<PAGE>
As filed with the Securities and Exchange Commission on January 11, 1996
Registration No. 33-
===============================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_____________________
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
_____________________
AMRESCO, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 59-1781257
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1845 WOODALL RODGERS FREEWAY
SUITE 1700
DALLAS, TEXAS 75201
(214) 953-7700
(Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices)
_____________________
L. KEITH BLACKWELL
GENERAL COUNSEL AND SECRETARY
1845 WOODALL RODGERS FREEWAY
SUITE 1700
DALLAS, TEXAS 75201
(214) 953-7700
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
_____________________
COPIES TO:
MICHAEL M. BOONE ROBERT C. SCHWARTZ
HAYNES AND BOONE, L.L.P. SMITH, GAMBRELL & RUSSELL
3100 NATIONSBANK PLAZA 3343 PEACHTREE ROAD, N.E.
901 MAIN STREET SUITE 1800
DALLAS, TEXAS 75202-3789 ATLANTA, GEORGIA 30326-1010
(214) 651-5000 (404) 264-2620
_____________________
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
From time to time after the effective date of this Registration Statement.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the
following box. / /
If any of the securities being registered on this Form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the Securities
Act of 1933, other than securities offered only in connection with dividend
or interest reinvestment plans, check the following box. /X/
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. / /
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement unmber of the earlier effective registration statement
for the same offering. / /
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. / /
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
=====================================================================================================================
PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
TITLE OF EACH CLASS AMOUNT TO BE OFFERING PRICE PER AGGREGATE OFFERING REGISTRATION
OF SECURITIES TO BE REGISTERED REGISTERED (1) SHARE (2) PRICE (2) FEE
- ---------------------------------------------------------------------------------------------------------------------
Common Stock, par value $0.05 per
share . . . . . . . . . . . . . . 3,600,000 shares $12.875 $46,350,000 $15,983
=====================================================================================================================
</TABLE>
(1) The shares of Common Stock being registered hereby are issuable upon
conversion of the Registrant's 8% Convertible Subordinated Debentures
due 2005 (the "Debentures"). Pursuant to Rule 416, the Registration
Statement also covers such indeterminate additional shares of Common
Stock as may become issuable on conversion of the Debentures as a result
of any future adjustments in the conversion price in accordance with the
terms of the Debentures.
(2) Estimated solely for purposes of calculating the registration fee
pursuant to Rule 457(c).
_____________________
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS
REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH
SECTION 8(A) OF THE SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THE
REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION,
ACTING PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
===============================================================================
<PAGE>
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement
becomes effective. This prospectus shall not constitute an offer to sell or
the solicitation of an offer to buy nor shall there be any sale of these
securities in any State in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the securities laws of
any such State.
<PAGE>
SUBJECT TO COMPLETION, DATED JANUARY 11, 1996
PROSPECTUS
AMRESCO, INC.
3,600,000 SHARES OF COMMON STOCK
The shares of Common Stock, $0.05 par value per share (the "Common
Stock"), of AMRESCO, INC. (the "Company") covered by this Prospectus are
shares which may be offered and sold (the "Offering"), from time to time, by
certain shareholders of the Company (collectively, the "Selling
Shareholders"). See "Selling Shareholders." The shares of Common Stock
covered by this Prospectus are issuable to the Selling Shareholders upon
conversion of the Company's 8% Convertible Subordinated Debentures Due 2005
(the "Debentures"). All of the shares covered hereby will only be sold by the
Selling Shareholders. This Prospectus does not purport to cover the initial
issuance by the Company of the shares of Common Stock upon conversion of the
Debentures, but only the reoffer and resale of such shares by the Selling
Shareholders. The Company will not receive any of the proceeds from the sale
of the shares of Common Stock by the Selling Shareholders.
The Selling Shareholders may from time to time sell the shares of Common
Stock covered by this Prospectus to or through one or more underwriters, and
may also sell shares of Common Stock directly to other purchasers or through
agents, on the Nasdaq National Market in ordinary brokerage transactions, in
negotiated transactions, or otherwise, at market prices prevailing at the
time of sale, at prices related to the then prevailing market price or at
negotiated prices. See "Plan of Distribution."
The Company's Common Stock is traded on the Nasdaq National Market under
the symbol "AMMB."
SEE "RISK FACTORS" BEGINNING ON PAGE 7 FOR A DISCUSSION OF CERTAIN FACTORS
THAT SHOULD BE CONSIDERED BY PROSPECTIVE PURCHASERS OF THE COMMON STOCK
OFFERED HEREBY.
_____________________
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
_____________________
The date of this Prospectus is _____________ ___, 1996
<PAGE>
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS, AND, IF GIVEN
OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS
HAVING BEEN AUTHORIZED. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL
OR THE SOLICITATION OF AN OFFER TO BUY ANY SECURITIES OTHER THAN THE
SECURITIES TO WHICH IT RELATES OR ANY OFFER TO SELL OR THE SOLICITATION OF AN
OFFER TO BUY SUCH SECURITIES IN ANY CIRCUMSTANCES IN WHICH SUCH OFFER OR
SOLICITATION IS UNLAWFUL. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY
SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION
THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE
HEREOF OR THAT THE INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY TIME
SUBSEQUENT ITS DATE.
_______________
TABLE OF CONTENTS
Page
----
Available Information . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Incorporation of Certain Documents by Reference . . . . . . . . . . . . . . 3
Certain Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
The Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Risk Factors. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Recent Developments . . . . . . . . . . . . . . . . . . . . . . . . . . . .10
Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11
Selling Shareholders. . . . . . . . . . . . . . . . . . . . . . . . . . . .12
Description of Capital Stock. . . . . . . . . . . . . . . . . . . . . . . .15
Plan of Distribution. . . . . . . . . . . . . . . . . . . . . . . . . . . .17
Legal Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .18
Independent Accountants . . . . . . . . . . . . . . . . . . . . . . . . . .18
_______________
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"). In
accordance with the Exchange Act, the Company files reports, proxy statements
and other information with the Securities and Exchange Commission (the
"Commission"). The reports, proxy statements and other information can be
inspected and copied at the public reference facilities that the Commission
maintains at Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549, and
at the Commission's regional offices located at 7 World Trade Center, 13th
Floor, New York, New York 10048, and Northwestern Atrium Center, Suite 1400,
500 West Madison Street, Chicago, Illinois 60661. Copies of these materials
can be obtained at prescribed rates from the Public Reference Section of the
Commission at the principal offices of the Commission, 450 Fifth Street,
N.W., Washington, D.C. 20549.
The Company has filed with the Commission a registration statement on
Form S-3 (the "Registration Statement") under the Securities Act of 1933, as
amended (the "Securities Act"), with respect to the Common Stock. This
Prospectus, which constitutes a part of the Registration Statement, does not
contain all the information set forth in the Registration Statement, certain
items of which are contained in schedules and exhibits to the Registration
Statement as permitted by the rules and regulations of the Commission.
Statements made in the Prospectus concerning the contents of any documents
referred to herein are not necessarily complete. With respect to each such
document filed with the Commission as an exhibit to the Registration
Statement, reference is made to the exhibit for a more complete description,
and each such statement shall be deemed qualified in its entirety by such
reference.
2
<PAGE>
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents, which have been filed by the Company with the
Commission pursuant to the Exchange Act, are hereby incorporated by reference
in this Prospectus: (i) Annual Report on Form 10-K for the year ended
December 31, 1994, (ii) Quarterly Report on Form 10-Q for the quarter ended
March 31, 1995, (iii) Quarterly Report on Form 10-Q for the quarter ended
June 30, 1995, (iv) Quarterly Report on Form 10-Q for the quarter ended
September 30, 1995, as amended by its Form 10-Q/A No. 1 dated October 25,
1995, (v) Current Report on Form 8-K dated November 22, 1995, (vi) Current
Report on Form 8-K dated December 13, 1995 and (vii) description of the
Company's business under the caption "Business" in the Company's Registration
Statement on Form S-3 (No. 33-65329), originally filed on December 22, 1995
and as it may be amended from time to time.
All documents filed by the Company pursuant to Sections 13(a), 13(c), 14
or 15(d) of the Exchange Act subsequent to the date of this Prospectus and
prior to the termination of the Offering shall be deemed to be incorporated
by reference herein. Any statement contained in a document incorporated or
deemed to be incorporated by reference herein shall be deemed superseded or
modified for purposes of this Prospectus to the extent that a statement
contained herein (or in any other subsequently filed document which also is
incorporated by reference herein) modifies or supersedes such statement. Any
such statement so modified or superseded shall not be deemed, except as so
modified or superseded, to constitute a part of this Prospectus.
The Company will provide without charge to each person, including any
beneficial owner, to whom this Prospectus is delivered, on the written or
oral request of any such person, a copy of any or all of the documents
incorporated by reference (other than exhibits to such documents which are
not specifically incorporated by reference in such documents). Written
requests for such copies should be directed to the Company, 1845 Woodall
Rodgers Freeway, Suite 1700, Dallas, Texas 75201, Attention: L. Keith
Blackwell, General Counsel and Secretary. Telephone requests may be directed
to L. Keith Blackwell, General Counsel and Secretary of the Company at (214)
953-7700.
3
<PAGE>
CERTAIN DEFINITIONS
The following are certain defined terms used in this Prospectus:
"ACACIA" means Acacia Realty Advisors, Inc.
"ACACIA ACQUISITION" means the acquisition by the Company of the real
estate pension advisory business of Acacia Realty Advisors, Inc.
"ACC" means AMRESCO Capital Corporation, a subsidiary of the Company.
"ARMC" means, collectively, AMRESCO Residential Mortgage Corporation and
AMRESCO Residential Credit Corporation, subsidiaries of the Company.
"ASSET PORTFOLIO" means a pool or portfolio of performing, non-performing
or underperforming commercial, industrial, agricultural and/or real
estate loans.
"BEI" means BEI Holdings, Ltd.
"BEI MERGER" means the merger of Holdings with and into a subsidiary of
BEI on December 31, 1993.
"CKSRS" means CKSRS Housing Group, Ltd., a Florida limited partnership.
"COMPANY" means, unless otherwise stated in this Prospectus or unless the
context otherwise requires, the Company and each of its subsidiaries.
"CONDUIT PURCHASERS" means investment bankers and other financial
intermediaries who purchase or otherwise accumulate pools or portfolios
of loans having common features (E.G., real estate mortgages, etc.), with
the intent of securitizing such loan assets and selling them to a trust
that secures its funds by selling ownership interests in the trust to
public or private investors.
"CREDIT AGREEMENTS" means the Revolving Loan Agreement and the Warehouse
Agreements.
"DEBENTURES" means the Company's 8% Convertible Subordinated Debentures
Due 2005.
"DEBENTURE INDENTURE" means that certain Indenture dated November 27, 1995,
governing the Debentures.
"EQS" means, collectively, EQ Services, Inc. and Equitable Real Estate
Investment Management, Inc.
"EQS ACQUISITION" means the acquisition by the Company of the third-party
securitized, commercial mortgage loan Master Servicer and Special
Servicer business of EQS.
"FACE VALUE" means, with respect to any loan or Asset Portfolio, the
aggregate unpaid principal balance of a loan or loans.
"FANNIE MAE" means the Federal National Mortgage Association.
"FDIC" means the Federal Deposit Insurance Corporation.
"FREDDIE MAC" means the Federal Home Loan Mortgage Corporation.
"HOLDINGS" means AMRESCO Holdings, Inc.
"HOLLIDAY FENOGLIO" means Holliday Fenoglio, Inc., a subsidiary of the
Company.
"MASTER SERVICER" means an entity which provides administrative services
to securitized pools of mortgage-backed securities.
"NATIONSBANK OF TEXAS" means NationsBank of Texas, N.A.
"PRIMARY SERVICER" means an entity which provides various administrative
services for loans such as collecting monthly mortgage payments,
maintaining escrow accounts for the payment of ad valorem taxes and
insurance premiums on behalf of borrowers, remitting payments of
principal and interest promptly to investors in mortgages or the Master
Servicer of a pool and reporting to those investors or the Master
Servicer on financial transactions related to such mortgages.
"REVOLVING LOAN AGREEMENT" means the Revolving Loan Agreement dated as of
September 29, 1995 and as subsequently amended, among the Company,
NationsBank of Texas, as Agent, and the Banks which are parties thereto
from time to time.
"RTC" means the Resolution Trust Corporation.
"SECURITIZATION" and "SECURITIZED" mean a transaction in which loans
originated or purchased by an entity are sold to special purpose entities
organized for the purpose of issuing asset-backed securities.
"SPECIAL SERVICER" means an entity which provides asset management and
resolution services for non-performing or under-performing loans within a
pool of performing loans and/or mortgages.
"WAREHOUSE AGREEMENTS" means, collectively, (i) the $25.0 million credit
facility dated as of April 28, 1995, among ACC, the Company and
NationsBank of Texas, (ii) the credit facility dated as of August 15,
1995, between ACC and Residential Funding Corporation and (iii) the
$150.0 million credit facility dated as of November 1, 1995 and as
subsequently amended, between ARMC and Prudential Securities Realty
Funding Corporation.
4
<PAGE>
THE COMPANY
GENERAL. The Company is a leading specialty financial services
company engaged primarily in Asset Portfolio acquisition and resolution and
mortgage banking. The Asset Portfolio acquisition and resolution business
involves acquiring at a substantial discount to Face Value and managing and
resolving Asset Portfolios to maximize cash recoveries. The Company manages
and resolves Asset Portfolios acquired by the Company alone, acquired by the
Company with co-investors and owned by third-parties. The Company's mortgage
banking business involves the origination, placement and servicing of
commercial real estate mortgages. In addition, the Company has formed a
residential mortgage banking business through which the Company will purchase
and securitize portfolios of residential mortgages of borrowers who do not
qualify for conventional loans and whose borrowing needs are not being met by
traditional financial institutions. The Company also is entering the real
estate pension advisory business through the purchase of substantially all of
the advisory contracts of Acacia.
HISTORY. The Company is the product of the December 1993 merger of
two Asset Portfolio management and resolution service companies: BEI and
Holdings. Holdings was the former Asset Portfolio management and resolution
unit of NationsBank of Texas, which was created in 1988 in connection with
NationsBank Corporation's acquisition from the FDIC of certain assets and
liabilities of the collapsed First RepublicBank. BEI, a publicly-held company
that was in the real estate and asset management services businesses, began
providing asset management and resolution services to the RTC in 1990. BEI
also participated in certain non-real estate service businesses, which were
not retained after the BEI Merger. The BEI Merger created one of the largest
Asset Portfolio management and resolution service companies in the United
States. Since 1987, the Company and its predecessors have managed
approximately $30.0 billion (Face Value) of Asset Portfolios.
ASSET ACQUISITION AND RESOLUTION BUSINESS. The Company manages and
resolves Asset Portfolios acquired at a substantial discount to Face Value by
the Company alone and by the Company with co-investors. The Company also
resolves Asset Portfolios owned by third parties. Asset Portfolios generally
include secured loans of varying qualities and collateral types. The
resolution of an Asset Portfolio typically involves either (i) negotiating
with debtors a discounted payoff, which may be accomplished through a
refinancing by the obligor with a lender other than the Company or (ii)
foreclosure and sale of the collateral. Since the Company's objective is to
resolve an Asset Portfolio as quickly as practicable, the Company's policy is
to not extend credit to debtors by advancing cash or by renewing and
extending their obligations. As of September 30, 1995, the Company's
management and resolution service contracts with third-parties (including
Asset Portfolios owned by the Company with co-investors) covered Asset
Portfolios having an aggregate Face Value of $2.7 billion of which $411.3
million was represented by securitized commercial mortgage pools with respect
to which the Company is the named Special Servicer. At September 30, 1995,
the Company's total investment in Asset Portfolios was $175.8 million
compared to $70.9 million at December 31, 1994 and $48.8 million at September
30, 1994. For the nine month period ended September 30, 1995 and the fiscal
year ended December 31, 1994, $54.3 million (78%) and $139.1 million (88%)
respectively of the Company's gross revenues were attributable to its Asset
Portfolio acquisition and resolution business.
MORTGAGE BANKING BUSINESS. The Company performs a wide range of
commercial mortgage banking services, including originating, underwriting,
placing, selling and servicing of commercial real estate loans through its
Holliday Fenoglio and ACC mortgage banking units. Holliday Fenoglio was one
of the largest mortgage bankers in the United States in 1994 (based on
origination volume) and primarily serves commercial real estate developers
and owners by originating commercial real estate loans. Holliday Fenoglio
primarily targets developers and owners of higher-quality commercial and
multi-family real estate properties. Holliday Fenoglio originates prospective
borrowers through its own commission-based mortgage bankers in its offices
located in Atlanta, Boca Raton, Buffalo, Dallas, Houston, New York City and
Orlando. The loans originated by Holliday Fenoglio generally are funded by
institutional lenders, primarily insurance companies, with Holliday Fenoglio
retaining the Primary
5
<PAGE>
Servicer rights on approximately 20% of such loans. The Company believes that
Holliday Fenoglio's relationship and credibility with the institutional
lender network provide the Company a competitive advantage in the commercial
mortgage banking industry.
ACC, which originated approximately $260.7 million of commercial real
estate mortgages during the nine months ended September 30, 1995, is a
mortgage banker that originates and underwrites commercial real estate loans
that are funded primarily by Conduit Purchasers rather than by institutional
lenders such as insurance companies. ACC, therefore, makes certain
representations and warranties concerning the loans it originates. These
representations cover such matters as title to the property, lien priority,
environmental reviews and certain other matters. ACC primarily targets
originators of commercial mortgage loans for commercial real estate
properties that are suitable for sale to Conduit Purchasers accumulating
loans for securitization programs. ACC markets its services directly through
ACC's offices located in Dallas, Miami and Washington, D.C., as well as
through a network of approximately 20 independent mortgage brokers located
throughout the United States. ACC established a relationship with the 22
office commercial real estate finance unit of a major insurance company
whereby the insurance company has agreed to refer prospective borrowers to
the Company in instances where the prospective borrower does not meet the
insurer's requirements (typically borrowers for medium-quality commercial
properties).
As of September 30, 1995, the Company was the servicer for
approximately $3.1 billion of commercial mortgages of which $117.0 million
was as a Master Servicer and $3.0 billion was as a Primary Servicer. The
Company has formed a residential mortgage banking business through which the
Company will purchase and securitize portfolios of non-conforming residential
mortgages. For the nine-month period ended September 30, 1995, $14.1 million
(20.2%) of the Company's gross revenues were attributable to the Company's
mortgage banking business.
See the information under the caption "Business" in the Prospectus
contained in the Company's Registration Statement on Form S-3 (No. 33-65329),
originally filed with the Commission on December 22, 1995 and as it may be
amended from time to time, for a more complete description of the Company's
business.
The Company is a Delaware corporation. The Company's principal
executive offices and mailing address are 1845 Woodall Rodgers Freeway, Suite
1700, Dallas, Texas 75201 and its telephone number is (214) 953-7700.
6
<PAGE>
RISK FACTORS
PROSPECTIVE INVESTORS SHOULD CAREFULLY CONSIDER, AMONG OTHER THINGS, THE
FOLLOWING FACTORS IN EVALUATING THE COMPANY AND ITS BUSINESS BEFORE PURCHASING
SHARES OF THE COMMON STOCK OFFERED HEREBY.
GENERAL ECONOMIC CONDITIONS
Periods of economic slowdown or recession, rising interest rates or
declining demand for real estate may adversely affect certain segments of the
Company's business. Although such economic conditions may increase the number
of non-performing loans available for sale to or for management by the
Company, such conditions could adversely affect the resolution of Asset
Portfolios held by the Company for its own account or managed for others by
the Company, lead to a decline in prices or demand for collateral underlying
Asset Portfolios or, in the case of Asset Portfolios held for the Company's
own account, increase the cost of capital invested by the Company and the
length of time that capital is invested in a particular portfolio, thereby
negatively impacting the rate of return upon resolution of the portfolio.
Economic downturns and rising interest rates also may reduce the number of
mortgage loan originations by the Company's mortgage banking business and
thereby may adversely affect the Company's mortgage banking business.
UNCERTAIN NATURE OF THE ASSET ACQUISITION AND RESOLUTION BUSINESS
The outsourcing of the management and resolution of Asset Portfolios has
grown rapidly since the late 1980s; accordingly, the asset acquisition and
resolution business is relatively young and still evolving. This business is
affected by long-term cycles in the general economy. In addition, the Asset
Portfolios available for purchase by investors and/or management by third
party servicers such as the Company has declined since 1993. The Company
cannot predict what will be a normal annual volume of Asset Portfolios to be
sold or outsourced for management and resolution. Moreover, there cannot be
any assurance that Asset Portfolio purchasers/owners for whom the Company
provides Asset Portfolio management services will not build their own
management and resolution staffs and reduce or eliminate their outsourcing of
these services. As a result of these factors, it is difficult to predict the
long-term future of this business.
STRATEGIC SHIFT IN BUSINESS LINES
In early 1994, the Company made the strategic decision to diversify its
business lines and to reduce the Company's dependence on asset management and
resolution contracts with governmental agencies and certain other entities.
The Company has substantially increased its investments in Asset Portfolios.
The Company also pursues private sector Asset Portfolio management contracts,
generally through co-investing in Asset Portfolios. Since 1993, the Company
has also entered the commercial and residential mortgage banking businesses
and has purchased a pension advisory business.
As a result, the Company must simultaneously manage (i) a significant
change in its customer mix, (ii) the investment of the Company's own capital
in Asset Portfolios, and (iii) the development of new business lines in which
the Company has not previously participated. All of these activities will
require the investment of additional capital and the significant involvement
of senior management to achieve a successful outcome. There is no assurance
that the Company will successfully execute this strategic transition.
7
<PAGE>
FINANCIAL LEVERAGE AND NEED FOR ADDITIONAL FINANCING
The Company's ability to execute its business strategy depends to a
significant degree on its ability to obtain additional indebtedness and
equity capital. Factors which could affect the Company's access to the
capital markets, or the costs of such capital, include changes in interest
rates, general economic conditions, and the perception in the capital markets
of the Company's business, results of operations, leverage, financial
condition and business prospects.
The Company has substantial indebtedness and, as a result, significant
debt service obligations. The degree of the Company's leverage could have
important consequences to purchasers of the Common Stock, including: (i)
limiting the Company's ability to obtain additional financing to fund future
working capital requirements, Asset Portfolio investments, capital
expenditures, acquisitions or other general corporate requirements, (ii)
requiring a significant portion of the Company's cash flow from operations to
be dedicated to debt service requirements, thereby reducing the funds
available for operations and future business opportunities, and (iii)
increasing the Company's vulnerability to adverse economic and industry
conditions. In addition, since certain of the Company's borrowings, including
borrowings under the Revolving Loan Agreement, will be at variable rates of
interest, the Company will be vulnerable to increases in interest rates. Each
of these factors is to a large extent subject to economic, financial,
competitive and other factors beyond the Company's control.
The Credit Agreements contain numerous financial and operating covenants
that will limit the discretion of the Company's management with respect to
certain business matters. These covenants will place significant restrictions
on, among other things, the ability of the Company to incur additional
indebtedness, to create liens or other encumbrances, to make certain payments
and investments, and to sell or otherwise dispose of assets and merge or
consolidate with other entities.
DEPENDENCE ON SECURITIZATION PROGRAM
The Company likely will become more dependent upon its ability to pool
and sell loans in the secondary market in order to generate cash proceeds for
new originations and purchases. Accordingly, adverse changes in the secondary
mortgage market could impair the Company's ability to originate, purchase and
sell mortgage loans on a favorable or timely basis. Any such impairment could
have a material adverse effect upon the Company's business and results of
operations. In addition, in order to gain access to the secondary market, the
Company may rely on monoline insurance companies to provide, in exchange for
premiums, a guarantee on outstanding senior interests in the related
securitization trusts to enable it to obtain a "AAA/Aaa" rating for such
interests. Any substantial reductions in the size or availability of the
secondary market for the Company's loans, or the unwillingness of monoline
insurance companies to guarantee the senior interests in the Company's loan
pools, could have a material adverse effect on the Company's financial
position and results of operations.
RISKS OF HEDGING TRANSACTIONS
The Company has in the past and may in the future enter into interest
rate or foreign currency financial instruments used for hedging purposes.
While intended to reduce the effects of volatility in interest rate or
foreign currency price movements, such transactions could cause the Company
to recognize losses depending on the terms of the instrument and the interest
rate or foreign currency price movement.
8
<PAGE>
COMPETITION
The Asset Portfolio management and other financial services industries
in which the Company operates are highly competitive. Some of the Company's
principal competitors in certain business lines are substantially larger and
better capitalized than the Company. Because of these resources, these
companies may be better able than the Company to obtain new customers, to
acquire Asset Portfolios, to pursue new business opportunities, or to survive
periods of industry consolidation.
The Company believes that its ability to acquire Asset Portfolios for
its own account will be important to its future growth. Acquisitions of Asset
Portfolios are often based on competitive bidding, where there are dangers of
bidding too low (which generates no business), as well as of bidding too high
(which could win the portfolio at an economically unattractive price). Asset
Portfolio acquisitions also require significant capital. There currently is
substantial competition for Asset Portfolio acquisitions and such competition
could increase in the future.
INFLUENCE OF CERTAIN SHAREHOLDERS
Two shareholders of the Company, CGW Southeast Partners I, L.P. and CGW
Southeast Partners II, L.P. (collectively, "CGW"), own, as of the date of
this Prospectus, in the aggregate approximately 26% of the outstanding Common
Stock. In addition, CGW is a party to a voting agreement with two other
persons (which persons hold, as of the date of this Prospectus, an aggregate
of approximately 2% of the outstanding Common Stock) whereby the parties
thereto have agreed to vote their shares of Common Stock for eight designees
nominated by the parties pursuant to the terms of such voting agreement. As a
result of the above-described ownership and relationships, CGW will be able
to continue to exercise significant influence over the affairs of the Company.
VOLATILITY OF MARKET PRICE FOR COMMON STOCK
From time to time after the Offering, there may be significant
volatility in the market price for the Common Stock. Quarterly operating
results of the Company, changes in conditions in the economy or the financial
services industries, or other developments affecting the Company could cause
the market price of the Common Stock to fluctuate substantially.
ANTI-TAKEOVER CONSIDERATIONS
The Company's Amended and Restated Certificate of Incorporation and
Amended and Restated Bylaws include a number of provisions that may have the
effect of encouraging persons considering unsolicited tender offers or other
unilateral takeover proposals to negotiate with the Company's Board of
Directors rather than pursue non-negotiated takeover attempts. These
provisions include a staggered Board of Directors, authorized "blank check"
preferred stock, supermajority voting requirements on certain matters and
prohibitions against certain business combinations. The Indenture governing
the Debentures requires the Company to repurchase all outstanding Debentures
in the event of certain change of control transactions. These anti-takeover
provisions could have the effect of discouraging or making more difficult a
merger, tender offer, other business combination or proxy contest, even if
such event would be favorable to the interests of the shareholders.
9
<PAGE>
RECENT DEVELOPMENTS
ACQUISITION OF CKSRS. Effective June 30, 1995, the Company acquired for
approximately $1.3 million substantially all of the assets of CKSRS, a
Miami-based commercial mortgage banking limited partnership specializing in
the origination, sale and servicing of mortgages on multi-family properties
in Florida.
ACQUISITION OF EQS. On October 27, 1995, the Company completed the
acquisition of the third-party securitized, commercial mortgage loan Master
Servicer and Special Servicer businesses of EQS. The purchase price was
approximately $16.9 million. At September 30, 1995, the EQS businesses
acquired by the Company had contracts to service approximately $6.0 billion
of securitized commercial mortgage loans. The Company believes that it is now
one of the largest servicers of securitized commercial mortgages in the
United States.
ACQUISITION OF ACACIA. Effective November 20, 1995, the Company
completed the purchase for approximately $4.5 million of substantially all of
the pension fund advisory contracts and certain other assets of Acacia.
Acacia provides real estate investment advisory services to pension and other
institutional investors in respect of investments in office, industrial and
distressed real estate properties. Through these contracts, to date
approximately 35 clients have invested over $970.0 million in commercial real
estate representing approximately 63 properties with over 13.5 million square
feet of commercial space and approximately 670 apartment units. Acacia is
based in Boston and has approximately 18 employees.
CONVERTIBLE SUBORDINATED DEBENTURE OFFERING. On November 27, 1995, the
Company completed an offering conducted in Europe, pursuant to Regulation S
promulgated under the Securities Act, of $45.0 million aggregate principal
amount of Debentures. The net proceeds (aggregating approximately $43.0
million) from such offering were used to repay borrowings under the Revolving
Loan Agreement. The Debentures bear interest at 8% per annum and will mature
on December 15, 2005. There is no sinking fund or amortization of principal
prior to maturity. The Debentures are not redeemable prior to December 15,
1996. The Debentures are convertible at the option of the holders into shares
of Common Stock at a conversion price of $12.50 per share (equivalent to a
conversion rate of 80 shares of Common Stock per $1,000 principal amount of
Debentures), subject to adjustment in certain events. The Debentures are
unsecured obligations of the Company and subordinated to all existing and
future Senior Indebtedness (as defined in the Debenture Indenture) of the
Company. The Debentures contain certain rights of the holder to require the
repurchase of the Debentures (i) upon a Fundamental Change (as defined in the
Debenture Indenture) and (ii) if the Company is not able to maintain a Net
Worth (as defined in the Debenture Indenture) of approximately $141.0 million
(which includes the net proceeds to the Company from the Common Stock
offering described below) plus the net proceeds to the Company from any other
offering of Common Stock by the Company subsequent to the date hereof. There
are certain other covenants restricting dividends on and redemptions of
capital stock.
The Debentures have not been registered under the Securities Act and may
not be offered or sold in the United States without registration under the
Securities Act or absent an applicable exemption from the registration
requirements.
10
<PAGE>
COMMON STOCK OFFERING. On December 13, 1995, the Company completed a
registered public offering of 2,000,000 shares of Common Stock. Subsequent
thereto, the Company sold an additional 300,000 shares of Common Stock upon
exercise of the Underwriters' over-allotment option. The net proceeds from
such offering, including the over-allotment shares, aggregated approximately
$25.1 million and were used to repay borrowings under the Revolving Loan
Agreement. The price to the public was $11.75 per share and the price to the
Company per share was $11.10 (after an underwriting discount of $.65 per
share). In addition to the offering of shares of Common Stock by the Company,
two institutional shareholders sold an aggregate of 2,300,000 shares of
Common Stock (including 300,000 shares sold pursuant to the exercise of the
underwriters' over-allotment option). The Company did not receive any
proceeds from the sale of these shares.
SENIOR SUBORDINATED NOTES OFFERING. On December 22, 1995, the Company
filed with the Commission a registration statement relating to the proposed
issuance and sale by the Company of up to $57,500,000 in aggregate principal
amount of Senior Subordinated Notes due 2003 (the "Notes"). The net proceeds
from the sale of the Notes will be used to reduce the Company's outstanding
borrowings under the Revolving Loan Agreement. The Notes will bear interest
at a rate that has not yet been determined and will mature in 2003. There is
no sinking fund or amortization of principal prior to maturity. The Notes may
not be redeemed prior to 2001. Thereafter, the Notes may be redeemed in whole
or in part at any time at the option of the Company, at par plus accrued
interest to the date of redemption. The Notes will be unsecured obligations
of the Company and will be subordinated to all existing and future Senior
Indebtedness (as defined in the indenture governing the Notes). The indenture
under which the Notes will be issued will contain certain covenants that,
among other things, will (i) limit the Company's ability to incur
Indebtedness for Money Borrowed (as defined in such indenture), (ii) limit
the payment of dividends or distributions to holders of the Company's equity
securities, (iii) limit consolidations, mergers and transfers of all or
substantially all of the Company's assets and (iv) require the Company to
repurchase, at the request of the holder, the Notes upon the occurrence of a
Repurchase Event ("Repurchase Event" is generally defined as the occurrence
of any event requiring that the Company repurchase, or make an offer to
repurchase, any Subordinated Indebtedness (as defined in the indenture),
whether now outstanding or issued in the future, other than the Notes,
including, without limitation, the repurchase options with respect to the
Debentures). All of these covenants, however, will be subject to a number of
important qualifications. There can be no assurance that the proposed
offering of the Notes will be consummated.
USE OF PROCEEDS
The Company will not receive any proceeds from the sale of Common Stock
by the Selling Shareholders.
11
<PAGE>
SELLING SHAREHOLDERS
This Prospectus covers offers from time to time by each Selling
Shareholder (after such person becomes a holder of Common Stock) of the
Common Stock to be owned by such person. The Selling Shareholders will hold
shares of Common Stock issued or issuable upon the conversion of the
Debentures. The Debentures were issued in a private placement conducted
outside of the United States pursuant to Regulation S promulgated pursuant to
the Securities Act and consummated on November 27, 1995. The Debentures are
convertible at any time through the close of business on December 15, 2005,
into shares of Common Stock at a price of $12.50 per share, subject to
adjustment under certain circumstances. The Debentures are currently
convertible into an aggregate of 3,600,000 shares of Common Stock. The
registration of the shares of Common Stock offered for resale hereby is
pursuant to a Registration Rights Agreement dated November 27, 1995, entered
into in connection with the original issuance of the Debentures (the
"Registration Rights Agreement").
The following table lists the name of each Selling Shareholder, the
number of shares of Common Stock owned by each Selling Shareholder before
this Offering, the number of shares of Common Stock that may be offered by
each Selling Shareholder pursuant to this Prospectus and the number of shares
of Common Stock to be owned by each Selling Shareholder upon completion of
the Offering if all shares registered hereby are sold. None of the Selling
Shareholders has held any position or office or had any other material
relationship with the Company or any of its predecessors or affiliates in the
last three years. The information below is as of the date of this Prospectus
and has been furnished with respect to the respective Selling Shareholders by
the Trustee of the Debentures, acting as the Security Registrar thereof.
12
<PAGE>
<TABLE>
<CAPTION>
NUMBER OF SHARES NUMBER OF SHARES NUMBER OF SHARES
NAME OF SHARES OWNED BEING REGISTERED OWNED AFTER
SELLING SHAREHOLDERS BEFORE THIS OFFERING FOR RESALE THIS OFFERING(1)
- ---------------------------- -------------------- ---------------- ----------------
<S> <C> <C> <C>
CEDEL A/C 16543 CANTRADE 24,000 24,000 - 0 -
PRIVATBANK ZUERICH
CUDD & CO AS CUSTODIAN FOR 12,000 12,000 - 0 -
GOVETT AMERICAN GROWTH FUND
CUDD & CO AS CUSTODIAN FOR 36,000 36,000 - 0 -
GOVETT GLOBAL SMALLER COMPANIES
INVESTMENT TRUST PLC
CUDD & CO AS CUSTODIAN FOR GOVETT 100,000 100,000 - 0 -
AMERICAN SMALLER COMPANIES TRUST
CUDD & CO AS CUSTODIAN FOR GOVETT 12,000 12,000 - 0 -
GLOBAL STOCK INVESTMENTS A/C U.S.
SMALLER COMPANIES FUND
PUDDLE DOCK NOMINEES LTD. FOR T.Z. 80,000 80,000 - 0 -
SMALLER COMPANIES INVESTMENT TRUST
PLC
HARRIS TRUST & SAVINGS BANK F/B/O 160,000 160,000 - 0 -
DERBY TRUST PLC
CHASE NOMINEES FOR ROYAL LIFE 320,000 320,000 - 0 -
INSURANCE LTD
BOOTH & CO AS CUSTODIAN FOR THE 160,000 160,000 - 0 -
EQUITABLE LIFE ASSURANCE SOCIETY
CUDD & CO AS CUSTODIAN FOR CHASE 40,000 40,000 - 0 -
MANHATTAN TRUSTEES LTD AS TRUSTEE
FOR THE PROLIFIC AMERICAN
OPPORTUNITIES UNIT TRUST
CUDD & CO AS CUSTODIAN FOR CHASE 24,000 24,000 - 0 -
MANHATTAN TRUSTEES LTD AS TRUSTEE
FOR THE PROLIFIC AMERICAN INCOME
UNIT TRUST
BROWN BROTHERS HARRIMAN AS CUSTODIAN 32,000 32,000 - 0 -
FOR RBS SECURITIES SERVICES
(IRELAND) LTD AS TRUSTEE FOR THE
PROLIFIC INTERNATIONAL FUND PLC
HARE & CO F/B/O NIPPON CREDIT 80,000 80,000 - 0 -
GARTMORE
MIDLAND BANK TRUST COMPANY LTD 72,000 72,000 - 0 -
GERLACH & CO F/B/O CITICORP TRUSTEE 384,000 384,000 - 0 -
COMPANY LIMITED A/C GARTMORE
AMERICAN EMERGING COMPANIES FUND
MEINL BANK AG 28,800 28,800 - 0 -
EGGAR AND CO FS97797 F/B/O 7,200 7,200 - 0 -
GARTMORE CAPITAL STRATEGY U.S.
SMALLER COMPANIES FUND
VEREINS UND WESTBANK 240,000 240,000 - 0 -
</TABLE>
13
<PAGE>
<TABLE>
<CAPTION>
NUMBER OF SHARES NUMBER OF SHARES NUMBER OF SHARES
NAME OF SHARES OWNED BEING REGISTERED OWNED AFTER
SELLING SHAREHOLDERS BEFORE THIS OFFERING FOR RESALE THIS OFFERING(1)
- ---------------------------- -------------------- ---------------- ----------------
<S> <C> <C> <C>
BANQUE INTERNATIONAL A 40,000 40,000 - 0 -
LUXENBOURG INTERNATIONAL
CONVERTIBLE EXPERT FUND
RUSH & CO F/B/O CREDIT SUISSE 200,000 200,000 - 0 -
BROWN BROTHERS HARRIMAN AS 126,400 126,400 - 0 -
NOMINEE FOR BANK JULIUS BAER &
CO FUND LTD
EXPERTA TREUHAND AG 125,600 125,600 - 0 -
DARIER HENTSCH & CIE 160,000 160,000 - 0 -
UNION BANK OF SWITZERLAND 120,000 120,000 - 0 -
BOYD & COMPANY AS NOMINEE FOR 40,000 40,000 - 0 -
J. HENRY SCHRODER BANK AG
PICTET & CIE 48,800 48,800 - 0 -
WASA LIFE INSURANCE 160,000 160,000 - 0 -
VERITAS SG INVESTMENT TRUST GMBH 320,000 320,000 - 0 -
FERRI 32,000 32,000 - 0 -
EGGAR AND CO F/B/O COURCOUX-BOUVET 112,000 112,000 - 0 -
STE DE BOURSE FERRI SA 80,000 80,000 - 0 -
CHOLET-DUPONT-GESTION 32,000 32,000 - 0 -
HANDELSBANKEN LIV 80,000 80,000 - 0 -
BANQUE OBC- ODIER BUNGENER 40,000 40,000 - 0 -
COURVOISIER
RUSH & CO F/B/O CREDIT SUISSE 71,200 71,200 - 0 -
--------- --------- ------
TOTAL 3,600,000 3,600,000 - 0 -
--------- --------- ------
--------- --------- ------
</TABLE>
___________
(1) Assumes all shares held by such Selling Shareholder will be offered and
sold.
14
<PAGE>
DESCRIPTION OF CAPITAL STOCK
The Company is authorized to issue 50,000,000 shares of Common Stock,
par value $0.05 per share, and 5,000,000 shares of preferred stock (the
"Preferred Stock"), par value $1.00 per share. As of November 30, 1995, the
Company had issued and outstanding 24,364,992 shares of Common Stock and no
shares of Preferred Stock. As of such date, there were approximately 3,100
holders of record of the outstanding shares of Common Stock.
The following summary of the Company's Common Stock and Preferred
Stock is qualified in its entirety by reference to the Company's Amended and
Restated Certificate of Incorporation (the "Certificate of Incorporation"),
its Amended and Restated Bylaws (the "Bylaws"), and the Delaware General
Corporation Law, as amended (the "DGCL").
COMMON STOCK
Subject to such preferential rights as may be granted by the Board of
Directors in connection with any issuances of Preferred Stock, holders of
shares of Common Stock are entitled to receive such dividends as may be
declared by the Board of Directors in its discretion from funds legally
available therefor. Upon the liquidation, dissolution or winding up of the
Company, after payment of creditors, the remaining net assets of the Company
will be distributed pro rata to the holders of Common Stock, subject to any
liquidation preference of the holders of Preferred Stock. There are no
preemptive rights, conversion rights, or redemption or sinking fund
provisions with respect to the shares of Common Stock. All of the outstanding
shares of Common Stock are duly and validly authorized and issued, fully paid
and non-assessable.
Holders of Common Stock are entitled to one vote per share of Common
Stock held of record on all such matters submitted to a vote of the
shareholders. Holders of the shares of Common Stock do not have cumulative
voting rights. As a result, the holders of a majority of the outstanding
shares of Common Stock voting for the election of directors can elect all the
directors, and, in such event, the holders of the remaining shares of Common
Stock will not be able to elect any persons to the Board of Directors.
PREFERRED STOCK
The Board of Directors may, without approval of the Company's
shareholders, from time to time, authorize the issuance of Preferred Stock in
one or more series for such consideration and, within certain limits, with
such relative rights, preferences and limitations as the Board of Directors
may determine. The relative rights, preferences and limitations that the
Board of Directors has the authority to determine as to any such series of
Preferred Stock include, among other things, dividend rates, voting rights,
conversion rights, redemption rights and liquidation preferences. Because the
Board of Directors has the power to establish the relative rights,
preferences and limitations of each series of Preferred Stock, it may afford
to the holders of any such series preferences and rights senior to the rights
of the holders of shares of Common Stock. Although the Board of Directors has
no intention at the present time of doing so, it could cause the issuance of
Preferred Stock that could discourage an acquisition attempt or other
transaction that some, or a majority of, the shareholders might believe to be
in their best interest or in which the shareholders might receive a premium
for their shares of Common Stock over the market price of such shares.
DELAWARE LAW AND CERTAIN CORPORATE PROVISIONS
The Company is subject to the provisions of Section 203 of the DGCL.
In general, this statute prohibits a publicly-held Delaware corporation from
engaging, under certain circumstances, in a "business combination" with an
"interested shareholder" for a period of three years after the date of the
transaction in which the person becomes an interested shareholder, unless
either (i) prior to the
15
<PAGE>
date at which the shareholder became an interested shareholder the Board of
Directors approved either the business combination or the transaction in
which the person becomes an interested shareholder, (ii) the shareholder
acquires more than 85% of the outstanding voting stock of the corporation
(excluding shares held by directors who are officers or held in certain
employee stock plans) upon consummation of the transaction in which the
shareholder becomes an interested shareholder or (iii) the business
combination is approved by the Board of Directors and by two-thirds of the
outstanding voting stock of the corporation (excluding shares held by the
interested shareholder) at a meeting of the shareholders (and not by written
consent) held on or subsequent to the date on which the person became an
"interested shareholder" of the business combination. An "interested
shareholder" is a person who, together with affiliates and associates, owns
(or is an affiliate or associate of the corporation and, together with
affiliates and associates, at any time within the prior three years did own)
15% or more of the corporation's voting stock. Section 203 defines a
"business combination" to include, without limitation, mergers,
consolidations, stock sales and asset based transactions and other
transactions resulting in a financial benefit to the interested shareholder.
The Company's Certificate of Incorporation and Bylaws contain a number
of provisions relating to corporate governance and to the rights of
shareholders. Certain of these provisions may be deemed to have a potential
"anti-takeover" effect in that such provisions may delay, defer or prevent a
change of control of the Company. These provisions include (i) the
classification of the Board of Directors into three classes, each class
serving for staggered three-year terms; (ii) the authority of the Board of
Directors to determine the size of the Board of Directors, subject to certain
minimums and maximums; (iii) the authority of certain members of the Board of
Directors to fill vacancies on the Board of Directors; (iv) a requirement
that special meetings of shareholders may be called only by the Board of
Directors, the Chairman of the Board or holders of at least one-tenth of all
the shares entitled to vote at the meeting; (v) the elimination of
shareholder action by written consent; (vi) the authority of the Board of
Directors to issue series of Preferred Stock with such voting rights and
other powers as the Board of Directors may determine; (vii) the requirement
that the Article in the Certificate of Incorporation creating the staggered
board may only be amended by the vote of at least 66 2/3% of the voting
securities of the Company; (viii) the prohibition on amending or rescinding,
before December 31, 1996, the Article in the Certificate of Incorporation
related to the filling of vacancies on the Board of Directors; and (ix) a
requirement that any business combination between the Company and a
beneficial owner of more that five percent of any class of an equity security
of the Company must be approved by the holders of a majority of the Company's
securities, excluding those securities held by such beneficial owner, voted
at a meeting called for the purpose of approving such business combination.
INDEMNIFICATION AND LIMITED LIABILITY
The Company's Certificate of Incorporation and Bylaws require the
Company to indemnify the directors and officers of the Company to the fullest
extent permitted by law. In addition, as permitted by the DGCL, the Company's
Certificate of Incorporation and Bylaws provide that no director of the
Company will be personally liable to the Company or its shareholders for
monetary damages for such director's breach of duty as a director. This
limitation of liability does not relieve directors from liability for (i) any
breach of the director's duty of loyalty to the Company or its shareholders,
(ii) acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law, (iii) any liability under Section
174 of the DGCL for unlawful distributions, or (iv) any transaction from
which the director derived an improper personal benefit. This provision of
the Certificate of Incorporation will limit the remedies available to a
shareholder who is dissatisfied with a decision of the Board of Directors
protected by this provision, and such shareholder's only remedy in that
circumstance may be to bring a suit to prevent the action of the Board of
Directors. In many situations, this remedy may not be effective, E.G., when
shareholders are not aware of a transaction or an event prior to action of
the Board of Directors in respect of such transaction or event.
16
<PAGE>
Subject to certain limitations, the Company's executive officers and
directors are insured against losses arising from claims made against them
for wrongful acts which they may become obligated to pay or for which the
Company may be required to indemnify them.
REGISTRATION RIGHTS
The Company has entered into an agreement granting registration rights
(the "Registration Rights Agreement") with certain holders of Common Stock
including the Selling Shareholders and Mr. James P. Cotton, Jr. and Mr.
Gerald E. Eickhoff (both of whom are directors of the Company). Pursuant to
the Registration Rights Agreement, these holders may exercise demand or
"piggyback" registration rights with respect to shares of Common Stock held
by them. The Company is obligated to register stock on only two occasions
pursuant to the demand registration rights. The Registration Rights Agreement
has a term of three years for demand registration rights and five years for
"piggyback" registration rights. These registration rights are subject to
certain conditions and limitations, including the right of underwriters to
restrict the number of shares offered in a registration.
OTHER MATTERS
The Common Stock is listed on Nasdaq National Market under the symbol
"AMMB." SunTrust Bank, Atlanta, Georgia, is the transfer agent and registrar
for the Common Stock.
PLAN OF DISTRIBUTION
The shares of Common Stock covered hereby may be offered and sold from
time to time by the Selling Shareholders. The Selling Shareholders will act
independently of the Company in making decisions with respect to the timing,
manner and size of each sale. Such sales may be made in the over-the-counter
market or otherwise, at market prices prevailing at the time of the sale, at
prices related to the then prevailing market price or in negotiated
transactions, including pursuant to an underwritten offering or pursuant to
one or more of the following methods: (i) purchases by a broker-dealer as
principal and resale by such broker or dealer for its account pursuant to
this Prospectus; (ii) ordinary brokerage transactions and transactions in
which a broker solicits purchasers; and (iii) block trades in which a
broker-dealer so engaged will attempt to sell the shares as agent but may
take a position and resell a portion of the block as principal to facilitate
the transaction. In effecting sales, broker-dealers engaged by the Selling
Shareholders may arrange for other broker-dealers to participate.
Broker-dealers may receive commissions or discounts from the Selling
Shareholders in amounts to be negotiated immediately prior to the sale.
In connection with the sale of shares of Common Stock covered hereby,
underwriters or agents may receive compensation from the Selling Shareholders
or from purchasers of the shares of Common Stock covered hereby for whom they
may act as agents, in the form of discounts, concessions or commissions.
Underwriters may sell shares of Common Stock to or through dealers and such
dealers may receive compensation in the form of discounts, concessions or
commissions from the underwriters and/or commissions from the purchasers for
whom they act as agents. Underwriters, dealers and agents that participate in
the distribution of shares of Common Stock covered hereby may be deemed to be
underwriters, and any discounts or commissions received by them from the
selling Shareholders and any profit on the resale of shares of Common Stock
by them may be deemed to be underwriting discounts and commissions under the
Securities Act.
The Registration Rights Agreement provides that the Company will
indemnify the Selling Shareholders against certain liabilities, including
liabilities under the Securities Act.
17
<PAGE>
This Offering will terminate on the earlier of (i) the date on which
all shares offered hereby have been sold by the Selling Shareholders and (ii)
November 27, 1998.
LEGAL MATTERS
The validity of the shares of Common Stock offered hereby will be
passed upon for the Company by L. Keith Blackwell, General Counsel of the
Company.
INDEPENDENT ACCOUNTANTS
The consolidated balance sheets of the Company as of December 31, 1993
and 1994, and the related statements of income, shareholders' equity and cash
flows for the period from November 1, 1992 through December 31, 1992 and the
years ended December 31, 1993 and 1994 and the combined statements of income
and cash flows of Holdings (predecessor of the Company) for the period
January 1, 1992 through October 31, 1992 have been audited by Deloitte &
Touche LLP, independent accountants, as stated in their reports incorporated
by reference herein.
18
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
<TABLE>
<S> <C>
Securities and Exchange Commission Registration Fee ........................ $15,983
Nasdaq National Market Listing Fee ......................................... 17,500
Printing Expenses .......................................................... 100
Accounting Fees and Expenses ............................................... 2,000
Legal Fees and Expenses (including fees of Selling Shareholders' counsel) .. 10,000
Fees of Transfer Agent and Registrar ....................................... 100
Miscellaneous Expenses ..................................................... 2,317
-------
Total .................................................................... $48,000
-------
-------
</TABLE>
All of the above expenses except the Securities and Exchange
Commission registration fee and the Nasdaq National Market listing fee are
estimated. All of such expenses will be borne by the Company.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Company's Amended and Restated Certificate of Incorporation (the
"Certificate") and the Company's Amended and Restated Bylaws (the "Bylaws")
provide that the Company shall indemnify, to the full extent permitted by
law, any person against liabilities arising from their service as directors,
officers, employees or agents of the Company. Section 145 of the DGCL
empowers a corporation to indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative
(other than an action by or in the right of the corporation) by reason of the
fact that he is or was a director, officer, employee or agent of the
corporation or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise, against expenses (including
attorney's fees), judgments, fines and amounts paid in settlement actually
and reasonably incurred by him in connection with such action, suit or
proceeding if he acted in good faith and in a manner he reasonably believed
to be in, or not opposed to, the best interests of the corporation, and, with
respect to any criminal action or proceeding, had no reasonable cause to
believe his conduct was unlawful.
Section 145 also empowers a corporation to indemnify any person who
was or is a party or is threatened to be made a party to any threatened,
pending or completed action or suit by or in the right of the corporation to
procure a judgment in its favor by reason of the fact that such person acted
in any of the capacities set forth above, against expenses (including
attorney's fees) actually and reasonably incurred by him in connection with
the defense or settlement of such action or suit if he acted under similar
standards, except that no indemnification may be made in respect of any
claim, issue or matter as to which such person shall have been adjudged to be
liable to the corporation unless, and only to the extent that, the Court of
Chancery or the court in which such action was brought shall determine that
despite the adjudication of liability such person is fairly and reasonably
entitled to indemnify for such expenses which the court shall deem proper.
Section 145 further provides that indemnification provided for by
Section 145 shall not be deemed exclusive of any other rights to which the
indemnified party may be entitled, and that the corporation is empowered to
purchase and maintain insurance on behalf of a director or officer of the
corporation against any liability asserted against him and incurred by him in
any such capacity, or arising out of his status as such, whether or not the
corporation would have the power to indemnify him against such liabilities
under Section 145.
II-1
<PAGE>
The Certificate and the Bylaws provide that no director of the Company
shall be personally liable to the Company or its shareholders for monetary
damages for breach of fiduciary duty as a director, except for liability (i)
for any breach of the director's duty of loyalty to the Company or its
shareholders, (ii) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (iii) under Section 174
of the DGCL or (iv) for any transaction from which the director derived an
improper personal benefit. Any repeal or modification of this provision
related to director's liability shall not adversely affect any right or
protection of a director of the Company existing immediately prior to such
repeal or modification. Further, if the DGCL shall be repealed or modified,
the elimination of liability of a director provided in the Certificate and
the Bylaws shall be to the fullest extent permitted by the DGCL as so
amended.
Pursuant to Registration Rights Agreements with certain shareholders
of the Company, the Company has agreed to indemnify such shareholders
(including the Selling Shareholders) against certain liabilities, including
liabilities under the Securities Act or otherwise. For the undertaking with
respect to indemnification, see Item 17 herein.
ITEM 16. EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT NO. EXHIBIT
- ----------- -------
<S> <C>
4.1 Restated Certificate of Incorporation, as amended, filed as
Exhibit 3(i) to the Company's Form 10-Q for the quarter ended
September 30, 1995, as amended by Form 10-Q/A No. 1 dated
October 25, 1995 (the "September 1995 10-Q"), which exhibit is
incorporated herein by reference.
4.2 Amended and Restated Bylaws as of May 23, 1994, filed as
Exhibit 3(f) to the Company's Annual Report on Form 10-K for the
fiscal year ended December 31, 1995, which exhibit is
incorporated herein by reference.
4.3 Revolving Loan Agreement, dated as of September 29, 1995, among
the Company, certain subsidiaries of the Company, NationsBank of
Texas, N.A. as Agent, and the Banks named therein, filed as
Exhibit 10(b) to the Company's September 1995 10-Q, which exhibit
is incorporated herein by reference.
4.4 First Amendment to Credit Agreement, dated as of November 21,
1995, among the Company and NationsBank of Texas, N.A., as
agent, and the Banks named therein, and consented to by certain
of the Company's subsidiaries, filed as Exhibit 4.2 to the
Company's Registration Statement on Form S-3 (No. 33-65329),
which exhibit is incorporated herein be reference.
4.5 Specimen Common Stock Certificate, filed as Exhibit 4.4 to the
Company's Registration Statement on Form S-3 (No. 33-63683),
which exhibit is incorporated herein by reference.
4.6 Indenture, dated as of November 27, 1995, between the Company
and First Interstate Bank of Texas, National Association in
respect of the Company's 8% Convertible Subordinated Debentures
due 2005, filed as Exhibit 4.5 to the Company's Registration
Statement on Form S-3 (No. 33-63683), which exhibit is
incorporated herein by reference.
4.7* Registration Rights Agreement, dated as of November 27, 1995, by
and among the Company and the Agents named therein on behalf of
the purchasers of the Company's 8% Convertible Subordinated
Debentures Due 2005.
5.1* Opinion of L. Keith Blackwell, General Counsel of the Company, as
to the validity of Common Stock to be offered.
23.1* Consent of L. Keith Blackwell, contained in the opinion filed as
Exhibit 5.1.
23.2* Consent of Deloitte & Touche LLP.
24.1* Power of Attorney of the Directors and certain Executive Officers
of the Company.
</TABLE>
___________________
* Filed herewith.
II-2
<PAGE>
ITEM 17. UNDERTAKINGS
The undersigned registrant hereby undertakes:
(1) to file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) to include any prospectus required by Section 10(a)(3)
of the Securities Act of 1933;
(ii) to reflect in the prospectus any facts or events arising
after the effective date of the registration statement
(or the most recent post-effective amendment thereof)
which, individually or in the aggregate, represent a
fundamental change in the information set forth in the
registration statement;
(iii) to include any material information with respect to the
plan of distribution not previously disclosed in the
registration statement or any material change to such
information in the registration statement;
PROVIDED, HOWEVER, that paragraphs (1)(i) and (1)(ii) do not apply if
the information required to be included in a post-effective amendment by
those paragraphs is contained in periodic reports filed by the registrant
pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of
1934 that are incorporated by reference in this registration statement.
(2) that, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to
be a new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof; and
(3) to remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
The undersigned Registrant hereby undertakes that, for the purposes of
determining any liability under the Securities Act of 1933, each filing of
the Registrant's annual report pursuant to Section 13(a) or Section 15(d) of
the Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in this
Registration Statement shall be deemed to be a new Registration Statement
relating to the securities offered herein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the Registrant pursuant to the foregoing provisions,
or otherwise, the Registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the Securities Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities (other
than the payment by the Registrant of expenses incurred or paid by a
director, officer or controlling person of the Registrant in the successful
defense of any action, suit or proceeding) is asserted by such director,
officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act and will be governed
by the final adjudication of such issue.
II-3
<PAGE>
The undersigned Registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities
Act of 1933, the information omitted from the form of Prospectus filed as
part of this Registration Statement in reliance upon Rule 430A and contained
in a form of Prospectus filed by the Registrant pursuant to Rule 424(b)(1) or
(4) or 497(h) under the Securities Act shall be deemed to be part of this
Registration Statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the
Securities Act of 1933, each post-effective amendment that contains a form of
Prospectus shall be deemed to be a new Registration Statement relating to the
securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
II-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-3 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Dallas, State of Texas, on the 11th
day of January, 1996.
AMRESCO, INC.
By: /s/ L. KEITH BLACKWELL
--------------------------------
L. Keith Blackwell
GENERAL COUNSEL AND SECRETARY
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the 11th day of January, 1996:
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<S> <C>
ROBERT H. LUTZ, JR.* Chairman of the Board and
- -------------------------------- Chief Executive Officer
Robert H. Lutz, Jr.
ROBERT L. ADAIR III* Director, President and
- -------------------------------- Chief Operating Officer
Robert L. Adair III
BARRY L. EDWARDS* Executive Vice President and
- ------------------------------- Chief Financial Officer
Barry L. Edwards (Principal Financial Officer)
JAMES P. COTTON, JR.*
- ------------------------------- Director
James P. Cotton, Jr.
RICHARD L. CRAVEY*
- ------------------------------- Director
Richard L. Cravey
- ------------------------------- Director
Gerald E. Eickhoff
- ------------------------------- Director
William S. Green
AMY J. JORGENSEN*
- ------------------------------- Director
Amy J. Jorgensen
JOHN J. MCDONOUGH*
- ------------------------------- Director
John J. McDonough
- ------------------------------- Director
Bruce W. Schnitzer
RONALD B. KIRKLAND* Vice President and Chief
- ------------------------------- Accounting Officer
Ronald B. Kirkland (Principal Accounting Officer)
</TABLE>
II-5
<PAGE>
L. Keith Blackwell, by signing his name hereto, does sign and execute
this Registration Statement on behalf of each of the above-named officers and
directors of the Registrant on this 11th day of January, 1996, pursuant to
powers of attorneys executed on behalf of each of such officers and
directors, and filed with the Securities and Exchange Commission.
*By: /s/ L. KEITH BLACKWELL
----------------------------
L. Keith Blackwell
ATTORNEY-IN-FACT
II-6
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
SEQUENTIALLY
NUMBERED
EXHIBIT NO. EXHIBIT PAGE
- ----------- ------- ------------
<S> <C> <C>
4.1 Restated Certificate of Incorporation, as amended, filed as
Exhibit 3(i) to the Company's Form 10-Q for the quarter ended
September 30, 1995, as amended by Form 10-Q/A No. 1 dated
October 25, 1995 (the "September 1995 10-Q"), which exhibit
is incorporated herein by reference.
4.2 Amended and Restated Bylaws as of May 23, 1994, filed as
Exhibit 3(f) to the Company's Annual Report on Form 10-K
for the fiscal year ended December 31, 1995, which exhibit
is incorporated herein by reference.
4.3 Revolving Loan Agreement, dated as of September 29, 1995, among
the Company, certain subsidiaries of the Company, NationsBank
of Texas, N.A. as Agent, and the Banks named therein, filed as
Exhibit 10(b) to the Company's September 1995 10-Q, which
exhibit is incorporated herein by reference.
4.4 First Amendment to Credit Agreement, dated as of November 21,
1995, among the Company and NationsBank of Texas, N.A., as
agent, and the Banks named therein, and consented to by certain
of the Company's subsidiaries, filed as Exhibit 4.2 to the
Company's Registration Statement on Form S-3 (No. 33-65329),
which exhibit is incorporated herein be reference.
4.5 Specimen Common Stock Certificate, filed as Exhibit 4.4 to the
Company's Registration Statement on Form S-3 (No. 33-63683),
which exhibit is incorporated herein by reference.
4.6 Indenture, dated as of November 27, 1995, between the Company
and First Interstate Bank of Texas, National Association in
respect of the Company's 8% Convertible Subordinated Debentures
due 2005, filed as Exhibit 4.5 to the Company's Registration
Statement on Form S-3 (No. 33-63683), which exhibit is
incorporated herein by reference.
4.7* Registration Rights Agreement, dated as of November 27, 1995, by
and among the Company and the Agents named therein on behalf
of the purchasers of the Company's 8% Convertible Subordinated
Debentures Due 2005.
5.1* Opinion of L. Keith Blackwell, General Counsel of the Company,
as to the validity of Common Stock to be offered.
23.1* Consent of L. Keith Blackwell, contained in the opinion filed as
Exhibit 5.1.
23.2* Consent of Deloitte & Touche LLP.
24.1* Power of Attorney of the Directors and certain Executive Officers
of the Company.
</TABLE>
___________________
* Filed herewith.
<PAGE>
EXHIBIT 4.7
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (this "Agreement") is made and
entered into as of November 27, 1995 by and among AMRESCO, INC., a Delaware
corporation (the "Company"), and The Robinson-Humphrey Company, Inc. ("R-H")
and Piper Jaffray Inc. ("Piper") (R-H and Piper are sometimes collectively
referred to herein as the "Agents") on behalf of the Persons (individually a
"Purchaser" and collectively the "Purchasers") who purchase the Company's 8%
Convertible Subordinated Debentures due 2005 (the "Debentures") pursuant to
Purchase Agreements (as defined below).
This Agreement is made pursuant to the various Purchase Agreements,
executed from time-to-time (the "Purchase Agreement"), by and between the
Company and the Purchasers. In order to induce the Purchasers to purchase the
Debentures, the Company has agreed to provide the registration rights set
forth in this Agreement. The execution and delivery of this Agreement is a
condition to the obligations of the Purchasers set forth in Section 2 of the
Purchase Agreement.
In consideration of the premises and other good and valuable
consideration, the receipt and sufficiency of which are acknowledged by all
parties hereto, the parties, intending to be legally obligated, hereby agree
as follows:
SECTION 1. DEFINITIONS
As used in this Agreement, the following capitalized terms shall have
the following meanings:
"ACT": The Securities Act of 1933, as amended.
"ADVICE": As defined in Section 5(b) hereof.
"AGENTS": The Robinson-Humphrey Company, Inc. and Piper Jaffray Inc.
"AMENDMENT NOTICE": As defined in Section 5(b) hereof.
"BLOCKING NOTICE": As defined in Section 5(b) hereof.
"BROKER-DEALER": Any broker or dealer registered as such under the
Exchange Act.
"CLOSING DATE": The date of this Agreement.
"COMMISSION" or "SEC": The United States Securities and Exchange
Commission.
"DAMAGES PAYMENT DATE": With respect to the Debentures, each Interest
Payment Date.
"DTC": The Depository Trust Company.
<PAGE>
"EXCHANGE ACT": The Securities Exchange Act of 1934, as amended.
"HOLDER": As defined in Section 2(b) hereof.
"INDEMNIFIED HOLDER": As defined in Section 7(a) hereof.
"INDENTURE": The Indenture, dated as of November 27, 1995, among the
Company and First Interstate Bank of Texas, National Association as trustee
(the "Trustee") pursuant to which the Debentures are to be issued, as such
Indenture is amended or supplemented from time to time in accordance with the
terms thereof.
"INTEREST PAYMENT DATE": As defined in the Indenture and the Debentures.
"NASD": National Association of Securities Dealers, Inc.
"PERSON": An individual, partnership, corporation, trust or unincorporated
organization, or a government or an agency, authority or political subdivision
thereof.
"PROSPECTUS": The prospectus (including without limitation preliminary and
final prospectuses) included in a Resale Registration Statement, as amended or
supplemented, including post-effective amendments therein.
"PURCHASER": As defined in the preamble hereto.
"RECORD HOLDER": With respect to any Damages Payment Date relating to
Debentures, each Person who is a Holder of Debentures on the record date with
respect to the Interest Payment Date on which such Damages Payment Date shall
occur.
"REGISTRATION DEFAULT": As defined in Section 4 hereof.
"RESALE FILING DEADLINE": As defined in Section 3(a) hereof.
"RESALE REGISTRATION STATEMENT": Any registration statement of the
Company filed with the SEC relating to the registration for resale of
Transfer Restricted Securities pursuant to a registration statement which is
filed pursuant to the provisions of this Agreement, including the Prospectus
included therein, all amendments and supplements thereto (including
post-effective amendments) and all exhibits and material incorporated by
reference therein.
"TERMINATION DATE": As defined in Section 3(a) hereof.
"TRANSFER RESTRICTED SECURITIES": Each share of Underlying Common
Stock, until the earliest to occur of (a) the date on which such Underlying
Common Stock has been effectively registered under the Act and disposed of in
accordance with a Resale Registration Statement or other applicable
registration statement, (b) the date on which such Underlying Common Stock is
eligible
2
<PAGE>
to be sold to the public pursuant to Rule 144 under the Act, or (c) the date
on which such Debenture has been redeemed or repurchased by the Company as
provided in the Indenture.
"UNDERLYING COMMON STOCK": The shares of common stock, par value $0.05 per
share, of the Company into which any Debenture may be converted.
"UNDERWRITTEN REGISTRATION" or "UNDERWRITTEN OFFERING": An offering in
which securities of the Company are sold to an underwriter for reoffering to the
public pursuant to an effective registration statement filed with the
Commission.
SECTION 2. SECURITIES SUBJECT TO THIS AGREEMENT
(a) TRANSFER RESTRICTED SECURITIES. The securities entitled to the
benefits of this Agreement are the Transfer Restricted Securities.
(b) HOLDERS. A Person is deemed to be a holder (a "Holder") of Transfer
Restricted Securities or Debentures whenever such Person owns Transfer
Restricted Securities or Debentures, whether directly or through the DTC book-
entry system.
SECTION 3. RESALE REGISTRATION STATEMENT
(a) REGISTRATION. The Company shall, subject to compliance with
Regulation S promulgated under the Act, as amended from time to time:
(i) cause to be filed one Resale Registration Statement on S-3
pursuant to Rule 415 under the Act, on or prior to the 45th day after the
Closing Date (the "Resale Filing Deadline"), and, if necessary and to the
extent required by this Agreement, additional Resale Registration
Statements from time-to-time after the Resale Filing Deadline, all of which
shall provide for sales of Transfer Restricted Securities, provided that
the Holders thereof shall have timely provided the information required
pursuant to Section 3(b) hereof; and
(ii) use all reasonable efforts to cause the initial Resale
Registration Statement to be declared effective by the Commission on or
before the 180th day after the Closing Date.
The Company shall use all reasonable efforts to keep such Resale Registration
Statement continuously effective, supplemented and amended to the extent
necessary to ensure that it is available for resales of Transfer Restricted
Securities by Holders of Transfer Restricted Securities who have complied with
Section 3(b), and to ensure that it conforms with the requirements of this
Agreement, the Act and the policies, rules and regulations of the Commission as
announced from time to time, until the earlier of (A) the third anniversary of
the Closing Date or (B) the date on which (i) all Transfer Restricted Securities
have ceased to be Transfer Restricted Securities and (ii) there remains
outstanding less than $1,000,000 principal amount of Debentures. The earlier of
the dates specified in clauses (A) and (B) in the immediately-preceding sentence
is referred to herein as the "Termination Date."
3
<PAGE>
(b) PROVISION BY HOLDERS OF CERTAIN INFORMATION. No Holder of Transfer
Restricted Securities may include any of its Transfer Restricted Securities in
any Resale Registration Statement pursuant to this Agreement unless and until
such Holder furnishes to the Company in writing, within 20 business days after
receipt of a request therefor, such information, affidavits or other instruments
as the Company may reasonably request for use in connection with any Resale
Registration Statement or Prospectus or preliminary Prospectus included therein.
No Holder of Transfer Restricted Securities shall be entitled to Liquidated
Damages pursuant to Section 4 hereof unless such Holder shall have timely
provided all such reasonably requested information. All information provided to
the Company by any Holder shall be accurate and complete in all material
respects and each Holder shall promptly notify the Company if any such
information becomes incorrect or incomplete.
SECTION 4. LIQUIDATED DAMAGES
Subject to Section 5(a)(iv) and to Section 5(b) of this Agreement,
if (i) the initial Resale Registration Statement required by this Agreement is
not filed with the Commission on or prior to the Resale Filing Deadline or (ii)
any Resale Registration Statement required by this Agreement is filed and
declared effective but thereafter, solely through the fault of the Company,
ceases to be effective or usable for its intended purpose without being restored
to effectiveness by amendment or otherwise within thirty (30) business days or
succeeded immediately by an additional Resale Registration Statement that cures
such failure and that is itself declared effective within thirty (30) business
days (each such event referred to in clauses (i) and (ii), a "Registration
Default"), the Company shall pay liquidated damages to each Holder of Transfer
Restricted Securities and to each Holder of Debentures with respect to the first
90-day period immediately following the occurrence of such Registration Default,
in an amount equal to $.05 per week per $1,000 principal amount of Debentures
outstanding or of the principal amount of the Debentures that previously were
converted into such Transfer Restricted Securities held by such Holder for each
week or portion thereof that the Registration Default continues. The amount of
the liquidated damages shall increase by an additional $.05 per week per $1,000
in principal amount of Debentures outstanding or of the principal amount of the
Debentures that previously were converted into such Transfer Restricted
Securities with respect to each subsequent 90-day period until all Registration
Defaults have been cured, up to a maximum amount of liquidated damages of $.50
per week per $1,000 principal amount of Debentures outstanding or of the
principal amount of the Debentures that previously were converted into such
Transfer Restricted Securities. All accrued liquidated damages shall be paid to
Record Holders by the Company by Company check on each Damages Payment Date.
Following the cure of all Registration Defaults relating to any particular
Debentures or Transfer Restricted Securities, the accrual of liquidated damages
with respect to such Debentures or Transfer Restricted Securities will cease.
All payment obligations of the Company set forth in the preceding paragraph
that are outstanding with respect to any Transfer Restricted Security at the
time such security ceases to be a Transfer Restricted Security shall survive
until such time as all such obligations with respect to such security shall have
been satisfied in full.
4
<PAGE>
SECTION 5. REGISTRATION PROCEDURES
(a) GENERAL PROVISIONS. In connection with any Resale Registration
Statement and any Prospectus required by this Agreement to permit the resale of
Transfer Restricted Securities, the Company shall:
(i) use all reasonable efforts to keep such Resale Registration
Statement continuously effective through the Termination Date, and upon the
occurrence of any event that would cause any such Registration Statement or
Prospectus (A) to contain a material misstatement or omission or (B) not to
be effective and usable for resale of Transfer Restricted Securities during
the period required by this Agreement, the Company shall, in the case of
clause (A), file promptly and as appropriate an amendment or supplement to,
or any filing incorporated by reference into, such Resale Registration
Statement, correcting any such misstatement or omission, and shall in the
case of either clause (A) or (B), use all reasonable efforts to cause any
such amendment to be declared effective and such Resale Registration
Statement and the related Prospectus to become usable for their intended
purpose(s) as soon as practicable thereafter (subject to Section 5(a)(iv)
and to Section 5(b) of this Agreement);
(ii) prepare and file with the Commission such amendments and post-
effective amendments to the Resale Registration Statement as may be
necessary to keep the Resale Registration Statement effective through the
Termination Date and cause the Prospectus to be supplemented by any
required prospectus supplement, and as so supplemented to be filed pursuant
to Rule 424 under the Act in a timely manner;
(iii) advise the underwriter(s), if any, and selling Holders of
Transfer Restricted Securities promptly and, if requested by such Person in
writing, to confirm such advice in writing, (A) when the Prospectus or any
Prospectus supplement or post-effective amendment has been filed, and with
respect to any Resale Registration Statement or any post-effective
amendment thereto, when the same has become effective, (B) of any request
by the Commission for amendments to the Resale Registration Statement or
amendments or supplements to the Prospectus or for additional information
relating thereto, (C) of the issuance by the Commission of any stop order
or other order or action suspending the effectiveness of the Registration
Statement under the Act or of the suspension by any state securities or
Blue Sky commission of the exemption, qualification or registration of the
Transfer Restricted Securities for offering or sale in any jurisdiction, or
the initiation of any proceeding for any of the preceding purposes, or (D)
of the existence of any fact or the happening or any event that makes any
statement of a material fact made in the Resale Registration Statement, the
Prospectus, any amendment or supplement thereto, or any document
incorporated by reference therein untrue, or that requires the making of
any additions to or changes in the Resale Registration Statement or the
Prospectus in order to make the statements therein not misleading. If at
any time the Commission shall issue any stop order or other order or take
other action suspending the effectiveness of the Resale Registration
Statement, or any state securities commission or other regulatory authority
shall
5
<PAGE>
issue an order suspending the exemption, qualification or registration
of the Transfer Restricted Securities under state securities or
Blue Sky laws, the Company shall use all reasonable efforts to obtain
the withdrawal or lifting of such order at the earliest possible time;
(iv) furnish to either (A) the underwriter(s) on any specific Resale
Registration Statement or (B) the Agents if no other underwriter then is
acting as such with respect to any specific Resale Registration Statement,
before filing with the Commission, copies of any Resale Registration
Statement or any Prospectus included therein or any amendments or
supplements to any such Resale Registration Statement or Prospectus, which
documents will be subject to the review of such Agents or underwriter(s),
if any, for a period of at least five business days, and the Company will
not file any such Resale Registration Statement or Prospectus or any
amendment or supplement to any such Resale Registration Statement or
Prospectus to which a selling Holder of Transfer Restricted Securities
covered by such Resale Registration Statement or the underwriter(s), if
any, shall reasonably object within five business days after the receipt
thereof; PROVIDED, HOWEVER, that any delay in the effectiveness of a Resale
Registration Statement caused by such Agents' or Underwriter(s)' objections
shall not constitute a Registration Default hereunder. A selling Holder or
underwriter, if any, shall be deemed to have reasonably objected to such
filing if such Resale Registration Statement, amendment, Prospectus or
supplement, as applicable, as proposed to be filed, contains a material
misstatement or omission;
(v) make available at reasonable times and upon reasonable notice for
inspection by the selling Holders, any underwriter participating in any
disposition pursuant to such Resale Registration Statement, and any
attorney or accountant retained by such selling Holders or any of the
underwriter(s), in each case subject to reasonable assurances of
confidentiality, and cause the Company's officers, directors and employees
to supply, all financial and other records, pertinent corporate documents
and properties of the Company reasonably requested by any such Holder,
underwriter, attorney or accountant in connection with such Resale
Registration Statement subsequent to the filing thereof and prior to its
effectiveness;
(vi) if requested by any selling Holders or the underwriter(s), if
any, promptly incorporate in any Resale Registration Statement or
Prospectus, pursuant to a supplement or post-effective amendment if
necessary, such information (PROVIDED such information shall be accurate
and complete in all respects) as such selling Holders and underwriter(s),
if any, may reasonably request to have included therein, PROVIDED such
information is usual and customary in such a document, including without
limitation information relating to the "Plan of Offering" of the Transfer
Restricted Securities, information with respect to the amount of Transfer
Restricted Securities being sold to such underwriter(s), the purchase price
being paid therefor and any other terms of the offering of the Transfer
Restricted Securities to be sold in such offering; and make all required
filings of such Prospectus supplement or post-effective amendment as soon
as practicable after the Company is notified of the matters to be
incorporated in such Prospectus supplement or post-effective amendment;
6
<PAGE>
(vii) furnish to each selling Holder and to either (A) the
underwriter(s) on any specific Resale Registration Statement or (B) the
Agents if no other underwriter then is acting as such with respect to any
specific Resale Registration Statement, without charge, one copy of the
Resale Registration Statement, as first filed with the Commission, and of
each amendment thereto, including all documents incorporated by reference
therein and all exhibits;
(viii) deliver to each selling Holder and each of the underwriter(s),
if any, without charge, as many copies of the Prospectus (including each
preliminary prospectus) and any amendment or supplement thereto as such
Persons reasonably may request; and the Company hereby consents to the use
of the Prospectus and any amendment or supplement thereto (other than in
those states or jurisdictions in which the Company has not complied with
or satisfied the requirements of the relevant "blue sky" securities laws)
by each of the selling Holders and each of the underwriter(s), if any, in
connection with the offering and the sale of the Transfer Restricted
Securities covered by the Prospectus or any amendment or supplement
thereto;
(ix) enter into such agreements (including an underwriting agreement),
and make such representations and warranties, and take all other actions in
connection therewith in order to expedite or facilitate the disposition of
the Transfer Restricted Securities pursuant to any Resale Registration
Statement contemplated by this Agreement, to the extent reasonable and
customary in this type of offering and as may be reasonably requested by
the selling Holder of Transfer Restricted Securities or underwriter in
connection with any sale or resale pursuant to any Resale Registration
Statement contemplated by this Agreement; and if the registration is an
Underwritten Registration, the Company shall:
(A) furnish to each selling Holder and each underwriter in such
substance and scope as they may reasonably request and as are
customarily made by issuers to underwriters in primary underwritten
offerings, upon the date of the effectiveness of the Resale
Registration Statement:
(1) a certificate, dated the date of effectiveness of the
Resale Registration Statement, as the case may be, signed by (i)
the President or any Vice President and (ii) a principal
financial or accounting officer of the Company, confirming, as of
the date thereof, the matters set forth in paragraph (d) of
Section 5 of the Placement Agreement and such other matters as
such parties may reasonably request;
(2) an opinion, dated the date of effectiveness of the
Resale Registration Statement, as the case may be, of the General
Counsel for the Company, covering the matters set forth in
paragraph (a) of Section 5 of the Placement Agreement and such
other matter as such parties may reasonably request, and in any
event including a statement to the effect that such counsel
7
<PAGE>
has participated in conferences with officers and other
representatives of the Company, the Purchasers' representatives
and the Purchaser's counsel in connection with the preparation of
such Resale Registration Statement and the related Prospectus and
has considered the matters required to be stated therein and the
statements contained therein, although such counsel has not
independently verified the accuracy, completeness or fairness of
such statements; and that such counsel advises that, on the basis
of the foregoing, no facts came to such counsel's attention that
caused such counsel to believe that the applicable Resale
Registration Statement, at the time such Resale Registration
Statement or any post-effective amendment thereto become
effective, 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 not misleading, or that
the Prospectus contained in such Resale Registration Statement as
of its date, an untrue statement of a material fact or omitted to
state a material fact necessary in order to make the statements
therein, in light of the circumstances under which they were
made, not misleading. Without limiting the foregoing, such
counsel may state further that such counsel assumes no
responsibility for, and has not independently verified, the
accuracy, completeness or fairness of the financial statements,
notes and schedules and other financial data included in any
Resale Registration Statement contemplated by this Agreement or
the related Prospectus; and
(3) a customary comfort letter, dated as of the date of
effectiveness of the Resale Registration Statement, as the case
may be, from the Company's independent accountants, in the
customary form and covering matters of the type customarily
covered in comfort letters by underwriters in connection with
primary underwritten offerings, and affirming the matters set
forth in the comfort letters delivered pursuant to Section 5(b)
of the Placement Agreement, without exception;
(B) set forth in full or incorporate by reference in the
underwriting agreement, if any, the indemnification provisions and
procedures of Section 7 hereof with respect to all parties to be
indemnified pursuant to said Section; and
(C) deliver such other documents and certificates as may be
reasonably requested by such parties to evidence compliance with
clause (A) above and with any customary conditions contained in the
underwriting agreement or other agreement entered into by the Company
pursuant to this clause (ix), if any.
(x) prior to any public offering of Transfer Restricted Securities,
cooperate with the selling Holders, the underwriter(s), if any, and their
respective counsel in connection with the registration and qualification of
the Transfer Restricted Securities under the securities or Blue Sky laws of
such jurisdictions as the selling Holders or underwriter(s) may
8
<PAGE>
reasonably request and do any and all other acts or things necessary or
advisable to enable the disposition in such jurisdictions of the Transfer
Restricted Securities covered by the Resale Registration Statement;
PROVIDED, that the Company shall not be required to register or qualify
as a foreign corporation where it is not now so qualified or to take any
action that would subject it to the service of process in suits or to
taxation, other than as to matters and transactions relating to the Resale
Registration Statement, in any jurisdiction where it is not now so subject;
(xi) cooperate with the selling Holders and the underwriter(s), if
any, to facilitate the timely preparation and delivery of certificates
representing Transfer Restricted Securities to be sold and not bearing any
restrictive legends; and enable such Transfer Restricted Securities to be
in such denominations and registered in such names as the Holders or the
underwriter(s), if any, may reasonably request at least two business days
prior to any sale of Transfer Restricted Securities made by such
underwriter(s);
(xii) use all reasonable efforts to cause the Transfer Restricted
Securities covered by the Resale Registration Statement to be registered
with or approved by such other governmental agencies or authorities as may
be necessary to enable the seller or sellers thereof or the underwriter(s),
if any, to consummate the disposition of such Transfer Restricted
Securities, subject to the proviso contained in paragraph (x) above;
(xiii) if any fact or event contemplated by paragraph (b)(iii)(D)
above shall exist or have occurred, prepare a supplement or post-effective
amendment to the Resale Registration Statement or related Prospectus or any
document incorporated therein by reference or file any other required
document so that, as thereafter delivered to the Purchasers of Transfer
Restricted Securities, the Prospectus will not contain an untrue statement
of a material fact or omit to state any material fact necessary to make the
statements therein not misleading;
(xiv) cooperate and assist in any filings required to be made with
the NASD and in the performance of any due diligence investigation by any
underwriter (including any "qualified independent underwriter") that is
required to be retained in accordance with the rules and regulations of the
NASD, and use its reasonable best efforts to cause such Resale Registration
Statement to become effective and approved by such governmental agencies or
authorities as may be necessary to enable the Holders selling Transfer
Restricted Securities to consummate the disposition of such Transfer
Restricted Securities;
(xv) otherwise comply with all applicable rules and regulations of the
Commission, and make generally available to its security holders, as soon
as practicable, a consolidated earnings statement meeting the requirements
of Rule 158 (which need not be audited) for the twelve-month period (A)
commencing at the end of any fiscal quarter in which Transfer Restricted
Securities are sold to underwriters in a firm or best efforts Underwritten
Offering or (B) if not sold to underwriters in such an offering, beginning
with
9
<PAGE>
the first month of the Company's first fiscal quarter commencing after
the effective date of the Resale Registration Statement;
(xvi) cause all shares of Underlying Common Stock which are Transfer
Restricted Securities covered by the Resale Registration Statement to be
listed on each securities exchange or market, if applicable, on which
similar securities issued by the Company are then listed if requested by
the Holders of a majority in aggregate principal amount of the Debentures
or the underwriter(s) (if any) on any specific Resale Registration
Statement; and
(xvii) provide promptly to each Holder upon request each document
filed with the Commission pursuant to the requirements of Sections 13, 14
and 15 of the Exchange Act for a period of three years from the Closing
Date.
(b) DISPOSITION NOTICE; BLOCKING NOTICE; AMENDMENT NOTICE. At least
five (5) business days prior to any disposition of Transfer Restricted
Securities, the Holder thereof shall advise the Company of the dates on which
such disposition is expected to commence and terminate, the number of
Transfer Restricted Securities expected to be sold, the method of
disposition, and such other information as the Company may reasonably request
in order to supplement the Prospectus in accordance with the rules and
regulations of the Commission. The Company may suspend dispositions under the
Resale Registration Statement and notify the Holders that they may not sell
Transfer Restricted Securities pursuant to any Resale Registration Statement
or Prospectus (a "Blocking Notice") if the Company's management determines in
its reasonable good faith judgment that the Company's obligation to ensure
that such Resale Registration Statement and Prospectus are current and
complete would require the Company to take actions that might reasonably be
expected to have a detrimental effect on any proposal, negotiations or plan
by the Company or any of its subsidiaries to engage in any acquisition of
assets (other than in the ordinary course of business) or any merger,
consolidation, tender offer, reorganization or similar transaction; PROVIDED
that such suspension may not exceed 60 days. Each Holder of Transfer
Restricted Securities agrees by acquisition of a Transfer Restricted Security
that, upon receipt of a Blocking Notice or Notice from the Company of the
existence of any fact of the kind described in Section 5(a)(iii)(D) hereof
(an "Amendment Notice"), such Holder shall not dispose of, sell or offer for
sale Transfer Restricted Securities under any Resale Registration Statement
until such Holder receives (i) copies of the supplemented or amended
Prospectus or until counsel for the Company shall have determined that such
disclosure is not required due to subsequent events; (ii) notice in writing
(the "Advice") from the Company that the use of the Prospectus may be
resumed, and (iii) copies of any additional or supplemental filings that are
incorporated by reference in the Prospectus. If so directed by the Company in
connection with a Blocking Notice or an Amendment Notice, each Holder will
deliver to the Company (at the Company's expense) all copies, other than
permanent file copies then in such Holder's possession, of the Prospectus
covering such Transfer Restricted Securities that was current immediately
prior to the time of receipt of such notice. In the event the Company shall
give any such notice, the time period regarding the effectiveness of such
Resale Registration Statement set forth in Section 3, shall be extended by
the number of days during the period from and including the date of the
giving of such notice to and including the date when each selling Holder
covered by such Resale Registration Statement shall have received the copies
of the supplemented or amended
10
<PAGE>
Prospectus, the Advice and any additional or supplemental filings that are
incorporated by reference in the Prospectus. Delivery of a Blocking Notice or
an Amendment Notice and the related suspension of any Resale Registration
Statement shall not constitute a Registration Default and shall not create
any obligation to pay liquidated damages under Section 4 hereof.
SECTION 6. REGISTRATION EXPENSES
(a) All expenses incident to the Company's performance of or compliance
with this Agreement will be borne by the Company regardless of whether a Resale
Registration Statement becomes effective, including without limitation: (i) all
registration and filing fees and expenses (including filings made by any Holder
with the NASD (and, if applicable, the fees and expenses of any "qualified
independent underwriter" and its counsel that may be required by the NASD));
(ii) all fees and expenses of compliance with federal securities, foreign
securities and state Blue Sky or securities laws; (iii) all expenses of printing
(including the printing of Prospectuses), messenger and delivery services and
telephone incurred by the Company; (iv) all fees and disbursements of counsel
for the Company and, subject to Section 6(b) below, the Holders of Transfer
Restricted Securities; (v) all application and filing fees in connection with
listing the shares of Underlying Common Stock on a national securities exchange
or automated quotation system pursuant to the requirements hereof; (vi) all fees
and disbursements of independent certified public accountants of the Company
(including the expenses of any special audit and comfort letters required by or
incident to such performance); and (vii) all fees and expenses of the Trustee
under the Indenture; PROVIDED, that the Company will not bear certain personal
expenses of a Holder who sells Transfer Restricted Securities, including
underwriting discounts, commissions, and messenger and delivery services and
telephone expenses incurred by such selling Holders.
The Company will, in any event, bear its internal expense (including,
without limitation, all salaries and expenses of its officers and employees
performing legal or accounting duties), the expenses of any annual audit, all
Trustee fees and charges and the fees and expenses of any Person, including
special experts, retained by the Company.
(b) In connection with any Resale Registration Statement required by this
Agreement, the Company will reimburse the Holders of Transfer Restricted
Securities being resold for the reasonable fees and disbursements of not more
than one counsel (which fees and disbursements shall not exceed $5,000 in the
aggregate), which shall be such counsel as may be chosen by the Holders of a
majority in principal amount of the Transfer Restricted Securities for whose
benefit such Resale Registration Statement is being prepared.
SECTION 7. INDEMNIFICATION
(a) The Company shall indemnify and hold harmless (i) each Holder and (ii)
each person, if any, who controls (within the meaning of Section 15 of the Act
or Section 20 of the Exchange Act) any Holder (any of the persons referred to in
this clause (ii) being hereinafter referred to as a "Controlling Person") and
(iii) the respective officers, directors, partners, employees, representatives
and agents of any Holder or any Controlling Person (any person referred to in
clause (i), (ii) or (iii)
11
<PAGE>
may hereinafter be referred to as an "Indemnified Holder"), to the fullest
extent lawful, from and against any and all losses, claims, damages,
liabilities, judgments, actions and reasonable expenses (including without
limitation, reimbursement of all reasonable costs of investigating,
preparing, pursuing or defending any claim or action, or any investigation or
proceeding by any governmental agency or body, commenced or threatened,
including the reasonable fees and charges of one counsel to all Indemnified
Holders as a group) directly or indirectly caused by, related to, based upon,
arising out of or in connection with any untrue statement or alleged untrue
statement of a material fact contained in any Resale Registration Statement
or Prospectus (or any amendment or supplement thereto), or any omission or
alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, except
insofar as such losses, claims, damages, liabilities or expenses are caused
by an untrue statement or omission or alleged untrue statement or omission
that is made in reliance upon and in conformity with information relating to
any of the Holders furnished in writing to the Company by any of the Holders
expressly for use therein. In addition to any other information furnished in
writing to the Company by any of the Holders, the information in the Resale
Registration Statement under the captions "Selling Stockholders" (or any
similarly captioned section containing the information required pursuant to
Item 507 of Regulation S-K promulgated pursuant to the Act) and "Plan of
Distribution" (or any similarly captioned section containing information
required pursuant to Item 508 of Regulation S-K) shall be deemed information
furnished in writing to the Company by the Holders.
In case any action or proceeding (including any governmental or regulatory
investigation or proceeding) shall be brought or asserted against any of the
Indemnified Holders with respect to which indemnity may be sought against the
Company, such Indemnified Holder (or the Indemnified Holder controlled by such
Controlling Person) shall promptly notify the Company in writing (provided, that
the failure to give such notice shall not relieve the Company of its obligations
pursuant to this Agreement unless and to the extent materially and adversely
affected). Such Indemnified Holder shall have the right to employ its own
counsel in any such action and the fees and expenses of such counsel shall be
paid, as incurred, by the Company (regardless of whether it is ultimately
determined that an Indemnified Holder is not entitled to indemnification
hereunder); PROVIDED, that if the Indemnified Holder is not successful and it is
determined that such Indemnified Holder is not entitled to indemnification
hereunder, then such Indemnified Holder shall reimburse the Company for all
monies advanced by the Company to which such Indemnified Holder was not
entitled. The Company shall not, in connection with any one such action or
proceeding or separate but substantially similar or related actions or
proceedings in the same jurisdiction arising out of the same general allegations
or circumstances, be liable for the reasonable fees and expenses of more than
one separate firm of attorneys (in addition to any local counsel) at any time
for such Indemnified Holders, which firm shall be designated by the Holders of a
majority of the securities that are subject to, or affected by, such action or
proceeding. The Company shall not be liable for any settlement of any such
action or proceeding effected with the Company's prior written consent, which
consent shall not be withheld unreasonably, and the Company will indemnify and
hold harmless any Indemnified Holder from and against any loss, claim, damage,
liability or reasonable expense by reason of any settlement of any action
effected with the prior written consent of the Company. The Company shall not,
without the prior written consent of each Indemnified Holder, settle or
compromise or consent to the entry of judgment in or otherwise seek to terminate
any
12
<PAGE>
pending or threatened action, claim, litigation or proceeding in respect of
which indemnification or contribution may be sought hereunder (whether or not
any Indemnified Holder is a party thereto), unless such settlement, compromise,
consent or termination includes an unconditional release of each Indemnified
Holder from all liability arising out of such action, claim, litigation or
proceeding.
(b) Each Holder of Transfer Restricted Securities agrees, severally and
not jointly, to indemnify and hold harmless the Company and its directors,
officers and any person controlling (within the meaning of Section 15 of the Act
or Section 20 of the Exchange Act) the Company, and its officers, directors,
partners, employees, representatives and agents, to the same extent as the
foregoing indemnity from the Company to each of the Indemnified Holders, but
only with respect to claims and actions based on information relating to such
Holder furnished in writing by such Holder expressly for use in any Resale
Registration Statement, including without limitation the information described
in the last sentence of the first paragraph of Section 7(a). In case any action
or proceeding shall be brought against the Company or its directors or officers
or any such Controlling Person in respect of which indemnity may be sought
against a Holder of Transfer Restricted Securities, such Holder shall have the
rights and duties given to each Holder by the preceding paragraph. In no event
shall the liability of any selling Holder hereunder be greater in amount than
the dollar amount of the proceeds received by such Holder upon the sale of the
securities giving rise to such indemnification obligation.
(c) If the indemnification provided for in this Section 7 is unavailable
to an indemnified party under Section 7(a) or Section 7(b) hereof (other than by
reason of the exceptions provided therein) in respect of any losses, claims,
damages, liabilities or expenses 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, liabilities or expenses in such proportion as
is appropriate to reflect the relative benefits received by the Company on the
one hand, and the Holders on the other hand from their purchase of Transfer
Restricted Securities or if such allocation is not permitted by applicable law,
the relative fault of the Company on the one hand and of the Indemnified Holder
on the other in connection with the statements or omissions which resulted in
such losses, claims, damages, liabilities or expenses, as well as any other
relevant equitable considerations. The relative fault of the Company on the one
hand, and of the Indemnified Holder on the other, 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 by the Indemnified Holder 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, liabilities and expenses
referred to above shall be deemed to include, subject to the limitations set
forth in the second paragraph of Section 7(a), any legal or other fees, expenses
or charges reasonably incurred by such party in connection with investigating or
defending any action or claim.
The Company and each Holder of Transfer Restricted Securities agree that it
would not be just and equitable if contribution pursuant to this Section 7(c)
were determined by pro rata allocation (even if the Holders were treated as one
entity for such purpose) or by any other method of
13
<PAGE>
allocation which does not take account of the equitable considerations
referred to in the immediately preceding paragraph. The amount paid or
payable by an indemnified party as a result of the losses, claims, damages,
liabilities or expenses referred to in the immediately preceding paragraph
shall be deemed to include, subject to the limitations set forth above, any
legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 7, none of the Holders (and
its related Indemnified Holders) shall be required to contribute, in the
aggregate, any amount in excess of the amount by which the total discount
received by such Holder with respect to the securities exceeds the amount of
any damages which such Holder has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation. The Holders' obligations to
contribute pursuant to this Section 7(c) are several in proportion to the
respective amounts of securities held by each of the Holders hereunder and
are not joint.
SECTION 8. RULE 144A
The Company hereby agrees with each Holder, for so long as any Transfer
Restricted Securities remain outstanding, to make available to any Holder of
Transfer Restricted Securities in connection with any sale thereof and any
prospective purchase of such Transfer Restricted Securities from such Holder,
the information required by Rule 144A(d)(4) under the Act in order to permit
resales of such Transfer Restricted Securities pursuant to Rule 144A.
SECTION 9. PARTICIPATION IN UNDERWRITTEN REGISTRATIONS
No Holder may participate in any Underwritten Registration hereunder unless
such Holder (a) agrees to sell such Holder's Transfer Restricted Securities on
the basis provided in any underwriting arrangements provided by the Persons
entitled hereunder to approve such arrangements and (b) completes and executes
all reasonable questionnaires, powers of attorney, indemnities, underwriting
agreements, lock-up letters and other documents required under the terms of such
underwriting agreements.
SECTION 10. SELECTION OF UNDERWRITERS
The Holders of Transfer Restricted Securities covered by the Resale
Registration Statement who desire to do so may sell such Transfer Restricted
Securities in an Underwritten Offering. In any such Underwritten Offering, the
investment banker or investment bankers and manager or managers that will
administer the offering will be selected by the Holders of a majority of the
Transfer Restricted Securities included in such offering; PROVIDED, that such
investment bankers and managers must be reasonably satisfactory to the Company.
14
<PAGE>
SECTION 11. MISCELLANEOUS
(a) REMEDIES. The Company agrees that monetary damages (including the
liquidated damages contemplated hereby) would not be adequate compensation for
any loss incurred by reason of a breach by it of the provisions of this
Agreement and hereby agree to waive the defense in any action for specific
performance that a remedy at law would be adequate.
(b) NO INCONSISTENT AGREEMENTS. The Company will not on or after the date
of this Agreement enter into any agreement with respect to its securities that
is inconsistent with the rights granted to the Holders in this Agreement or
otherwise conflicts with the provisions hereof. The Company has not previously
entered into any agreement granting any registration rights with respect to its
securities to any Person, except as specifically disclosed in the final Offering
Memorandum. The rights granted to the Holders hereunder do not in any way breach
or conflict with and are not inconsistent with the rights granted to the Holders
of the Company's securities under any agreement in effect on the date hereof.
(c) AMENDMENTS AND WAIVERS. The provisions of this Agreement may not be
amended, modified or supplemented, and waivers or consents to or departures from
the provisions hereof may not be given unless the Company has obtained the
written consent of Holders of a majority of the Transfer Restricted Securities.
Notwithstanding the foregoing, a waiver or consent to departure from the
provisions hereof that relates exclusively to the rights of Holders whose
securities are being resold pursuant to the Resale Registration Statement and
that does not affect directly or indirectly the rights of other Holders whose
securities are not reselling pursuant to such Resale Registration Statement may
be given by the Holders of a majority of the Transfer Restricted Securities
being resold pursuant to such Resale Registration Statement.
(d) NOTICES. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand-delivery, first-class or
certified mail, telex, telecopier, or reliable overnight delivery service, and
shall be concurrently delivered by the Person giving the same to the Trustee at
the address specified in the Indenture:
(i) if to a Holder, at the address set forth on the records of the
Registrar under the Indenture, with a copy to the Registrar under the
Indenture; and
(ii) If to the Company:
AMRESCO, Inc.
1845 Woodall Rodgers Freeway
Dallas, Texas 75201
Telecopier No.: (214) 953-7824
Attention: General Counsel
15
<PAGE>
All such notices and communications shall be deemed to have been given: at
the time delivered by hand, if personally delivered; five business days after
being deposited in the mail, postage prepaid, if mailed; when answered back, if
telexed; when receipt acknowledged, if telecopied; and on the next business day,
if sent via a reliable overnight delivery service.
(e) SUCCESSORS AND ASSIGNS. This Agreement shall inure to the benefit of
and be binding upon the successors and assigns of each of the parties, including
without limitation and without the need for an express assignment, subsequent
Holders of Transfer Restricted Securities.
(f) COUNTERPARTS. This Agreement may be executed in any number of
counterparts by the parties hereto, each of which when so executed shall be
deemed to be an original and all of which taken together shall constitute one
and the same agreement.
(g) HEADINGS. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(h) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS, WITHOUT REGARD TO THE CONFLICT
OF LAWS RULES THEREOF.
(i) SEVERABILITY. In the event that any one or more of the provisions
contained herein, or the application thereof, in any circumstances, is held
invalid, illegal or unenforceable, the validity, legality and enforceability of
any such provision in every other respect and of the remaining provisions
contained herein shall not be affected or impaired thereby.
(j) ENTIRE AGREEMENT. This Agreement, together with the other agreements
referred to in the respective Purchase Agreements, is intended by the parties as
a final expression of their agreement and intended to be a complete and
exclusive statement of the agreement and understanding of the parties hereto in
respect of the subject matter hereof. There are no restrictions, promises,
warranties or undertakings, other than those set forth or referred to herein
with respect to the registration rights granted by the Company with respect to
the Transfer Restricted Securities. This Agreement supersedes all prior
agreements and understandings between the parties with respect to such subject
matter.
16
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written above.
AMRESCO, INC.
By: /s/ ROBERT H. LUTZ, JR.
-----------------------------------
Name: Robert H. Lutz, Jr.
Title: Chairman & CEO
THE ROBINSON-HUMPHREY COMPANY, INC.
By: /s/ GERARD J. O'MEARA, JR.
-----------------------------------
Name: Gerard J. O'Meara, Jr.
Title: Managing Director
PIPER JAFFRAY INC.
By: /s/ JOYCE NELSON SCHUETTE
-----------------------------------
Name: Joyce Nelson Schuette
Title: Managing Director
17
<PAGE>
EXHIBIT 5.1
[AMRESCO LETTERHEAD]
January 10, 1996
AMRESCO, INC.
1845 Woodall Rodgers Freeway
Dallas, Texas 75201
Re: Registration on Form S-3 of 3,600,000 shares of Common Stock, par
value $.05 per share, of AMRESCO, INC. ("Common Stock")
Gentlemen:
I am general counsel of AMRESCO, INC., a Delaware corporation (the
"Company"), in connection with the registration and sale of up to 3,600,000
shares of Common Stock (the "Shares") (plus an indeterminate number of
additional shares of Common Stock issuable upon changes in the conversion
price in respect of the Debentures (defined below)) to be sold by the Selling
Shareholders named in the Prospectus constituting a part of this Registration
Statement (the "Selling Shareholders") following conversion of the Company's
8% Convertible Subordinated Debentures due 2005 (the "Debentures") pursuant to
the Indenture (the "Indenture") dated as of November 27, 1995 between the
Company and First Interstate Bank of Texas, National Association, as Trustee
(the "Trustee").
I have examined such documents, records and matters of law as I have
deemed necessary for purposes of this opinion. Based on the foregoing, I am
of the opinion that the Shares are duly authorized and, when sold by the
Selling Shareholders as described in the Prospectus contained in the
Company's Registration Statement on Form S-3 to which this opinion is an
exhibit, will be validly issued, fully paid and nonassessable.
In rendering the foregoing opinion, I have relied as to certain factual
matters upon certificates of officers of the Company, the Trustee, the Selling
Shareholders and public officials, and I have not independently checked or
verified the accuracy of the statements contained therein.
I hereby consent to the filing of this opinion as Exhibit 5.1 to this
Registration Statement on Form S-3 filed by the Company to effect registration
of the Shares under the Securities Act of 1933, as amended, and to the
reference to me under the caption "Legal Matters" in the Prospectus
constituting a part of such Registration Statement.
Very truly yours,
/s/ L. KEITH BLACKWELL
L. Keith Blackwell
General Counsel and Secretary
<PAGE>
EXHIBIT 23.2
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement
of AMRESCO, INC. on Form S-3 of our report dated February 6, 1995 on AMRESCO,
INC. and of our report dated March 26, 1993 on AMRESCO (predecessor
businesses), included and incorporated by reference in the Annual Report on
Form 10-K of AMRESCO, INC. for the year ended December 31, 1994. We also
consent to the reference to us under the heading "Independent Accountants" in
such Prospectus.
/s/ DELOITTE & TOUCHE LLP
Dallas, Texas
January 11, 1996
<PAGE>
EXHIBIT 24.1
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints each of Robert H. Lutz, Jr., Robert L. Adair
III and L. Keith Blackwell, his true and lawful attorney-in-fact and agent,
with full power of substitution and resubstitution, for him and in his name,
place and stead, in any and all capacities, acting alone, to sign, execute
and file with the Securities and Exchange Commission and any state securities
regulatory board or commission any documents relating to the proposed
registration of the securities offered pursuant to the Registration Statement
of AMRESCO, INC. on Form S-3 under the Securities Act of 1933, including any
amendment or amendments relating thereto, with all exhibits and any and all
documents required to be filed with respect thereto with any regulatory
authority, granting unto said attorneys-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises in order to
effectuate the same as fully to all intents and purposes as he might or could
do if personally present, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, or their or his substitute or
substitutes, may lawfully do or cause to be done.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ ROBERT H. LUTZ, JR. Chairman of the Board and January 11, 1996
- --------------------------- Chief Executive Officer
Robert H. Lutz, Jr.
/s/ ROBERT L. ADAIR III Director, President and January 11, 1996
- --------------------------- Chief Operating Officer
Robert L. Adair III
/s/ BARRY L. EDWARDS Executive Vice President and January 11, 1996
- --------------------------- Chief Financial Officer
Barry L. Edwards (Principal Financial Officer)
/s/ JAMES P. COTTON, JR. Director January 11, 1996
- ---------------------------
James P. Cotton, Jr.
/s/ RICHARD L. CRAVEY Director January 11, 1996
- ---------------------------
Richard L. Cravey
Director January __, 1996
- ---------------------------
Gerald E. Eickhoff
Director January __, 1996
- ---------------------------
William S. Green
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C>
/s/ AMY J. JORGENSEN Director January 11, 1996
- ---------------------------
Amy J. Jorgensen
/s/ JOHN J. MCDONOUGH Director January 11, 1996
- ---------------------------
John J. McDonough
Director January __, 1996
- ---------------------------
Bruce W. Schnitzer
/s/ RONALD B. KIRKLAND Vice President and Chief January 11, 1996
- --------------------------- Accounting Officer
Ronald B. Kirkland (Principal Accounting Officer)
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