DECOR GROUP, INC.
325,000 Shares of Common
Stock
AGREEMENT AMONG UNDERWRITERS
____________, 1996
To each of the Underwriters named in Schedule I
to the attached Underwriting Agreement
Dear Sirs:
1. Underwriting Agreement. Decor Group, Inc., a Delaware corporation (the
"Company"), proposes to enter into an underwriting agreement in the form of the
Underwriting Agreement attached hereto as Exhibit "A" (the "Underwriting
Agreement") with the underwriters named in Schedule I to the Underwriting
Agreement (the "Underwriters"), acting severally and not jointly, with respect
to the purchase from the Company of 300,000 shares of Common Stock and from a
selling security holder an additional 25,000 shares of Common Stock for a total
of 325,000 shares of Common Stock (the "Firm Shares"). Upon our request, and as
provided in Section 3 of the Underwriting Agreement, the Company will also issue
and sell to the Underwriters up to a maximum of an additional 45,000 Shares (the
"Optional Shares"). Both the Firm Shares and the Optional Shares are sometimes
collectively referred to herein as the "Shares." All of the Shares which are the
subject of this Agreement are more fully described in the Prospectus of the
Company described below. Under the terms of the Underwriting Agreement, each of
the Underwriters will agree, in accordance with the terms thereof to purchase
the aggregate number of Firm Shares set forth opposite its name in said Schedule
I, subject to adjustment pursuant to Section 12 hereof and Section 14 of the
Underwriting Agreement.
2. Registration Statement and Prospectus. The Shares are described in a
registration statement and related prospectus which have been filed with the
Securities and Exchange Commission (the "Commission") under the Securities Act
of 1933, as amended (the "Act"). An amendment to such registration statement has
been or
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will be filed in which you have been or will be named as one of the Underwriters
of the Shares. Copies of the registration statement as filed and as amended have
been delivered to you, and you hereby authorize us to approve on your behalf any
further amendments or supplements which may be necessary or appropriate. The
registration statement, as amended at the time it becomes effective, is called
the "Registration Statement" and the final prospectus relating to the Shares as
filed by the Company with the Commission pursuant to Rule 424(b) under the Act
is referred to as the "Prospectus."
3. Authority of Representative. You authorize us as your Representative to
execute the Underwriting Agreement with the Company in the form attached with
such insertions, deletions or other changes as we may approve (but not as to the
number of, and price of, the Shares to be purchased by you except as provided
herein and therein) and to take such action as in our discretion we may deem
advisable in respect of all matters pertaining to the Underwriting Agreement,
this Agreement, the transactions for the accounts of the several Underwriters
contemplated thereby and hereby, and the purchase, carrying, sale and
distribution of the Shares.
4. Public Offering. In connection with the public offering of the Shares,
you authorize us, in our discretion:
(a) To determine the time and manner of the initial public offering
(after the Registration Statement become effective), the initial public offering
price, and the concessions and reallowances to dealers, to change the public
offering price and such concessions and reallowances after the initial public
offering, to furnish the Company with the information to be included in the
Registration Statement and the Prospectus (and any amendment or supplement
thereto) with respect to the terms of the public offering, and to determine all
matters relating to the public advertisement of the Shares and any
communications with dealers or others;
(b) To reserve all or any part of your Shares for sale to retail
purchasers (including institutions) and to dealers selected by us ("Selected
Dealers") among which may be included any Underwriter (including ourselves) and
each of which shall be a member of the National Association of Securities
Dealers, Inc., and
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each of which shall agree that in making sales to purchasers in the United
States it will conform to the Rules of Fair Practice of said Association (or, in
the case of a foreign dealer not eligible for membership in such Association,
which shall agree not to reoffer, resell or deliver Shares in the United States,
its territories or its possessions, or to persons whom it has reason to believe
are citizens thereof or residents therein), such reservations for sales to
retail purchasers to be as nearly as practicable in proportion to the respective
underwriting obligations of the Underwriters and such reservations for sales to
Selected Dealers to be in such proportion as we determine, and from time to time
to add to the reserved Shares such Shares retained by you remaining unsold and
to release to you any of your Shares reserved but not sold;
(c) To sell reserved Shares as nearly as practicable in proportion
to the respective reservations to retail purchasers at the public offering
price, and to Selected Dealers at the public offering price less the Selected
Dealer's concession pursuant to the Selected Dealers Agreement in substantially
the form attached; and
(d) To buy Shares for your account from Selected Dealers at the
public offering price less such amount not in excess of the Selected Dealer's
concession as we may determine.
After advice from us that the Shares are released for public offering, you
will offer to the public in conformity with the terms of offering set forth in
the Prospectus, or any amendment or supplement, such of your Shares as we advise
you are not reserved.
You recognize the importance of a broad distribution of the Shares among
bona fide investors and you agree to use your best efforts to obtain such broad
distribution and to that end, to the extent you deem practicable, to give
priority to small orders. In offering the Shares to Selected Dealers we will
take such action as we deem appropriate to effect a broad distribution.
5. Repurchase of Shares Not Effectively Placed for Investment. You are
requested to place for investment those of your Shares which are not reserved as
aforesaid. Any Shares sold by you (otherwise than through us) which may be
delivered to us against a purchase contract made by us for the account of any
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Underwriter prior to termination of the provisions referred to in Section 11 of
this Agreement, shall be purchased by you upon demand from us at the cost of
such purchase plus brokerage commissions and transfer taxes on redelivery.
Shares delivered on such repurchase need not be identical to those purchased by
you. In lieu of demand repurchase by you we may in our discretion (i) sell for
your account the Shares so purchased by us, at such price and upon such terms as
we may determine, and debit or credit your account with the loss and expense or
net profit resulting from such sale, or (ii) charge your account with an amount
not in excess of the Selected Dealer's concession with respect to such Shares
plus brokerage commissions and transfer taxes paid in connection with such
purchase.
6. Payment and Delivery. We shall give you at least 24 hours prior notice
of the Closing Date. You agree to deliver to us at or before 9:00 a.m., New York
City time, on such Closing Date and at or before 9:00 a.m. New York City time,
on the Additional Closing Date referred to in the Underwriting Agreement if the
Optional Shares are purchased, at the office of VTR Capital, Inc., 00 Xxxx
Xxxxxx, Xxx Xxxx, XX 00000 (or such other office as we may direct), a certified
check or bank cashier's check payable in New York Clearing House funds to the
order of VTR Capital Inc., as Representative, for the full purchase price of the
Shares which you shall have agreed to purchase from the Company less the
concession to selected dealers. If you are a member or clear through a member of
the Depository Trust Company ("DTC"), you may, in your discretion, deliver
payment and receive Shares through the facilities of DTC. The proceeds shall be
delivered in the amounts required in each case for payment of the full purchase
price by us to the Company against delivery of the Shares to us for your
account. We are authorized to accept that delivery and to give a receipt
therefor. We may in our discretion make such payment on your behalf with our own
funds, in which event you will reimburse us promptly upon request. You authorize
us, as your custodian, to take delivery of your Shares, registered as we may
direct in order to facilitate deliveries. You also authorize us to hold for your
account such of your Shares as we have reserved for sale to retail purchasers
and to Selected Dealers, and to deliver your reserved Shares against such sales.
We will deliver your unreserved Shares to you promptly and, after we receive
payment for reserved Shares sold by us for your account, we will remit to you,
as promptly as practicable, an amount equal to the price paid
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by you for such Shares. As soon as practicable after termination of Sections 4,
5 and 9 and the first and penultimate sentences of Section 8 of this Agreement
(pursuant to Section 11 hereof) we will deliver to you any of your Shares
reserved but not sold. All Shares delivered to you pursuant to this Section will
be evidenced by certificates in such denominations as you shall direct by
written notice received by us not later than the second full business day
preceding the Closing Date.
7. Authority to Borrow. In connection with the purchase or carrying of any
Shares purchased hereunder for your account, you authorize us, in our
discretion, to advance funds for your account, charging current interest rates,
or to arrange loans for your account, and in connection therewith to execute and
deliver any notes or other instruments and hold or pledge as security any of
your Shares. Any lender may rely on our instructions in all matters relating to
any such loan. Any of your Shares held by us for your account may be delivered
to you for carrying purposes only, and subject to our further direction.
8. Stabilization and Over-Allotment. To facilitate the distribution of the
Shares, you authorize us during the term of this Agreement, or for such longer
period as may be necessary in our discretion, to make purchases and sales of the
Shares for your account in the open market or otherwise, for long or short
account, on such terms as we deem advisable and, in arranging sales, to
over-allot. You also authorize us to cover any short position incurred pursuant
to this Section on such terms as we deem advisable. Included in the authority
granted to us by you is the authority to exercise the over-allotment option to
purchase the Optional Shares granted by Section 3 of the Underwriting Agreement.
Except with respect to the exercise of such over-allotment option, all such
purchases and sales (other than purchases and sales of the Optional Shares)
shall be made for the accounts of the several Underwriters as nearly as
practicable in proportion to their respective underwriting obligations. Your net
commitment under this Section shall not, at the end of any business day, exceed
15% of your maximum underwriting obligation. You will on our demand take up at
cost or deliver against payment any Shares purchased or sold or over-allotted
for your account and, if any such other Underwriter defaults in its
corresponding obligation, you will assume your proportionate share of such
obligation without relieving the defaulting Underwriter from
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liability. You will be obligated in respect to purchases and sales made for your
account hereunder whether or not the proposed purchase of the Shares is
consummated. Upon request you will advise us of Shares retained by you and
unsold and will sell to us for the account of one or more of the Underwriters
such of your unsold Shares as we may designate, at the public offering price
thereof less such amount as we may determine, but not in excess of the Selected
Dealer's concession with respect thereto. Until the termination of this
Agreement pursuant to Section 11 hereof, or prior notification by us, we shall
have the sole right to effect stabilizing transactions in the Shares. You agree
that until such time you will not make any purchases or sales of any of such
Shares except as provided in Section 9 hereof. You also agree to timely provide
us with the information required by Rule 17a-2(d) under the Securities Exchange
Act of 1934, as amended (the "1934 Act").
9. Open Market Transactions. You agree not to bid for, purchase, attempt
to induce others to purchase, or sell, directly or indirectly, any Shares,
except as brokers pursuant to unsolicited orders and as otherwise provided in
this Agreement or in the Underwriting Agreement. You further agree not to offer
the Shares for sale until notified by us, as the Representative of the
Underwriters, that they are released for that purpose.
10. Expenses and Settlement. We may charge your account with Selected
Dealer's concessions and all transfer taxes on sales made by us for your account
and with your proportionate share (based upon your underwriting obligation) of
all other expenses incurred by us under the terms of this Agreement or the
Underwriting Agreement, in excess of those reimbursed by the Company pursuant to
Section 8 of the Underwriting Agreement, or in connection with the purchase,
carrying, sale or distribution of the Shares. Our determination of the amount
and allocation of expenses shall be conclusive. As soon as practicable after
termination of the provisions referred to in Section 11, the accounts hereunder
will be settled, but we may reserve from distribution such amount as we deem
advisable to cover possible additional expenses. We may at any time make partial
distribution of credit balances or call for payment of debit balances. Any of
your funds in our hands may be held with our general funds without
accountability for interest. Notwithstanding any settlement, you will pay (i)
your proportionate share (based upon your underwriting obligation) of any
liability
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which may be incurred by the Underwriters, or any of them, based on the claim
that the Underwriters constitute an association, partnership, unincorporated
business or other separate entity, and of any expenses incurred by us, or by any
other Underwriter with our approval, in contesting any such liability, and (ii)
any transfer taxes which may be assessed and paid after such settlement on
account of any sale or transfer for your account.
11. Termination and Settlement. This Agreement will terminate (a) at the
close of business on the 30th day after the date of the Underwriting Agreement;
or (b) on such earlier or later date, not more than 30 days after the date
specified in (a), as we may determine; or (c) on the date of termination of the
Underwriting Agreement, if the same shall be terminated as provided by its
terms.
Upon termination of this Agreement, all authorizations, rights and
obligations hereunder will cease, except (a) the mutual obligation to settle
accounts hereunder, (b) your obligation to pay any claims referred to in the
last paragraph of this Section, (c) the obligations with respect to indemnity
set forth in Section 15 hereof (all obligations of which will continue until
fully discharged), and (d) your obligation with respect to purchases which may
be made by us from time to time thereafter to cover any short position with
respect to the offering, all of which will continue until fully discharged, and
except our authority with respect to matters to be determined by us, or by us
and the Company, pursuant to the terms of the Underwriting Agreement, which will
survive the termination of this Agreement.
The accounts arising pursuant to this Agreement will be settled and paid
as soon as practicable after termination. The determination by us of the amounts
to be paid to or by you will be final and conclusive.
Notwithstanding any settlement upon the termination of this Agreement, you
will pay your proportionate share of any amount asserted against and discharged
by the Underwriters, or any of them, based upon the claim that the Underwriters
constitute an association, unincorporated business or other separate entity, or
based upon or arising out of a claim that this Agreement or the Underwriting
Agreement is invalid or illegal for any reason, including any expense incurred
in defending against such claim, and
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will pay any transfer taxes which may be assessed thereafter on account of any
sale or transfer of Shares for our account.
12. Default by Underwriters. Default by one or more Underwriters hereunder
or under the Underwriting Agreement shall not release the other Underwriters
from their obligations or affect the liability of any defaulting Underwriter to
the other Underwriters for damages resulting from such default. In case of
default under the Underwriting Agreement by one or more Underwriters, we may
arrange for the purchase by others, including non-defaulting Underwriters, of
Shares not taken up by such defaulting Underwriter and you will, at our request,
increase pro rata with the other non-defaulting Underwriters the aggregate
principal amount of Shares which you are to purchase, or both, by an amount not
exceeding one-ninth of your original underwriting obligations. In the event any
such arrangements are made, the respective Shares to be purchased by
non-defaulting Underwriters and by such others shall be taken as the basis for
the underwriting obligations under this Agreement.
In the event of default by one or more Underwriters in respect of their
obligations under this Agreement, each non-defaulting Underwriter shall assume
its proportionate share of the obligations under this Agreement of each such
defaulting Underwriter (other than, to the extent stated in the first paragraph
of this Section, the purchase obligation of such defaulting Underwriter).
13. Position of Representative. We shall be under no liability to you for
any act or omission except for obligations expressly assumed by us in this
Agreement, but no obligation on our part shall be implied or inferred. Nothing
shall constitute the Underwriters, or any of them, an association, partnership,
unincorporated business or other separate entity and the rights and liability of
ourselves and each of the Underwriters are several and not joint.
14. Compensation to Representative. As compensation for our services as
Representative, you agree to pay us $____ per Share out of the aggregate
underwriting discount attributable to Shares which you agree to purchase from
the Company under the Underwriting Agreement. We are authorized to charge your
account with such an amount.
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15. Indemnification. You will indemnify and hold harmless each other
Underwriter and each person, if any, who controls such Underwriter within the
meaning of Section 15 of the Act to the extent and upon the terms by which each
Underwriter agrees to indemnify the Company in the Underwriting Agreement. Such
indemnity agreement shall survive the termination of any of the provisions of
this Agreement.
In the event that at any time any claim shall be asserted against us as or
as a result of our having acted as Representative, or otherwise involving the
Underwriters generally, relating to the Registration Statement or any
preliminary prospectus or the Prospectus, as from time to time amended or
supplemented, the public offering of the Shares or any of the transactions
contemplated by this Agreement, you authorize us to make such investigation, to
retain such counsel and to take such other action as we shall deem necessary or
desirable under the circumstances, including settlement of any claim or claims
if such course of action shall be recommended by counsel retained by us. You
agree to pay to us, on request, your proportionate share (based upon your
underwriting obligation) of all expenses incurred by us (including, but not
limited to, the disbursements and fees of counsel so retained) in investigating
and defending against such claim or claims, and your proportionate share (based
upon your underwriting obligation) of any liability incurred by us in respect of
such claim or claims, whether such liability shall be the result of a judgment
against us or as a result of any such settlement.
16. Blue Sky Matters. We shall not have any responsibility with respect to
the right of any Underwriter or other person to sell Shares in any jurisdiction,
notwithstanding any information we may furnish in that connection. You hereby
authorize us to take such action as may be necessary or advisable to qualify the
Shares for offering and sale in any jurisdiction. We have caused to be filed
Further State Notices respecting the Shares to be offered to the public in New
York in the form required by, and pursuant to, the provisions of Article 23A of
the General Business Law of the State of New York.
17. Title to Shares. The Shares purchased for the respective accounts of
the several Underwriters shall remain the property of those Underwriters until
sold; and no title to such
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Shares shall in any event pass to us, as Representative, by virtue of any of the
provisions of this Agreement.
18. Capital Requirements. Unless the provisions of clause (b) of the
second sentence of the last paragraph of this Agreement are applicable to you,
you confirm that your commitment hereunder will not result in any violation of
Section 8(b) or 15(c) of the 1934 Act or in any violation of any of the rules
and regulations promulgated under the 1934 Act, including, without limitation,
Rule 15c3-1, or any provision of any applicable rules of any securities exchange
to which you are subject or of any restriction imposed upon you by such
exchange.
19. Notices and Governing Laws. Any notice from you to us shall be mailed
or transmitted by any standard form of written telecommunication to us at 00
Xxxx Xxxxxx, Xxx Xxxx, XX 00000. Any notice from us to you shall be mailed or
transmitted by any standard from of written telecommunication to you at your
address as set forth in your Underwriter's Questionnaire. This Agreement shall
be governed by and construed in accordance with the laws of the State of New
York.
We represent that we are a member in good standing of the National
Association of Securities Dealers, Inc. You represent that you are (a) a member
in good standing of such Association or (b) a foreign dealer which is not
eligible for membership in such Association, in which event you will make sales
of any Shares only outside the United States and its territories and possessions
to persons who are not citizens or residents of the United States or its
territories or possessions, and that in making any such sales, you will comply
with such Association's Interpretation with respect to Free-Riding and
Withholding. You further represent that: (i) you will notify each of your
customers with respect to whose account you have investment discretion and to
whose account you intend to sell any Shares that you propose to sell Shares to
such account as a principal and you will obtain the customer's written consent
to such sale; and (ii) you will comply with the requirements of Rule 15c2-8
under the 1934 Act and have distributed or are distributing copies of a
Preliminary Prospectus to all persons to whom you then expected to mail
confirmations of sale, not less than 48 hours prior to the time it is expected
to mail such confirmations.
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Very truly yours,
VTR CAPITAL, INC.
By:________________________________
As Representative of the several
Underwriters
Confirmed and accepted as of
the date first above written.
_________________________________
Attorney-in-fact for the several
Underwriters named in Schedule I
to the Underwriting Agreement
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