under an indenture, dated as of [________, 1997] (the
"Indenture"), between the Company and The Bank of New York (the "Trustee").
The Company hereby confirms its agreement with the Underwriters as
follows:
SECTION 2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The
Company represents and warrants to the several Underwriters that:
(a) A registration statement on Form S-3 (Registration No. 333-_____)
with respect to debt securities of the Company, including the Notes,
has been filed with the Securities and Exchange Commission (the
"Commission"); such registration statement and any post-effective
amendment thereto, each in the form heretofore
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delivered to you, and, excluding exhibits thereto but including all
documents incorporated by reference in the prospectus contained therein,
to you for each of the other Underwriters, have been declared effective by
the Commission in such form; no other document with respect to such
registration statement or document incorporated by reference therein has
heretofore been filed with the Commission; and no stop order suspending the
effectiveness of such registration statement has been issued and no
proceeding for that purpose has been initiated or threatened by the
Commission (any preliminary prospectus included in such registration
statement or filed with the Commission pursuant to Rule 424(a) of the
rules and regulations of the Commission under the Securities Act of
1933, as amended (the "1933 Act;" all references herein to specific
rules are rules promulgated under the 1933 Act unless otherwise
specified), being hereinafter called a "Preliminary Prospectus"; the
various parts of such registration statement, including all exhibits
thereto but excluding the Statement of Eligibility on Form T-1 (the
"Statement of Eligibility") and including (i) the information
contained in the prospectus included therein and, if applicable, in
the form of final prospectus filed with the Commission pursuant to
Rule 424(b) in accordance with Section 5(a) hereof and deemed by
virtue of Rule 430A to be part of the registration statement at the
time it was declared effective and (ii) the documents incorporated by
reference in the prospectus contained in the registration statement at
the time such part of the registration statement became effective,
each as amended at the time such part of the registration statement
became effective, being hereinafter called the "Registration
Statement"; and such prospectus included therein, as supplemented by
the prospectus supplement relating to the Notes, or, if applicable,
such final prospectus, relating to the Notes, in either case in the
form first filed pursuant to Rule 424(b), being hereinafter called the
"Prospectus"; and any reference herein to any Preliminary Prospectus
or the Prospectus shall be deemed to refer to and include the
documents incorporated by reference therein pursuant to Item 12 of
Form S-3 under the 1933 Act, as of the date of such Preliminary
Prospectus or Prospectus, as the case may be; any reference to any
amendment or supplement to any Preliminary Prospectus or the
Prospectus shall be deemed to refer to and include any documents filed
after the date of such Preliminary Prospectus or Prospectus, as the
case may be, under the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), and incorporated by reference in such
Preliminary Prospectus or
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Prospectus, as the case may be; and any reference to any amendment to the
Registration Statement shall be deemed to refer to and include any annual
report of the Company filed pursuant to Section 13(a) or 15(d) of the
Exchange Act after the effective date of the Registration Statement that
is incorporated by reference in the Registration Statement.
(b) The documents incorporated by reference in the Prospectus,
when they became effective or were filed with the Commission, as the
case may be, conformed in all material respects to the requirements of
the 1933 Act or the Exchange Act, as applicable, and the rules and
regulations of the Commission thereunder, and, when read together and
with the other information in the Prospectus, none of such documents
contained an untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they
were made, not misleading; and any further documents so filed and
incorporated by reference in the Prospectus or any further amendment
or supplement thereto, when such documents become effective or are
filed with the Commission, as the case may be, will conform in all
material respects to the requirements of the 1933 Act or the Exchange
Act, as applicable, and the rules and regulations of the Commission
thereunder and will not contain an untrue statement of a material fact
or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided,
however, that this representation and warranty shall not apply to any
statements or omissions made in reliance upon and in conformity with
information specified in Section 3 of this Agreement furnished in
writing to the Company by an Underwriter through you expressly for use
therein.
(c) The Notes have been duly and validly authorized and, when
authenticated by the Trustee in the manner set forth in the Indenture
and issued, sold and delivered in accordance with this Agreement and
the Indenture against payment therefor, will have been duly and
validly executed, authenticated, issued and delivered and will
constitute valid and binding obligations of the Company, entitled to
the benefits provided by the Indenture and enforceable against the
Company in accordance with their terms, except as enforceability of
the same may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting creditors'
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rights and by the exercise of judicial discretion in accordance with
general principles applicable to equitable and similar remedies. The
Notes conform to the descriptions thereof contained in the Prospectus.
(d) The Indenture has been duly and validly authorized, executed
and delivered by the Company and the Trustee and constitutes a valid
and binding instrument of the Company, enforceable against the Company
in accordance with its terms, except as enforceability of the same may
be limited by bankruptcy, insolvency, reorganization, moratorium or
other similar laws affecting creditors' rights and by the exercise of
judicial discretion in accordance with general principles applicable
to equitable and similar remedies. The Indenture complies with the
Trust Indenture Act of 1939, as amended, and the rules and regulations
of the Commission thereunder (the "Trust Indenture Act") and has been
duly qualified under the Trust Indenture Act. The Indenture conforms
to the description thereof contained in the Prospectus.
(e) Each preliminary prospectus has conformed in all material
respects with the requirements of the 1933 Act and the Trust Indenture
Act and, as of its date, has not included any untrue statement of a
material fact or omitted to state a material fact necessary to make
the statements therein, in the light of the circumstances under which
they were made, not misleading; and when the Registration Statement
became effective, and at all times subsequent thereto up to the
Closing Date (as defined in Section 4(a) hereof), the Registration
Statement and the Prospectus and any amendments or supplements
thereto, contained or will contain all statements that are required to
be stated therein in accordance with the 1933 Act and the Trust
Indenture Act and in all material respects conformed and will in all
material respects conform to the requirements of the 1933 Act and the
Trust Indenture Act, and neither the Registration Statement nor the
Prospectus, nor any amendment or supplement thereto, included or will
include any untrue statement of a material fact or omitted or will
omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading; provided,
however, that the Company makes no representation or warranty as to
information contained in or omitted from any preliminary prospectus,
the Registration Statement, the Prospectus or any such amendment or
supplement in reliance upon and in conformity with written information
specified in Section 3 of this Agreement furnished to the
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Company by or on behalf of any Underwriter through the Representatives
specifically for use in the preparation thereof.
(f) The subsidiaries (the "Subsidiaries") identified in an
officers' certificate, dated the date hereof, are the only
subsidiaries of the Company. The only Subsidiaries that own over five
percent (5%) of the Consolidated Net Tangible Assets (as defined in
the Indenture) or are "significant subsidiaries," as such term is
defined in Rule 405 are Buyers Vehicle Protection Plan, Inc., a
Michigan corporation ("BVPP"), and Credit Acceptance Corporation UK
Limited, a limited liability company incorporated under the laws of
England and Wales ("CACUK" and together with BVPP, the "Significant
Subsidiaries").
(g) The Company and the Subsidiaries have been duly incorporated
and are validly existing as corporations, or in the case of CACUK and
Credit Acceptance Corporation Ireland Limited ("CACIL") as a limited
liability company, in good standing under the laws of their respective
places of incorporation, or in the case of CACUK and CACIL no
liquidator, administrator or receiver has been appointed, with
corporate power and authority to own their properties and conduct
their business as described in the Prospectus; the Company and each
Subsidiary is duly qualified to do business as a foreign corporation,
or in the case of CACUK and CACIL as a limited liability company,
under the corporation law of, and is in good standing as such in, each
jurisdiction in which it owns or leases properties, has an office, or
in which business is conducted by it and such qualification is
required except in any such case where the failure to so qualify or be
in good standing would not have a material adverse effect upon the
financial condition, assets, business, business prospects or results
of operations of the Company and the Subsidiaries taken as a whole (a
"Material Adverse Effect"); and no proceeding of which the Company has
knowledge has been instituted in any such jurisdiction revoking,
limiting or curtailing, or seeking to revoke, limit or curtail, such
power and authority or qualification.
(h) The Company has an authorized capitalization as set forth in
the Prospectus. The issued and outstanding shares of capital stock of
the Company as set forth in the Prospectus have been duly authorized
and validly issued and are fully paid and nonassessable. All of the
issued and outstanding shares of capital stock of each
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Subsidiary have been duly authorized and validly issued, are fully paid
and non-assessable and are owned of record directly or indirectly by the
Company (except that all of the outstanding common shares of CAC Ohio,
which constitutes 1% of the issued and outstanding capital stock of
CAC Insurance Agency of Ohio, Inc., are owned by ▇▇▇▇▇▇ ▇▇▇▇▇▇ and one
share of CACIL is held by the Company's attorney in Ireland as a
nominee and on behalf of and in trust for the Company), and, except as
set forth in the Registration Statement, are free and clear of any
liens, claims, security interests, pledges, charges, encumbrances,
stockholders' agreements and voting trusts or rights of others.
Except as set forth in the Registration Statement and other than
options granted subsequent to December 31, 1996 pursuant to option
plans described in the Registration Statement, there are no options,
agreements, contracts or other rights in existence to acquire from the
Company or any Subsidiary any of the capital stock of the Company or
any Subsidiary.
(i) The making and performance by the Company of this Agreement
has been duly authorized by all necessary corporate action and will
not violate any provision of the Company's articles of incorporation
or bylaws and will not result in the breach, or be in contravention,
of any provision of any agreement, franchise, license, indenture,
mortgage, deed of trust, or other instrument to which the Company or
any Subsidiary is a party or by which the Company, any Subsidiary or
the property of any of them may be bound or affected (other than any
such violation, breach or contravention which would not have a
Material Adverse Effect), or any order, rule or regulation applicable
to the Company or any Subsidiary of any court or regulatory body,
administrative agency or other governmental body having jurisdiction
over the Company or any Subsidiary or any of their respective
properties, or any order of any court or governmental agency or
authority entered in any proceeding to which the Company or any
Subsidiary was or is now a party or by which it is bound. No consent,
approval, authorization or other order of any court, regulatory body,
administrative agency or other governmental body is required for the
execution and delivery of this Agreement or the Indenture or the
issuance and sale of the Notes, except for compliance with the 1933
Act, the Trust Indenture Act, and any blue sky laws applicable to the
public offering of the Notes by the Underwriters. This Agreement has
been duly authorized, executed and delivered by the Company.
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(j) The accountants who have expressed their opinions with
respect to certain of the financial statements and schedules included
or incorporated by reference in the Registration Statement are
independent accountants as required by the 1933 Act.
(k) The consolidated financial statements and schedules of the
Company included or incorporated by reference in the Registration
Statement present fairly the consolidated financial position of the
Company as of the respective dates of such financial statements, and
the consolidated statements of income, shareholders' equity and cash
flows of the Company for the respective periods covered thereby, all
in conformity with generally accepted accounting principles
consistently applied throughout the periods involved, except as
disclosed in the Prospectus, and the supporting schedules included or
incorporated by reference in the Registration Statement present fairly
the information required to be stated therein. The financial
information set forth in the Prospectus under "Selected Consolidated
Financial and Operating Data" presents fairly on the basis stated in
the Prospectus, the information set forth therein. All pro forma
financial statements and other pro forma information included in the
Prospectus present fairly the information shown therein, have been
prepared in accordance with the Commission's rules and guidelines with
respect to pro forma financial statements and other pro forma
information, have been properly compiled on the pro forma basis
described therein, and, in the opinion of the Company, the assumptions
used in the preparation thereof are reasonable and the adjustments
used therein are appropriate under the circumstances.
(l) Neither the Company nor any Subsidiary is in violation of its
articles of incorporation or bylaws or in default under any consent
decree, or in default with respect to any material provision of any
lease, loan agreement, franchise, license, permit or other contract
obligation to which it is a party and there does not exist any state
of facts which constitutes an event of default as defined in such
documents or which, with notice or lapse of time or both, would
constitute such an event of default, in each case, except for defaults
which would not have a Material Adverse Effect.
(m) There are no legal or governmental proceedings pending or, to
the Company's knowledge, threatened to which the Company or any
Subsidiary is or may be a party or of which material property owned or
leased by the
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Company or any Subsidiary is or may be the subject, or related to
environmental or discrimination matters which are not disclosed in the
Prospectus and which, if determined adversely to the Company or such
Subsidiary, could reasonably be expected to have a Material Adverse Effect,
or which question the validity of this Agreement or any action taken or
to be taken pursuant hereto or thereto.
(n) There are no holders of securities of the Company having
rights to registration thereof or preemptive rights to purchase Common
Stock except as disclosed in the Prospectus.
(o) The Company and each of its Subsidiaries have good and
marketable title to all the properties and assets reflected as owned
in the financial statements hereinabove described (or elsewhere in the
Prospectus), subject to no lien, mortgage, pledge, charge or
encumbrance of any kind except those, if any, reflected in such
financial statements (or elsewhere in the Prospectus) or which are not
material to the Company and its Subsidiaries taken as a whole. The
Company and each of its Subsidiaries hold their respective leased
properties which are material to the Company and its Subsidiaries
taken as a whole under valid and binding leases.
(p) Subsequent to the respective dates as of which information is
given in the Registration Statement and Prospectus, and except as
contemplated by, set forth in or incorporated by reference in the
Registration Statement or the Prospectus, the Company and the
Subsidiaries, taken as a whole, have not incurred any material
liabilities or obligations, direct or contingent, nor entered into any
material transactions not in the ordinary course of business and there
has not been any material adverse change in their condition (financial or
otherwise) or results of operations nor any material change in their
capital stock, short-term debt or long-term debt.
(q) There is no material document of a character required to be
described in the Registration Statement or the Prospectus or to be
filed as an exhibit to the Registration Statement which is not
described or filed as required.
(r) The Company together with the Subsidiaries owns and possesses
all right, title and interest in and to, or
8
has duly licensed from third parties, all trademarks, copyrights and other
proprietary rights ("Trade Rights") material to the business of the Company
and each of the Subsidiaries taken as a whole. Neither the Company nor any
Subsidiary has received any notice of infringement, misappropriation
or conflict from any third party as to such material Trade Rights
which has not been resolved or disposed of and neither the Company nor
any Subsidiary has infringed, misappropriated or otherwise conflicted
with material Trade Rights of any third parties, which infringement,
misappropriation or conflict would have a Material Adverse Effect.
(s) The conduct of the business of the Company and each
Subsidiary is in compliance in all respects with applicable federal,
state, local and foreign laws and regulations (including, without
limitation, Regulation Z, the Truth in Lending Act, the Equal Credit
Opportunity Act, the Fair Credit Reporting Act, the rules and
regulations of the Federal Trade Commission, and other federal, state
and local laws, rules and regulations that pertain to repossession of
collateral, consumer debt collection practices, garnishment of wages,
truth in lending, insurance premium financing and the sale of vehicle
service agreements) except where the failure to be in compliance would
not have a Material Adverse Effect.
(t) All offers and sales of the Company's capital stock prior to
the date hereof were at all relevant times duly registered with or
exempt from the registration requirements of the 1933 Act and were
duly registered with or the subject of an available exemption from the
registration requirements of the applicable state securities or blue
sky laws.
(u) The Company and each Subsidiary have filed all necessary
federal, state and local income and franchise tax returns and have
paid all taxes shown as due thereon, and there is no tax deficiency
that has been, or to the knowledge of the Company might be, asserted
against the Company or any of its properties or assets that would or
could reasonably be expected to have a Material Adverse Effect.
(v) The Company is not conducting, and does not intend to
conduct, its business in a manner in which it would become, an
"investment company" as defined in Section 3(a) of the Investment
Company Act of 1940, as amended ("INVESTMENT COMPANY ACT").
9
(w) There are no negotiations now underway with any party or
parties with regard to the possible sale of the Company or of a block
of its capital stock exceeding, in the aggregate, 5% of the
outstanding capital stock except as described in the Registration
Statement.
SECTION 3. REPRESENTATIONS AND WARRANTIES OF THE UNDERWRITERS. The
Representatives, on behalf of the several Underwriters, represent and warrant to
the Company that (a) the information set forth on the cover page of the
Prospectus with respect to price, underwriting discount and terms of the
offering and (b) the information set forth under "Underwriting" in the
Prospectus, the only information furnished to the Company by and on behalf of
the Underwriters for use in connection with the preparation of the Registration
Statement, is correct and complete in all material respects.
SECTION 4. PURCHASE, SALE AND DELIVERY OF NOTES. 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 agrees, severally and not
jointly, to purchase from the company, at a purchase price of [_____] percent of
the principal amount thereof, plus accrued interest, if any, from [__________,
1997] to the Closing Date hereunder, the principal amount of Notes set forth
opposite the name of such Underwriter in SCHEDULE A hereto.
(a) The Notes to be purchased by each Underwriter hereunder will be
represented by one or more definitive global securities in book-entry form which
will be deposited by or on behalf of the Company with The Depository Trust
Company ("DTC") or its designated custodian. The Company will deliver the Notes
to ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Company, L.L.C., for the account of each Underwriter, against
payment by or on behalf of such Underwriter of the purchase price therefor by
wire transfer to an account specified by the Company in Federal (same day)
funds, by causing DTC to credit the Notes to the account of ▇▇▇▇▇▇▇ ▇▇▇▇▇ &
Company, L.L.C. at DTC. The Company will cause the certificates representing
the Notes to be made available to ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Company, L.L.C. for checking
at least twenty-four hours prior to the Closing Date (as defined below) at the
office of DTC or its designated custodian (the "Designated Office"). The time
and date of such delivery and payment shall be 9:00 a.m., Chicago time, on
[___________, 1997] or such other time and date as ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Company,
L.L.C. and the Company may agree upon in writing. Such time and date are herein
called the "Closing Date".
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(b) The documents to be delivered at the Closing Date by or on behalf
of the parties hereto pursuant to Section 7 hereof, including the cross-receipt
for the Notes and any additional documents requested by the Underwriters
pursuant to Section 7(g)(v) hereof, will be delivered at the offices of ▇▇▇▇▇▇
▇▇▇▇▇▇▇ PLLC, ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (the "Closing
Location"), and the Notes will be delivered at the Designated Office, all at the
Closing Date. A meeting will be held at the Closing Location at 3:00 p.m.,
Detroit time, on the Business Day (as hereinafter defined) next preceding the
Closing Date, at which meeting the final drafts of the documents to be delivered
pursuant to the preceding sentence will be available for review by the parties
hereto. For the purposes of this Section 4, "Business Day" shall mean each
Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on which
banking institutions in Chicago are generally authorized or obligated by law or
executive order to close.
You have advised the Company that each Underwriter has authorized you
to accept delivery of its Notes, to make payment and to receipt therefor. You,
individually and not as the Representatives of the Underwriters, may make
payment for any Notes to be purchased by any Underwriter whose funds shall not
have been received by you by the Closing Date for the account of such
Underwriter, but any such payment shall not relieve such Underwriter from any
obligation hereunder.
SECTION 5. COVENANTS OF THE COMPANY. The Company covenants and
agrees that:
(a) To prepare the Prospectus in a form approved by you and to
file such prospectus pursuant to Rule 424(b) not later than the
Commission's close of business on the second business day following
the execution and delivery of this Agreement, or, if applicable, such
earlier time as may be required by Rule 430A(a)(3); to make no further
amendment or any supplement to the Registration Statement or
Prospectus prior to the Closing Date which shall be disapproved by you
promptly after reasonable notice thereof; to advise you, promptly
after it receives notice thereof, of the time when the Registration
Statement, or any amendment thereto, has been filed or becomes
effective or any supplement to the Prospectus or any amended
Prospectus has been filed and to furnish you with copies thereof; to
file promptly all reports and any definitive proxy or information
statements required to be filed by the Company with the Commission
pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act
subsequent to the date of the Prospectus and for so long as the
delivery of a prospectus is required in connection
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with the offering or sale of the Notes; to advise you, promptly after it
receives notice thereof, of the issuance by the Commission of any stop
order or of any order preventing or suspending the use of any Preliminary
Prospectus or the Prospectus, of the suspension of the qualification of
the Notes for offering or sale in any jurisdiction, of the initiation or
threatening of any proceeding for any such purpose, or of any request
by the Commission for the amending or supplementing of the
Registration Statement or Prospectus or for additional information;
and, in the event of the issuance of any stop order or of any order
preventing or suspending the use of any Preliminary Prospectus or the
Prospectus or suspending any such qualification, to use promptly its
best efforts to obtain its withdrawal.
(b) Neither the Company nor any Subsidiary will, prior to the
Closing Date, incur any liability or obligation, direct or contingent,
or enter into any material transaction, other than in the ordinary
course of business, except as contemplated by the Prospectus.
(c) Not later than 18 months after the effective date of the
Registration Statement, the Company will make generally available to
its security holders an earnings statement (which need not be audited)
covering a period of at least 12 months beginning after the Closing
Date which will satisfy the provisions of the last paragraph of
Section 11(a) of the 1933 Act and Rule 158 promulgated thereunder.
(d) During such period as a prospectus is required by law to be
delivered in connection with offers and sales of the Notes by an
Underwriter or dealer, the Company will furnish to you at its expense,
copies of the Registration Statement, the Prospectus, each preliminary
prospectus, the documents incorporated by reference therein, and all
amendments and supplements to any such documents in each case as soon
as available (and in the case of the Prospectus, not later than 11:00
a.m. Chicago time on the business day following the date of this
Agreement) and in such quantities as you may reasonably request, for
the purposes contemplated by the 1933 Act.
(e) During the period beginning from the date hereof and
continuing to and including the earlier of (i) the termination of
trading restrictions on the Notes, as notified to the Company by you,
and (ii) the Closing Date, not to offer, sell, contract to sell or
otherwise dispose of any debt securities of the Company which
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mature more than one year after the Closing Date and which are substantially
similar to the Notes, without your prior written consent.
(f) During the period of five years hereafter, the Company will
furnish you and each of the other Underwriters with a copy (i) as soon
as practicable after the filing thereof, of each report filed by the
Company with the Commission, any securities exchange or the NASD; (ii)
as soon as practicable after the release thereof, of each press
release in respect of the Company; and (iii) as soon as available, of
each report of the Company mailed to shareholders.
(g) The Company will use the net proceeds received by it from the
sale of the Notes being sold by it in the manner specified in the
Prospectus.
SECTION 6. PAYMENT OF EXPENSES. Whether or not the transactions
contemplated hereunder are consummated or this Agreement is terminated, the
Company agrees to pay (i) all costs, fees and expenses incurred in connection
with the performance of the Company's obligations hereunder, including without
limiting the generality of the foregoing, all fees and expenses of legal counsel
for the Company, legal counsel for the Underwriters and of the Company's
independent accountants, all costs and expenses incurred in connection with the
preparation, printing, filing and distribution of the Registration Statement,
each preliminary prospectus and the Prospectus (including all documents
incorporated by reference therein, exhibits and financial statements) and all
amendments and supplements provided for herein, this Agreement, the Indenture,
(ii) all costs, fees and expenses (including legal fees (not to exceed $2,000
without the Company's reasonable consent) incurred by the Underwriters in
connection with qualifying or registering all or any part of the Notes for offer
and sale under blue sky laws of any jurisdiction and any required clearance of
such offering with the NASD; (iii) any fees charged by securities rating
services for rating the Notes; (iv) the cost of preparing the Notes; (v) the
fees and expenses of the Trustee and any agent of the Trustee and the fees and
disbursements of counsel for the Trustee in connection with the Indenture and
the Notes; and (vi) all other costs and expenses incident to the performance of
its obligations hereunder which are not otherwise specifically provided for in
this Section.
SECTION 7. CONDITIONS OF THE OBLIGATIONS OF THE UNDERWRITERS. The
obligations of the several Underwriters to purchase and pay for the Notes on the
Closing Date shall be subject to the accuracy of the representations and
warranties on the part
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of the Company herein set forth as of the date hereof and as of the Closing
Date, to the accuracy of the statements of officers of the Company made
pursuant to the provisions hereof, to the performance by the Company of its
respective obligations hereunder, and to the following additional conditions:
(a) The Prospectus shall have been filed with the Commission
pursuant to Rule 424(b) within the applicable time period prescribed
for such filing by the rules and regulation under the 1933 Act and in
accordance with Section 5(a) hereof; no stop order suspending the
effectiveness of the Registration Statement or any part thereof shall
have been issued and no proceeding for that purpose shall have been
initiated or threatened by the Commission; and all requests for
additional information on the part of the Commission shall have been
complied with to your reasonable satisfaction.
(b) The Notes shall have been qualified for sale under the blue
sky laws of such states as shall have been specified by the
Representatives.
(c) The legality and sufficiency of the authorization, issuance
and sale of the Notes hereunder, the validity and form of the
certificates representing the Notes, the execution and delivery of
this Agreement and the Indenture and the corporate proceedings and
other legal matters incident thereto, and the form of the Registration
Statement and the Prospectus (except financial statements) shall have
been approved by counsel for the Underwriters.
(d) You shall not have advised the Company that the Registration
Statement or the Prospectus or any amendment or supplement thereto,
contains an untrue statement of fact, which, in the opinion of counsel
for the Underwriters, is material or omits to state a fact which, in
the opinion of such counsel, is material and is required to be stated
therein or necessary to make the statements therein not misleading.
(e) Subsequent to the execution and delivery of this Agreement,
there shall not have occurred any change, or any development involving
a prospective change, in or affecting particularly the business or
properties of the Company or any Subsidiary, whether or not arising in
the ordinary course of business, which, in the reasonable judgment of
the Representatives makes it impractical or inadvisable to proceed
with the public offering or purchase of the Notes as contemplated
hereby.
14
(f) On or after the date hereof (i) no downgrading shall have
occurred in the rating accorded the Company's debt securities by any
"nationally recognized statistical rating organization", as that term
is defined by the Commission for purposes of Rule 436(g)(2) and (ii)
no organization shall have publicly announced that it has under
surveillance or review, with possible negative implications, its
rating of any of the Company's debt securities.
(g) There shall have been furnished to you, as Representatives of
the Underwriters, on the Closing Date, except as otherwise expressly
provided below:
(i) An opinion of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ PLLC, counsel for the
Company addressed to the Underwriters and dated the Closing
Date to the effect that:
(1) the Company and BVPP have been duly incorporated and
are validly existing as corporations in good standing under the
laws of the jurisdiction in which they are incorporated with
corporate power and authority to own their properties and conduct
their business as described in the Prospectus. With respect to
CACUK's due incorporation, existence, good standing and
corporate power and authority, such counsel may state that it is
aware that an opinion of local counsel in the country in which
CACUK does business has been obtained by the Company and is
being delivered to you on the Closing Date and may assume that
you have reviewed a copy of such opinion;
(2) all of the issued and outstanding capital stock of BVPP
has been duly authorized, validly issued and is fully paid and
nonassessable, is owned by the Company and, except as disclosed
in the Registration Statement or in this Agreement, to the best
knowledge of such counsel, the Company owns directly or
indirectly
15
all of the outstanding capital stock of each Subsidiary, free
and clear of any claims, liens, encumbrances or security
interests;
(3) the authorized capital stock of the Company is as set
forth in the Registration Statement. The issued and outstanding
capital stock of the Company has been duly authorized and validly
issued and is fully paid (to such counsel's actual knowledge and
based upon a certificate of the chief executive officer or chief
operating officer and of the principal financial officer of the
Company) and nonassessable;
(4) the Notes have been duly and validly authorized by the
Company and, when duly authenticated by the Trustee and issued,
delivered and sold in accordance with this Agreement and the
Indenture, will have been duly and validly executed,
authenticated, issued and delivered and will constitute valid
and binding obligations of the Company, entitled to the benefits
provided by the Indenture, enforceable against the Company in
accordance with their terms and the terms of the Indenture, except
as enforceability of the same may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws
affecting creditors' rights and by the exercise of judicial
discretion in accordance with general principles of equity,
regardless of whether such enforceability is considered in a
proceeding in equity or at law;
(5) the Notes conform in all material respects to the
description thereof contained in the Prospectus and conform in
all material respects
16
to the applicable provisions of the Indenture;
(6) the Indenture has been duly authorized, executed and
delivered by the Company and the Trustee and constitutes a valid
and binding instrument of the Company, enforceable against the
Company in accordance with its terms, except as enforceability of
the same may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting creditors' rights
and by the exercise of judicial discretion in accordance with
general principles of equity, regardless of whether such
enforceability is considered in a proceeding in equity or at law;
the Indenture has been duly qualified under the Trust Indenture
Act; and the Indenture conforms in all material respects to the
description thereof contained in the Prospectus;
(7) the Registration Statement has become effective under
the 1933 Act, and, to the actual knowledge of such counsel, no
stop order suspending the effectiveness of the Registration
Statement has been issued and no proceedings for that purpose
have been instituted or are pending or contemplated under the
1933 Act; and the Registration Statement, the Prospectus and each
amendment or supplement thereto (except for the financial
statements and the notes and schedules related thereto and other
numerical, statistical or financial data included therein and the
Statement of Eligibility as to which such counsel need express no
opinion) comply as to form in all material respects with the
requirements of the 1933 Act and the Indenture complies in all
material respects as
17
to form with the Trust Indenture Act;
(8) such counsel does not know of any statutes, rules and
regulations required to be described or referred to in the
Registration Statement or the Prospectus that are not described
or referred to therein as required; and such counsel does not
know of any legal or governmental proceedings pending or
threatened required to be described in the Prospectus which are
not described as required, nor of any contracts or documents of
a character required to be described in the Registration Statement
or Prospectus or to be filed as exhibits to the Registration
Statement which are not described or filed, as required;
(9) this Agreement has been duly authorized, executed and
delivered by and on behalf of the Company, and is the legal,
valid and binding agreement of the Company, except as
enforceability of the same may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws
affecting creditors' rights and by the exercise of judicial
discretion in accordance with general principles of equity,
regardless of whether such enforceability is considered in a
proceeding in equity or at law, and except to the extent the
enforceability of the indemnification, exculpation and
contribution provisions of this Agreement may be limited by
applicable law and as to which no opinion need be expressed;
(10) no approval, authorization or consent of any public
board, agency, or instrumentality of the United States
18
or of any state or other jurisdiction is necessary in connection
with the issue or sale of the Notes by the Company pursuant
to this Agreement (other than under the 1933 Act, any applicable
blue sky laws and the rules of the NASD) or the consummation by
the Company of any other transactions contemplated hereby;
(11) the execution and performance of this Agreement will
not contravene any of the provisions of, or result in a default
under, any agreement, franchise, license, indenture, mortgage,
deed of trust, or other instrument known to such counsel, of the
Company or any Subsidiary or by which the property of any of them
is bound and which contravention or default would be material to
the Company and the Subsidiaries taken as a whole; or violate any
of the provisions of the articles of incorporation, charter or
bylaws of the Company or any Subsidiary or, so far as is known to
such counsel, violate any statute, order, rule or regulation of
any regulatory or governmental body having jurisdiction over the
Company or any Subsidiary the effect of which would be materially
adverse to the Company and the Subsidiaries taken as a whole;
(12) all documents incorporated by reference in the
Prospectus, when they were filed with the Commission, complied
as to form in all material respects with the requirements of the
Exchange Act;
(13) the Company is not an "investment company" or a person
controlled by" an "investment company" within the meaning of the
Investment Company Act.
19
In addition, such counsel shall state that (x) in passing on the
form of the Registration Statement and the Prospectus, such counsel
has necessarily assumed the correctness and completeness of the
statements made or included therein by the Company since such
counsel did not verify independently the accuracy or completeness of
such statements, (y) however, in the course of preparation of the
Registration Statement and the Prospectus, such counsel had
conferences with officials of the Company and its independent
auditors, and with representatives of the Underwriters and their
counsel, and also had discussions with such officials of the Company
with a view toward a clear understanding on their part of the
requirements of the 1933 Act and the rules and regulations with
reference to the preparation of registration statements and
prospectuses, and (z) such counsel's examination of the Registration
Statement and the Prospectus and its discussions in the above-mentioned
conferences did not disclose to it any information which gives it
reason to believe that the Registration Statement or the Prospectus
(other than numerical, financial or statistical data, the financial
statements and notes or any related schedules thereto and the Statement
of Eligibility, as to which such counsel need express no opinion or
belief) at the time the Registration Statement became effective
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 (other
than numerical, financial or statistical data, the financial
statements and notes or any related schedules thereto, and the
Statement of Eligibility, as to which such counsel need express no
opinion or belief) as of the Closing Date contains any untrue statement
of a material fact or omits to state any material fact necessary to
make the statements therein, in the light of the circumstances in
which they were made, not misleading.
In rendering such opinion, such counsel may assume that the laws of
the States of New York and Illinois as to the enforceability of
20
contracts are not different than the laws of the state of Michigan.
(ii) An opinion of counsel reasonably acceptable to the
Representatives addressed to the Underwriters and dated the Closing
Date to the effect that:
(1) CACUK has been duly organized and is validly existing
as a limited liability company under the laws of England and
Wales with corporate power and authority to own its properties
and conduct its business as described in the Prospectus;
(2) a search with the Registrar of Companies for England
and Wales with respect to CACUK does not reveal the appointment
of any liquidator, administrator or receiver; and
(3) the entire issued share capital of CACUK has been duly
authorized and validly issued and an inspection of CACUK's
Register of Members and of CACUK's filings with the Registrar
of Companies for England and Wales indicate that the Company
owns the whole of the issued share capital of CACUK.
(iii) Such opinion or opinions of ▇▇▇▇▇▇▇▇▇, Will & ▇▇▇▇▇, counsel
for the Underwriters, dated the Closing Date, with respect to the
valid existence of the Company, the validity of the Notes to be sold
by the Company, the Registration Statement and the Prospectus and
other related matters as you may reasonably require, and the Company
shall have furnished to such counsel such documents and shall have
exhibited to them such papers and records as they request for the
purpose of enabling them to pass upon such matters.
(iv) A certificate of the chief executive officer or chief
operating officer and of the principal financial officer of the
21
Company, dated the Closing Date, to the effect that:
(1) the representations and warranties of the Company set
forth in Section 2 of this Agreement are true and correct as of
the date of this Agreement and as of the Closing Date and the
Company has complied with all the agreements and satisfied all
the conditions on its part to be performed or satisfied at or
prior to the Closing Date; and
(2) the Commission has not issued an order preventing or
suspending the use of the Prospectus or any preliminary
prospectus filed as a part of the Registration Statement or any
amendment thereto; no stop order suspending the effectiveness of
the Registration Statement has been issued; and to the best
knowledge of the respective signers, no proceedings for that
purpose have been instituted or are pending or contemplated
under the 1933 Act.
The delivery of the certificate provided for in this subparagraph
shall be and constitute a representation and warranty of the Company
as to the facts required in the immediately foregoing clauses (1) and
(2) of this subparagraph to be set forth in said certificate.
(v) Immediately prior to the time this Agreement is executed and
also on the Closing Date, there shall be delivered to you a letter
addressed to you, as Representatives of the Underwriters, from ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ LLP, independent accountants, the first one to be dated the
date of this Agreement and the second one to be dated the Closing
Date, to the effect set forth in SCHEDULE B together with such
additional matters as the Underwriters may reasonably request. There
shall not have been disclosed in the letters referred to in this
subparagraph any
22
information which makes it impractical or inadvisable in the judgment
of the Representatives to proceed with the public offering or purchase
of the Notes as contemplated hereby.
(vi) Such further certificates and documents as you may
reasonably request.
In giving their opinions, such counsel may rely, or assume the
accuracy of, the opinions of other competent counsel and, as to factual matters,
on representations of the Company made herein and on certificates of officers of
the Company and of state officials, in which case their opinion is to state that
they are so doing and copies of said opinions or certificates are to be attached
to the opinion unless said opinions or certificates (or, in the case of
certificates, the information therein) have been furnished to the
Representatives in other form.
All opinions, certificates, letters and documents shall be in
compliance with the provisions hereof only if they are satisfactory to you and
to ▇▇▇▇▇▇▇▇▇, Will & ▇▇▇▇▇, counsel for the Underwriters. The Company shall
furnish you with such manually signed or conformed copies of such opinions,
certificates, letters and documents as you request.
If any condition to the Underwriters' obligations hereunder to be
satisfied prior to or at the Closing Date is not so satisfied, this Agreement at
your election will terminate upon notification to the Company without liability
on the part of any Underwriter or the Company, except for the expenses to be
paid or reimbursed by the Company pursuant to Sections 6 hereof and except to
the extent provided in Section 9 hereof.
SECTION 8. REIMBURSEMENT OF UNDERWRITERS' EXPENSES. If the sale to
the Underwriters of the Notes on the Closing Date is not consummated because any
condition of the Underwriters' obligations hereunder is not satisfied or because
of any refusal, inability or failure on the part of the Company to perform any
agreement herein or to comply with any provision hereof, unless such failure to
satisfy such condition or to comply with any provision hereof is due to the
default or omission of any Underwriter, the Company agrees to reimburse you and
the other Underwriters upon demand for all out-of-pocket expenses (including
reasonable fees and disbursements of counsel) that shall have been reasonably
incurred by you and them in connection with the proposed purchase and the sale
of the Notes. Any such termination shall be without liability of any party to
any other party except that the provisions of this Section, Section 6 and
Section 9 shall at all times be effective and shall apply.
23
SECTION 9. INDEMNIFICATION. (a) The Company agrees to indemnify and
hold harmless each Underwriter and each person, if any, who controls any
Underwriter within the meaning of the 1933 Act or 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 1933 Act,
the Exchange Act or other federal or state statutory law or regulation, at
common law or otherwise (including in settlement of any litigation if such
settlement is effected with the written consent of the Company), insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon any untrue statement or alleged untrue statement of any
material fact contained in the Registration Statement, including the information
deemed to be part of the Registration Statement at the time of effectiveness
pursuant to Rule 430A, if applicable, any preliminary prospectus, the
Prospectus, or any amendment or supplement thereto, or arise out of or are based
upon the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not misleading;
and will reimburse each Underwriter and each such controlling person for any
legal or other expenses reasonably incurred by such Underwriter or such
controlling person in connection with investigating or defending any such loss,
claim, damage, liability or action; provided, however, that the Company will not
be liable in any such case to the extent that (i) any such loss, claim, damage
or liability arises out of or is based upon an untrue statement or alleged
untrue statement or omission or alleged omission made in the Registration
Statement, any preliminary prospectus, the Prospectus or any amendment or
supplement thereto in reliance upon and in conformity with written information
furnished to the Company by or on behalf of any Underwriter through the
Representatives, specifically for use therein; or (ii) if such statement or
omission was contained or made in any preliminary prospectus and corrected in
the Prospectus and (1) any such loss, claim, damage or liability suffered or
incurred by any Underwriter (or any person who controls any Underwriter)
resulted from an action, claim or suit by any person who purchased Notes which
are the subject thereof from such Underwriter in the offering and (2) such
Underwriter failed to deliver or provide a copy of the Prospectus to such person
at or prior to the confirmation of the sale of such Notes in any case where such
delivery is required by the 1933 Act. In addition to their other obligations
under this Section 9(a), the Company agrees that, as an interim measure during
the pendency of any claim, action, investigation, inquiry or other proceeding
arising out of or based upon any statement or omission, or any alleged statement
or omission, described in this Section 9(a), they will reimburse the
Underwriters on a monthly basis for all reasonable legal and other expenses
incurred in connection with investigating or defending any such claim, action,
investigation, inquiry or other proceeding, notwithstanding the absence of a
24
judicial determination as to the propriety and enforceability of the Company's
obligation to reimburse the Underwriters for such expenses and the possibility
that such payments might later be held to have been improper by a court of
competent jurisdiction. This indemnity agreement will be in addition to any
liability which the Company may otherwise have.
(b) Each Underwriter will severally indemnify and hold harmless the
Company, each of its directors, each of its officers who signed the Registration
Statement and each person, if any, who controls the Company within the meaning
of the 1933 Act or 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 1933 Act, the Exchange Act or other federal
or state statutory law or regulation, at common law or otherwise (including in
settlement of any litigation, if such settlement is effected with the written
consent of the Representatives on behalf of the Underwriters), insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon any untrue or alleged untrue statement of any material fact
contained in the Registration Statement, any preliminary prospectus, the
Prospectus, or any amendment or supplement thereto, or arise out of or are based
upon the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not misleading,
in each case to the extent, but only to the extent, that such untrue statement
or alleged untrue statement or omission or alleged omission was made in the
Registration Statement, any preliminary prospectus, the Prospectus, or any
amendment or supplement thereto in reliance upon and in conformity with Section
3 of this Agreement or any other written information furnished to the Company by
such Underwriter through the Representatives specifically for use in the
preparation thereof, and will reimburse 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 action. In addition to their other obligations under this Section
9(b), the Underwriters agree that, as an interim measure during the pendency of
any claim, action, investigation, inquiry or other proceeding arising out of or
based upon any statement or omission, or any alleged statement or omission,
described in this Section 9(b), they will reimburse the Company on a monthly
basis for all reasonable legal and other expenses incurred in connection with
investigating or defending any such claim, action, investigation, inquiry or
other proceeding, notwithstanding the absence of a judicial determination as to
the propriety and enforceability of the Underwriters' obligation to reimburse
the Company for such expenses and the possibility that such payments might later
be held to have been improper by a court of competent jurisdiction. This
indemnity agreement will be in
25
addition to any liability which such Underwriter may otherwise have.
(c) Promptly after receipt by an indemnified party under this Section
of notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against an indemnifying party under this
Section, 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 except to the extent that
the indemnifying party was prejudiced by such failure to notify. In case any
such action is brought against any indemnified party, and it notifies an
indemnifying party of the commencement thereof, the indemnifying party will be
entitled to participate in, and, to the extent that it may wish, jointly with
all other indemnifying parties similarly notified, to assume the defense
thereof, with counsel satisfactory to such indemnified party; provided, however,
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 legal defenses available to it and/or other indemnified
parties which are different from or additional to those available to the
indemnifying party, or the indemnified and indemnifying parties may have
conflicting interests which would make it inappropriate for the same counsel to
represent both of them, the indemnified party or parties shall have the right to
select separate counsel to assume such legal defense and otherwise to
participate in the defense of such action on behalf of such indemnified party or
parties. Upon receipt of notice from the indemnifying party to such indemnified
party of its election so to assume the defense of such action and approval by
the indemnified party of counsel, which approval shall not be unreasonably
withheld, the indemnifying party will not be liable to such indemnified party
under this Section for any legal or other expenses subsequently incurred by such
indemnified party in connection with the defense thereof unless (i) the
indemnified party shall have employed such counsel in connection with the
assumption of legal defense in accordance with the proviso to the next preceding
sentence (it being understood, however, that the indemnifying party shall not be
liable for the expenses of more than one separate counsel, approved by the
Representatives in the case of paragraph (a) and by the Company in the case of
paragraph (b) representing all indemnified parties not having different or
additional defenses or potential conflicting interest among themselves who are
parties to such action), (ii) the indemnifying party shall not have employed
counsel satisfactory to the indemnified party to represent the indemnified party
within a reasonable time after notice of commencement of the action or (iii) the
indemnifying party has authorized the employment of counsel for the indemnified
party at the expense of the indemnifying party. No
26
indemnifying party shall, without the prior written consent of the
indemnified party, effect any settlement of any pending or threatened
proceeding in respect of which any indemnified party is or could have been a
party and indemnity could have been sought hereunder by such indemnified
party, unless such settlement includes an unconditional release of such
indemnified party from all liability arising out of such proceeding.
(d) If the indemnification provided for in this Section 9 is
unavailable to an indemnified party under paragraphs (a) or (b) hereof in
respect of any losses, claims, damages or liabilities referred to therein, then
each applicable indemnifying party, in lieu of indemnifying such indemnified
party, shall contribute to the amount paid or payable by such indemnified party
as a result of such losses, claims, damages or liabilities (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Company and the Underwriters from the offering of the Notes or (ii) if the
allocation provided by clause (i) above is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Company and
the Underwriters in connection with the statements or omissions which resulted
in such losses, claims, damages or liabilities, as well as any other relevant
equitable considerations. The respective relative benefits received by the
Company and the Underwriters shall be deemed to be in the same proportion in the
case of the Company as the total price paid to the Company for the Notes by the
Underwriters (net of underwriting discount but before deducting expenses), and
in the case of the Underwriters as the underwriting discount received by them
bears to the total of such amounts paid to the Company received by the
Underwriters as underwriting discount in each case as contemplated by the
Prospectus. The relative fault of the Company and the Underwriters shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission to state a material fact
relates to information supplied by the Company or by the Underwriters and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The amount paid or payable by a
party as a result of the losses, claims, damages and liabilities referred to
above shall be deemed to include any legal or other fees or expenses reasonably
incurred by such party in connection with investigating or defending any action
or claim.
The Company and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this Section were determined by pro
rata allocation or by any other method of allocation which does not take
account of the equitable considerations referred to in the immediately
preceding paragraph. Notwithstanding the provisions of this Section 9, no
Underwriter
27
shall be required to contribute any amount in excess of the amount by which
the total price at which the Notes underwritten by it and distributed to the
public were offered to the public exceeds the amount of any damages which
such Underwriter has otherwise been required to pay by reason of such untrue
or alleged untrue statement or omission or alleged omission. No person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f)
of the ▇▇▇▇ ▇▇▇) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation. The Underwriters'
obligations to contribute pursuant to this Section are several in proportion
to their respective underwriting commitments and not joint.
(e) The provisions of this Section shall survive any termination of
this Agreement.
SECTION 10. DEFAULT OF UNDERWRITERS. It shall be a condition to the
agreement and obligation of the Company to sell and deliver the Notes hereunder,
and of each Underwriter to purchase the Notes hereunder, that, except as
hereinafter in this paragraph provided, each of the Underwriters shall purchase
and pay for the aggregate principal amount of Notes agreed to be purchased by
such Underwriter hereunder upon tender to the Representatives of such Notes in
accordance with the terms hereof. If any Underwriter or Underwriters default in
their obligations to purchase the aggregate principal amount of Notes hereunder
on the Closing Date and the aggregate number of Notes which such defaulting
Underwriter or Underwriters agreed but failed to purchase does not exceed 10
percent of the aggregate principal amount of Notes which the Underwriters are
obligated to purchase on the Closing Date, the Representatives may make
arrangements satisfactory to the Company for the purchase of such aggregate
principal amount of Notes by other persons, including any of the Underwriters,
but if no such arrangements are made by such date the nondefaulting Underwriters
shall be obligated severally, in proportion to their respective commitments
hereunder, to purchase the aggregate principal amount of Notes which such
defaulting Underwriters agreed but failed to purchase on such date. If any
Underwriter or Underwriters so default and the aggregate principal amount of
Notes with respect to which such default or defaults occur is more than the
above percentage and arrangements satisfactory to the Representatives and the
Company for the purchase of such Notes by other persons are not made within 36
hours after such default, this Agreement will terminate without liability on the
part of any nondefaulting Underwriter or the Company, except for the expenses to
be paid by the Company pursuant to Section 6 hereof and except to the extent
provided in Section 9 hereof.
In the event that the aggregate principal amount of Notes to which a
default relates are to be purchased by the nondefaulting
28
Underwriters or by another party or parties, the Representatives or the
Company shall have the right to postpone the Closing Date for not more than
seven business days in order that the necessary changes in the Registration
Statement, Prospectus and any other documents, as well as any other
arrangements, may be effected. As used in this Agreement, the term
"Underwriter" includes any person substituted for an Underwriter under this
Section. Nothing herein will relieve a defaulting Underwriter from liability
for its default.
SECTION 11. TERMINATION. Without limiting the right to terminate
this Agreement pursuant to any other provision hereof, this Agreement may be
terminated by you prior to the Closing Date if (i) trading in securities on the
New York Stock Exchange shall have been suspended or minimum prices shall have
been established on such exchange, or (ii) a banking moratorium shall have been
declared by Illinois, Michigan, New York, or United States authorities, or (iii)
there shall have been any material and adverse change in financial markets or in
political, economic or financial conditions which, in the opinion of the
Representatives, either renders it impracticable or inadvisable to proceed with
the offering and sale of the Notes on the terms set forth in the Prospectus or
materially and adversely affects the market for the Notes, or (iv) there shall
have been an outbreak of major armed hostilities between the United States and
any foreign power which in the opinion of the Representatives makes it
impractical or inadvisable to offer or sell the Notes. Any termination pursuant
to this Section 11 shall be without liability on the part of any Underwriter to
the Company or on the part of the Company to any Underwriter (except for
expenses to be paid or reimbursed pursuant to Section 6 hereof and except to the
extent provided in Section 9 hereof).
SECTION 12. REPRESENTATIONS AND INDEMNITIES TO SURVIVE DELIVERY. The
respective indemnities, agreements, representations, warranties and other
statements of the Company, of its officers and of the several Underwriters set
forth in or made pursuant to this Agreement will remain in full force and
effect, regardless of any investigation made by or on behalf of any Underwriter
or the Company or any of its or their partners, officers or directors or any
controlling person, and will survive delivery of and payment for the Notes sold
hereunder.
SECTION 13. NOTICES. All communications hereunder will be in writing
and, if sent to the Underwriters will be mailed, delivered or telegraphed and
confirmed to you c/o ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Company, L.L.C., ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Manager, Fixed Income, with a copy to
▇▇▇▇▇▇▇▇▇, Will & ▇▇▇▇▇, ▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇,
29
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, P.C.; and if sent to the Company will be mailed,
delivered or telegraphed and confirmed to the Company at its corporate
headquarters with a copy to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ PLLC, Attention ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇,
Esq., ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
SECTION 14. SUCCESSORS. This Agreement will inure to the benefit of
and be binding upon the parties hereto and their respective successors, personal
representatives and assigns, and to the benefit of the officers and directors
and controlling persons referred to in Section 9, and no other person will have
any right or obligation hereunder. The term "successors" shall not include any
purchaser of the Notes as such from any of the Underwriters merely by reason of
such purchase.
SECTION 15. REPRESENTATION OF UNDERWRITERS. You will act as
Representatives for the several Underwriters in connection with this financing,
and any action under or in respect of this Agreement taken by you will be
binding upon all the Underwriters.
SECTION 16. PARTIAL UNENFORCEABILITY. If any section, paragraph or
provision of this Agreement is for any reason determined to be invalid or
unenforceable, such determination shall not affect the validity or
enforceability of any other section, paragraph or provision hereof.
SECTION 17. APPLICABLE LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of Illinois.
30
If the foregoing is in accordance with your understanding of our
agreement, kindly sign and return to us the enclosed duplicates hereof,
whereupon it will become a binding agreement among the Company and the several
Underwriters including you, all in accordance with its terms.
Very truly yours,
CREDIT ACCEPTANCE CORPORATION
By:
---------------------------------
Its:
---------------------------------
The foregoing Agreement is
hereby confirmed and accepted
as of the date first above
written.
▇▇▇▇▇▇▇ ▇▇▇▇▇ & Company, L.L.C.
First Chicago Capital Markets, Inc.
NationsBanc Capital Markets, Inc.
As Representatives of the several
Underwriters named in Schedule A
By: ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Company, L.L.C.
By:
---------------------------------
Its:
--------------------------------
31
SCHEDULE A
PRINCIPAL
AMOUNT OF
NOTES TO BE
UNDERWRITER PURCHASED
----------- -----------
▇▇▇▇▇▇▇ ▇▇▇▇▇ & Company, L.L.C.. . . . . . . . . . . . . . . $
First Chicago Capital Markets, Inc.. . . . . . . . . . . . .
NationsBanc Capital Markets, Inc.. . . . . . . . . . . . . .
-----------
Total . . . . . . . . . . . . . . . . . . . . . . . . . $
-----------
-----------
SCHEDULE B
Comfort Letter of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP
(1) They are independent public accountants with respect to the
Company and its subsidiaries within the meaning of the 1933 Act.
(2) In their opinion the consolidated financial statements and
schedules of the Company and its subsidiaries included or incorporated by
reference in the Registration Statement and the consolidated financial
statements of the Company from which the information presented under the caption
"Selected Consolidated Financial Data" has been derived which are stated therein
to have been examined by them comply as to form in all material respects with
the applicable accounting requirements of the 1933 Act and the Exchange Act.
(3) They have undertaken specified procedures (but not an examination
in accordance with generally accepted auditing standards), including inquiries
of certain officers of the Company and its subsidiaries responsible for
financial and accounting matters as to transactions and events subsequent to
December 31, 1996, a reading of minutes of meetings of the stockholders and
directors of the Company and its subsidiaries since __________________, 19____,
a reading of the latest available interim unaudited consolidated financial
statements of the Company and its subsidiaries (with an indication of the date
thereof) and other procedures as specified in such letter, and have been advised
by officers of the Company that (i) the unaudited consolidated financial
statements of the Company and its subsidiaries included or incorporated by
reference in the Registration Statement comply as to form in all material
respects with the applicable accounting requirements of the 1933 Act and the
Exchange Act and that such unaudited financial statements are fairly presented
in accordance with generally accepted accounting principles applied on a basis
substantially consistent with that of the audited financial statements included
in the Registration Statement, [IF APPLICABLE, COVER PRO FORMA FINANCIAL
STATEMENTS] and (ii) at a specified date not more than five days prior to the
date thereof in the case of the first letter and not more than two business days
prior to the date thereof in the case of the second letter, there was no change
in the capital stock or long-term debt or short-term debt (other than normal
payments) of the Company and its subsidiaries on a consolidated basis and no
decrease in consolidated net current assets or consolidated stockholders' equity
as compared with amounts shown on the latest unaudited balance sheet of the
Company included in the Registration Statement or for the period from the date
of such balance sheet to a date not more than five days prior
C-1
to the date thereof in the case of the first letter and not more than two
business days prior to the date thereof in the case of the second and third
letters, there were no decreases, as compared with the corresponding period
of the prior year, in consolidated total revenue, operating income or in the
total or per share amounts of consolidated net income except, in all
instances, for changes or decreases which the Prospectus discloses have
occurred or may occur or which are set forth in such letter.
(4) They have carried out specified procedures, which have been
agreed to by the Representatives, with respect to certain information in the
Prospectus specified by the Representatives, and on the basis of such
procedures, they have found such information to be in agreement with the general
accounting records of the Company and its subsidiaries.
C-2
