GT Draft: 9/21/96
2,000,000 Shares
NATIONAL AUTO FINANCE COMPANY, INC.
Common Stock
FORM OF UNDERWRITING AGREEMENT
St. Petersburg, Florida
, 1997
Xxxxxxx Xxxxx & Associates, Inc.
--------------------------------
As Representatives of the Several Underwriters
c/o Raymond Xxxxx & Associates, Inc.
000 Xxxxxxxx Xxxxxxx
Xx. Xxxxxxxxxx, Xxxxxxx 00000
Ladies and Gentlemen:
National Auto Finance Company, Inc., a Delaware corporation (the
"Company"), proposes, subject to the terms and conditions stated herein, to
issue and sell an aggregate of 2,000,000 shares of common stock, $.01 par value
per share (the "Common Stock"), of the Company, to the several Underwriters
named in Schedule I hereto (the "Underwriters") (the "Firm Shares"). In
addition, the Company has agreed to sell to the Underwriters, upon the terms
and conditions set forth herein, up to an additional 300,000 shares (the
"Additional Shares") of the Common Stock to cover over-allotments by the
Underwriters, if any. The Firm Shares and the Additional Shares are hereinafter
collectively referred to as the "Shares."
The Company wishes to confirm as follows its agreement with you and
the other several Underwriters, on whose behalf you are acting, in connection
with the several purchases of the Shares from the Company.
1. Registration Statement and Prospectus. The Company has prepared and
filed with the Securities and Exchange Commission (the "Commission") in
accordance with the provisions of the Securities Act of 1933, as amended, and
the rules and regulations of the Commission thereunder (collectively, the
"Act"), a registration statement on Form S-1 (File No. 333-13667), including a
prospectus subject to completion, relating to the Shares. Such registration
statement, as amended at the time when it becomes effective and as thereafter
amended by post-effective amendment, is referred to in this Agreement as the
"Registration Statement." The prospectus in the form included in the
Registration Statement, or, if the prospectus included in the Registration
Statement omits information in reliance upon Rule 430A under the Act and such
information is included in a prospectus filed with the Commission pursuant to
Rule 424(b) under the Act or as part of a post-effective amendment to the
Registration Statement after the Registration Statement becomes effective, the
prospectus as so filed is referred to in this Agreement as the "Prospectus." If
the Company elects to rely on Rule 434 under
the Act, all references to the Prospectus shall be deemed to include, without
limitation, the form of prospectus and the term sheet contemplated by Rule 434,
taken together, provided to the Underwriters by the Company in reliance on Rule
434 under the Act (the "Rule 434 Prospectus"). If the Company files another
registration statement with the Commission to register a portion of the Shares
pursuant to Rule 462(b) under the Act (the "Rule 462 Registration Statement"),
then any reference to "Registration Statement" herein shall be deemed to
include the registration statement on Form S-1 (File No. 333-13667) and the
Rule 462 Registration Statement, as each such registration statement may be
amended pursuant to the Act. The prospectus subject to completion in the form
included in the Registration Statement at the time of the initial filing of
such Registration Statement with the Commission and as such prospectus is
amended from time to time until the date of the Prospectus, are collectively
referred to in this Agreement as the "Prepricing Prospectus."
2. Agreements to Sell and Purchase. The Company hereby agrees to sell
the Firm Shares to the Underwriters and, upon the basis of the representations,
warranties and agreements of the Company herein contained and subject to all
the terms and conditions set forth herein, each Underwriter agrees, severally
and not jointly, to purchase from the Company at a purchase price of $____ per
Share (the "purchase price per Share"), the number of Firm Shares set forth
opposite the name of such Underwriter in Schedule I hereto (or such number of
Firm Shares as adjusted pursuant to Section 10 hereof).
The Company hereby also agrees to sell to the Underwriters, and upon
the basis of the representations, warranties and agreements of the Company
contained herein and subject to all the terms and conditions set forth herein,
the Underwriters shall have the right for 30 days from the date of the
Prospectus to purchase from the Company up to 300,000 Additional Shares at the
purchase price per Share for the Firm Shares. The Additional Shares may be
purchased solely for the purpose of covering over-allotments, if any, made in
connection with the offering of the Firm Shares. If any Additional Shares are
to be purchased, each Underwriter, severally and not jointly, agrees to
purchase the number of Additional Shares (subject to such adjustments as you
may determine to avoid fractional shares) which bears the same proportion to
the total number of Additional Shares to be purchased by the Underwriters as
the number of Firm Shares set forth opposite the name of such Underwriter in
Schedule I hereto (or such number of Firm Shares as adjusted pursuant to
Section 10 hereof) bears to the total number of Firm Shares.
3. Terms of Public Offering. The Company has been advised by you that
the Underwriters propose to make a public offering of their respective portions
of the Shares as soon after the Registration Statement and this Agreement have
become effective as in your judgment is advisable and initially to offer the
Shares upon the terms set forth in the Prospectus.
4. Delivery of the Shares and Payment Therefor. Delivery to the
Underwriters of the Firm Shares and payment therefor shall be made at the
offices of Xxxxxxx Xxxxx & Associates, Inc., 000 Xxxxxxxx Xxxxxxx, Xx.
Xxxxxxxxxx, Xxxxxxx, at 10:00 a.m., St. Petersburg, Florida time, on , 1996
(the "Closing Date"). The place of closing for the Firm Shares and the Closing
Date may be varied by agreement between you and the Company.
Delivery to the Underwriters of and payment for any Additional Shares
to be purchased by the Underwriters shall be made at the offices of Xxxxxxx
Xxxxx & Associates, Inc., 000 Xxxxxxxx Xxxxxxx, Xx. Xxxxxxxxxx, Xxxxxxx, at
10:00 a.m., St. Petersburg, Florida time, on such date or dates (the
"Additional Closing Date") (which may be the same as the Closing Date but shall
in no event be earlier than the Closing Date nor earlier than three nor later
than ten business days after the giving of the notice hereinafter referred to)
as shall be specified in a written notice from you on behalf of the
Underwriters to the Company of the Underwriters' determination to purchase a
number, specified in such notice, of Additional Shares. Such notice may be
given to the Company by you at any time within 30 days after the date of the
Prospectus. The place of closing for the Additional Shares and the Additional
Closing Date may be varied by agreement between you and the Company.
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Certificates for the Firm Shares and for any Additional Shares to be
purchased hereunder shall be registered in such names and in such denominations
as you shall request prior to 1:00 p.m., St. Petersburg, Florida time, not
later than the second full business day preceding the Closing Date or the
Additional Closing Date, as the case may be. Such certificates shall be made
available to you in St. Petersburg, Florida for inspection and packaging not
later than 9:30 a.m., St. Petersburg, Florida time, on the business day
immediately preceding the Closing Date or the Additional Closing Date, as the
case may be. The certificates evidencing the Firm Shares and any Additional
Shares to be purchased hereunder shall be delivered to you on the Closing Date
or the Additional Closing Date, as the case may be, against payment of the
purchase price therefor by certified or official bank check or checks payable
in New York Clearing House (next day) funds.
5. Covenants and Agreements of the Company. The Company covenants and
agrees with the several Underwriters as follows:
(a) The Company will use its best efforts to cause the
Registration Statement to become effective and will advise you
promptly and, if requested by you, will confirm such advice in writing
(i) when the Registration Statement has become effective and when any
post-effective amendment thereto becomes effective, (ii) if Rule 430A
under the Act is employed, when the Prospectus has been timely filed
pursuant to Rule 424(b) under the Act, (iii) of any request by the
Commission for amendments or supplements to the Registration
Statement, any Prepricing Prospectus or the Prospectus or for
additional information, (iv) of the issuance by the Commission of any
stop order suspending the effectiveness of the Registration Statement
or of the suspension of qualification of the Shares for offering or
sale in any jurisdiction or the initiation of any proceeding for such
purposes and (v) within the period of time referred to in Section 5(e)
below, of any change in the Company's condition (financial or other),
business, prospects, properties, net worth or results of operations,
or of any event that comes to the attention of the Company that makes
any statement made in the Registration Statement or the Prospectus (as
then amended or supplemented) untrue in any material respect or that
requires the making of any additions thereto or changes therein in
order to make the statements therein not misleading in any material
respect, or of the necessity to amend or supplement the Prospectus (as
then amended or supplemented) to comply with the Act or any other law.
If at any time the Commission shall issue any stop order suspending
the effectiveness of the Registration Statement, the Company will make
every reasonable effort to obtain the withdrawal of such order at the
earliest possible time. If the Company elects to rely on Rule 434
under the Act, the Company will provide the Underwriters with copies
of the form of Rule 434 Prospectus (including copies of a term sheet
that complies with the requirements of Rule 434 under the Act), in
such number as the Underwriters may reasonably request, and file with
the Commission in accordance with Rule 424(b) of the Act the form of
Prospectus complying with Rule 434(b)(2) of the Act before the close
of business on the first business day immediately following the date
hereof. If the Company elects not to rely on Rule 434 under the Act,
the Company will provide the Underwriters with copies of the form of
Prospectus, in such number as the Underwriters may reasonably request,
and file with the Commission such Prospectus in accordance with Rule
424(b) of the Act before the close of business on the [first] business
day immediately following the date hereof.
(b) The Company will furnish to you, without charge, two
signed duplicate originals of the Registration Statement as originally
filed with the Commission and of each amendment thereto, including
financial statements and all exhibits thereto, and will also furnish
to you, without charge, such number of conformed copies of the
Registration Statement as originally filed and of each amendment
thereto as you may reasonably request.
(c) The Company will not file any Rule 462 Registration
Statement or any amendment to the Registration Statement or make any
amendment or supplement to the Prospectus unless (A) you shall have
previously been advised thereof and given a reasonable opportunity to
review such filing,
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amendment or supplement, and (B) you have not reasonably objected to
such filing, amendment or supplement after being so advised.
(d) Prior to the execution and delivery of this Agreement,
the Company has delivered or will deliver to you, without charge, in
such quantities as you have requested or may hereafter reasonably
request, copies of each form of the Prepricing Prospectus. The Company
consents to the use, in accordance with the provisions of the Act and
with the securities or Blue Sky laws of the jurisdictions in which the
Shares are offered by the several Underwriters and by dealers, prior
to the date of the Prospectus, of each Prepricing Prospectus so
furnished by the Company.
(e) As soon after the execution and delivery of this
Agreement as is practicable and thereafter from time to time for such
period as in the reasonable opinion of counsel for the Underwriters a
prospectus is required by the Act to be delivered in connection with
sales by any Underwriter or a dealer, and for so long a period as you
may request for the distribution of the Shares, the Company will
deliver to each Underwriter, without charge, as many copies of the
Prospectus (and of any amendment or supplement thereto) as they may
reasonably request. The Company consents to the use of the Prospectus
(and of any amendment or supplement thereto) in accordance with the
provisions of the Act and with the securities or Blue Sky laws of the
jurisdictions in which the Shares are offered by the several
Underwriters and by all dealers to whom Shares may be sold, both in
connection with the offering and sale of the Shares and for such
period of time thereafter as the Prospectus is required by the Act to
be delivered in connection with sales by any Underwriter or dealer. If
at any time prior to the later of (i) the completion of the
distribution of the Shares pursuant to the offering contemplated by
the Registration Statement or (ii) the expiration of prospectus
delivery requirements with respect to the Shares under Section 4(3) of
the Act and Rule 174 thereunder, any event shall occur that in the
judgment of the Company or in the opinion of counsel for the
Underwriters is required to be set forth in the Prospectus (as then
amended or supplemented) or should be set forth therein in order to
make the statements therein, in the light of the circumstances under
which they were made, not misleading, or if it is necessary to
supplement or amend the Prospectus to comply with the Act or any other
law, the Company will forthwith prepare and, subject to Sections 5(a)
and 5(c) hereof, file with the Commission and use its best efforts to
cause to become effective as promptly as possible an appropriate
supplement or amendment thereto, and will furnish to each Underwriter
who has previously requested Prospectuses, without charge, a
reasonable number of copies thereof.
(f) The Company will cooperate with you and counsel for the
Underwriters in connection with the registration or qualification of
the Shares for offering and sale by the several Underwriters and by
dealers under the securities or Blue Sky laws of such jurisdictions as
you may reasonably designate and will file such consents to service of
process or other documents as may be reasonably necessary in order to
effect and maintain such registration or qualification for so long as
required to complete the distribution of Shares; provided that in no
event shall the Company be obligated to qualify to do business in any
jurisdiction where it is not now so qualified or to take any action
which would subject it to service of process in suits, other than
those arising out of the offering or sale of the Shares, in any
jurisdiction where it is not now so subject. In the event that the
qualification of the Shares in any jurisdiction is suspended, the
Company shall so advise you promptly in writing.
(g) The Company will make generally available to its security
holders a consolidated earnings statement (in form complying with the
Provisions of Rule 158), which need not be audited, covering a
twelve-month period commencing after the effective date of the
Registration Statement and the Rule 462 Registration Statement, if
any, and ending not later than 15 months thereafter, as soon as
practicable after the end of such period, which consolidated earnings
statement shall satisfy the provisions of Section 11(a) of the Act.
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(h) During the period ending five years from the date hereof,
the Company will furnish to you and, upon your request, to each of the
other Underwriters, (i) as soon as available, a copy of each proxy
statement, quarterly or annual report or other report of the Company
mailed to shareholders or filed with the Commission, the National
Association of Securities Dealers, Inc. (the "NASD") or The Nasdaq
Stock Market or any securities exchange and (ii) from time to time
such other information concerning the Company as you may reasonably
request.
(i) If this Agreement shall terminate or shall be terminated
after execution pursuant to any provision hereof (except pursuant to a
termination under Section 10 hereof) or if this Agreement shall be
terminated by the Underwriters because of any inability, failure or
refusal on the part of the Company to perform any agreement herein or
to comply with any of the terms or provisions hereof, the Company
agrees to reimburse you and the other Underwriters for all
out-of-pocket expenses (including travel expenses and fees and
expenses of counsel for the Underwriters but excluding wages and
salaries paid by you) reasonably incurred by you in connection
herewith.
(j) The Company will apply the net proceeds from the sale of
the Shares to be sold by it hereunder for the purposes set forth under
"Use of Proceeds" in the Prospectus.
(k) If Rule 430A under the Act is employed, the Company will
timely file the Prospectus pursuant to Rule 424(b) under the Act.
(l) For a period of 180 days after the date of the Prospectus
first filed pursuant to Rule 424(b) under the Act, without your prior
written consent, the Company will not, directly or indirectly, issue,
sell, offer or contract to sell or otherwise dispose of or transfer
any shares of Common Stock or securities convertible into or
exchangeable or exercisable for shares of Common Stock (collectively,
"Company Securities") or any rights to purchase Company Securities,
except (i) to the Underwriters pursuant to this Agreement, (ii)
pursuant to and in accordance with the Company's 1996 Stock Option
Plan referenced in the Registration Statement under the caption
"Management - Stock Option Plans," (iii) pursuant to the [X.X. Xxxxxx
equity interests], or (iv) up to an aggregate of __________ shares of
Common Stock issued as consideration to __________ in connection with
the transactions described in the Prospectus under the caption "The
Reorganization" (such transactions are referred to herein as the
"Reorganization").
(m) Prior to the Closing Date or the Additional Closing Date,
as the case may be, the Company will furnish to you, as promptly as
possible, copies of any unaudited interim consolidated financial
statements of the Company and its subsidiaries for any period
subsequent to the periods covered by the financial statements
appearing in the Prospectus.
(n) The Company will comply with all provisions of any
undertakings contained in the Registration Statement.
(o) The Company will not at any time, directly or indirectly
take any action designed, or which might reasonably be expected to
cause or result in, or which will constitute, stabilization or
manipulation of the price of the shares of Common Stock to facilitate
the sale or resale of any of the Shares.
(p) The Company will use its best efforts to qualify or
register its Common Stock for sale in non-issuer transactions under
(or obtain exemptions from the application of) the Blue Sky laws of
each state where necessary to permit market making transactions and
secondary trading, and will comply with such Blue Sky laws and will
continue such qualifications, registrations and exemptions in effect
for a period of five years after the date hereof.
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(q) The Company will timely file within the National
Association of Securities Dealers Automated Quotation National Market
System ("NASDAQ/NMS") all documents and notices required by the
NASDAQ/NMS of companies that have issued securities that are traded in
the over-the-counter market and quotations for which are reported by
the NASDAQ/NMS.
(r) The Company will file with the Commission such reports on
Form SR as may be required pursuant to Rule 463 under the Act.
6. Representations and Warranties of the Company. The Company
represents and warrants to each Underwriter on the date hereof, and shall be
deemed to represent and warrant to each Underwriter on the Closing Date and the
Additional Closing Date, that:
(a) The Company satisfies all of the requirements of the Act
for use on Form S-1 and for the offering of Shares contemplated
hereby. Each Prepricing Prospectus included as part of the
Registration Statement as originally filed or as part of any amendment
or supplement thereto, or filed pursuant to Rule 424(a) under the Act,
complied when so filed in all material respects with the provisions of
the Act, except that this representation and warranty does not apply
to statements in or omissions from such Prepricing Prospectus (or any
amendment or supplement thereto) made in reliance upon and in
conformity with information relating to any Underwriter furnished to
the Company in writing by or on behalf of any Underwriter through you
expressly for use therein. The Commission has not issued any order
preventing or suspending the use of any Prepricing Prospectus.
(b) The Registration Statement (including any Rule 462
Registration Statement), in the form in which it becomes effective and
also in such form as it may be when any post-effective amendment
thereto shall become effective, and the Prospectus, and any supplement
or amendment thereto when filed with the Commission under Rule 424(b)
under the Act, will comply in all material respects with the
provisions of the Act and will not at any such times contain an untrue
statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein not
misleading, except that this representation and warranty does not
apply to statements in or omissions from the Registration Statement or
the Prospectus (or any amendment or supplement thereto) made in
reliance upon and in conformity with information relating to any
Underwriter furnished to the Company in writing by or on behalf of any
Underwriter through you expressly for use therein.
(c) The capitalization of the Company is and will be as set
forth in the Prospectus as of the date set forth therein. All the
outstanding shares of Common Stock of the Company have been, and as of
the Closing Date will be, duly authorized and validly issued, are
fully paid and nonassessable and are free of any preemptive or similar
rights; except as set forth in the Prospectus, the Company is not a
party to or bound by any outstanding options, warrants, or similar
rights to subscribe for, or contractual obligations to issue, sell,
transfer or acquire, any of its capital stock or any securities
convertible into or exchangeable for any of such capital stock; the
Shares to be issued and sold to the Underwriters by the Company
hereunder have been duly authorized and, when issued and delivered to
the Underwriters against payment therefor in accordance with the terms
hereof, will be validly issued, fully paid and nonassessable and free
of any preemptive or similar rights; the capital stock of the Company
conforms to the description thereof in the Registration Statement and
the Prospectus (or any amendment or supplement thereto); and the
delivery of certificates for the Shares against payment therefor
pursuant to the terms of this Agreement and payment for the Shares
will pass valid title to the Shares, free and clear of any claim,
encumbrance or defect in title to the several Underwriters purchasing
the Shares in good faith and without notice of any lien, claim or
encumbrance. The certificates for the Shares are in valid and
sufficient form.
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(d) The Company is a corporation duly organized and validly
existing in good standing under the laws of the State of Delaware with
full power and authority to own, lease and operate its properties and
to conduct its business as presently conducted and as described in the
Registration Statement and the Prospectus (and any amendment or
supplement thereto), and is duly registered and qualified to conduct
its business and is in good standing in each jurisdiction or place
where the nature of its properties or the conduct of its business
requires such registration or qualification, except where the failure
to so register or qualify does not have a material adverse effect on
the condition (financial or other), business, properties, net worth or
results of operations of the Company and the Subsidiaries (as
hereinafter defined) taken as a whole.
(e) The Company does not own a material interest in or
control, directly or indirectly, any other corporation, partnership,
joint venture, association, trust or other business organization.
(f) There are no legal or governmental proceedings pending
or, to the knowledge of the Company, threatened, against the Company
or its predecessors, or to which the Company or any of its
predecessors, or to which any of their respective properties, is
subject that are required to be described in the Registration
Statement or the Prospectus (or any amendment or supplement thereto)
but are not described as required. Except as described in the
Prospectus, there is no action, suit, inquiry, proceeding, or
investigation by or before any court or governmental or other
regulatory or administrative agency or commission pending or, to the
knowledge of the Company, threatened, against or involving the Company
or its predecessors, which might individually or in the aggregate
prevent or adversely affect the transactions contemplated by this
Agreement or result in a material adverse change in the condition
(financial or otherwise), properties, business, results of operations
of the Company or any of its Subsidiaries, nor, to the knowledge of
the Company, is there any basis for any such action, suit, inquiry,
proceeding, or investigation. There are no agreements, contracts,
indentures, leases or other instruments that are required to be
described in the Registration Statement or the Prospectus (or any
amendment or supplement thereto) or to be filed as an exhibit to the
Registration Statement that are not described or filed as required by
the Act. All such contracts to which the Company or its predecessors
is a party have been duly authorized, executed and delivered by the
Company or its predecessors, constitute valid and binding agreements
of the Company and are enforceable against the Company or such
Subsidiary in accordance with the terms thereof, subject to applicable
bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and similar laws affecting creditors' rights and remedies
generally, and subject, as to enforceability, to general principles of
equity, including principles of commercial reasonableness, good faith
and fair dealing (regardless of whether enforcement is sought in a
proceeding at law or in equity), and neither the Company nor its
predecessors, nor to the Company's knowledge, any other party, is in
breach in any material respect of or default under any of such
contracts. With respect to the consumer automobile loan documents that
the Company has acquired in connection with its financing activities
(the "Loan Documents"), any such Loan Documents which contain
provisions that deviate from the standard forms of such contracts that
have been provided to you have not had or will not have, individually
or in the aggregate, a material adverse effect on the condition
(financial or other), business, net worth or results of operations of
the Company and the Subsidiaries taken as a whole.
(g) The Company is not in violation of its certificate or
articles of incorporation or bylaws, or other organizational
documents, nor is the Company or its predecessors in violation in any
material respect of any law, ordinance, administrative or governmental
rule or regulation applicable to the Company or its predecessors or of
any decree of any court or governmental agency or body having
jurisdiction over the Company or its predecessors, or in default in
any material respect in the performance of any obligation, agreement
or condition contained in (i) any bond, debenture, note or any other
evidence of indebtedness, or (ii) any material agreement, indenture,
lease or other instrument to which the Company or its predecessors is
a party or by which any of them or any of their respective properties
may be bound; and there does not exist any state of facts which
constitutes an event of default
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on the part of the Company or its predecessors as defined in such
documents or which, with notice or lapse of time or both, would
constitute such an event of default.
(h) The execution and delivery of this Agreement and the
performance by the Company of its obligations under this Agreement
have been duly and validly authorized by the Company, and this
Agreement has been duly executed and delivered by the Company and
constitutes the valid and legally binding agreement of the Company,
enforceable against the Company in accordance with its terms.
(i) Neither the issuance and sale of the Shares, the
execution, delivery or performance of this Agreement by the Company
nor the consummation by the Company of the transactions contemplated
hereby (i) requires any consent, approval, authorization or other
order of or registration or filing with, any court, regulatory body,
administrative agency or other governmental body, agency or official
(except such as may be required for the registration of the Shares
under the Act and compliance with the securities or Blue Sky laws of
various jurisdictions, all of which will be, or have been, effected in
accordance with this Agreement) or conflicts with or will conflict
with or constitutes or will constitute a breach of, or a default
under, the certificate or articles of incorporation or bylaws, or
other organizational documents, of the Company or any of the
Subsidiaries or (ii) conflicts or will conflict with or constitutes a
breach of, or a default under, any agreement, indenture, lease or
other instrument to which the Company or any of the Subsidiaries is a
party or by which any of them or any of their respective properties
may be bound, or violates any statute, law, regulation or filing or
judgment, injunction, order or decree applicable to the Company or any
of the Subsidiaries or any of their respective properties, or results
in the creation or imposition of any lien, charge or encumbrance upon
any property or assets of the Company or any of the Subsidiaries
pursuant to the terms of any agreement or instrument to which any of
them is a party or by which any of them may be bound or to which any
of the property or assets of any of them is subject.
(j) Except as described in the Prospectus, the Company does
not have outstanding and at the Closing Date (and the Additional
Closing Date, if applicable) will not have outstanding any options to
purchase, or any warrants to subscribe for, or any securities or
obligations convertible into, or any contracts or commitments to issue
or sell, any shares of Common Stock or any such warrants or
convertible securities or obligations. No holder of securities of the
Company has rights to the registration of any securities of the
Company because of the filing of the Registration Statement that have
not been satisfied or heretofore waived in writing.
(k) KPMG Peat Marwick LLP, the certified public accountants
who have certified the financial statements filed as part of the
Registration Statement and the Prospectus (or any amendment or
supplement thereto) are independent public accountants as required by
the Act.
(l) The financial statements, together with related schedules
and notes, included in the Registration Statement and the Prospectus
(and any amendment or supplement thereto), present fairly the
consolidated financial position, results of operations and changes in
financial position of the Company and the Subsidiaries on the basis
stated in the Registration Statement at the respective dates or for
the respective periods to which they apply; such statements and
related schedules and notes have been prepared in accordance with
generally accepted accounting principles consistently applied
throughout the periods involved, except as disclosed therein; and the
other financial and statistical information and data set forth in the
Registration Statement and Prospectus (and any amendment or supplement
thereto) is accurately presented and prepared on a basis consistent
with such financial statements and the books and records of the
Company. No other financial statements or schedules are required to be
included in the Registration Statement.
(m) Except as disclosed in the Registration Statement and the
Prospectus (or any amendment or supplement thereto), subsequent to the
respective dates as of which such information
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is given in the Registration Statement and the Prospectus (or any
amendment or supplement thereto), (i) the Company has not incurred any
material liabilities or obligations, indirect, direct or contingent,
or entered into any other transaction which is not in the ordinary
course of business or which could result in a material reduction in
the future earnings of the Company; (ii) the Company has not sustained
any material loss or interference with its businesses or properties
from fire, flood, windstorm, accident or other calamity, whether or
not covered by insurance; (iii) the Company has not paid or declared
any dividends or other distributions with respect to its capital stock
and the Company is not in default in the payment of principal or
interest on any outstanding debt obligations; (iv) there has not been
any change in the capital stock (other than upon the sale of the
Shares hereunder and upon the exercise of options and warrants
described in the Prospectus) or indebtedness material to the Company
and its Subsidiaries (other than in the ordinary course of business);
and (v) there has not been any material adverse change, or any
development involving or which may reasonably be expected to involve a
potential future material adverse change, in the condition (financial
or otherwise), business, properties, result of operations or prospects
of the Company and its Subsidiaries.
(n) The Company has good and marketable title to all property
(real and personal) described in the Prospectus as being owned by it,
free and clear of all liens, claims, security interests or other
encumbrances except (i) such as are described in the financial
statements included in the Prospectus or (ii) such as are not
materially burdensome and do not interfere in any material respect
with the use of the property or the conduct of the business of the
Company. The property (real and personal) held under lease by each of
the Company and the Subsidiaries is held by it under valid, subsisting
and enforceable leases with only such exceptions as in the aggregate
are not materially burdensome and do not interfere in any material
respect with the conduct of the business of the Company.
(o) The Company has not distributed and will not distribute
any offering material in connection with the offering and sale of the
Shares other than the Prepricing Prospectus, the Prospectus, or other
offering material, if any, as permitted by the Act and the Rules and
Regulations.
(p) The Company has not taken, directly or indirectly, any
action which constituted, or any action designed, or which might
reasonably be expected to cause or result in or constitute, under the
Act or otherwise, stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of the
Shares.
(q) The Company is not an "investment company," an
"affiliated person" of, or "promoter" or "principal underwriter" for
an investment company within the meaning of the Investment Company Act
of 1940, as amended.
(r) The Company has all permits, licenses, franchises,
approvals, consents and authorizations of governmental or regulatory
authorities (hereinafter "permit" or "permits") as are necessary to
own their respective properties and to conduct their respective
businesses in the manner described in the Prospectus, subject to such
qualifications as may be set forth in the Prospectus, except where the
failure to have obtained any such permit has not and will not have a
material adverse effect upon the condition (financial or other) or the
business of the Company; the Company and its predecessors have
fulfilled and performed all of their material obligations with respect
to each such permit and no event has occurred which allows, or after
notice or lapse of time would allow, revocation or termination of any
such permit or result in any other material impairment of the rights
of the holder of any such permit, subject in each case to such
qualification as may be set forth in the Prospectus; and, except as
described in the Prospectus, such permits contain no restrictions that
are materially burdensome to the Company.
9
(s) The Company and its predecessors have complied and the
Company will comply in all material respects with wage and hour
determinations issued by the U.S. Department of Labor under the
Service Contract Act of 1965 and the Fair Labor Standards Act in
paying its employees' salaries, fringe benefits, and other
compensation for the performance of work or other duties in connection
with contracts with the U.S. government. The Company and its
predecessors have complied and the Company will comply in all material
respects with the terms of all certifications and representations made
to the U.S. government in connection with the submission of any bid or
proposal or any contract. The Company and its predecessors have
complied and the Company will comply with the requirements of the
American with Disabilities Act of 1990, the Family and Medical Leave
Act of 1993, the Employee Retirement Income Security Act, the Civil
Rights Act of 1964 (Title VII), as amended, the Age Discrimination in
Employment Act and other applicable federal and state employment and
labor laws.
(t) The Company and its predecessors maintain a system of
internal accounting controls sufficient to provide reasonable
assurances that (i) transactions are executed in accordance with
management's general or specific authorizations; (ii) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles and to
maintain accountability for assets; (iii) access to assets is
permitted only in accordance with management's general or specific
authorizations; and (iv) the recorded accountability for assets is
compared with existing assets at reasonable intervals and appropriate
action is taken with respect to any differences.
(u) Neither the Company nor its predecessors has, directly or
indirectly, at any time during the past five years (i) made any
unlawful contribution to any candidate for political office, or failed
to disclose fully any contribution in violation of law, or (ii) made
any payment to any federal, state or foreign governmental official, or
other person charged with similar public or quasi-public duties, other
than payments required or permitted by the laws of the United States
or any jurisdiction thereof or applicable foreign jurisdictions.
(v) The Company and its predecessors have obtained all
required permits, licenses, and other authorizations, if any, which
are required under federal, state, local and foreign statutes,
ordinances and other laws relating to pollution or protection of the
environment, including laws relating to emissions, discharges,
releases, or threatened releases of pollutants, contaminants,
chemicals, or industrial, hazardous, or toxic materials or wastes into
the environment (including, without limitation, ambient air, surface
water, ground water, land surface, or subsurface strata) or otherwise
relating to the manufacture, processing, distribution, use, treatment,
storage, disposal, transport, or handling of pollutants, contaminants,
chemicals, or industrial, hazardous, or toxic materials or wastes, or
any regulation, rule, code, plan, order, decree, judgment, injunction,
notice, or demand letter issued, entered, promulgated, or approved
thereunder ("Environmental Laws"). The Company and its predecessors
are in material compliance with all terms and conditions of all
required permits, licenses, and authorizations, and are also in
material compliance with all other limitations, restrictions,
conditions, standards, prohibitions, requirements, obligations,
schedules, and timetables contained in the Environmental Laws. There
is no pending or, to the best knowledge of the Company, threatened
civil or criminal litigation, notice of violation, or administrative
proceeding relating in any way to the Environmental Laws (including
but not limited to notices, demand letters, or claims under the
Resource Conservation and Recovery Act of 1976, as amended ("RCRA"),
the Comprehensive Environmental Response, Compensation and Liability
Act of 1980, as amended ("CERCLA"), the Emergency Planning and
Community Right to Know Act of 1986, as amended ("EPCRA"), the Clean
Air Act, as amended ("CAA"), or the Clean Water Act, as amended
("CWA") and similar federal, foreign, state, or local laws) involving
the Company or the Subsidiaries. There have not been and there are not
any past, present, or foreseeable future events, conditions,
circumstances, activities, practices, incidents, actions, or plans
which may interfere with or prevent continued compliance, or which may
give rise to any common law or legal liability, or otherwise form the
basis of any claim, action, demand, suit, proceeding, hearing, study,
or investigation, based on or related to the manufacture, processing,
distribution, use, treatment,
10
storage, disposal, transport, or handling, or the emission, discharge,
release, or threatened release into the environment, of any pollutant,
contaminant, chemical, or industrial, hazardous, or toxic material or
waste, including, without limitation, any liability arising, or any
claim, action, demand, suit, proceeding, hearing, study, or
investigation which may be brought, under RCRA, CERCLA, EPCRA, CAA,
CWA or similar federal, foreign, state or local laws.
(w) The Company owns and has full right, title and interest
in and to, or have valid licenses to use, each material trade name,
trademark or service xxxx under which the Company or any of its
predecessors conducts its business, and the Company and its
predecessors have created no lien or encumbrance on, or granted any
right or license with respect to, any such trade name, trademark or
service xxxx; there is no claim pending against the Company or its
predecessors with respect to any trade name, trademark or service xxxx
and neither the Company nor any of its predecessors has received
notice that any trade name, trademark or service xxxx which it uses or
has used in the conduct of its business infringes upon or conflicts
with the rights of any third party.
(x) All offers and sales of the Company's and its
Subsidiaries' capital stock prior to the date hereof were made in
compliance with the Act and all other applicable state and federal
laws or regulations (or in compliance with exemptions available under
such laws and regulations).
(y) The Shares have been duly authorized for trading on the
NASDAQ/NMS subject to notice of issuance and upon consummation of the
offering contemplated hereby the Company will be in compliance with
the designation and maintenance criteria applicable to Nasdaq National
Market issuers.
(z) All federal, state and local tax returns required to be
filed by or on behalf of the Company or any of its predecessors with
respect to all periods ended prior to the date of this Agreement have
been filed (or are the subject of valid extension) with the
appropriate federal, state and local authorities and all such tax
returns, as filed, are accurate in all material respects. All federal,
state and local taxes (including estimated tax payments) required to
be shown on all such tax returns or claimed to be due from or with
respect to the business of the Company or any of its predecessors have
been paid or reflected as a liability on the financial statements of
the Company and its predecessors for appropriate periods, except for
those taxes or claims therefor which are being contested by the
Company in good faith and for which appropriate reserves are reflected
in the Company's financial statements. All deficiencies asserted as a
result of any federal, state or local tax audits have been paid or
finally settled and no issue has been raised in any such audit which,
by application of the same or similar principles, reasonably could be
expected to result in a proposed deficiency for any other period not
so audited. No state of facts exists or has existed which would
constitute grounds for the assessment of any tax liability with
respect to the periods which have not been audited by appropriate
federal, state or local authorities. There are no outstanding
agreements or waivers extending the statutory period of limitation
applicable to any federal, state or local tax return for any period.
On the Closing Date, and Additional Closing Date, if any, all stock
transfer and other taxes which are required to be paid in connection
with the sale of the shares to be sold by the Company to the
Underwriters will have been fully paid by the Company and all laws
imposing such taxes will have been complied with.
(aa) Except as set forth in the Prospectus, there are no
transactions with affiliates, as defined in Rule 405 promulgated under
the Act, which are required by the Act and the applicable rules and
regulations thereunder to be disclosed in the Registration Statement.
(bb) The Company has procured the written agreement of each
of the officers and directors and shareholders of the Company as set
forth in the Prospectus not to (i) directly or indirectly sell, offer
or contract to sell or otherwise dispose of or transfer any shares of
Common Stock or securities of the Company convertible into or
exchangeable or exercisable for Common Stock (collectively, "Company
11
Securities") owned or controlled by such persons now or hereafter or
any rights to purchase Company Securities for a period of 180 days
after the date of the Prospectus first filed pursuant to Rule 424(b)
under the Act (the "Restriction Period"), without your prior written
consent, or (ii) exercise or seek to exercise or effectuate in any
manner any rights of any nature that such persons have or may
hereafter have to require the Company to register under the Act any
such person's sale, transfer or other disposition of any Company
Securities or other securities of the Company held by any such
persons, or to otherwise participate as a selling securityholder in
any manner in any registration effected by the Company under the Act,
including the registration to which this Agreement relates, before the
expiration of the Restriction Period.
(cc) Neither the Company nor any of its predecessors (i)
conduct business or have affiliates which conduct business in or with
Cuba, (ii) plan to commence doing business in or with Cuba after the
effective date of the Registration Statement or (iii) are required by
Florida law to report a material change in information previously
reported to the State of Florida regarding business conducted in or
with Cuba.
(dd) All of the following transactions shall occur on or
before the Closing Date as described in the Prospectus (i) National
Auto Finance Company, L.P., a Delaware limited partnership (the "NAFCO
Partnership") and Auto Credit Clearinghouse L.P., a Delaware limited
partnership (the "ACCH Partnership" and together with the NAFCO
Partnership, the "Partnerships") will transfer all of their assets and
liabilities to the Company _______________________ as described in the
Prospectus, and (iii) the Company's Certificate of Incorporation, in
the form previously presented to and approved by the Representatives,
shall be duly approved by the Company's Board of Directors and
security holders in accordance with applicable law and shall have
become effective upon the filing thereof with the Secretary of State
of the State of Delaware (which Certificate of Incorporation provide
for, among other things, the authorization of _________ shares of
Common Stock and __________ shares of "blank check" preferred stock),
(the foregoing transactions described in this paragraph (dd) are
referred to herein collectively as the "Company Transactions").
7. Expenses. Whether or not the transactions contemplated hereby are
consummated or this Agreement becomes effective or is terminated, the Company
will pay or cause to be paid the following: (i) the fees, disbursements and
expenses of the Company's counsel and accountants in connection with the
registration of the Shares under the Act and all other expenses in connection
with the preparation, printing and filing of the Registration Statement and the
Prospectus and amendments and supplements thereto and the mailing and
delivering of copies thereof and of any Prepricing Prospectus to the
Underwriters and dealers; (ii) the printing and delivery (including, without
limitation, postage, air freight charges and charges for counting and
packaging) of such copies of the Registration Statement, the Prospectus, each
Prepricing Prospectus, the Blue Sky memoranda, the Power of Attorney, the
Master Agreement Among Underwriters, this Agreement, the Selected Dealers
Agreement and all amendments or supplements to any of them as may be reasonably
requested for use in connection with the offering and sale of the Shares; (iii)
all expenses in connection with the qualification of the Shares for offering
and sale under state securities laws or Blue Sky laws, including the fees of
the counsel for the Underwriters in connection therewith; (iv) the filing fees
incident to securing any required review by the NASD of the terms of the sale
of the Shares and the reasonable fees and disbursements of the Underwriters'
counsel relating thereto; (v) the cost of preparing stock certificates; (vi)
the costs and charges of any transfer agent or registrar; (vii) the cost of the
tax stamps, if any, in connection with the issuance and delivery of the Shares
to the respective Underwriters; (viii) all other fees, costs and expenses
referred to in Item 13 of the Registration Statement and (ix) all other costs
and expenses incident to the performance of the obligations of the Company
hereunder which are not otherwise specifically provided for in this Section.
Notwithstanding the foregoing, in the event that the proposed offering is
terminated for the reasons set forth in Section 5(i) hereof, the Company agrees
to reimburse the Underwriters as provided in Section 5(i).
12
8. Indemnification and Contribution. The Company agrees to indemnify
and hold harmless you and each other Underwriter, the directors, officers,
employees and agents of each Underwriter, and each person, if any, who controls
any Underwriter within the meaning of Section 15 of the Act or Section 20 of
the Securities Exchange Act of 1934, as amended (the "Exchange Act") from and
against any and all losses, claims, damages, liabilities and expenses
(including reasonable costs of investigation) arising out of or based upon (i)
any untrue statement or alleged untrue statement of a material fact contained
in any Prepricing Prospectus or in the Registration Statement or the Prospectus
or in any amendment or supplement thereto, or arising out of or based upon 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 arise
out of or are based upon an untrue statement or omission or alleged untrue
statement or omission which has been made therein or omitted therefrom in
reliance upon and in conformity with the information furnished in writing to
the Company by or on behalf of any Underwriter through you expressly for use in
connection therewith, or (ii) any inaccuracy in the representations and
warranties of the Company contained herein or any failure of the Company to
perform its obligations hereunder or under law; provided, however, that with
respect to any untrue statement or omission made in any Prepricing Prospectus,
the indemnity agreement contained in this subsection shall not inure to the
benefit of any Underwriter (or to the benefit of any person controlling such
Underwriter) from whom the person asserting any such losses, claims, damages or
liabilities purchased the Shares of Stock concerned if both (A) a copy of the
Prospectus was not sent or given to such person at or prior to the written
confirmation of the sale of such Shares of Stock to such person as required by
the Act, and (B) the untrue statement or omission in the Prepricing Prospectus
was corrected in the Prospectus.
In addition to its other obligations under this Section 8, the Company
agrees that, as an interim measure during the pendency of any claim, action,
investigation, inquiry or other proceeding arising out of or based upon any
statement or omission, or any inaccuracy in the representations and warranties
of the Company herein or failure to perform its obligations hereunder, all as
described in this Section 8, it will reimburse each Underwriter on a quarterly
basis for all reasonable legal or other expenses incurred in connection with
investigating or defending any such claim, action, investigation, inquiry or
other proceeding, notwithstanding the absence of a judicial determination as to
the propriety and enforceability of the Company's obligation to reimburse each
Underwriter for such expenses and the possibility that such payments might
later be held to have been improper by a court of competent jurisdiction. To
the extent that any such interim reimbursement payment is so held to have been
improper, each Underwriter shall promptly return it to the Company together
with interest, compounded daily determined on the basis of the base lending
rate announced from time to time by Chase Manhattan Bank, N.A. (the "Prime
Rate"). Any such interim reimbursement payments which are not made to the
Underwriters within 30 days of a request for reimbursement shall bear interest
at the Prime Rate from the date of such request.
If any action or claim shall be brought against any Underwriter or any
person controlling any Underwriter in respect of which indemnity may be sought
against the Company such Underwriter or such controlling person shall promptly
notify in writing the party(s) against whom indemnification is being sought
(the "indemnifying party" or "indemnifying parties"), and such indemnifying
party(s) shall assume the defense thereof, including the employment of counsel
reasonably acceptable to such Underwriter or such controlling person and
payment of all fees and expenses. Such Underwriter or any such controlling
person shall have the right to employ separate counsel (but the Company shall
not be liable for the fees and expenses of more than one counsel) in any such
action and participate in the defense thereof, but the fees and expenses of
such counsel shall be at the expense of such Underwriter or such controlling
person unless (i) the indemnifying party(s) has (have) agreed in writing to pay
such fees and expenses, (ii) the indemnifying party(s) has (have) failed to
assume the defense and employ counsel reasonably acceptable to the Underwriter
or such controlling person or (iii) the named parties to any such action
(including any impleaded parties) include both such Underwriter or such
controlling person and the indemnifying party(s), and such Underwriter or such
controlling person shall have been advised by its counsel that one or more
legal defenses may be available to the Underwriter which may not be available
to the Company, or that representation of such indemnified party and any
indemnifying party(s) by the same counsel would be inappropriate under
applicable standards of professional conduct (whether or not
13
such representation by the same counsel has been proposed) due to actual or
potential differing interests between them (in which case the indemnifying
party(s) shall not have the right to assume the defense of such action on
behalf of such Underwriter or such controlling person (notwithstanding its
(their) obligation to bear the fees and expenses of such counsel)). The
indemnifying party(s) shall not be liable for any settlement of any such action
effected without its (their) written consent, but if settled with such written
consent, or if there be a final judgment for the plaintiff in any such action,
the indemnifying party(s) agrees to indemnify and hold harmless any Underwriter
and any such controlling person from and against any loss, claim, damage,
liability or expense by reason of such settlement or judgment, but in the case
of a judgment only to the extent stated in the immediately preceding paragraph.
Each Underwriter agrees, severally and not jointly, to indemnify and
hold harmless the Company, its directors, its officers who sign the
Registration Statement, and any person who controls the Company within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act, to the same
extent as the foregoing indemnity from the Company to each Underwriter, but
only with respect to information furnished in writing by or on behalf of such
Underwriter through you expressly for use in the Registration Statement, the
Prospectus or any Prepricing Prospectus, or any amendment or supplement
thereto. If any action or claim shall be brought or asserted against the
Company, any of its directors, any such officers, or any such controlling
person based on the Registration Statement, the Prospectus or any Prepricing
Prospectus, or any amendment or supplement thereto, and in respect of which
indemnity may be sought against any Underwriter pursuant to this paragraph,
such Underwriter shall have the rights and duties given to the Company by the
preceding paragraph (except that if the Company shall have assumed the defense
thereof such Underwriter shall not be required to do so, but may employ
separate counsel therein and participate in the defense thereof, but the fees
and expenses of such counsel shall be at such Underwriter's expense), and the
Company, its directors, any such officers, and any such controlling persons
shall have the rights and duties given to the Underwriters by the immediately
preceding paragraph.
In addition to its other obligations under this Section 8, each
Underwriter severally agrees that, as an interim measure during the pendency of
any claim, action, investigation, inquiry or other proceeding arising out of or
based upon any statement or omission, or any alleged statement or omission,
described in this Section 8 which relates to information furnished to the
Company in writing by or on behalf of the Underwriters through you expressly
for use in the Registration Statement, it will reimburse the Company (and, to
the extent applicable, each officer, director or controlling person) on a
quarterly basis for all reasonable legal or other expenses incurred in
connection with investigating or defending any such claim, action,
investigation, inquiry or other proceeding, notwithstanding the absence of a
judicial determination as to the propriety and enforceability of the
Underwriters' obligation to reimburse the Company (and, to the extent
applicable, each officer, director or controlling person) for such expenses and
the possibility that such payments might later be held to have been improper by
a court of competent jurisdiction. To the extent that any such interim
reimbursement payment is so held to have been improper, the Company (and, to
the extent applicable, each officer, director or controlling person) shall
promptly return it to the Underwriters together with interest, compounded
daily, determined on the basis of the Prime Rate. Any such interim
reimbursement payments which are not made to the Company within 30 days of a
request for reimbursement shall bear interest at the Prime Rate from the date
of such request.
If the indemnification provided for in this Section 8 is unavailable
or insufficient for any reason whatsoever to an indemnified party under the
first or fourth paragraph hereof in respect of any losses, claims, damages,
liabilities or expenses referred to therein, then an 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 (i) in such proportion as is appropriate to
reflect the relative benefits received by the Company on the one hand and the
Underwriters on the other hand from the offering of the Shares or (ii) if the
allocation provided by clause (i) above is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Company on
the one hand and the Underwriters on the other hand in connection with the
14
statements or omissions that resulted in such losses, claims, damages,
liabilities or expenses, as well as any other relevant equitable
considerations. The relative benefits received by the Company on the one hand
and the Underwriters on the other shall be deemed to be in the same proportion
as the total net proceeds from the offering (before deducting expenses)
received by the Company bear to the total underwriting discounts and
commissions received by the Underwriters, in each case as set forth in the
table on the cover page of the Prospectus; provided that, in the event that the
Underwriters shall have purchased any Additional Shares hereunder, any
determination of the relative benefits received by the Company or the
Underwriters from the offering of the Shares shall include the net proceeds
(before deducting expenses) received by the Company, and the underwriting
discounts and commissions received by the Underwriters, from the sale of such
Additional Shares, in each case computed on the basis of the respective amounts
set forth in the notes to the table on the cover page of the Prospectus. The
relative fault of the Company on the one hand and the Underwriters on the other
hand 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 on the one hand or by the Underwriters on the other hand and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission.
The Company and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this Section 8 was determined by a pro
rata allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation that 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 and 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 8, no Underwriter
shall be required to contribute any amount in excess of the amount by which the
total price of the Shares underwritten by it and distributed to the public
exceeds the amount of any damages which such Underwriter has otherwise been
required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations to contribute pursuant to this
Section 8 are several in proportion to the respective numbers of Firm Shares
set forth opposite their names in Schedule I hereto (or such numbers of Firm
Shares increased as set forth in Section 10 hereof) and not joint.
Notwithstanding the second and fifth paragraphs of this Section 8, any
losses, claims, damages, liabilities or expenses for which an indemnified party
is entitled to indemnification or contribution under this Section 8 shall be
paid by the indemnifying party to the indemnified party as such losses, claims,
damages, liabilities or expenses are incurred. The indemnity, contribution and
reimbursement agreements contained in Section 8 and the representations and
warranties of the Company set forth in this Agreement shall remain operative
and in full force and effect, regardless of (i) any investigation made by or on
behalf of any Underwriter or any person controlling any Underwriter, the
Company, its directors or officers or any person controlling the Company, (ii)
acceptance of any Shares and payment therefor hereunder and (iii) any
termination of this Agreement. A successor to any Underwriter or any person
controlling any Underwriter, or to the Company, its directors or officers, or
any person controlling the Company, shall be entitled to the benefits of the
indemnity, contribution and reimbursement agreements contained in this
Section 8.
It is agreed that any controversy arising out of the operation of the
interim reimbursement arrangements set forth in the second and fifth paragraphs
of this Section 8, including the amounts of any requested reimbursement
payments and the method of determining such amounts, shall be settled by
arbitration conducted under the provisions of the Constitution and Rules of the
Board of Governors of the New York Stock Exchange, Inc. or pursuant to the Code
of Arbitration Procedure of the NASD. Any such arbitration must be commenced by
service of a written demand for arbitration or written notice of intention to
arbitrate, therein electing the arbitration tribunal. In the event the party
demanding arbitration does not make such designation of an
15
arbitration tribunal in such demand or notice, then the party responding to
said demand or notice is authorized to do so. Such an arbitration would be
limited to the operation of the interim reimbursement provisions contained in
the second and fifth paragraphs of this Section 8, and would not resolve the
ultimate propriety or enforceability of the obligation to reimburse expenses
which is created by the provisions of the second and fifth paragraphs of this
Section 8.
9. Conditions of Underwriters' Obligations. The several obligations of
the Underwriters to purchase the Firm Shares hereunder are subject to the
following conditions:
(a) The Registration Statement shall have become effective
not later than 12:00 noon, New York City time, on the date hereof, or
at such later date and time as shall be consented to in writing by
you, and all filings required by Rules 424(b), 430A and 462 under the
Act shall have been timely made.
(b) You shall be reasonably satisfied that since the
respective dates as of which information is given in the Registration
Statement and Prospectus, (i) there shall not have been any change in
the capital stock (other than pursuant to the Company Transactions as
described in Section 6(dd) hereof and the Prospectus) of the Company
or any of its Subsidiaries or any material change in the indebtedness
(other than in the ordinary course of business) of the Company or any
of its Subsidiaries, (ii) except as set forth or contemplated by the
Registration Statement or the Prospectus, no material verbal or
written agreement or other transaction shall have been entered into by
the Company or any of its Subsidiaries, which is not in the ordinary
course of business or which could reasonably be expected to result in
a material reduction in the future earnings of the Company and its
Subsidiaries, (iii) no loss or damage (whether or not insured) to the
property of the Company or any of its Subsidiaries shall have been
sustained which materially and adversely affects the condition
(financial or otherwise), business, or results of operations of the
Company and its Subsidiaries, (iv) no legal or governmental action,
suit or proceeding affecting the Company or any of its Subsidiaries
which is material to the Company and its Subsidiaries or which affects
or could reasonably be expected to affect the transactions
contemplated by this Agreement shall have been instituted or
threatened, and (v) there shall not have been any material change in
the condition (financial or otherwise), business, management, results
or operations or prospects of the Company and its Subsidiaries which
makes it impractical or inadvisable in your judgment to proceed with
the public offering or purchase the Shares as contemplated hereby.
(c) The Company, shall deliver an opinion of counsel, dated
the Closing Date, reasonably satisfactory to you and your counsel.
(d) You shall have received on the Closing Date (and the
Additional Closing Date, if any) an opinion of Greenberg, Traurig,
Hoffman, Lipoff, Xxxxx & Xxxxxxx, P.A., as counsel for the
Underwriters, dated the Closing Date with respect to the issuance and
sale of the Firm Shares, the Registration Statement and other related
matters as you may reasonably request and the Company and its counsel
shall have furnished to your counsel such documents as they may
reasonably request for the purpose of enabling them to pass upon such
matters.
(e) You shall have received letters addressed to you and
dated the date hereof and the Closing Date from KPMG Peat Marwick LLP,
independent certified public accountants, substantially in the forms
heretofore approved by you.
(f)(i) No stop order suspending the effectiveness of the
Registration Statement shall have been issued and no proceedings for
that purpose shall be pending or, to the knowledge of the Company,
shall be threatened or contemplated by the Commission at or prior to
the Closing Date; (ii) no order suspending the effectiveness of the
Registration Statement or the qualification or registration of the
Shares under the securities or Blue Sky laws of any jurisdiction shall
be in effect and no proceeding for such purpose shall be pending or,
to the knowledge of the Company, threatened or contemplated by the
Commission or the authorities of any jurisdiction; (iii) any request
for additional information on the part of the staff of the Commission
or any such authorities shall have been complied with to the
satisfaction of the staff of the Commission or such authorities; (iv)
after the date hereof no amendment or supplement to the Registration
Statement or the Prospectus shall have been filed unless a copy
thereof was first submitted to you and you did not object thereto in
good faith; and (v) all of the representations and warranties of the
Company contained in this Agreement shall be true and correct in all
respects on and as of the date hereof and on and as of the Closing
Date as if made on and as of the Closing Date, and you shall have
received a certificate, dated the Closing Date and signed by the chief
executive officer
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and the chief financial officer of the Company (or such other officers
as are acceptable to you) to the effect set forth in this Section 9(g)
and in Sections 9(b) and 9(h) hereof.
(g) The Company shall not have failed in any respect at or
prior to the Closing Date to have performed or complied with any of
its agreements herein contained and required to be performed or
complied with by it hereunder at or prior to the Closing Date.
(h) The Company shall have furnished or caused to have been
furnished to you such further certificates and documents as you shall
have reasonably requested.
(i) At or prior to the Closing Date, you shall have received
the written commitment of each of the Company's officers and directors
and shareholders not to (i) directly or indirectly sell, offer or
contract to sell, or otherwise dispose of or transfer any shares of
Common Stock or securities of the Company convertible into or
exchangeable or exercisable for Common Stock (collectively, "Company
Securities") owned or controlled by such persons now or hereafter or
any rights to purchase Company Securities, for a period of 180 days
after the date of the Prospectus first filed pursuant to Rule 424(b)
under the Act (the "Restriction Period"), without your prior written
consent, or (ii) exercise or seek to exercise or effectuate in any
manner any rights of any nature that such persons have or may
hereafter have to require the Company to register under the Act any
such person's sale, transfer or other disposition of any Company
Securities or other securities of the Company held by any such
persons, or to otherwise participate as a selling securityholder in
any manner in any registration effected by the Company under the Act,
including the registration to which this Agreement relates, before the
expiration of the Restriction Period.
(j) At or prior to the effective date of the Registration
Statement, you shall have received a letter from the Corporate
Financing Department of the NASD confirming that such Department has
determined to raise no objections with respect to the fairness or
reasonableness of the underwriting terms and arrangements of the
offering contemplated hereby.
All such opinions, certificates, letters and other documents will be
in compliance with the provisions hereof only if they are reasonably
satisfactory in form and substance to you and your counsel.
The several obligations of the Underwriters to purchase Additional
Shares hereunder are subject to the satisfaction on and as of the Additional
Closing Date of the conditions set forth in this Section 9, except that, if the
Additional Closing Date is other than the Closing Date, the certificates,
opinions and letters referred to in paragraphs (c) through (i) shall be dated
as of the Additional Closing Date and the opinions called for by paragraphs (c)
and (d) shall be revised to reflect the sale of Additional Shares.
If any of the conditions hereinabove provided for in this Section 9
shall not have been satisfied when and as required by this Agreement, this
Agreement may be terminated by you by notifying the Company of such termination
in writing or by telegram at or prior to such Closing Date, but you shall be
entitled to waive any of such conditions.
10. Effective Date of Agreement. This Agreement shall become effective
upon the later of (a) the execution and delivery hereof by the parties hereto,
and (b) release of notification of the effectiveness of the Registration
Statement by the Commission; provided, however, that the provisions of Sections
7 and 8 shall at all times be effective.
If any one or more of the Underwriters shall fail or refuse to
purchase Firm Shares which it or they have agreed to purchase hereunder, and
the aggregate number of Firm Shares which such defaulting Underwriter or
Underwriters agreed but failed or refused to purchase is not more than
one-tenth of the aggregate number of the Firm Shares, each non-defaulting
Underwriter shall be obligated, severally, in the proportion which the
20
number of Firm Shares set forth opposite its name in Schedule I hereto bears to
the aggregate number of Firm Shares set forth opposite the names of all
non-defaulting Underwriters or in such other proportion as you may specify in
the Agreement Among Underwriters, to purchase the Firm Shares which such
defaulting Underwriter or Underwriters agreed, but failed or refused to
purchase. If any Underwriter or Underwriters shall fail or refuse to purchase
Firm Shares and the aggregate number of Firm Shares with respect to which such
default occurs is more than one-tenth of the aggregate number of Firm Shares
and arrangements satisfactory to you, the Company for the purchase of such Firm
Shares are not made within 48 hours after such default, this Agreement will
terminate without liability on the part of any non-defaulting Underwriter or
the Company. In any such case which does not result in termination of this
Agreement, either you or the Company shall have the right to postpone the
Closing Date, but in no event for longer than seven (7) days, in order that the
required changes, if any, in the Registration Statement and the Prospectus or
any other documents or arrangements may be effected. Any action taken under
this paragraph shall not relieve any defaulting Underwriter from liability in
respect of any such default of any such Underwriter under this Agreement.
11. Termination of Agreement. This Agreement shall be subject to
termination in your absolute discretion, without liability on the part of any
Underwriter to the Company by notice to the Company, if prior to the Closing
Date or the Additional Closing Date (if different from the Closing Date and
then only as to the Additional Shares), as the case may be, in your sole
judgment, (i) trading in the Company's Common Stock shall have been suspended
by the Commission or the NASDAQ/NMS, (ii) trading in securities generally on
the New York Stock Exchange, American Stock Exchange or NASDAQ/NMS shall have
been suspended or materially limited, or minimum or maximum prices shall have
been generally established on such exchange, or additional material
governmental restrictions, not in force on the date of this Agreement, shall
have been imposed upon trading in securities generally by any such exchange or
by order of the Commission or any court or other governmental authority, (iii)
a general moratorium on commercial banking activities shall have been declared
by either federal or New York State authorities or (iv) there shall have
occurred any outbreak or escalation of hostilities or other international or
domestic calamity, crisis or change in political, financial or economic
conditions or other material event the effect of which on the financial markets
of the United States is such as to make it, in your judgment, impracticable or
inadvisable to market the Shares or to enforce contracts for the sale of the
Shares. Notice of such cancellation shall be promptly given to the Company and
its counsel by telegraph, telecopy or telephone and shall be subsequently
confirmed by letter.
12. Information Furnished by the Underwriters. The Company
acknowledges that the statements set forth under footnote (3) on the cover page
of the Prospectus and under the second paragraph under the caption
"Underwriting" in any Prepricing Prospectus and in the Prospectus, constitute
the only information furnished by or on behalf of the Underwriters through you
or on your behalf as such information is referred to in Sections 6(a), 6(b) and
8 hereof.
13. Miscellaneous. Except as otherwise provided in Sections 5 and 12
hereof, notice given pursuant to any of the provisions of this Agreement shall
be in writing and shall be delivered (i) if to the Company, to the office of
the Company at 000 X.X. 00xx Xxxxxx, Xxxxx 000, Xxxx Xxxxx, Xxxxxxx 00000,
Attention: Xxxxx X. Xxxxx (with copy to Weil, Gotshal & Xxxxxx LLP, 000 Xxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxxxx Xxxxxxxxxx and Salim Day)
or (ii) if to you, as Representatives of the Underwriters, to Xxxxxxx Xxxxx &
Associates, Inc., 000 Xxxxxxxx Xxxxxxx, Xx. Xxxxxxxxxx, Xxxxxxx 00000,
Attention: Xxxx X. Xxxxxx and Xxxx X. Xxxxxx; (with copy to Greenberg, Traurig,
Hoffman, Lipoff, Xxxxx & Quentel, P.A., 0000 Xxxxxxxx Xxxxxx, Xxxxx, Xxxxxxx
00000, Attention: Xxxxx X. Xxxxxxxx).
This Agreement has been and is made solely for the benefit of the
several Underwriters, the Company, its directors and officers, and the other
controlling persons referred to in Section 8 hereof, and their respective
successors and assigns, to the extent provided herein, and no other person
shall acquire or have any right under or by virtue of this Agreement. Neither
of the terms "successor" and "successors and assigns" as used in this Agreement
shall include a purchaser from you of any of the Shares in his status as such
purchaser.
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14. Applicable Law; Counterparts. This Agreement shall be governed by
and construed in accordance with the laws of the State of Florida without
reference to choice of law principles thereunder.
This Agreement may be signed in various counterparts which together
shall constitute one and the same instrument.
This Agreement shall be effective when, but only when, at least one
counterpart hereof shall have been executed on behalf of each party hereto.
The Company and the Underwriters each hereby irrevocably waive any
right they may have to a trial by jury in respect to any claim based upon or
arising out of this Agreement or the transactions contemplated hereby.
Please confirm that the foregoing correctly sets forth the agreement
between the Company and the several Underwriters.
Very truly yours,
National Auto Finance Company, Inc.
By:________________________________
Name:______________________________
Title:_____________________________
CONFIRMED as of the date first above mentioned, on behalf of itself and the
other several Underwriters named in Schedule I hereto.
XXXXXXX XXXXX & ASSOCIATES, INC.
By:_____________________________
Name:___________________________
Title:__________________________
The undersigned agrees to indemnify and hold harmless the Company and
the directors, officers, employees and agents of the Company from and against
any and all losses, claims, damages, liabilities and expenses arising out of or
based upon [Title of Shareholder litigations], together with any related
controversy or successor litigation.
NATIONAL AUTO FINANCE COMPANY, L.P.
By:_____________________________
Name:___________________________
Title:__________________________
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SCHEDULE I
Number
of Firm
Name Shares
---- -------
Xxxxxxx Xxxxx & Associates, Inc.......................................
TOTAL.................................................................
=======
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