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EXHIBIT 1.1
1,341,000 SHARES(1)
FIRSTCITY FINANCIAL CORPORATION
COMMON STOCK
PURCHASE AGREEMENT
__________, 1998
Xxxxx Xxxxxxx Inc.
As Representative of the several Underwriters
named in Schedule II hereto c/o
Xxxxx Xxxxxxx Inc.
Xxxxx Xxxxxxx Tower
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
Ladies and Gentlemen:
FirstCity Financial Corporation, a Delaware corporation (the
"Company"), and the stockholders of the Company listed in Schedule I hereto (the
"Selling Stockholders") severally propose to sell to the several Underwriters
named in Schedule II hereto (the "Underwriters") an aggregate of 1,341,000
shares (the "Firm Shares") of Common Stock, $0.01 par value per share (the
"Common Stock"), of the Company. The Firm Shares consist of 1,000,000 authorized
but unissued shares of Common Stock to be issued and sold by the Company and
341,000 outstanding shares of Common Stock to be sold by the Selling
Stockholders. The Company has also granted to the several Underwriters an option
to purchase up to 201,150 additional shares of Common Stock on the terms and for
the purposes set forth in Section 3 hereof (the "Option Shares"). The Firm
Shares and any Option Shares purchased pursuant to this Purchase Agreement are
herein collectively called the "Securities."
The Company and the Selling Stockholders hereby confirm their agreement
with respect to the sale of the Securities to the several Underwriters, for whom
you are acting as Representative (the "Representative").
1. Registration Statement and Prospectus. A registration statement
on Form S-3 (File No. 333-_______) with respect to the Securities, including a
preliminary form of prospectus, has been prepared by the Company in conformity
with the requirements of the Securities Act of 1933, as amended (the "Act"), and
the rules and regulations ("Rules and Regulations") of the Securities and
Exchange Commission (the "Commission") thereunder and has been filed with the
Commission;
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1 Plus an option to purchase up to 201,150 additional shares to cover
over-allotments.
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one or more amendments to such registration statement have also been so prepared
and have been, or will be, so filed; and, if the Company has elected to rely
upon Rule 462(b) of the Rules and Regulations to increase the size of the
offering registered under the Act, the Company will prepare and file with the
Commission a registration statement with respect to such increase pursuant to
Rule 462(b). Copies of such registration statement(s) and amendments and each
related preliminary prospectus have been delivered to the Underwriters.
If the Company has elected not to rely upon Rule 430A of the Rules and
Regulations, the Company has prepared and will promptly file an amendment to the
registration statement and an amended prospectus (including a term sheet meeting
the requirements of Rule 434 of the Rules and Regulations). If the Company has
elected to rely upon Rule 430A of the Rules and Regulations, it will prepare and
file a prospectus (or a term sheet meeting the requirements of Rule 434)
pursuant to Rule 424(b) that discloses the information previously omitted from
the prospectus in reliance upon Rule 430A. Such registration statement as
amended at the time it is or was declared effective by the Commission, and, in
the event of any amendment thereto after the effective date and prior to the
First Closing Date (as hereinafter defined), such registration statement as so
amended (but only from and after the effectiveness of such amendment), including
a registration statement (if any) filed pursuant to Rule 462(b) of the Rules and
Regulations increasing the size of the offering registered under the Act,
documents incorporated by reference therein and information (if any) deemed to
be part of the registration statement at the time of effectiveness pursuant to
Rules 430A(b) and 434(d) of the Rules and Regulations, is hereinafter called the
"Registration Statement." The prospectus included in the Registration Statement
at the time it is or was declared effective by the Commission is hereinafter
called the "Prospectus," except that if any prospectus (including any term sheet
meeting the requirements of Rule 434 of the Rules and Regulations provided by
the Company for use with a prospectus subject to completion within the meaning
of Rule 434 in order to meet the requirements of Section 10(a) of the Rules and
Regulations) filed by the Company with the Commission pursuant to Rule 424(b)
(and Rule 434, if applicable) of the Rules and Regulations or any other such
prospectus provided to the Underwriters by the Company for use in connection
with the offering of the Securities (whether or not required to be filed by the
Company with the Commission pursuant to Rule 424(b) of the Rules and
Regulations) differs from the prospectus on file at the time the Registration
Statement is or was declared effective by the Commission, the term "Prospectus"
shall refer to such differing prospectus (including any term sheet within the
meaning of Rule 434 of the Rules and Regulations) from and after the time such
prospectus is filed with the Commission or transmitted to the Commission for
filing pursuant to such Rule 424(b) (and Rule 434, if applicable) or from and
after the time it is first provided to the Underwriters by the Company for such
use. The term "Preliminary Prospectus" as used herein means any preliminary
prospectus included in the Registration Statement prior to the time it becomes
or became effective under the Act and any prospectus subject to completion as
described in Rule 430A or 434 of the Rules and Regulations.
All references in this Agreement to financial statements and schedules
and other information which is "contained," "included," "stated" or "set forth"
in the Registration Statement, any preliminary prospectus or the Prospectus (or
other references of like import) shall be deemed to mean and include all such
financial statements and schedules and other information which is incorporated
by reference in the Registration Statement, any preliminary prospectus or the
Prospectus, as the case may be, and any reference herein to the Registration
Statement, any
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preliminary prospectus or the Prospectus shall be deemed to refer to and include
such information and any documents incorporated by reference therein pursuant to
Form S-3 under the Act (collectively, the "Incorporated Documents"), as of the
date of the Preliminary Prospectus or the Prospectus, as the case may be. Any
document filed by the Company under the Securities Exchange Act of 1934, as
amended and the rules and regulations of the Commission thereunder (collectively
the "Exchange Act"), after the effective date of the Registration Statement or
the date of the Prospectus and incorporated by reference in the Prospectus shall
be deemed to be included in the Registration Statement and the Prospectus as of
the date of such filing.
2. Representations and Warranties of the Company and the Selling
Stockholders.
(a) The Company represents and warrants to, and agrees
with, the several Underwriters as follows:
(i) No order preventing or suspending the use of
any Preliminary Prospectus has been issued by the Commission and each
Preliminary Prospectus, at the time of filing thereof, did not contain
an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made,
not misleading; except that the foregoing shall not apply to statements
in or omissions from any Preliminary Prospectus in reliance upon, and
in conformity with, written information furnished to the Company by
you, or by any Underwriter through you, specifically for use in the
preparation thereof.
(ii) As of the time the Registration Statement
(or any post-effective amendment thereto, including a registration
statement (if any) filed pursuant to Rule 462(b) of the Rules and
Regulations increasing the size of the offering registered under the
Act) is or was declared effective by the Commission, upon the filing or
first delivery to the Underwriters of the Prospectus (or any supplement
to the Prospectus (including any term sheet meeting the requirements of
Rule 434 of the Rules and Regulations)) and at the First Closing Date
and Second Closing Date (as hereinafter defined), (A) the Registration
Statement and Prospectus (in each case, as so amended and/or
supplemented) conformed or will conform in all material respects to the
requirements of the Act and the Rules and Regulations, (B) the
Registration Statement (as so amended) did not or will not include 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, and (C) the Prospectus (as so supplemented) did
not or will not include an untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances in which
they are or were made, not misleading; except that the foregoing shall
not apply to statements in or omissions from any such document in
reliance upon, and in conformity with, written information furnished to
the Company by you, or by any Underwriter through you, specifically for
use in the preparation thereof. If the Registration Statement has been
declared effective by the Commission, no stop order suspending the
effectiveness of the Registration Statement has been issued, and no
proceeding for that purpose has been initiated or, to the Company's
knowledge, threatened by the Commission.
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(iii) The consolidated financial statements of
the Company and its subsidiaries, together with the notes thereto, set
forth in the Registration Statement and Prospectus comply in all
material respects with the requirements of the Act and fairly present
the consolidated financial condition of the Company as of the dates
indicated and the consolidated results of operations and changes in
cash flows for the periods therein specified in conformity with
generally accepted accounting principles consistently applied
throughout the periods involved (except as otherwise stated therein);
and the supporting schedules and other financial and statistical
information and data included in the Registration Statement and
Prospectus present fairly the information required to be stated therein
and are in all material respects 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 or Prospectus.
KPMG Peat Marwick LLP, which has expressed its opinion with respect to
the financial statements filed as a part of the Registration Statement
and included in the Registration Statement and Prospectus, are
independent public accountants as required by the Act and the Rules and
Regulations.
(iv) Each of the Company and its subsidiaries
(including for all purposes of this Agreement the subsidiary of the
Company that is the general partner or limited partner of each
Acquisition Partnership (as defined in the Prospectus)) has been duly
organized and is validly existing as a corporation, in good standing
under the laws of its jurisdiction of incorporation. Each of the
Acquisition Partnerships is identified on Schedule III hereto and has
been duly organized and is validly existing as a limited partnership
under the laws of its jurisdiction of organization. Each of the
Company, its subsidiaries and the Acquisition Partnerships has full
corporate power and authority to own its properties and conduct its
business as currently being carried on and as described in the
Registration Statement and the Prospectus, and is duly qualified to do
business as a foreign corporation or limited partnership in good
standing in each jurisdiction in which it owns or leases real property
or in which the conduct of its business makes such qualification
necessary and in which the failure to so quality would have a material
adverse effect upon the condition (financial or otherwise), business,
prospects, net worth or results of operations of the Company and its
subsidiaries, taken as a whole.
(v) Except as contemplated in the Prospectus,
subsequent to the respective dates as of which information is given in
the Registration Statement and the Prospectus, none of the Company, its
subsidiaries or the Acquisition Partnerships has incurred any material
liabilities or obligations, direct or contingent, or entered into any
material transactions, or declared or paid any dividends or made any
distribution of any kind with respect to its capital stock; and there
has not been any change in the capital stock (other than a change in
the number of outstanding shares of Common Stock due to the issuance of
shares upon the exercise of outstanding options or warrants), or any
material change in the short-term or long-term debt, or any issuance of
options, warrants, convertible securities or other rights to purchase
the capital stock, except for issuances of stock options pursuant to
the Stock Option Plans (as defined in the Prospectus) in the ordinary
course consistent with the Company's past practice, of the Company,
any of its subsidiaries or any of the Acquisition Partnerships, or any
material adverse change, or any development involving a prospective
material adverse change, in the condition (financial or otherwise),
business,
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prospects, net worth or results of operations of the Company and its
subsidiaries, taken as a whole.
(vi) Except as set forth in the Prospectus, there
is not pending or, to the knowledge of the Company, threatened, any
action, suit or proceeding to which the Company or any of its
subsidiaries or Acquisition Partnerships is a party before or by any
court or governmental agency, authority or body, or any arbitrator,
which might result in any material adverse change in the condition
(financial or otherwise), business, prospects, net worth or results of
operations of the Company and its subsidiaries, taken as a whole.
(vii) There are no contracts or documents of the
Company or any of its subsidiaries or Acquisition Partnerships that are
required to be filed as exhibits to the Registration Statement by the
Act or by the Rules and Regulations or as exhibits to the Incorporated
Documents by the Exchange Act that have not been so filed.
(viii) This Agreement has been duly authorized,
executed and delivered by the Company, and constitutes a valid, legal
and binding obligation of the Company, enforceable in accordance with
its terms, except as rights to indemnity hereunder may be limited by
federal or state securities laws and except as such enforceability may
be limited by bankruptcy, insolvency, reorganization or similar laws
affecting the rights of creditors generally and subject to general
principles of equity. The execution, delivery and performance of this
Agreement and the consummation of the transactions herein contemplated
will not result in a breach or violation of any of the terms and
provisions of, or constitute a default under, any statute, any
agreement or instrument to which the Company is a party or by which it
is bound or to which any of its property is subject, the Company's
charter or by-laws, or any order, rule, regulation or decree of any
court or governmental agency or body having jurisdiction over the
Company or any of its properties; no consent, approval, authorization
or order of, or filing with, any court or governmental agency or body
is required for the execution, delivery and performance of this
Agreement or for the consummation of the transactions contemplated
hereby, including the issuance or sale of the Securities by the
Company, except such as may be required under the Act or state
securities or blue sky laws; and the Company has full power and
authority to enter into this Agreement and to authorize, issue and sell
the Securities as contemplated by this Agreement.
(ix) All of the issued and outstanding shares of
capital stock of the Company, including the outstanding shares of
Common Stock, are duly authorized and validly issued, fully paid and
nonassessable, have been issued in compliance with all federal and
state securities laws, were not issued in violation of or subject to
any preemptive rights or other rights to subscribe for or purchase
securities, and the holders thereof are not subject to personal
liability by reason of being such holders; the Securities which may be
sold hereunder by the Company have been duly authorized and, when
issued, delivered and paid for in accordance with the terms hereof,
will have been validly issued and will be fully paid and nonassessable,
the holders thereof will not be subject to personal liability by reason
of being such holders, and the certificates evidencing the Securities
will comply with all
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applicable requirements of Delaware law and The Nasdaq Stock Market
("Nasdaq"); and the capital stock of the Company, including the Common
Stock, conforms to the description thereof in the Registration
Statement and Prospectus, the Company's charter and the Company's Form
8-A Registration Statement filed with the Commission on July 12, 1997.
Except as otherwise stated in the Registration Statement and
Prospectus, there are no preemptive rights or other rights to subscribe
for or to purchase, or any restriction upon the voting or transfer of,
any shares of Common Stock pursuant to the Company's charter, by-laws
or any agreement or other instrument to which the Company is a party or
by which the Company is bound. Except as disclosed in the Prospectus or
set forth in an exhibit to the Registration Statement, there are no
contracts, agreements or understandings between the Company and any
person with respect to the registration under the Act of any securities
of the Company owned or to be owned by such person. Neither the filing
of the Registration Statement nor the offering or sale of the
Securities as contemplated by this Agreement gives rise to any rights
for or relating to the registration of any shares of Common Stock or
other securities of the Company. All of the issued and outstanding
shares of capital stock of each of the Company's subsidiaries have been
duly and validly authorized and issued and are fully paid and
nonassessable, and, except as otherwise described in the Registration
Statement and Prospectus, and except for any directors' qualifying
shares, the Company owns of record and beneficially, free and clear of
any security interests, claims, liens, proxies, equities or other
encumbrances, all of the issued and outstanding shares of such stock.
Except as described in the Registration Statement and the Prospectus,
there are no options, warrants, agreements, contracts or other rights
in existence to purchase or acquire from the Company or any subsidiary
of the Company any shares of the capital stock of the Company or any
subsidiary of the Company. The Company has an equity interest in each
of the Acquisition Partnerships as set forth in the Registration
Statement and the Prospectus, and there are no options, warrants,
agreements, contracts or other rights in existence to purchase or
acquire from any Acquisition Partnership any equity interest in any
Acquisition Partnership. The Company has an authorized and outstanding
capitalization as set forth in the Registration Statement and the
Prospectus.
(x) Except as would not, singly or in the
aggregate, result in a material adverse effect on the condition
(financial or otherwise), business, prospects, net worth or results of
operations of the Company and its subsidiaries, taken as a whole, (A)
each of the Company, its subsidiaries and the Acquisition Partnerships
holds, and is operating in compliance in all respects with, all
franchises, grants, authorizations, licenses, permits, easements,
consents, certificates and orders of any governmental or
self-regulatory body required for the conduct of its business and all
such franchises, grants, authorizations, licenses, permits, easements,
consents, certificates and orders are valid and in full force and
effect; and (B) the Company and each of its subsidiaries and
Acquisition Partnerships is in compliance in all respects with all
applicable federal, state, local and foreign laws, rules, regulations,
orders, judgments and decrees.
(xi) Except as would not, singly or in the
aggregate, result in a material adverse effect on the condition
(financial or otherwise), business, prospects, net worth or results of
operations of the Company and its subsidiaries, taken as a whole, (A)
each of the Company, its subsidiaries and the Acquisition Partnerships
has good and marketable title to all property described in the
Registration Statement and Prospectus as being owned by it, in each
case free and clear of all liens, claims, security interests or other
encumbrances except such as are described in the Registration Statement
and the Prospectus; (B) the property held under lease by the Company,
its subsidiaries and the Acquisition Partnerships is held by them under
valid, subsisting and enforceable leases with only such exceptions with
respect to any particular lease as do not interfere in any
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respect with the conduct of the business of the Company, its
subsidiaries or the Acquisition Partnerships; (C) each of the Company,
its subsidiaries and the Acquisition Partnerships owns or possesses all
patents, patent applications, trademarks, service marks, tradenames,
trademark registrations, service xxxx registrations, copyrights,
licenses, inventions, trade secrets and rights necessary for the
conduct of the business of the Company, its subsidiaries and the
Acquisition Partnerships as currently carried on and as described in
the Registration Statement and Prospectus; (D) except as stated in the
Registration Statement and Prospectus, no name which the Company, any
of its subsidiaries or any of the Acquisition Partnerships uses and no
other aspect of the business of the Company, any of its subsidiaries or
any of the Acquisition Partnerships will, to the best knowledge of the
Company, involve or give rise to any infringement of, or license or
similar fees for, any patents, patent applications, trademarks, service
marks, tradenames, trademark registrations, service xxxx registrations,
copyrights, licenses, inventions, trade secrets or other similar rights
and neither the Company nor any of its subsidiaries or any of the
Acquisition Partnerships has received any notice alleging any such
infringement or fee.
(xii) Neither the Company nor any of its
subsidiaries or any of the Acquisition Partnerships is, and no event
has occurred that with the giving of notice or passage of time or both
would cause the Company, any of its subsidiaries or any of the
Acquisition Partnerships to be, in violation of its respective charter
or by-laws or other organizational document or in breach of or
otherwise in default in the performance of any material obligation,
agreement or condition contained in any bond, debenture, note,
indenture, loan agreement or any other material contract, lease or
other instrument to which it is subject or by which any of them may be
bound, or to which any of the material property or assets of the
Company, any of its subsidiaries or any of the Acquisition Partnerships
is subject.
(xiii) Each of the Company, its subsidiaries
and the Acquisition Partnerships has filed all federal, state, local
and foreign income and franchise tax returns required to be filed and
is not in default in the payment of any taxes which were payable
pursuant to said returns or any assessments with respect thereto, other
than any which the Company, any of its subsidiaries or any of the
Acquisition Partnerships is contesting in good faith. No deficiency
with respect to any such return has been assessed or proposed.
(xiv) The Company has not distributed and will
not distribute any prospectus or other offering material in connection
with the offering and sale of the Securities other than any Preliminary
Prospectus or the Prospectus or other materials permitted by the Act to
be distributed by the Company.
(xv) A registration statement relating to the
Common Stock has been declared effective by the Commission pursuant to
the Exchange Act, and the Common Stock is duly registered thereunder.
The Securities have been listed on the Nasdaq National Market subject
to notification of issuance of the Securities. The Company has taken no
action designed to terminate, or likely to have the effect of
terminating, the registration of the Securities under the Exchange Act
or qualification of the Securities on the Nasdaq National Market, nor
has the Company received any notification that the Commission or the
National
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Association of Securities Dealers, Inc. ("NASD") is contemplating
terminating such registration or qualification.
(xvi) Other than the subsidiaries of the
Company and the Acquisition Partnerships listed on Schedule III hereto,
the Company owns no capital stock or other equity or ownership or
proprietary interest in any corporation, partnership, association,
trust or other entity.
(xvii) Each of the Company, its subsidiaries and
the Acquisition Partnerships maintains a system of internal accounting
controls sufficient to provide reasonable assurances that (i)
transactions are executed in accordance with management's general or
specific authorization; (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 authorization; 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.
(xviii) Other than as contemplated by this
Agreement, the Company has not incurred any liability for any finder's
or broker's fee or agent's commission in connection with the execution
and delivery of this Agreement or the consummation of the transactions
contemplated hereby.
(xix) The Company is not, will not become as a
result of the transactions contemplated hereby, and does not intend to
conduct its business in a manner that would cause it to become, an
"investment company" or a company "controlled" by an "investment
company" within the meaning of the Investment Company Act of 1940.
(xx) Except as set forth in the loan agreements
entered into by the Company's subsidiaries, which loan agreements are
identified in the Registration Statement, or as set forth in loan
agreements entered into by the Acquisition Partnerships, no subsidiary
of the Company or any Acquisition Partnership is currently prohibited,
directly or indirectly, from paying any dividends to the Company, from
making any other distributions, from repaying to the Company any loans
or advances to such entity or from transferring any of such entity's
property or assets to the Company or any other subsidiary of the
Company or Acquisition Partnership, except as disclosed in the
Registration Statement and the Prospectus.
(xxi) The Incorporated Documents, when such
documents or the documents from which such information was
incorporated, including any amendments to such documents, were filed
with the Commission, conformed in all materials respects to the
requirements of the Exchange Act and the rules and regulations of the
Commission thereunder, and none of such documents or information
contained an untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they
were made, not misleading, and any further documents so filed and
incorporated by reference in the Prospectus, when such documents are
filed with the Commission, will conform in all
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material respects to the requirements of the Exchange Act and the rules
and regulations of the Commission thereunder and will not contain an
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made,
not misleading.
(xxii) Since the date of the most recent audited
financial statements included in the Registration Statement and the
Prospectus, neither the Company nor any of its subsidiaries or
Acquisition Partnerships has sustained any material loss or
interference with its business, which loss or interference was material
to the Company, its subsidiaries and the Acquisition Partnerships taken
as a whole, from fire, explosion, flood or other calamity, whether or
not covered by insurance, or from any labor dispute or court or
governmental action, order or decree, otherwise than as disclosed in or
contemplated by the Registration Statement and the Prospectus.
(xxiii) Neither the Company nor any of its
officers, directors or affiliates has (A) taken, directly or
indirectly, any action designed to cause or result in, or that has
constituted or might reasonably be expected to constitute, the
stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of the Securities, or (B)
since the filing of the Registration Statement, sold, or paid anyone
any compensation for soliciting purchases of, the Securities.
(xxiv) The Company, each of its subsidiaries and
the Acquisition Partnerships are insured by insurers of recognized
financial responsibility against such losses and risks and in such
amounts as is prudent; and neither the Company nor any such subsidiary
or Acquisition Partnership has any reason to believe that it will not
be able to renew its existing insurance coverage from similar insurers
as may be necessary to continue its business at a comparable cost,
except as disclosed in the Registration Statement and the Prospectus.
(xxv) Except as would not, singly or in the
aggregate, result in a material adverse effect on the condition
(financial or otherwise), business, prospects, net worth or results of
operations of the Company and its subsidiaries, taken as a whole, (A)
neither the Company nor any of its subsidiaries or the Acquisition
Partnerships is in violation of any federal, state, local or foreign
state, law, rule, regulation, ordinance, code, policy or rule of common
law or any judicial or administrative interpretation thereof, including
any judicial or administrative order, consent, decree or judgment,
relating to pollution or protection of human health, the environment
(including, without limitation, ambient air, surface water,
groundwater, land surface or subsurface strata) or wildlife, including,
without limitation, laws and regulations relating to the release or
threatened release of chemical, pollutants, contaminants, wastes, toxic
substances, hazardous substances, petroleum or petroleum products
(collectively, "Hazardous Materials") or to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport
or handling of Hazardous Materials (collectively, "Environmental
Laws"), (B) there are no pending or threatened administrative,
regulatory or judicial actions, suits, demands, demand letters, claims,
liens, notices of noncompliance or violation, investigation or
proceedings relating to any Environmental Law against the Company or
any of its subsidiaries or Acquisition
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Partnerships and (C) there are no events or circumstances that may
reasonably be expected to form the basis of an order for clean-up or
remediation, or an action, suit or proceeding by any private party or
governmental body or agency, against or affecting the Company or any of
its subsidiaries or Acquisition Partnerships relating to Hazardous
Materials or any Environmental Laws.
(xxvi) Except as set forth in the Prospectus, to
the best of the Company's knowledge, the computer information systems
used by the Company, its subsidiaries and the Acquisition Partnerships
will not be adversely affected by issues relating to the Year 2000,
including the processing of information with dates after December 31,
1999.
(b) Each Selling Stockholder represents and warrants to,
and agrees with, the several Underwriters as follows:
(i) Such Selling Stockholder is the record
and beneficial owner of, and has, and on the First Closing Date (as
herein defined), as the case may be, will have, valid and marketable
title to the Securities to be sold by such Selling Stockholder, free
and clear of all security interests, claims, liens, voting trust
arrangements, restrictions on transferability, legends, proxies,
equities or other encumbrances; and upon delivery of and payment for
such Securities hereunder, the several Underwriters will acquire valid
and marketable title thereto, free and clear of any security interests,
claims, liens, voting trust arrangements, restrictions on
transferability, legends, proxies, equities or other encumbrances. Such
Selling Stockholder is selling the Securities to be sold by such
Selling Stockholder for such Selling Stockholder's own account and is
not selling such Securities, directly or indirectly, for the benefit of
the Company, and no part of the proceeds of such sale received by such
Selling Stockholder will inure, either directly or indirectly, to the
benefit of the Company other than as described in the Registration
Statement and Prospectus.
(ii) Such Selling Stockholder has duly
authorized, executed and delivered a letter of Transmittal and Custody
Agreement ("Custody Agreement"), which Custody Agreement is a valid and
binding obligation of such Selling Stockholder, to
__________________________, as Custodian (the "Custodian"); pursuant to
the Custody Agreement the Selling Stockholder has placed in custody
with the Custodian, for delivery under this Agreement, the certificates
representing the Securities to be sold by such Selling Stockholder;
such certificates represent validly issued, outstanding, fully paid and
nonassessable shares of Common Stock; and such certificates were duly
and properly endorsed in blank for transfer, or were accompanied by all
documents duly and properly executed that are necessary to validate the
transfer of title thereto, to the Underwriters, free of any legend,
restriction on transferability, proxy, lien or claim, whatsoever.
(iii) Such Selling Stockholder has the power and
authority to enter into this Agreement and to sell, transfer and
deliver the Securities to be sold by such Selling
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Stockholder; and such Selling Stockholder has duly authorized, executed
and delivered to ________ and __________, as attorneys-in-fact (the
"Attorneys-in-Fact"), an irrevocable power of attorney (a "Power of
Attorney") authorizing and directing the Attorneys-in-Fact, or either
of them, to effect the sale and delivery of the Securities being sold
by such Selling Stockholder, to enter into this Agreement and to take
all such other action as may be necessary hereunder.
(iv) This Agreement, the Custody Agreement and
the Power of Attorney have each been duly authorized, executed and
delivered by or on behalf of such Selling Stockholder and each
constitutes a valid and binding agreement of such Selling Stockholder,
enforceable in accordance with its terms, except as rights to indemnity
hereunder or thereunder may be limited by federal or state securities
laws and except as such enforceability may be limited by bankruptcy,
insolvency, reorganization or laws affecting the rights of creditors
generally and subject to general principles of equity. The execution
and delivery of this Agreement, the Custody Agreement and the Power of
Attorney and the performance of the terms hereof and thereof and the
consummation of the transactions herein and therein contemplated will
not result in a breach or violation of any of the terms and provisions
of, or constitute a default under, any agreement or instrument to which
such Selling Stockholder is a party or by which such Selling
Stockholder is bound, or any law, regulation, order or decree
applicable to such Selling Stockholder; no consent, approval,
authorization or order of, or filing with, any court or governmental
agency or body is required for the execution, delivery and performance
of this Agreement, the Custody Agreement and the Power of Attorney or
for the consummation of the transactions contemplated hereby and
thereby, including the sale of the Securities being sold by such
Selling Stockholder, except such as may be required under the Act or
state securities laws or blue sky laws.
(v) Such Selling Stockholder has not
distributed and will not distribute any prospectus or other offering
material in connection with the offering and sale of the Securities
other than any Preliminary Prospectus or the Prospectus or other
materials permitted by the Act to be distributed by such Selling
Stockholder.
(vi) Such Selling Stockholder has reviewed the
Registration Statement and the Prospectus and to the best knowledge of
such Selling Stockholder neither the Registration Statement nor the
Prospectus contains any untrue statement of a material fact or omits to
state any material fact required to be stated therein or necessary to
make the statements therein not misleading regarding such Selling
Stockholder.
(vii) Such Selling Stockholder and each of its
affiliates, directly or indirectly through one or more intermediaries,
do not control, are not controlled by, are not under common control
with, and have no other association with (within the meaning of Article
I, Section 1(m) of the By-laws of the NASD) any member firm of the
NASD.
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(c) Any certificate signed by any officer of the Company
and delivered to you or the Underwriters or to counsel for the Underwriters
shall be deemed a representation and warranty by the Company to each Underwriter
as to the matters covered thereby; any certificate signed by or on behalf of any
Selling Stockholder as such and delivered to you or the Underwriters or to
counsel for the Underwriters shall be deemed a representation and warranty by
such Selling Stockholder to each Underwriter as to the matters covered thereby.
3. Purchase, Sale and Delivery of Securities.
(a) On the basis of the representations, warranties and
agreements herein contained, but subject to the terms and conditions herein set
forth, the Company agrees to issue and sell 1,000,000 Firm Shares, and each
Selling Stockholder agrees, severally and not jointly, to sell the number of
Firm Shares set forth opposite the name of such Selling Stockholder in Schedule
I hereto, to the several Underwriters, and each Underwriter agrees, severally
and not jointly, to purchase from the Company and the Selling Stockholders the
number of Firm Shares set forth opposite the name of such Underwriter in
Schedule II hereto. The purchase price for each Firm Share shall be $ per
share. The obligation of each Underwriter to each of the Company and the Selling
Stockholders shall be to purchase from each of the Company and the Selling
Stockholders that number of Firm Shares (to be adjusted by the Underwriters to
avoid fractional shares) which represents the same proportion of the number of
Firm Shares to be sold by each of the Company and the Selling Stockholders
pursuant to this Agreement as the number of Firm Shares set forth opposite the
name of such Underwriter in Schedule II hereto represents to the total number of
Firm Shares to be purchased by all Underwriters pursuant to this Agreement. In
making this Agreement, each Underwriter is contracting severally and not
jointly; except as provided in paragraph (c) of this Section 3 and in Section 8
hereof, the agreement of each Underwriter is to purchase only the respective
number of Firm Shares specified in Schedule II.
The Firm Shares will be delivered by the Company and the Custodian to
you for the accounts of the several Underwriters against payment of the purchase
price therefor by certified or official bank check or other next day funds
payable to the order of the Company and the Custodian, as appropriate, at the
offices of Xxxxx Xxxxxxx Inc., Xxxxx Xxxxxxx Tower, 000 Xxxxx Xxxxx Xxxxxx,
Xxxxxxxxxxx, Xxxxxxxxx, or such other location as may be mutually acceptable, at
9:00 a.m. Central time on the third (or if the Securities are priced, as
contemplated by Rule 15c6-1(c) under the Exchange Act, after 4:30 p.m. Eastern
time, the fourth) full business day following the date hereof, or at such other
time and date as you and the Company determine pursuant to Rule 15c6-1(a) under
the Exchange Act, such time and date of delivery being herein referred to as the
"First Closing Date." If the Underwriters so elect, delivery of the Firm Shares
may be made by credit through full fast transfer to the accounts at The
Depository Trust Company designated by the Underwriters. Certificates
representing the Firm Shares, in definitive form and in such denominations and
registered in such names as you may request upon at least two business days'
prior notice to the Company and the Custodian, will be made available for
checking and packaging not later than 10:30
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a.m., Central time, on the business day next preceding the First Closing Date at
the offices of Xxxxx Xxxxxxx Inc., Xxxxx Xxxxxxx Tower, 000 Xxxxx Xxxxx Xxxxxx,
Xxxxxxxxxxx, Xxxxxxxxx, or such other location as may be mutually acceptable.
(b) On the basis of the representations, warranties and
agreements herein contained, but subject to the terms and conditions herein set
forth, the Company, with respect to the Option Shares, hereby grants to the
several Underwriters an option to purchase all or any portion of the Option
Shares at the same purchase price as the Firm Shares, for use solely in covering
any over-allotments made by the Underwriters in the sale and distribution of the
Firm Shares. The option granted hereunder may be exercised at any time (but not
more than once) within 30 days after the effective date of this Agreement upon
notice (confirmed in writing) by the Underwriters to the Company setting forth
the aggregate number of Option Shares as to which the several Underwriters are
exercising the option, the names and denominations in which the certificates for
the Option Shares are to be registered and the date and time, as determined by
the Underwriters, when the Option Shares are to be delivered, such time and date
being herein referred to as the "Second Closing" and "Second Closing Date",
respectively; provided, however, that the Second Closing Date shall not be
earlier than the First Closing Date nor earlier than the second business day
after the date on which the option shall have been exercised. If the option is
exercised, the obligation of each Underwriter shall be to purchase from the
Company up to an aggregate of 195,000 Option Shares. The number of Option Shares
to be purchased by each Underwriter shall be the same percentage of the total
number of Option Shares to be purchased by the several Underwriters as the
number of Firm Shares to be purchased by such Underwriter is of the total number
of Firm Shares to be purchased by the several Underwriters, as adjusted by the
Underwriters in such manner as the Underwriters deem advisable to avoid
fractional shares. No Option Shares shall be sold and delivered unless the Firm
Shares previously have been, or simultaneously are, sold and delivered.
The Option Shares will be delivered by the Company to you for the
accounts of the several Underwriters against payment of the purchase price
therefor by certified or official bank check or other next day funds payable to
the order of the Company at the offices of Xxxxx Xxxxxxx Inc., Xxxxx Xxxxxxx
Tower, 000 Xxxxx Xxxxx Xxxxxx, Xxxxxxxxxxx, Xxxxxxxxx, or such other location as
may be mutually acceptable at 9:00 a.m., Central time, on the Second Closing
Date. If the Underwriters so elect, delivery of the Option Shares may be made by
credit through full fast transfer to the accounts at The Depository Trust
Company designated by the Underwriters. Certificates representing the Option
Shares in definitive form and in such denominations and registered in such names
as you have set forth in your notice of option exercise, will be made available
for checking and packaging not later than 10:30 a.m., Central time, on the
business day next preceding the Second Closing Date at the office of Xxxxx
Xxxxxxx Inc., Xxxxx Xxxxxxx Tower, 000 Xxxxx Xxxxx Xxxxxx, Xxxxxxxxxxx,
Xxxxxxxxx, or such other location as may be mutually acceptable.
(c) It is understood that you, individually and not as
Representative of the Underwriters, may (but shall not be obligated to) make
payment to the Company or the Selling Stockholders, on behalf of any Underwriter
for the Securities to be purchased by such Underwriter. Any such payment by you
shall not relieve any such Underwriter of any of its obligations hereunder.
Nothing herein contained shall constitute any of the Underwriters an
unincorporated association or partner with the Company or any Selling
Stockholder.
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4. Covenants.
(a) The Company covenants and agrees with the several
Underwriters as follows:
(i) If the Registration Statement has not
already been declared effective by the Commission, the Company will use
its best efforts to cause the Registration Statement and any
post-effective amendments thereto to become effective as promptly as
possible; the Company will notify you promptly of the time when the
Registration Statement or any post-effective amendment to the
Registration Statement has become effective or any supplement to the
Prospectus (including any term sheet within the meaning of Rule 434 of
the Rules and Regulations) has been filed and of any request by the
Commission for any amendment or supplement to the Registration
Statement or Prospectus or additional information; if the Company has
elected to rely on Rule 430A of the Rules and Regulations, the Company
will prepare and file a Prospectus (or term sheet within the meaning of
Rule 434 of the Rules and Regulations) containing the information
omitted therefrom pursuant to Rule 430A of the Rules and Regulations
with the Commission within the time period required by, and otherwise
in accordance with the provisions of, Rules 424(b), 430A and 434, if
applicable, of the Rules and Regulations; if the Company has elected to
rely upon Rule 462(b) of the Rules and Regulations to increase the size
of the offering registered under the Act, the Company will prepare and
file a registration statement with respect to such increase with the
Commission within the time period required by, and otherwise in
accordance with the provisions of, Rule 462(b); the Company will
prepare and file with the Commission, promptly upon your request, any
amendments or supplements to the Registration Statement or Prospectus
(including any term sheet within the meaning of Rule 434 of the Rules
and Regulations) that, in your opinion, may be necessary or advisable
in connection with the distribution of the Securities by the
Underwriters; and the Company will not file any amendment or supplement
to the Registration Statement or Prospectus (including any term sheet
within the meaning of Rule 434 of the Rules and Regulations) to which
you shall reasonably object by notice to the Company after having been
finished a copy a reasonable time prior to the filing.
(ii) The Company will advise you, promptly after
it shall receive notice or obtain knowledge thereof, of the issuance by
the Commission of any stop order suspending the effectiveness of the
Registration Statement or any part thereof, of the suspension of the
qualification of the Securities for offering or sale in any
jurisdiction, or of the initiation or threatening of any proceeding for
any such purpose; and the Company will promptly use its best efforts to
prevent the issuance of any stop order or to obtain its withdrawal if
such a stop order should be issued.
(iii) Within the time during which a prospectus
(including any term sheet within the meaning of Rule 434 of the Rules
and Regulations) relating to the Securities is required to be delivered
under the Act, the Company will comply as far as it is able with all
requirements imposed upon it by the Act, as now and hereafter amended,
and by the Rules and Regulations, as from time to time in force, so far
as necessary to permit the continuance of sales of or dealings in the
Securities as contemplated by the provisions hereof and the
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Prospectus. If during such period any event occurs as a result of which
the Prospectus would include an untrue statement of a material fact or
omit to state a material fact necessary to make the statements therein,
in the light of the circumstances then existing, not misleading, or if
during such period it is necessary to amend the Registration Statement
or supplement the Prospectus to comply with the Act, the Company will
promptly notify you and will amend the Registration Statement or
supplement the Prospectus (at the expense of the Company) so as to
correct such statement or omission or effect such compliance.
(iv) The Company will use its best efforts to
qualify the Securities for sale under the securities laws of such
jurisdictions as you reasonably designate and to continue such
qualifications in effect so long as required for the distribution of
the Securities, except that the Company shall not be required in
connection therewith to qualify as a foreign corporation or to execute
a general consent to service of process in any state.
(v) The Company will furnish to the
Underwriters copies of the Registration Statement (three of which will
be signed and will include all exhibits), each Preliminary Prospectus,
the Prospectus, each Incorporated Document and all amendments and
supplements (including any term sheet within the meaning of Rule 434 of
the Rules and Regulations) to such documents, in each case as soon as
available and in such quantities as the Underwriters may from time to
time reasonably request.
(vi) During a period of three years commencing
with the date hereof, the Company will furnish to each Underwriter
copies of all periodic and special reports furnished to the
stockholders of the Company and all information, documents and reports
filed with the Commission, the NASD, Nasdaq or any securities exchange.
(vii) The Company will make generally available
to its security holders as soon as practicable, but in any event not
later than 15 months after the end of the Company's current fiscal
quarter, an earnings statement (which need not be audited) covering a
12-month period beginning after the effective date of the Registration
Statement that shall satisfy the provisions of Section 11(a) of the Act
and Rule 158 of the Rules and Regulations.
(viii) The Company, whether or not the
transactions contemplated hereunder are consummated or this Agreement
is prevented from becoming effective under the provisions of Section
9(a) hereof or is terminated, will pay or cause to be paid (A) all
expenses (including transfer taxes allocated to the respective
transferees) incurred in connection with the delivery to the
Underwriters of the Securities, (B) all expenses and fees (including,
without limitation, fees and expenses of the Company's accountants and
counsel and the Selling Stockholder's counsel but, except as otherwise
provided below, not including fees of the Underwriters' counsel) in
connection with the preparation, printing, filing, delivery and
shipping of the Registration Statement (including the financial
statements therein and all amendments, schedules, and exhibits
thereto), the Securities, each Preliminary Prospectus, the Prospectus,
and any amendment thereof or supplement thereto, and the printing,
delivery, and shipping of this Agreement and other underwriting or
selling group documents, including blue sky memoranda, (C) all filing
fees and fees and disbursements of
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the Underwriters' counsel incurred in connection with the qualification
of the Securities for offering and sale by the Underwriters or by
dealers under the securities or blue sky laws of the states and other
jurisdictions which you shall designate in accordance with Section 4(d)
hereof, (D) the fees and expenses of any transfer agent or registrar,
(E) the filing fees incident to, and the reasonable fees and
disbursements of counsel to the Underwriters in connection with, any
required review by the NASD of the terms of the sale of the Securities,
(F) listing or quotation fees of Nasdaq and (G) all other costs and
expenses incident to the performance of its obligations hereunder that
are not otherwise specifically provided for herein. If the sale of the
Securities provided for herein is not consummated by reason of action
by the Company pursuant to Section 9(a) hereof which prevents this
Agreement from becoming effective, or by reason of any failure, refusal
or inability on the part of the Company to perform any agreement on its
part to be performed, or because any other condition of the
Underwriters' obligations hereunder required to be fulfilled by the
Company is not fulfilled or because this Agreement is terminated
pursuant to Section 9(b)(i) or (ii) (with respect to 9(b)(ii), insofar
as such condition is required to be fulfilled by the Company), the
Company will reimburse the several Underwriters for all out-of-pocket
disbursements (including fees and disbursements of counsel) incurred by
the Underwriters in connection with their investigation, preparing to
market and marketing the Securities or in contemplation of performing
their obligations hereunder. The Company shall not in any event be
liable to any of the Underwriters for loss of anticipated profits from
the transactions covered by this Agreement.
(ix) During a period of 90 days from the date
of the Prospectus, the Company will not, without the prior written
consent of the Underwriters, (A) directly or indirectly, offer, pledge,
sell, contract to sell, sell any option or contract to purchase,
purchase any option or contract to sell, grant any option, right or
warrant to purchase or otherwise transfer or dispose of, or announce an
offering, sale or contract of sale of, any share of Common Stock or any
securities convertible into or exercisable or exchangeable for Common
Stock or file any registration statement under the Act with respect to
any of the foregoing or (B) enter into any swap or any other agreement
or any transaction that transfers, in whole or in part, directly or
indirectly, the economic consequence of ownership of the Common Stock,
whether any such swap or transaction described in clause (A) or (B)
above is to be settled by delivery of Common Stock or such other
securities, in cash or otherwise.
(x) The Company either has caused to be
delivered to you or will cause to be delivered to you prior to the
effective date of the Registration Statement a letter from each of the
Company's directors and the other Selling Stockholders stating that
such person agrees that during a period of 90 days from the date of the
Prospectus, such person will not, without your prior written consent
(A) directly or indirectly, offer, sell, contract to sell, sell any
option or contract to purchase, purchase any option or contract to
sell, grant any option, right or warrant to purchase or otherwise
transfer or dispose of, or announce an offering, sale or contract of
sale of, any share of Common Stock or any securities convertible into
or exercisable or exchangeable for Common Stock or (B) enter into any
swap or any other agreement or any transaction that transfers, in whole
or in part, directly or indirectly, the economic consequence of
ownership of the Common Stock, whether any such swap or
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transaction described in clause (A) or (B) above is to be settled by
delivery of Common Stock or such other securities, in cash or
otherwise.
(xi) The Company, its subsidiaries and the
Acquisition Partnerships have not taken and will not take, directly or
indirectly, any action designed to or which might reasonably be
expected to cause or result in, or which has constituted, the
stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of the Securities, and the
Company has not effected any sales of Common Stock which are required
to be disclosed in response to Item 701 of Regulation S-K under the Act
which have not been so disclosed in the Registration Statement.
(xii) Except as contemplated hereby, the
Company, its subsidiaries and the Acquisition Partnerships will not
incur any liability for any finder's or broker's fee or agent's
commission in connection with the execution and delivery of this
Agreement or the consummation of the transactions contemplated hereby.
(b) Each Selling Stockholder covenants and agrees with
the several Underwriters as follows:
(i) If this Agreement is terminated by the
Underwriters because of any failure, refusal or inability on the part
of such Selling Stockholder to perform any agreement on such Selling
Stockholder's part to be performed, or because any other condition of
the Underwriters' obligations hereunder required to be fulfilled by
such Selling Stockholder is not fulfilled, such Selling Stockholder
agrees to reimburse the several Underwriters for all out-of-pocket
disbursements (including fees and disbursements of counsel for the
Underwriters) incurred by the Underwriters in connection with their
investigation, preparing to market and marketing the Securities or in
contemplation of performing their obligations hereunder. The Selling
Stockholder shall not in any event be liable to any of the Underwriters
for loss of anticipated profits from the transactions covered by this
Agreement.
(ii) The Securities to be sold by such Selling
Stockholder, represented by the certificates on deposit with the
Custodian pursuant to the Custody Agreement of such Selling
Stockholder, are subject to the interest of the several Underwriters
and the other Selling Stockholders; the arrangements made for such
custody are, except as specifically provided in the Custody Agreement,
irrevocable; and the obligations of such Selling Stockholder hereunder
shall not be terminated, except as provided in this Agreement or in the
Custody Agreement, by any act of such Selling Stockholder, by operation
of law, whether by the liquidation, dissolution or merger of such
Selling Stockholder, by the death of such Selling Stockholder, or by
the occurrence of any other event. If any Selling Stockholder should
liquidate, dissolve or be a party to a merger or if any other such
event should occur before the delivery of the Securities hereunder,
certificates for the Securities deposited with the Custodian shall be
delivered by the Custodian in accordance with the terms and conditions
of this Agreement as if such liquidation, dissolution, merger or other
event had not occurred, whether or not the Custodian shall have
received notice thereof.
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(iii) Such Selling Stockholder will not, during
a period of 90 days from the date of the Prospectus, without the prior
written consent of the Underwriters, (A) directly or indirectly, offer,
sell, contract to sell, sell any option or contract to purchase,
purchase any option or contract to sell, grant any option, right or
warrant to purchase or otherwise transfer or dispose of, or announce an
offering, sale or contract of sale of, any share of Common Stock or any
securities convertible into or exercisable or exchangeable for Common
Stock or (B) enter into any swap or any other agreement or any
transaction that transfers, in whole or in part, directly or
indirectly, the economic consequence of ownership of the Common Stock,
whether any such swap or transaction described in clause (A) or (B)
above is to be settled by delivery of Common Stock or such other
securities, in cash or otherwise.
(iv) Selling Stockholder has not taken and will
not take, directly or indirectly, any action designed to or which might
reasonably be expected to cause or result in stabilization or
manipulation of the price of any security of the Company to facilitate
the sale or resale of the Securities, and has not effected any sales of
Common Stock which, if effected by the Company, would be required to be
disclosed in response to Item 701 of Regulation S-K.
(v) Such Selling Stockholder shall immediately
notify you if any event occurs, or of any change in information
relating to such Selling Stockholder, which results in the Prospectus
(as supplemented) including an untrue statement of a material fact or
omitting to state any material fact necessary to make the statements
therein, in the light of the circumstances under which they were made,
not misleading.
5. Conditions of Underwriters' Obligations. The obligations of
the several Underwriters to purchase and pay for the Firm Shares on the First
Closing Date and the Option Shares on the Second Closing Date are subject to the
accuracy, as of the date hereof and at each of the First Closing Date and the
Second Closing Date (as if made at such Closing Date), of and compliance with
all representations, warranties and agreements of the Company and the Selling
Stockholders contained herein, to the performance by the Company and the Selling
Stockholders of their respective obligations hereunder and to the following
additional conditions:
(a) The Registration Statement shall have become
effective not later than 5:00 p.m., Central time, on the date of this Agreement,
or such later time and date as the Underwriters shall approve and all filings
required by Rules 424, 430A and 434 of the Rules and Regulations shall have been
timely made; no stop order suspending the effectiveness of the Registration
Statement or any amendment thereof shall have been issued; no proceedings for
the issuance of such an order shall have been initiated or threatened; and any
request of the Commission for additional information (to be included in the
Registration Statement or the Prospectus or otherwise) shall have been complied
with to your satisfaction.
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(b) No Underwriter shall have advised the Company that
the Registration Statement or the Prospectus, or any amendment thereof or
supplement thereto (including any term sheet within the meaning of Rule 434 of
the Rules and Regulations), contains an untrue statement of fact which, in your
opinion, is material, or omits to state a fact which, in your opinion, is
material and is required to be stated therein or necessary to make the
statements therein not misleading.
(c) Except as contemplated in the Prospectus, subsequent
to the respective dates as of which information is given in the Registration
Statement and the Prospectus, neither the Company nor any of its subsidiaries or
any of the Acquisition Partnerships shall have incurred any material liabilities
or obligations, direct or contingent, or entered into any material transactions,
or declared or paid any dividends or made any distribution of any kind with
respect to its capital stock; and there shall not have been any change in the
capital stock (other than a change in the number of outstanding shares of Common
Stock due to the issuance of shares upon the exercise of outstanding options or
warrants), or any material change in the short-term or long-term debt of the
Company, or any issuance of options, warrants, convertible securities or other
rights to purchase the capital stock of the Company or any of its subsidiaries
or an equity interest in any Acquisition Partnership, or any material adverse
change or any development involving a prospective material adverse change
(whether or not arising in the ordinary course of business), in the condition
(financial or otherwise), business prospects, net worth or results of operations
of the Company and its subsidiaries, taken as a whole, that, in your judgment,
makes it impractical or inadvisable to offer or deliver the Securities on the
terms and in the manner contemplated in the Prospectus.
(d) On each Closing Date, there shall have been furnished
to the Underwriters the opinion of Weil, Gotshal & Xxxxxx LLP, counsel for the
Company, dated such Closing Date and addressed to you, to the effect that:
(i) Each of the Company and its subsidiaries has
been duly organized and is validly existing as a corporation in good
standing under the laws of its jurisdiction of incorporation. Each
Acquisition Partnership has been duly organized and is validly existing
as a limited partnership in good standing under the laws of its
jurisdiction of organization. Each of the Company, its subsidiaries and
the Acquisition Partnerships has full corporate power and authority to
own its properties and conduct its business as currently being carried
on and as described in the Registration Statement and Prospectus, and
is duly qualified to do business as a foreign corporation or limited
partnership and is in good standing in each jurisdiction in which it
owns or leases real property or in which the conduct of its business
makes such qualification necessary and in which the failure to so
qualify would have a material adverse effect upon the business,
condition (financial or otherwise) or properties of the Company and its
subsidiaries, taken as a whole.
(ii) The capital stock of the Company conforms as
to legal matters to the description thereof contained in the
Registration Statement and Prospectus, the Company's charter and the
Company's Form 8-A Registration Statement filed with the Commission on
July 12, 1997
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All of the issued and outstanding shares of the capital stock of the
Company have been duly authorized and validly issued and are fully paid
and nonassessable, and the holders thereof are not subject to personal
liability by reason of being such holders. The Securities to be issued
and sold by the Company hereunder have been duly authorized and, when
issued, delivered and paid for in accordance with the terms of this
Agreement, will have been validly issued and will be fully paid and
nonassessable, the holders thereof will not be subject to personal
liability by reason of being such holders and the certificates
evidencing the Securities comply with all applicable requirements of
Delaware law and Nasdaq. Except as otherwise stated in the Registration
Statement and Prospectus, there are no preemptive rights or other
rights to subscribe for or to purchase, or any restriction upon the
voting or transfer of, any shares of Common Stock pursuant to the
Company's charter, by-laws or any agreement or other instrument known
to such counsel to which the Company is a party or by which the Company
is bound.
(iii) All of the issued and outstanding shares of
capital stock of each of the Company's subsidiaries have been duly and
validly authorized and issued and are fully paid and nonassessable,
and, to the best of such counsel's knowledge, except as otherwise
described in the Registration Statement and Prospectus, the Company
owns of record and beneficially, free and clear of any security
interests, claims, liens, proxies, equities or other encumbrances, all
of the issued and outstanding shares of such stock. To the best of such
counsel's knowledge, except as described in the Registration Statement
and Prospectus, there are no options, warrants, agreements, contracts
or other rights in existence to purchase or acquire from the Company or
any subsidiary or Acquisition Partnership any shares of the capital
stock of the Company or any subsidiary of the Company or any equity
interest in any Acquisition Partnership.
(iv) The Registration Statement has become
effective under the Act and, to the best of such counsel's knowledge,
no stop order suspending the effectiveness of the Registration
Statement has been issued and no proceeding for that purpose has been
instituted or, to the knowledge of such counsel, threatened by the
Commission.
(v) The descriptions in the Registration
Statement and Prospectus of statutes, legal and governmental
proceedings, contracts and other documents are accurate and fairly
present the information required to be shown; and such counsel does not
know of any statutes or legal or governmental proceedings required to
be described in the Prospectus that are not described as required, or
of any contracts or documents of a character required to be
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described in the Registration Statement or Prospectus or included as
exhibits to the Registration Statement that are not described or
included as required.
(vi) The Company has full corporate power and
authority to enter into this Agreement, and this Agreement has been
duly authorized, executed and delivered by the Company and constitutes
a valid, legal and binding obligation of the Company enforceable in
accordance with its terms (except as rights to indemnity hereunder may
be limited by federal or state securities laws and except as such
enforceability may be limited by bankruptcy, insolvency, reorganization
or similar laws affecting the rights of creditors generally and subject
to general principles of equity); the execution, delivery and
performance of this Agreement and the consummation of the transactions
herein contemplated will not result in a breach or violation of any of
the terms and provisions of, or constitute a default under, any
statute, rule or regulation, any agreement or instrument known to such
counsel to which the Company is a party or by which it is bound or to
which any of its property is subject, the Company's charter or by-laws,
or any order or decree known to such counsel of any court or
governmental agency or body having jurisdiction over the Company or any
of its respective properties; and no consent, approval, authorization
or order of, or filing with, any court or governmental agency or body
is required for the execution, delivery and performance of this
Agreement or for the consummation of the transactions contemplated
hereby, including the issuance or sale of the Securities by the
Company, except such as may be required under the Act or state
securities laws.
(vii) The Registration Statement and the
Prospectus, and any amendment thereof or supplement thereto (including
any term sheet within the meaning of Rule 434 of the Rules and
Regulations), comply as to form in all material respects with the
requirements of the Act and the Rules and Regulations; and on the basis
of conferences with officers,
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directors and certain employees of the Company and KPMG Peat Marwick
LLP, who examined certain of the financial statements of the Company
included in the Registration Statement and the Prospectus, examination
of documents referred to in the Registration Statement and Prospectus
and such other procedures as such counsel deemed appropriate, nothing
has come to the attention of such counsel that causes such counsel to
believe that the Registration Statement or any amendment thereof, at
the time the Registration Statement became effective and as of such
Closing Date (including any Registration Statement filed under Rule
462(b) of the Rules and Regulations), contained any untrue statement of
a material fact or omitted to state any material fact required to be
stated therein or necessary to make the statements therein not
misleading or that the Prospectus (as of its date and as of such
Closing Date), as amended or supplemented, includes any untrue
statement of material fact or omits to state a material fact necessary
to make the statements therein, in the light of the circumstances under
which they were made, not misleading; it being understood that such
counsel need express no opinion as to the financial statements or other
financial data included in any of the documents mentioned in this
clause.
(viii) All documents incorporated by reference in
the Prospectus, when they were filed with the Commission, complied as
to form in all material respects with the requirements of the Exchange
Act; and such counsel has no reason to believe that any of such
documents, when they were so filed, contained an untrue statement of a
material fact or omitted to state a material fact necessary in order to
make the statements therein, in the light of the circumstances under
which they were made when such documents were so filed, not misleading.
(ix) The Company is not, and immediately after
the consummation of the Offering in accordance with this Agreement will
not be, required to be registered under the Investment Company Act of
1940, as amended, as an "investment company" and, to the actual
knowledge of such counsel, is not a Company "controlled" by an
"investment company" within the meaning of the Investment Company Act
of 1940, as amended.
(x) The statements contained in the Prospectus
under the captions "Business -- Government Regulation,"
"Transferability and Ownership of Capital Stock" and "Certain Federal
Income Tax Considerations", insofar as such statements constitute a
summary of the legal matters referred to therein, are a fair and
accurate summary in all material respects of such legal matters.
(xi) The merger of J-Hawk Corporation ("J-Hawk")
with and into First City Bancorporation of Texas, Inc. ("FCBOT") on
July 3, 1995, pursuant to an Agreement
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and Plan of Merger by and between FCBOT and J-Hawk, dated as of July 3,
1995, qualified for federal income tax purposes as a reorganization
within the meaning of Section 368(a) of the Code.
In rendering such opinion such counsel may rely (i) as to
matters of law other than Texas, Delaware, New York and federal law, upon the
opinion or opinions of local counsel provided that the extent of such reliance
is specified in such opinion and that such counsel shall state that such opinion
or opinions of local counsel are satisfactory to them and that they believe they
and you are justified in relying thereon and (ii) as to matters of fact, to the
extent such counsel deems reasonable upon certificates of officers of the
Company, its subsidiaries and the Acquisition Partnerships provided that the
extent of such reliance is specified in such opinion. In addition, with respect
to such of the matters above as may be reasonably agreed upon by the Company and
the Underwriters, such matters may be set forth in an opinion of the Company's
Senior Vice President and General Counsel.
(e) On each Closing Date, there shall have been furnished
to the Underwriters the opinion of Weil, Gotshal & Xxxxxx LLP, counsel for the
Selling Stockholders, dated such Closing Date and addressed to you, to the
effect that:
(i) Each of the Selling Stockholders is the sole
record owner of the Securities to be sold by such Selling Stockholder
and delivery of the certificates for the Securities to be sold by each
Selling Stockholder pursuant to this Agreement, upon payment therefor
by the Underwriters, will pass marketable title to such Securities to
the Underwriters and the Underwriters will acquire all the rights of
such Selling Stockholder in the Securities (assuming the Underwriters
have no knowledge of an adverse claim), free and clear of any security
interests, claims, liens, voting trust arrangements, restrictions on
transferability, legends, proxies, equities or other encumbrances.
(ii) Each of the Selling Stockholders that is not
an individual has the power and authority to enter into the Custody
Agreement, the Power of Attorney and this Agreement and to perform and
discharge such Selling Stockholder's obligations thereunder and
hereunder; and this Agreement, the Custody Agreements and the Powers of
Attorney have been duly and validly authorized, executed and delivered
by (or by the Attorneys-in-Fact, or either of them, on behalf of) the
Selling Stockholders and are valid and binding agreements of the
Selling Stockholders, enforceable in accordance with their respective
terms (except as rights to indemnity hereunder or thereunder may be
limited by federal or state securities laws and except as such
enforceability may be limited by bankruptcy, insolvency, reorganization
or similar laws affecting creditors' rights generally and subject to
general principles of equity).
(iii) The execution and delivery of this
Agreement, the Custody Agreement and the Power of Attorney and the
performance of the terms hereof and thereof and the consummation of the
transactions herein and therein contemplated will not result in a
breach or violation of any of the terms and provisions of, or
constitute a default under, any statute, rule or regulation, or any
agreement or instrument known to such counsel to which any Selling
Stockholder that is not an individual is a party or by which such
Selling Stockholder is bound or to which any of its property is
subject, any such Selling Stockholder's charter or by-laws, or any
order or
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decree known to such counsel of any court or government agency or body
having jurisdiction over such Selling Stockholder or any of its
respective properties; and no consent, approval, authorization or order
of, or filing with, any court or governmental agency or body is
required for the execution, delivery and performance of this Agreement,
the Custody Agreement and the Power of Attorney or for the consummation
of the transactions contemplated hereby and thereby, including the sale
of the Securities being sold by such Selling Stockholder, except such
as may be required under the Act or state securities laws or blue sky
laws.
(iv) Such other matters as you may reasonably
request.
In rendering such opinion such counsel may rely (i) as to matters of
law other than Texas, Delaware, New York and federal law, upon the opinion or
opinions of local counsel provided that the extent of such reliance is specified
in such opinion and that such counsel shall state that such opinion or opinions
of local counsel are satisfactory to them and that they believe they and you are
justified in relying thereon and (ii) as to matters of fact, to the extent such
counsel deems reasonable upon certificates of officers of the Selling
Stockholders provided that the extent of such reliance is specified in such
opinion.
(f) On each Closing Date, there shall have been furnished
to the Underwriters such opinion or opinions from Xxxxx, Day, Xxxxxx & Xxxxx,
counsel for the several Underwriters, dated such Closing Date and addressed to
you, with respect to the formation of the Company, the validity of the
Securities, the Registration Statement, the Prospectus and other related matters
as you reasonably may request, and such counsel shall have received such papers
and information as they request to enable them to pass upon such matters.
(g) On each Closing Date the Underwriters shall have
received a letter of KPMG Peat Marwick LLP, dated such Closing Date and
addressed to the Underwriters, confirming that they are independent public
accountants within the meaning of the Act and are in compliance with the
applicable requirements relating to the qualifications of accountants under Rule
2-01 of Regulation S-X of the Commission, and stating, as of the date of such
letter (or, with respect to matters involving changes or developments since the
respective dates as of which specified financial information is given in the
Prospectus, as of a date not more than five days prior to the date of such
letter), the conclusions and findings of said firm with respect to the financial
information and other matters covered by its letter delivered to the
Underwriters concurrently with the execution of this Agreement, and the effect
of the letter so to be delivered on such Closing Date shall be to confirm the
conclusions and findings set forth in such prior letter.
(h) On each Closing Date, there shall have been furnished
to the Underwriters, a certificate, dated such Closing Date and addressed to the
Underwriters, signed by the chief executive officer and the chief financial
officer or chief administrative officer of the Company, to the effect that:
(i) The representations and warranties of the
Company in this Agreement are true and correct, in all material
respects, as if made at and as of such Closing Date, and
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the Company has complied with all the agreements and satisfied all the
conditions on its part to be performed or satisfied at or prior to such
Closing Date;
(ii) No stop order or other order suspending the
effectiveness of the Registration Statement or any amendment thereof,
the use of the Prospectus or any supplement thereof, or the
qualification of the Securities for offering or sale has been issued,
and no proceeding for that purpose has been instituted or, to the best
of their knowledge, is contemplated by the Commission or any state or
regulatory body; and
(iii) The signers of said certificate have
carefully examined the Registration Statement and the Prospectus, and
any amendments thereof or supplements thereto (including any term sheet
within the meaning of Rule 434 of the Rules and Regulations), and (A)
such documents contain all statements and information required to be
included therein, the Registration Statement, or any amendment thereof,
does not contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to
make the statements therein not misleading, and the Prospectus, as
amended or supplemented, does not include any untrue statement of
material fact or omit to state a material fact necessary to make the
statements therein, in the light of the circumstances under which they
were made, not misleading, (B) since the effective date of the
Registration Statement, there has occurred no event required to be set
forth in an amended or supplemented prospectus which has not been so
set forth, (C) subsequent to the respective dates as of which
information is given in the Registration Statement and the Prospectus,
neither the Company nor any of its subsidiaries or any of the
Acquisition Partnerships has incurred any material liabilities or
obligations, direct or contingent, or entered into any material
transactions, not in the ordinary course of business, or declared or
paid any dividends or made any distribution of any kind with respect to
its capital stock, and except as disclosed in the Prospectus, there has
not been any change in the capital stock (other than a change in the
number of outstanding shares of Common Stock due to the issuance of
shares upon the exercise of outstanding options or warrants), or any
material change in the short-term or long-term debt, or any issuance of
options, warrants, convertible securities or other rights to purchase
the capital stock, of the Company, or any of its subsidiaries or any of
the Acquisition Partnerships, or any material adverse change or any
development involving a prospective material adverse change (whether or
not arising in the ordinary course of business), in the condition
(financial or otherwise), business, prospects, net worth or results of
operations of the Company and its subsidiaries, taken as a whole, and
(D) except as stated in the Registration Statement and the Prospectus,
there is not pending, or, to the knowledge of the Company, threatened
any action, suit or proceeding to which the Company, any of its
subsidiaries or any of the Acquisition Partnerships is a party before
or by any court or governmental agency, authority or body, or any
arbitrator, which might result in any material adverse change in the
condition (financial or otherwise), business, prospects, net worth or
results of operations of the Company and its subsidiaries and taken as
a whole.
(i) On each Closing Date, there shall have been furnished
to the Underwriters a certificate or certificates, dated such Closing Date and
addressed to the Underwriters, signed by each
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of the Selling Stockholders or either of such Selling Stockholder's
Attorneys-in-Fact to the effect that the representations and warranties of such
Selling Stockholder contained in this Agreement are true and correct as if made
at and as of such Closing Date, and that such Selling Stockholder has complied
with all the agreements and satisfied all the conditions on such Selling
Stockholder's part to be performed or satisfied at or prior to such Closing
Date.
(j) The NASD has confirmed that it has not raised any
objection with respect to the fairness and reasonableness of the underwriting
terms and arrangements.
(k) The Company shall have furnished to the Underwriters
and counsel for the Underwriters such additional documents, certificates and
evidence as the Underwriters or they may have reasonably requested.
All such opinions, certificates, letters and other documents will be in
compliance with the provisions hereof only if they are satisfactory in form and
substance to the Underwriters and counsel for the Underwriters. The Company will
furnish the Underwriters with such conformed copies of such opinions,
certificates, letters and other documents as the Underwriters shall reasonably
request.
6. Indemnification and Contribution.
(a) The Company and each Selling Stockholder, jointly and
severally, agree to indemnify and hold harmless each Underwriter against any
losses, claims, damages or liabilities, joint or several, to which such
Underwriter may become subject, under the Act or otherwise (including in
settlement of any litigation if such settlement is effected with the written
consent of the Company and/or such Selling Stockholders, as the case may be),
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon an untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement, including
the information deemed to be a part of the Registration Statement at the time of
effectiveness pursuant to Rules 430A and 434(d) of the Rules and Regulations, if
applicable, any Preliminary Prospectus, the Prospectus, or any amendment or
supplement thereto (including any term sheet within the meaning of Rule 434 of
the Rules and Regulations), or arise out of or are based upon the omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, and will reimburse
each Underwriter for any legal or other expenses reasonably incurred by it in
connection with investigating or defending against such loss, claim, damage,
liability or action; provided, however, that neither the Company nor any Selling
Stockholder shall be liable in any such case to the extent that any such loss,
claim, damage, liability or action arises out of or is based upon an untrue
statement or alleged untrue statement or omission or alleged omission made in
the Registration Statement, any Preliminary Prospectus, the Prospectus or any
such amendment or supplement, in reliance upon and in conformity with written
information furnished to the Company by you, or by any Underwriter through you,
specifically for use in the preparation thereof; and further provided, however,
that in no event shall any Selling Stockholder be liable under the provisions of
this Section 6 for any amount in excess of the aggregate amount of proceeds such
Selling Stockholder received from the sale of the Securities pursuant to this
Agreement.
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In addition to their other obligations under this Section 6(a), the
Company and each Selling Stockholder, jointly and severally, agree that, as an
interim measure during the pendency of any claim, action, investigation, inquiry
or other proceeding arising out of or based upon any statement or omission, or
any alleged statement or omission, described in this Section 6(a), they will
reimburse each Underwriter on a monthly basis for all reasonable legal fees 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 and/or the Selling Stockholder's obligation to reimburse the
Underwriters for such expenses and the possibility that such payments might
later be held to have been improper by a court of competent jurisdiction. To the
extent that any such interim reimbursement payment is so held to have been
improper, the Underwriter that received such payment shall promptly return it to
the party or parties that made such payment, together with interest, compounded
daily, determined on the basis of the prime rate (or other commercial lending
rate for borrowers of the highest credit standing) announced from time to time
by __________________ (the "Prime Rate"). Any such interim reimbursement
payments which are not made to an Underwriter within 30 days of a request for
reimbursement shall bear interest at the Prime Rate from the date of such
request. This indemnity agreement shall be in addition to any liabilities which
the Company or the Selling Stockholders may otherwise have.
(b) Each Underwriter, severally but not jointly, will
indemnify and hold harmless the Company and each Selling Stockholder against any
losses, claims, damages or liabilities to which the Company and the Selling
Stockholders may become subject, under the Act or otherwise (including in
settlement of any litigation, if such settlement is effected with the written
consent of such Underwriter), insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon an
untrue statement or alleged untrue statement of a material fact contained in the
Registration Statement, any Preliminary Prospectus, the Prospectus, or any
amendment or supplement thereto (including any term sheet within the meaning of
Rule 434 of the Rules and Regulations), or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, in
each case to the extent, but only to the extent, that such untrue statement or
alleged untrue statement or omission or alleged omission was made in the
Registration Statement, any Preliminary Prospectus, the Prospectus, or any such
amendment or supplement, in reliance upon and in conformity with written
information furnished to the Company by you, or by such Underwriter through you,
specifically for use in the preparation thereof, and will reimburse the Company
and the Selling Stockholders for any legal or other expenses reasonably incurred
by the Company or any such Selling Stockholder in connection with investigating
or defending against any such loss, claim, damage, liability or action.
(c) Promptly after receipt by an indemnified party under
subsection (a) or (b) above of notice of the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made against the
indemnifying party under such subsection, notify the indemnifying party in
writing of the commencement thereof, but the omission so to notify the
indemnifying party shall not relieve the indemnifying party from any liability
that it may have to any indemnified party. In case any such action shall be
brought against any indemnified party, and it shall notify the indemnifying
party of the commencement thereof, the indemnifying party shall be
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entitled to participate in, and, to the extent that it shall wish, jointly with
any other indemnifying party similarly notified, to assume the defense thereof,
with counsel satisfactory to such indemnified party and after notice from the
indemnifying party to such indemnified party of the indemnifying party's
election so to assume the defense thereof, the indemnifying party shall not be
liable to such indemnified party under such subsection for any legal or other
expenses subsequently incurred by such indemnified party in connection with the
defense thereof other than reasonable costs of investigation; provided, however,
that if, in the sole judgment of the Underwriters, it is advisable for the
Underwriters to be represented as a group by separate counsel, the Underwriters
shall have the right to employ a single counsel to represent all Underwriters
who may be subject to liability arising from any claim in respect of which
indemnity may be sought by the Underwriters under subsection (a) of this Section
6, in which event the reasonable fees and expenses of such separate counsel
shall be borne by the indemnifying party or parties and reimbursed to the
Underwriters as incurred (in accordance with the provisions of the second
paragraph in subsection (a) above). An indemnifying party shall not be obligated
under any settlement agreement relating to any action under this Section 6 to
which it has not agreed in writing.
(d) If the indemnification provided for in this Section 6
is unavailable or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above, then each indemnifying party shall contribute to
the amount paid or payable by such indemnified party as a result of the losses,
claims, damages or liabilities referred to in subsection (a) or (b) above, (i)
in such proportion as is appropriate to reflect the relative benefits received
by the Company and the Selling Stockholders on the one hand and the Underwriters
on the other from the offering of the Securities or (ii) if the allocation
provided by clause (i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred
to in clause (i) above but also the relative fault of the Company and the
Selling Stockholders on the one hand and the Underwriters on the other in
connection with the statements or omissions that resulted in such losses,
claims, damages or liabilities, as well as any other relevant equitable
considerations. The relative benefits received by the Company and the Selling
Stockholders 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 and Selling Stockholders 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. The
relative fault 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, the Selling Stockholders or the Underwriters and the parties' relevant
intent, knowledge, access to information and opportunity to correct or prevent
such untrue statement or omission. The Company, the Selling Stockholders and the
Underwriters agree that it would not be just and equitable if contributions
pursuant to this subsection (d) were to be determined by pro rata allocation
(even if the Underwriters were treated as one entity for such purpose) or by any
other method of allocation which does not take account of the equitable
considerations referred to in the first sentence of this subsection (d). The
amount paid by an indemnified party as a result of the losses, claims, damages
or liabilities referred to in the first sentence of this subsection (d) shall be
deemed to include any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending against any
action or claim which is the subject of this subsection (d). Notwithstanding the
provisions of this subsection (d), no Underwriter shall be required to
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contribute any amount in excess of the amount by which the total price at which
the Securities underwritten by it and distributed to the public were offered to
the public exceeds the amount of any damages that 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 in this subsection (d) to
contribute are several in proportion to their respective underwriting
obligations and not joint.
(e) The obligations of the Company and the Selling
Stockholders under this Section 6 shall be in addition to any liability which
the Company and the Selling Stockholders may otherwise have and shall extend,
upon the same terms and conditions, to each person, if any, who controls any
Underwriter within the meaning of the Act; and the obligations of the
Underwriters under this Section 6 shall be in addition to any liability that the
respective Underwriters may otherwise have and shall extend, upon the same terms
and conditions, to each director of the Company (including any person who, with
such person's consent, is named in the Registration Statement as about to become
a director of the Company), to each officer of the Company who has signed the
Registration Statement and to each person, if any, who controls the Company or
any Selling Stockholder within the meaning of the Act.
7. Representations and Agreements to Survive Delivery. All
representations, warranties, and agreements of the Company herein or in
certificates delivered pursuant hereto, and the agreements of the several
Underwriters, the Company and the Selling Stockholders contained in Section 6
hereof, shall remain operative and in full force and effect regardless of any
investigation made by or on behalf of any Underwriter or any controlling person
thereof, or the Company or any of its officers, directors, or controlling
persons, or any Selling Stockholders or any controlling person thereof, and
shall survive delivery of, and payment for, the Securities to and by the
Underwriters hereunder.
8. Substitution of Underwriters.
(a) If any Underwriter or Underwriters shall fail to take
up and pay for the amount of Firm Shares agreed by such Underwriter or
Underwriters to be purchased hereunder, upon tender of such Firm Shares in
accordance with the terms hereof, and the amount of Firm Shares not purchased
does not aggregate more than 10% of the total amount of Firm Shares set forth in
Schedule II hereto, the remaining Underwriters shall be obligated to take up and
pay for (in proportion to their respective underwriting obligations hereunder as
set forth in Schedule II hereto except as may otherwise be determined by you)
the Firm Shares that the withdrawing or defaulting Underwriters agreed but
failed to purchase.
(b) If any Underwriter or Underwriters shall fail to take
up and pay for the amount of Firm Shares agreed by such Underwriter or
Underwriters to be purchased hereunder, upon tender of such Firm Shares in
accordance with the terms hereof, and the amount of Firm Shares not purchased
aggregates more than 10% of the total amount of Firm Shares set forth in
Schedule II hereto, and arrangements satisfactory to you for the purchase of
such Firm Shares by other persons
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are not made within 36 hours thereafter, this Agreement shall terminate. In the
event of any such termination neither the Company nor any Selling Stockholder
shall be under any liability to any Underwriter (except to the extent provided
in Section 4(a)(viii) or Section 6 hereof) nor shall any Underwriter (other than
an Underwriter who shall have failed, otherwise than for some reason permitted
under this Agreement, to purchase the amount of Firm Shares agreed by such
Underwriter to be purchased hereunder) be under any liability to the Company or
the Selling Stockholders (except to the extent provided in Section 6 hereof).
If Firm Shares to which a default relates are to be purchased by the
non-defaulting Underwriters or by any other party or parties, the Underwriters
or the Company shall have the right to postpone the First Closing Date for not
more than seven business days in order that the necessary changes in the
Registration Statement, Prospectus and any other documents, as well as any other
arrangements, may be effected. As used herein, the term "Underwriter" includes
any person substituted for an Underwriter under this Section 8.
9. Effective Date of this Agreement and Termination.
(a) This Agreement shall become effective at 10:00 a.m.,
Central time, on the first full business day following the effective date of the
Registration Statement, or at such earlier time after the effective time of the
Registration Statement as the Underwriters in their discretion shall first
release the Securities for sale to the public; provided, that if the
Registration Statement is effective at the time this Agreement is executed, this
Agreement shall become effective at such time as the Underwriters in their
discretion shall first release the Securities for sale to the public. For the
purpose of this Section, the Securities shall be deemed to have been released
for sale to the public upon release by the Underwriters of the publication of a
newspaper advertisement relating thereto or upon release by the Underwriters of
telexes offering the Securities for sale to securities dealers, whichever shall
first occur. By giving notice as hereinafter specified before the time this
Agreement becomes effective, the Underwriters or the Company may prevent this
Agreement from becoming effective without liability of any party to any other
party, except that the provisions of Section 4(a)(viii) or Section 6 hereof
shall at all times be effective.
(b) The Underwriters shall have the right to terminate
this Agreement by giving notice as hereinafter specified at any time at or prior
to the First Closing Date, and the option referred to in Section 3(b), if
exercised, may be canceled at any time prior to the Second Closing Date, if (i)
the Company shall have failed, refused or been unable, at or prior to such
Closing Date, to perform any agreement on its part to be performed hereunder,
(ii) any other condition of the Underwriters' obligations hereunder is not
fulfilled, (iii) trading on the New York Stock Exchange, the American Stock
Exchange or the Nasdaq National Market shall have been suspended, (iv) minimum
or maximum prices for trading shall have been fixed, or maximum ranges for
prices for securities shall have been required, on the New York Stock Exchange,
the American Stock Exchange or the Nasdaq National Market, by such Exchange or
market or by order of the Commission or the NASD or any other governmental
authority having jurisdiction, (v) a banking moratorium shall have been declared
by Federal, New York or Texas authorities, or (vi) there has occurred any
material adverse change in the financial markets in the United States or an
outbreak of major hostilities (or an escalation thereof) in which the United
States is involved, a declaration
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of war by Congress, any other substantial national or international calamity or
any change or development involving a prospective change in national or
international political, financial or economic conditions or any other event or
occurrence of a similar character shall have occurred since the execution of
this Agreement that, in the Underwriters' judgment, makes it impractical or
inadvisable to proceed with the completion of the sale of and payment for the
Securities. Any such termination shall be without liability of any party to any
other party except that the provisions of Section 4(a)(viii) or Section 6 hereof
shall at all times be effective.
(c) If the Underwriters elect to prevent this Agreement
from becoming effective or to terminate this Agreement as provided in this
Section, the Company and an Attorney-in-Fact, on behalf of the Selling
Stockholders, shall be notified promptly by the Underwriters by telephone or
telegram, confirmed by letter. If the Company elects to prevent this Agreement
from becoming effective, the Underwriters and an Attorney-in-Fact, on behalf of
the Selling Stockholders, shall be notified by the Company by telephone or
telegram, confirmed by letter.
10. Default by One or More of the Selling Stockholders or the
Company. If one or more of the Selling Stockholders shall fail at the First
Closing Date to sell and deliver the number of Securities which such Selling
Stockholder or Selling Stockholders are obligated to sell hereunder, and the
remaining Selling Stockholders do not exercise the right hereby granted to
increase, pro rata or otherwise, the number of Securities to be sold by them
hereunder to the total number of Securities to be sold by all Selling
Stockholders as set forth in Schedule I, then the Underwriters may at their
option, by notice from the Underwriters to the Company and the non-defaulting
Selling Stockholders, either (a) terminate this Agreement without any liability
on the part of any non-defaulting party or (b) elect to purchase the Securities
which the Company and the non-defaulting Selling Stockholders have agreed to
sell hereunder.
In the event of a default by any Selling Stockholder as referred to in
this Section, either the Underwriters or the Company or, by joint action only,
the non-defaulting Selling Stockholders shall have the right to postpone the
First Closing Date for a period not exceeding seven business days in order to
effect any required changes in the Registration Statement or Prospectus or in
any other documents or arrangements.
If the Company shall fail at the First Closing Date to sell and deliver
the number of Securities which it is obligated to sell hereunder, then this
Agreement shall terminate without any liability on the part of any
non-defaulting party.
No action taken pursuant to this Section shall relieve the Company or
any Selling Stockholders so defaulting from liability, if any, in respect of
such default.
11. Information Furnished by Underwriters. The statements set
forth in the last two paragraphs of the inside front cover page and in the fifth
and sixth paragraphs under the caption "Underwriting" in any Preliminary
Prospectus and in the Prospectus constitute the only written information
furnished by or on behalf of the Underwriters referred to in Section 2 and
Section 6 hereof.
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12. Notices. Except as otherwise provided herein, all
communications hereunder shall be in writing or by telegraph and, if to the
Underwriters, shall be mailed, telegraphed or delivered to the Underwriters c/o
Xxxxx Xxxxxxx Inc., Xxxxx Xxxxxxx Tower, 000 Xxxxx Xxxxx Xxxxxx, Xxxxxxxxxxx,
Xxxxxxxxx 00000, except that notices given to an Underwriter pursuant to Section
6 hereof shall be sent to such Underwriter at the following address, as
appropriate: Xxxxx Xxxxxxx Inc., 000 Xxxxx Xxxxx Xxxxxx, Xxxxxxxxxxx, Xxxxxxxxx
00000, The Xxxxxxxx-Xxxxxxxx Company, Inc., 0000 Xxxxxxxxx Xxxx, X.X., 00xx
Xxxxx, Xxxxxxx, Xxxxxxx 00000, Sandler X'Xxxxx & Partners, L.P., Two World Trade
Center, 000xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000; if to the Company, shall be
mailed, telegraphed or delivered to it at FirstCity Financial Corporation, 0000
Xxxxxxxx Xxxxx, Xxxx, Xxxxx 00000 Attention: President; if to any of the Selling
Stockholders, at the address of the Attorneys-in-Fact as set forth in the Powers
of Attorney, or in each case to such other address as the person to be notified
may have requested in writing. All notices given by telegram shall be promptly
confirmed by letter. Any party to this Agreement may change such address for
notices by sending to the parties to this Agreement written notice of a new
address for such purpose.
13. Persons Entitled to Benefit of Agreement. This Agreement shall
inure to the benefit of and be binding upon the parties hereto and their
respective successors and assigns and the controlling persons, officers and
directors referred to in Section 6. Nothing in this Agreement is intended or
shall be construed to give to any other person, film or corporation any legal or
equitable remedy or claim under or in respect of this Agreement or any provision
herein contained. The term "successors and assigns" as herein used shall not
include any purchaser, as such purchaser, of any of the Securities from any of
the several Underwriters.
14. Governing Law. This Agreement shall be governed by and
construed in accordance with the internal laws of the State of Minnesota without
reference to the conflicts of laws principles thereof.
[Signature Page Follows]
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Please sign and return to the Company the enclosed duplicates of this
letter whereupon this letter will become a binding agreement between the
Company, the Selling Stockholders and the several Underwriters in accordance
with its terms.
Very truly yours,
FIRSTCITY FINANCIAL CORPORATION
By
--------------------------------------
Executive Vice President
Selling Stockholders
By
--------------------------------------
Attorney-in-Fact
Confirmed as of the date first
above mentioned, on behalf of
themselves and the other several
Underwriters named in Schedule II
hereto:
XXXXX XXXXXXX INC.
By
-------------------------------
Title:
------------------------
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SCHEDULE I
Selling Stockholders
Number of Firm
Name Shares to be Sold
---- -----------------
-----------------
Total . . . . . . . 341,000
=================
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SCHEDULE II
Underwriter Number of Firm Shares(1)
-----------
Xxxxx Xxxxxxx Inc.
The Xxxxxxxx-Xxxxxxxx Company, LLC
Sandler X'Xxxxx & Partners, L.P.
-----------------
Total . . . . . . . . 1,341,000
=================
----------
(1) The Underwriters may purchase up to an additional 201,150 Option
Shares, to the extent the option described in Section 3(b) of the
Agreement is exercised, in the proportions and in the manner described
in the Agreement.
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SCHEDULE III
Acquisition Partnership Percentage of Ownership
----------------------- -----------------------
Subsidiary Percentage of Ownership
---------- -----------------------
