Exhibit 1.1
2,000,000 Shares
LINC CAPITAL, INC.
(a Delaware corporation)
Common Shares
($0.001 Par Value)
UNDERWRITING AGREEMENT
----------------------
[________], 1997
XXXXXX XXXX LLC
EVEREN SECURITIES, INC.
As representatives of the
several Underwriters
c/o Xxxxxx Xxxx LLC
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Ladies and Gentlemen:
SECTION 1. Introduction.
LINC Capital, Inc., a Delaware corporation (the "Company"), proposes to
issue and sell to the several Underwriters named in Schedule I hereto (the
"Underwriters"), acting severally and not jointly, for which Xxxxxx Xxxx LLC and
EVEREN Securities, Inc. are acting as representatives (the "Representatives"),
an aggregate of 2,000,000 shares of the Company's Common Stock, $0.001 par value
(the "Common Shares"). The 2,000,000 Common Shares to be purchased by the
Underwriters are referred to herein as the "Initial Shares." The Company also
proposes to issue and sell to the several Underwriters, acting severally and not
jointly, an aggregate of not more than 300,000 additional Common Shares (the
"Additional Shares"), if requested by the Underwriters in accordance with
Section 4 ("Over-Allotment") hereof. The Initial Shares and the Additional
Shares are collectively referred to herein as the "Shares." The words "you" and
"your" refer to the Representatives of the Underwriters.
The Company hereby agrees with the several Underwriters as follows:
SECTION 2. Representations and Warranties.
(a) The Company represents, warrants and agrees with each of the
Underwriters that, assuming with respect to each of the following (other than
subsection (xxiii)) that the transactions described under the caption "Certain
Transactions" in the Prospectus (as hereinafter defined) and in Exhibit 10.2 of
the
Registration Statement (as hereinafter defined) to be completed upon or prior to
the consummation of the Offering (as defined in the Prospectus) have been
completed and giving effect thereto:
(i) Compliance with Registration Requirements. A registration
-----------------------------------------
statement on Form S-1 (File No. 333-34729 under the Securities Act of 1933,
as amended (the "1933 Act"), with respect to the Shares, including a form
of prospectus subject to completion, has been prepared by the Company in
conformity with the requirements of the 1933 Act and the rules and
regulations of the Securities and Exchange Commission (the "Commission")
thereunder (the "1933 Act Regulations"). Such registration statement has
been filed with the Commission under the 1933 Act, and one or more
amendments to such registration statement may also have been so filed.
Promptly after execution and delivery of this Agreement, the Company will
either (i) prepare and file a prospectus in accordance with the provisions
of Rule 430A ("Rule 430A") of the 1933 Act Regulations and paragraph (b) of
Rule 424 ("Rule 424(b)") of the 1933 Act Regulations or (ii) if the Company
has elected to rely upon Rule 434 ("Rule 434") of the 1933 Act Regulations,
prepare and file a term sheet (a "Term Sheet") in accordance with the
provisions of Rule 434 and Rule 424(b). The information included in such
prospectus or in such Term Sheet, as the case may be, that was omitted from
such registration statement at the time it became effective but that is
deemed to be part of such registration statement at the time it became
effective (a) pursuant to paragraph (b) of Rule 430A is referred to as
"Rule 430A Information" or (b) pursuant to paragraph (d) of Rule 434 is
referred to as "Rule 434 Information." Each prospectus used before such
registration statement became effective, and any prospectus that omitted,
as applicable, the Rule 430A Information or the Rule 434 Information, that
was used after such effectiveness and prior to the execution and delivery
of this Agreement, is herein called a "Preliminary Prospectus." Such
registration statement, including the exhibits and any schedules, at the
time it became effective and including the Rule 430A Information and the
Rule 434 Information, as applicable, is herein called the "Registration
Statement." Any registration statement filed pursuant to Rule 462(b) of the
1933 Act Regulations is herein referred to as the "Rule 462(b) Registration
Statement," and after such filing the term "Registration Statement" shall
include the Rule 462(b) Registration Statement. The final prospectus in the
form first furnished to the Underwriters for use in connection with the
offering of the Shares is herein called the "Prospectus." If Rule 434 is
relied on, the term "Prospectus" shall refer to the Preliminary Prospectus
dated [_____] 1997 together with the Term Sheet and all references in this
Agreement to the date of the Prospectus shall mean the date of the Term
Sheet. For purposes of this Agreement, all references to the Registration
Statement, any Preliminary Prospectus, the
-2-
Prospectus or any Term Sheet or any amendment or supplement to any of the
foregoing shall be deemed to include the copy filed with the Commission
pursuant to its Electronic Data Gathering, Analysis and Retrieval system
("XXXXX").
(ii) No Suspension Orders. The Commission has not issued any order
--------------------
preventing or suspending the use of any Preliminary Prospectus and has not
instituted or, to the best of the Company's knowledge, threatened to
institute any proceedings with respect to such order. When any Preliminary
Prospectus was filed with the Commission it (A) contained in all material
respects all statements required to be stated therein in accordance with,
and complied in all material respects with the requirements of, the 1933
Act and the 1933 Act Regulations and (B) did not include any untrue
statement of a material fact or omit to state any material fact necessary
in order to make the statements therein not misleading, in the light of the
circumstances under which they were made. When the Registration Statement,
any Rule 462(b) Registration Statement or any amendment thereto was or is
declared effective, it (A) contained or will contain in all material
respects all statements required to be stated therein in accordance with,
and complied or will comply in all material respects with the requirements
of, the 1933 Act and the 1933 Act Regulations and (B) did not or will not
include any untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein not misleading. When
the Prospectus or any amendment or supplement thereto is filed with the
Commission pursuant to Rule 424(b) (or, if the Prospectus or such amendment
or supplement is not required to be so filed, when the Registration
Statement or any amendment thereto containing such amendment or supplement
to the Prospectus was or is declared effective) and on the Closing Date (as
defined in Section 3 hereof: "Purchase, Sale and Delivery of the Shares")
and the Option Closing Date (as defined in Section 4 hereof: "Over-
Allotment"), the Prospectus, as amended or supplemented at any such time,
(A) contained or will contain in all material respects all statements
required to be stated therein in accordance with, and complied or will
comply in all material respects with the requirements of, the 1933 Act and
the 1933 Act Regulations and (B) did not or will not include any untrue
statement of a material fact or omit to state any material fact necessary
in order to make the statements therein, in the light of the circumstances
under which they were made, not misleading. If Rule 434 is used, the
Company will comply with the requirements of Rule 434 and the Prospectus
shall not be "materially different," as such term is used in Rule 434, from
the Prospectus included in the Registration Statement at the time it became
effective. The foregoing provisions of this paragraph (ii) shall not apply
to statements or omissions made in any Preliminary Prospectus, the
Registration Statement or any
-3-
amendment thereto or the Prospectus or any amendment or supplement thereto
in reliance upon, and in conformity with, information furnished in writing
to the Company by or on behalf of the Underwriters through the
Representatives expressly for use therein.
(iii) Good Standing of the Company and Subsidiaries. Each of the
---------------------------------------------
Company and its subsidiaries (the "Subsidiaries") (A) is a duly
incorporated and validly existing corporation in good standing under the
laws of its jurisdiction of incorporation, with full power and authority
(corporate and other) to own or lease its properties and to conduct its
business as described in the Registration Statement and the Prospectus; and
(B) is duly qualified to do business as a foreign corporation in each
jurisdiction (x) in which the conduct of its business requires such
qualification and (y) in which it owns or leases property (except, in each
case (x) and (y) for those jurisdictions in which the failure so to qualify
has not had and will not have a Material Adverse Effect. "Material Adverse
Effect" means, when used in connection with the Company or its
Subsidiaries, any development, change or effect that is materially adverse
to the business, properties, assets, net worth, condition (financial or
other), results of operations or prospects of the Company and its
Subsidiaries taken as a whole.
(iv) Capitalization. As of June 30, 1997, the Company had the duly
--------------
authorized and validly outstanding capitalization set forth under the
caption "Capitalization" in the Prospectus based on the assumptions set
forth therein. The securities of the Company conform to the descriptions
thereof contained in the Prospectus. The outstanding Common Shares have
been duly authorized and validly issued by the Company and are fully paid
and nonassessable. Except as created hereby or referred to in the
Prospectus, there are no outstanding options, warrants, rights or other
arrangements requiring the Company or any Subsidiary, if not wholly-owned
at any time, to issue any capital stock. No holders of outstanding shares
of capital stock of the Company are entitled as such to any preemptive or
other rights to subscribe for any of the Shares and neither the filing of
the Registration Statement or the offering or sale of the Shares as
contemplated by this Agreement gives rise to any rights, other than those
which have been waived or satisfied, for or relating to, the registration
of any securities of the Company. The Shares have been duly authorized; and
on the Closing Date or the Option Closing Date (as the case may be), after
payment therefor in accordance with the terms of this Agreement, the
Initial Shares and the Additional Shares to be sold by the Company
hereunder will be validly issued, fully paid and nonassessable, and good
and marketable title to such Shares will pass to the Underwriters on the
Closing Date or the
-4-
Option Closing Date (as the case may be) free and clear of any lien,
encumbrance, security interest, claim or other restriction whatsoever. All
the outstanding shares of capital stock of each Subsidiary have been duly
authorized and validly issued, are fully paid and nonassessable. Upon
application of the proceeds of the Offering in the manner contemplated by
the Prospectus, and except as set forth in the Registration Statement and
the Prospectus, all of the outstanding shares of capital stock of each
Subsidiary will be owned directly by the Company or one of its wholly-owned
Subsidiaries, free and clear of any lien, encumbrance, security interest,
claim or other restriction whatsoever. The Company has received, subject
to notice of issuance, approval to have the Shares quoted on the National
Market System of the National Association of Securities Dealers' Automated
Quotation System ("Nasdaq NMS") and the Company knows of no reason or set
of facts which is likely to adversely affect such approval.
(v) Financial Statements. The financial statements and the related
--------------------
notes and schedules thereto included in the Registration Statement and the
Prospectus fairly present the financial condition, results of operations,
shareholders' equity and cash flows of the Company and its Subsidiaries at
the dates and for the periods specified therein. Such financial statements
and the related notes and schedules thereto have been prepared in
accordance with generally accepted accounting principles consistently
applied throughout the periods involved (except as otherwise noted therein)
and have been examined by KPMG Peat Marwick LLP, who are independent public
accountants within the meaning of the 1933 Act and the 1933 Act
Regulations, as indicated in their reports filed therewith. The selected
financial information and statistical data set forth under the caption
"Selected Financial Data" in the Prospectus are prepared on a basis
consistent with the financial statements of the Company and its
Subsidiaries.
(vi) Tax Compliance. The Company and each of its Subsidiaries have
--------------
filed all federal, state and local income and franchise tax returns
required to have been filed and have paid all taxes shown as due
thereunder, except for such taxes that the payment of which is being
contested in good faith, and the Company has no knowledge of any tax
deficiency which is reasonably likely to be assessed against the Company
and which, if so assessed, is reasonably likely to have a Material Adverse
Effect.
(vii) Insurance. The Company and each of its Subsidiaries maintains
---------
insurance of the types and in amounts which they reasonably believe to be
adequate for their business, all of which insurance is in full force and
effect.
-5-
(viii) Absence of Proceedings. Except as disclosed in the Prospectus,
----------------------
there is no pending or, to the best of the Company's knowledge, threatened
action, suit, proceeding or investigation before or by any court,
regulatory body or administrative agency or any other governmental agency
or body, domestic or foreign, which (A) questions the validity of the
capital stock of the Company or this Agreement or of any action taken or to
be taken by the Company pursuant to or in connection with this Agreement,
(B) is required to be disclosed in the Registration Statement which is not
so disclosed (and such proceedings, if any, as are summarized in the
Registration Statement are accurately summarized in all material respects),
or (C) is reasonably likely to have a Material Adverse Effect.
(ix) Authorization of Agreement. The Company has full legal right,
--------------------------
power and authority to enter into this Agreement and to consummate the
transactions provided for herein. This Agreement has been duly authorized,
executed and delivered by the Company and, assuming it is a binding
agreement of yours, constitutes a legal, valid and binding agreement of the
Company enforceable against the Company in accordance with its terms
(except as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other laws of general application
relating to or affecting the enforcement of creditors' rights and the
application of equitable principles relating to the availability of
remedies and except as rights to indemnity or contribution may be limited
by federal or state securities laws and the public policy underlying such
laws), and none of the Company's execution or delivery of this Agreement,
its performance hereunder, its consummation of the transactions
contemplated herein, or the conduct of its business as described in the
Prospectus, materially conflicts or will conflict with or results or will
result in any material breach or violation of any of the terms or
provisions of, or constitutes or will constitute a material default under,
or result in the creation or imposition of any material lien, charge or
encumbrance upon, any property or assets of the Company or any of its
Subsidiaries pursuant to the terms of (A) the certificate of incorporation
or by-laws of the Company or any of its Subsidiaries, (B) any indenture,
shareholders' agreement, note agreement or other agreement or instrument to
which the Company or any of its Subsidiaries is a party or by which any of
them are or may be bound or to which any of their respective property is or
may be subject or (C) any statute, judgment, decree, order, rule or
regulation applicable to the Company or any of its Subsidiaries of any
arbitrator, court, regulatory body or administrative agency or other
governmental agency or body, domestic or foreign, having jurisdiction over
the Company, any of its Subsidiaries or any of their respective activities
or properties.
-6-
(x) Accuracy and Validity of Exhibits. The descriptions in the
---------------------------------
Registration Statement of contracts and other documents are accurate in all
material respects and fairly present the information required to be shown
with respect thereto by Form S-1 and there are no contracts or other
documents which are required by the 1933 Act or such Form to be described
in the Registration Statement or filed as exhibits to the Registration
Statement which are not described or filed as required, and the exhibits
which have been filed are complete and correct copies in all material
respects of the documents of which they purport to be copies.
(xi) No Material Adverse Change in Business. Subsequent to the most
--------------------------------------
recent respective dates as of which information is given in the Prospectus,
and except as expressly contemplated therein, neither the Company nor any
of its Subsidiaries has incurred, other than in the ordinary course of its
business, any material liabilities or obligations, direct or contingent,
purchased any of its outstanding common shares (except as described in
Exhibit 10.2 to the Registration Statement), paid or declared any dividends
or other distributions on its common shares (except as described in Exhibit
10.2 to the Registration Statement) or entered into any material
transactions not in the ordinary course of business, and there has been no
material change in capital stock or debt or any material adverse change in
the condition (financial or other), net worth or results of operations of
the Company and its Subsidiaries taken as a whole. Neither the Company nor
any of its Subsidiaries is in breach or violation of, or in default under,
any term or provision of (A) its certificate of incorporation or by-laws,
(B) any indenture, mortgage, deed of trust, voting trust agreement,
stockholders' agreement, note agreement or other agreement or instrument to
which it is a party or by which it is or may be bound or to which any of
its property is or may be subject, or any indebtedness, the effect of which
breach or default is reasonably likely to have a Material Adverse Effect,
or (C) any statute, judgment, decree, order, rule or regulation applicable
to the Company or any of its Subsidiaries or of any arbitrator, court,
regulatory body, administrative agency or any other governmental agency or
body, domestic or foreign, having jurisdiction over the Company or any of
its Subsidiaries or any of their respective activities or properties and
the effect of which breach or default is reasonably likely to have a
Material Adverse Effect.
(xii) Absence of Labor Dispute. No labor disturbance by the employees
------------------------
of the Company or any of its Subsidiaries exists or, to the best of the
Company's knowledge, is imminent which is reasonably likely to have a
Material Adverse Effect.
-7-
(xiii) No Material Liabilities under the 1933 Act. Since its
------------------------------------------
inception, the Company has not incurred any material liability arising
under or as a result of the application of the provisions of the 1933 Act.
(xiv) Possession of Intellectual Property. Each of the Company and
-----------------------------------
its Subsidiaries owns, or is licensed or otherwise has sufficient right to
use, the proprietary knowledge, inventions, patents, trademarks, service
marks, trade names, logo marks and copyrights used in or necessary for the
conduct of its business (collectively "Rights") as described in the
Prospectus, except for such Rights as to which the failure to obtain would
not have a Material Adverse Effect. No material claims have been asserted
against the Company or any of its Subsidiaries by any person with respect
to the use of such Rights or challenging or questioning the validity or
effectiveness of any such Rights. The use, in connection with the business
and the operations of the Company of such Rights does not, to the Company's
best knowledge, infringe on the rights of any person.
(xv) No Violation of Laws. Neither the Company nor any Subsidiary
--------------------
(nor the manner in which any of them conducts its business or proposes to
conduct its business) is in violation of any laws, ordinances or
governmental rules or regulations to which it is subject, except for such
violations as would not have a Material Adverse Effect.
(xvi) No Consents Required. No consent, approval, authorization or
--------------------
order of any court, regulatory body, administrative agency or any other
governmental agency or body, domestic or foreign, is required for the
performance of this Agreement or the consummation of the transactions
contemplated hereby, except such as have been or may be obtained under the
1933 Act or may be required under state securities or Blue Sky laws or the
rules and regulations of the National Association of Securities Dealers,
Inc. (the "NASD") in connection with the Underwriters' purchase and
distribution of the Shares.
(xvii) Registration Rights. There are no contracts, agreements or
-------------------
understandings between the Company and any person granting such person the
right to require the Company to file a registration statement under the
1933 Act with respect to any securities of the Company owned or to be owned
by such person or to require the Company to include such securities under
the Registration Statement (other than those that have been disclosed in
the Prospectus or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus), that have not been waived with respect to the
Registration Statement.
-8-
(xviii) No Price Stabilization or Manipulation. Neither the Company
--------------------------------------
nor any of its officers, directors or affiliates (within the meaning of the
Rules and Regulations) has taken, directly or indirectly, any action
designed to stabilize or manipulate the price of any security of the
Company, or which has constituted or which might in the future 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 Shares or otherwise.
(xix) Title to Property. Each of the Company and its Subsidiaries
-----------------
has good and marketable title to, or valid and enforceable leasehold
interests in, all properties and assets owned or leased by it free and
clear of all liens, encumbrances, security interests, restrictions,
equities, claims and defects, except (A) such as are described in the
Prospectus, or such as do not materially adversely affect the value of any
of such properties or assets taken as a whole and do not interfere with the
use made and proposed to be made of any of such properties or assets, (B)
liens for taxes not yet due and payable as to which appropriate reserves
have been established and reflected on the financial statements included in
the Registration Statement and (C) except as would not have a Material
Adverse Effect. The Company owns or leases all such properties as are
necessary to its operations as now conducted, and as proposed to be
conducted as set forth in the Registration Statement and the Prospectus;
and the properties and business of the Company and its Subsidiaries conform
in all material respects to the descriptions thereof contained in the
Registration Statement and the Prospectus. All the material leases and
subleases of the Company and its Subsidiaries, and under which the Company
or any Subsidiary holds properties or assets as lessee or sublessee,
constitute valid leasehold interests of the Company or such Subsidiary free
and clear of any lien, encumbrance, security interest, restriction, equity,
claim or defect, are in full force and effect, and neither the Company nor
any Subsidiary is in default in respect of any of the material terms or
provisions of any such material leases or subleases, and neither the
Company nor any Subsidiary has notice of any claim which has been asserted
by anyone adverse to the Company's or any of its Subsidiary's rights as
lessee or sublessee under either the material lease or sublease, or
affecting or questioning the Company's or any Subsidiary's right to the
continued possession of the leased or subleased premises under any such
material lease or sublease, which is reasonably likely to have a Material
Adverse Effect.
(xx) Compliance with Environmental, Safety and Health Laws, and
----------------------------------------------------------
ERISA. Neither the Company nor any Subsidiary has violated any applicable
-----
environmental, safety, health or similar law applicable to the business of
the Company, nor
-9-
any federal or state law relating to discrimination in the hiring,
promotion, or pay of employees, nor any applicable federal or state wages
and hours law, nor any provisions of ERISA or the rules and regulations
promulgated thereunder, the consequences of which violation reasonably
likely to have a Material Adverse Effect.
(xxi) Licenses and Permits. Each of the Company and its Subsidiaries
--------------------
holds all franchises, licenses, permits, certificates and other
authorizations from federal, state and other regulatory authorities
necessary to the ownership, leasing and operation of its properties or
required for the present conduct of its business, and such franchises,
licenses, permits and other governmental authorizations are in full force
and effect and the Company is in compliance therewith in all material
respects except where the failure so to obtain, maintain or comply with
would not have a Material Adverse Effect.
(xxii) Subsidiary Dividends. No Subsidiary of the Company is
--------------------
currently prohibited, directly or indirectly, from paying any dividends to
the Company, from making any other distribution on such Subsidiary's
capital stock, from repaying to the Company any loans or advances to such
Subsidiary from the Company or from transferring any of such Subsidiary's
property or assets to the Company or any other Subsidiary of the Company,
except as described in or contemplated by the Prospectus (or, if the
Prospectus is not in existence, the most recent Preliminary Prospectus).
(xxiii) Certain Transactions. Each of transactions described under the
--------------------
caption "Certain Transactions" in the Prospectus (as hereinafter defined)
and in Exhibit 10.2 of the Registration Statement (as hereinafter defined)
to be completed upon or prior to the consummation of the Offering, will be
completed upon or prior to the consummation of the Offering.
(b) Officer's Certificates. Any certificate signed by any officer of the
----------------------
Company or of any Subsidiary and delivered to the Representatives 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.
SECTION 3. Purchase, Sale and Delivery of the Initial Shares.
On the basis of the representations, warranties, covenants and agreements
herein contained, but subject to the terms and conditions herein set forth, the
Company agrees to sell to each Underwriter and each Underwriter, severally and
not jointly, agrees to purchase from the Company at a purchase price of $_______
per Share, the number of Initial Shares set forth opposite the name of such
Underwriter in Schedule I hereto.
-10-
Delivery of certificates, and payment of the purchase price, for the
Initial Shares shall be made at the offices of Xxxxxxxx & Xxxxx, 000 X. Xxxxxxxx
Xxxxx, Xxxxxxx, Xxxxxxxx, 00000 or such other location as such be agreed upon by
the Company and the Representatives. Such delivery and payment shall be made at
10:00 a.m., New York City time, on the third (fourth, if the pricing occurs
after 4:30 PM New York City Time on any given day) business day after the date
hereof (unless postponed in accordance with the provisions of Section 12
("Substitution of Underwriters")), or at such other time and date not more than
ten business days thereafter as shall be agreed upon by the Representatives and
the Company. The time and date of such delivery and payment are herein called
the "Closing Date." Delivery of the certificates for the Initial Shares shall
be made to the Representatives for the respective accounts of several
Underwriters against payment by the several Underwriters through the
Representatives of the purchase price for the Initial Shares by certified or
official bank checks in New York Clearing House (next day) funds drawn to the
order of the Company. The certificates for the Shares to be so delivered will
be in definitive, fully registered form, will bear no restrictive legends and
will be in denominations and registered in such names as the Representatives
shall request, not less than two full business days prior to the Closing Date.
The certificates for the Initial Shares will be made available to the
Representatives at such office or such other place as the Representatives may
designate for inspection, checking and packaging not later than 9:30 a.m., New
York City time, on the business day prior to the Closing Date.
SECTION 4. Over-Allotment.
At any time during a period of 30 days from the date of the Prospectus, the
Underwriters, by no less than three business days' prior notice to the Company
may designate a closing (which may be concurrent with, and part of, the closing
on the Closing Date with respect to the Common Shares or may be a second closing
held on a date subsequent to the Closing Date, either case such date shall be
referred to herein as the "Option Closing Date") at which the Underwriters may
purchase all or less than all of the Additional Shares in accordance with the
provisions of this Section 4 ("Over-Allotment") at the purchase price per share
to be paid for the Initial Shares. In no event shall the Option Closing Date be
later than 10 business days after written notice of election to purchase
Additional Shares is given.
The Company agrees to sell to the several Underwriters on the Option
Closing Date the number of Additional Shares specified in such notice and the
Underwriters agree, severally and not jointly, to purchase such Additional
Shares on the Option Closing Date. Such Additional Shares shall be purchased for
the account of each Underwriter in the same proportion as the number of Initial
Shares set forth opposite such Underwriter's name bears to the total number of
Initial Shares (subject to adjustment by
-11-
you to eliminate fractions) and may be purchased by the Underwriters only for
the purpose of covering over-allotments made in connection with the sale of the
Initial Shares.
No Additional Shares shall be sold or delivered unless the Initial Shares
previously have been, or simultaneously are, sold and delivered. The right to
purchase the Additional Shares or any portion thereof may be surrendered and
terminated at any time upon notice by you to the Company.
Delivery of the certificates, and payment of the purchase price, for the
Additional Shares shall be made on the Option Closing Date at the office of
Xxxxxxxx & Xxxxx, 000 X. Xxxxxxxx Xxxxx, Xxxxxxx, Xxxxxxxx 00000, or such other
location as shall be agreed upon by the Company and the Representatives.
Delivery of the certificates for the Additional Shares shall be made to the
Representatives for the accounts of the several Underwriters against payment of
the purchase price therefor by certified or official bank check or checks in New
York Clearing House (next day) funds drawn to the order of the Company at the
office of Xxxxxx Xxxx LLC at 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000. The
certificates for the Additional Shares to be so delivered will be in definitive,
fully registered form, will bear no restrictive legends and will be in such
denominations and registered in such names as you request, not less than two
full business days prior to the Option Closing Date. The certificates for the
Additional Shares will be made available to the Representatives at such office
or such other place as the Representatives may designate for inspection,
checking and packaging not later than 9:30 a.m., New York City time, on the
business day prior to the Option Closing Date. Except to the extent waived by
the Underwriters, all the provisions of this Agreement applicable with respect
to the transactions contemplated on the Closing Date shall apply to such Option
Closing Date, mutatis mutandis, and the Additional Shares purchased at such
closing hereunder shall be deemed Shares for all purposes of this Agreement.
SECTION 5. Public Offering of the Shares.
As soon after the Registration Statement becomes effective as the
Representatives deem advisable, the Underwriters propose to make a public
offering of the Shares (other than to residents of or in any jurisdiction in
which qualification of the Shares is required and has not become effective) at
the price and upon the other terms set forth in the Prospectus.
SECTION 6. Covenants of the Company
The Company covenants and agrees with each of the Underwriters that:
-12-
(a) Compliance with Securities Regulations and Commission Requests. The
--------------------------------------------------------------
Company, subject to Section 6(b) hereof ("Filing of Amendments"), will
comply with the requirements of Rule 430A and will notify the
Representatives immediately, and confirm the notice in writing, (i) when
any post-effective amendment to the Registration Statement shall become
effective, or any supplement to the Prospectus or any amended Prospectus
shall have been filed, (ii) of the receipt of any comments from the
Commission, (iii) of any request by the Commission for any amendment to the
Registration Statement or any amendment or supplement to the Prospectus or
for additional information, and (iv) of the issuance by the Commission of
any stop order suspending the effectiveness of the Registration Statement
or of any order preventing or suspending the use of any preliminary
prospectus, or of the suspension of the qualification of the Shares for
offering or sale in any jurisdiction, or of the initiation or, to the best
of the Company's knowledge, threatening of any proceedings for any of such
purposes. The Company will promptly effect the filings necessary pursuant
to Rule 424(b) and will take such steps as it deems necessary to ascertain
promptly whether the form of prospectus transmitted for filing under Rule
424(b) was received for filing by the Commission and, in the event that it
was not, it will promptly file such prospectus. The Company will make
every reasonable effort to prevent the issuance of any stop order and, if
any stop order is issued, to obtain the lifting thereof at the earliest
possible moment.
(b) Filing of Amendments. The Company will give the Representatives
--------------------
notice of its intention to file or prepare any amendment to the
Registration Statement (including any filing under Rule 462(b)), any Term
Sheet or any amendment, supplement or revision to either the prospectus
included in the Registration Statement at the time it became effective or
to the Prospectus, will furnish the Representatives with copies of any such
documents and a reasonable amount of time prior to such proposed filing or
use, as the case may be, and will not file or use any such document to
which the Representatives or counsel for the Underwriters shall reasonably
object unless, in the opinion of counsel for the Company, it is necessary.
(c) Delivery of Registration Statements. The Company has furnished or
-----------------------------------
will deliver to the Representatives and counsel for the Underwriters,
without charge, signed copies of the Registration Statement as originally
filed and of each amendment thereto (including exhibits filed therewith or
incorporated by reference therein) and signed copies of all consents and
certificates of experts filed therewith, and will also deliver to the
Representatives, without charge, a conformed copy of the Registration
Statement as originally filed and of each amendment thereto (without
exhibits) for each of the Underwriters. If applicable, the
-13-
copies of the Registration Statement and each amendment thereto furnished
to the Underwriters will be identical to the electronically transmitted
copies thereof filed with the Commission pursuant to XXXXX, except to the
extent permitted by Regulation S-T.
(d) Delivery of Prospectuses. The Company has delivered to each
------------------------
Underwriter, without charge, as many copies of each preliminary prospectus
as such Underwriter reasonably requested, and the Company hereby consents
to the use of such copies for purposes permitted by the 1933 Act. The
Company will furnish to each Underwriter, without charge, during the period
when the Prospectus is required to be delivered under the 1933 Act or the
Securities Exchange Act of 1934 (the "1934 Act"), such number of copies of
the Prospectus (as amended or supplemented) as such Underwriter may
reasonably request. If applicable, the Prospectus and any amendments or
supplements thereto furnished to the Underwriters will be identical to the
electronically transmitted copies thereof filed with the Commission
pursuant to XXXXX, except to the extent permitted by Regulation S-T.
(e) Continued Compliance with Securities Laws. The Company will comply
-----------------------------------------
with the 1933 Act and the 1933 Act Regulations so as to permit the
completion of the distribution of the Shares as contemplated in this
Agreement and in the Prospectus. If at any time when a prospectus is
required by the 1933 Act to be delivered in connection with sales of the
Shares, any event shall occur or condition shall exist as a result of which
it is necessary, in the opinion of counsel for the Underwriters or for the
Company, to amend the Registration Statement or amend or supplement the
Prospectus in order that the Prospectus will not include any untrue
statements of a material fact or omit to state a material fact necessary in
order to make the statements therein not misleading in the light of the
circumstances existing at the time it is delivered to a purchaser, or if it
shall be necessary, in the opinion of such counsel, at any such time to
amend the Registration Statement or amend or supplement the Prospectus in
order to comply with the requirements of the 1933 Act or the 1933 Act
Regulations, the Company will promptly prepare and file with the
Commission, subject to Section 6(b) hereof ("Filing of Amendments"), such
amendment or supplement as may be necessary to correct such statement or
omission or to make the Registration Statement or the Prospectus comply
with such requirements, and the Company will furnish to the Underwriters
such number of copies of such amendment or supplement as the Underwriters
may reasonably request.
(f) Blue Sky Qualifications. The Company will use its commercially
-----------------------
reasonable efforts, in cooperation with the Underwriters, to qualify the
Shares for offering and sale under the applicable securities laws of such
states and
-14-
other jurisdictions (domestic or foreign) as the Representatives may
reasonably designate and to maintain such qualifications in effect for a
period of not less than one year from the later of the effective date of
the Registration Statement and any Rule 462(b) Registration Statement;
provided, however, that the Company shall not be obligated to file any
general consent to service of process or to qualify as a foreign
corporation or as a dealer in securities in any jurisdiction in which it is
not so qualified or to subject itself to taxation in respect of doing
business in any jurisdiction in which it is not otherwise so subject.
(g) Rule 158. The Company will timely file such reports pursuant to
--------
the 1934 Act as are necessary in order to make generally available to its
security holders as soon as practicable, but in any event not later than 45
days after the end of the 12-month period beginning on the day after the
end of the fiscal quarter of the Company during which the effective date of
the Registration Statement occurs (90 days in the event that the end of
such fiscal quarter is the end of the Company's fiscal year), an earnings
statement for the purposes of, and to provide the benefits contemplated by,
the last paragraph of Section 11(a) of the 1933 Act.
(h) Use of Proceeds. The Company will use the net proceeds received by
---------------
it from the sale of the Shares in the manner specified in the Prospectus
under "Use of Proceeds."
(i) Listing. The Company will use its best efforts to effect and
-------
maintain the quotation of the Shares on the Nasdaq NMS and will file with
the Nasdaq NMS all documents and notices required by the Nasdaq NMS of
companies that have securities that are traded in the over-the-counter
market and quotations for which are reported by the Nasdaq NMS.
(j) Restriction on Sale of Shares. During a period of 180 days from
-----------------------------
the date of the Prospectus, the Company will not, without the prior written
consent of Xxxxxx Xxxx LLC, (i) offer, pledge, sell, contract to sell, sell
any option or contract to purchase, grant any option, right or warrant to
purchase or otherwise transfer or dispose of, directly or indirectly, any
Common Shares or any securities convertible into or exercisable or
exchangeable for Common Shares or file any registration statement under the
1933 Act with respect to any of the foregoing or (ii) enter into any swap
or any other agreement or any transactions that transfers, in whole or in
part, directly or indirectly, the economic consequence of ownership of the
Common Shares, whether any such swap or transaction described in clause (i)
or (ii) above is to be settled by delivery of Common Shares or such other
securities, in cash or otherwise. The foregoing sentence shall not apply to
(A) the Shares to be sold hereunder, (B) any Common Shares issued by the
Company upon
-15-
the exercise of an option or warrant or the conversion of security
outstanding on the date hereof and referred to in the Prospectus, (C) any
Common Shares issued or options to purchase Common Shares granted pursuant
to existing employee benefit plans of the Company referred to in the
Prospectus or (D) any Common Shares issued pursuant to any non-employee
director stock plan.
(k) Reporting Requirements. The Company, during the period when the
----------------------
Prospectus is required to be delivered under the 1933 Act or the 1934 Act,
will file all documents required to be filed with the Commission pursuant
to the 1934 Act within the time periods required by the 1934 Act and the
rules and regulations of the Commission under the 1934 Act.
(l) Form SR. The Company will file with the Commission such reports on
-------
Form SR as may be required pursuant to Rule 463 of the 1933 Act
Regulations.
(m) During a period of five years after the date hereof, the Company
will furnish to its shareholders and the Representatives annual reports
(including financial statements audited by independent public accountants)
and unaudited quarterly reports of earnings, and will deliver to the
Representatives:
(i) as soon as they are available, copies of all reports
(financial or other) mailed to shareholders;
(ii) as soon as they are available, copies of all reports and
financial statements furnished to or filed with the Commission, the NASD
or any securities exchange;
(iii) every material press release, news item and article of
interest to the financial community in respect of the Company or its
affairs which was released or prepared by the Company; and
(iv) any additional information of a public nature concerning the
Company or its business which the Representatives may reasonably
request.
During such five-year period, if the Company has active subsidiaries,
the foregoing financial statements will be on a consolidated basis to the
extent that the accounts of the Company and its subsidiaries are
consolidated, and will be accompanied by similar financial statements for
any significant subsidiary which is not so consolidated.
(n) Transfer Agent. The Company will maintain a Transfer Agent and, if
--------------
necessary under the jurisdiction of incorporation of the Company, a
Registrar (which may be the same entity as the Transfer Agent) for its
Common Shares.
-16-
(o) No Price Stabilization. The Company shall not take, and shall use
----------------------
reasonable best efforts to prevent any of its officers and directors, and
affiliates of any of them (within the meaning of the Rules and
Regulations), directly or indirectly, from taking any action designed to,
or which might in the future reasonably be expected to cause or result in,
stabilization or manipulation of the price of any securities of the Company
during any period in which the distribution of any Common Shares (including
any Additional Shares) is continuing.
SECTION 7. Expenses.
(a) Regardless of whether the transactions contemplated in this Agreement
are consummated, and regardless of whether for any reason this Agreement is
terminated, the Company will pay, and hereby agrees to indemnify each
Underwriter against, all fees and expenses incident to the performance of the
obligations of the Company under this Agreement, including, but not limited to,
(i) fees and expenses of accountants and counsel for the Company, (ii) all costs
and expenses incurred in connection with the preparation, printing, duplication,
filing, delivery and shipping of copies of the Registration Statement and any
pre-effective or post-effective amendments thereto, any Preliminary Prospectus
and the Prospectus and any amendments or supplements thereto (including postage
costs related to the delivery by the Underwriters of any Preliminary Prospectus
or Prospectus, or any amendment or supplements thereto), this Agreement, the
Agreement Among Underwriters, any Selected Dealer Agreement, Underwriters'
Questionnaire, Underwriters' Power of Attorney, and all other documents in
connection with the transactions contemplated herein, including the cost of all
copies thereof, (iii) fees and expenses relating to qualification of the Shares
under state securities or Blue Sky laws, including the cost of preparing and
mailing the preliminary and final Blue Sky memoranda and filing fees and
disbursements and fees and disbursements of counsel to the Underwriters and
other related expenses, if any, in connection therewith, (iv) filing fees of the
Commission and of the NASD relating to the Shares, including the fees and
disbursements of counsel to the Underwriters, (v) any fees and expenses in
connection with the quotation of the Shares on the Nasdaq NMS, and (vi) costs
and expenses incident to the preparation, issuance and delivery to the
Underwriters of any certificates evidencing the Shares, including transfer
agent's and registrar's fees and any applicable transfer taxes incurred in
connection with the delivery to the Underwriters of the Shares to be sold by the
Company pursuant to this Agreement; provided that, the Company's obligation
--------
pursuant to this Section 7 with respect to (A) the fees (but not disbursements)
of counsel to the Underwriters described in clause (iii) of this Section 7 and
(B) the fees (but not disbursements) of such counsel relating to filing with the
NASD shall be limited to a maximum aggregate of $10,000.
-17-
(b) If the purchase of the Shares as herein contemplated is not
consummated for any reason other than the Underwriters' default under this
Agreement, the Company shall reimburse the several Underwriters for their
reasonable out-of-pocket expenses (including reasonable counsel fees and
disbursements) in connection with any investigation made by them, and any
preparation made by them in respect of marketing of the Shares or in
contemplation of the performance by them of their obligations hereunder.
SECTION 8. Conditions of the Underwriters' Obligations.
The obligation of each Underwriter to purchase and pay for the Shares
set forth opposite the name of such Underwriter in Schedule I is subject to the
continuing accuracy of the representations and warranties of the Company herein
as of the date hereof and as of the Closing Date as if they had been made on and
as of the Closing Date; the accuracy on and as of the Closing Date of the
statements of officers of the Company made pursuant to the provisions hereof;
the performance by the Company on and as of the Closing Date of its covenants
and agreements hereunder; and the following additional conditions:
(a) Effectiveness of Registration Statement. If the Registration
---------------------------------------
Statement, including any Rule 462(b) Registration Statement, or any amendment
thereto filed prior to the Closing Date, has not been declared effective as of
the time of execution hereof, the Registration Statement or such amendment shall
have been declared effective not later than 11:00 A.M., New York City time, on
the date on which the amendment to the registration statement originally filed
with respect to the Shares or the Registration Statement (containing the
information omitted therefrom pursuant to Rule 430A under the 1933 Act included
in the Prospectus), as the case may be, containing information regarding the
initial public offering price of the Shares has been filed with the Commission,
or such later time and date as shall have been consented to by the
Representatives; if required, the Prospectus and any amendment or supplement
thereto shall have been filed with the Commission in the manner and within the
time period required by Rule 424(b) under the 1933 Act; no stop order suspending
the effectiveness of the Registration Statement or any amendment thereto shall
have been issued, and no proceedings for that purpose shall have been instituted
or, to the knowledge of the Company or the Representatives, shall be
contemplated by the Commission; and the Company shall have complied with any
request of the Commission for additional information (to be included in the
Registration Statement or the Prospectus or otherwise).
(b) No Material Misstatements Or Omissions. The Representatives shall
--------------------------------------
not have advised the Company that, in the opinion of counsel to the
Underwriters, the Registration Statement, or any amendment thereto, contains an
untrue statement of fact which is material or omits to state a fact which is
material and is required to be stated therein or is necessary to
-18-
make the statements therein not misleading, or that the Prospectus, or any
supplement thereto, contains an untrue statement of fact which is material or
omits to state a fact which is material and is required to be stated therein or
is necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading.
(c) Opinion of Counsel to the Underwriters. On or prior to the Closing
--------------------------------------
Date, the Representatives shall have received from Xxxxxxx Xxxx & Xxxxxxxxx,
counsel to the Underwriters, such opinion or opinions with respect to the
issuance and sale of the Initial Shares, the Registration Statement and the
Prospectus and such other related matters as the Representatives reasonably may
request, and such counsel shall have received such documents and other
information as they may reasonably request to enable them to pass upon such
matters.
(d) Opinions of Counsel to the Company. On the Closing Date, the
----------------------------------
Underwriters shall have received the opinion, dated the Closing Date, of
Xxxxxxxx & Xxxxx, counsel to the Company, and the opinion, dated the Closing
Date and of Xxxxx Xxxxxxx, Esq. in-house counsel to the Company in substantially
the forms attached hereto as Exhibits C and D, respectively.
(e) Accuracy and Completeness of the Representations and Warranties of
------------------------------------------------------------------
the Company. On or prior to the Closing Date, counsel to the Underwriters shall
-----------
have been furnished such documents, certificates and opinions as they may
reasonably require in order to evidence the accuracy, completeness or
satisfaction of any of the representations or warranties of the Company, or
conditions herein contained.
(f) Accountants' Comfort Letter. At the time that this Agreement is
---------------------------
executed by the Company the Underwriters shall have received from KPMG Peat
Marwick LLP a letter as of the date this Agreement is executed by the Company in
form and substance satisfactory to you (the "Original Letter"), and on the
Closing Date the Underwriters shall have received from such firm a letter dated
the Closing Date stating that, as of a specified date not earlier than three (3)
days prior to the Closing Date, nothing has come to the attention of such firm
to suggest that the statements made in the Original Letter are not true and
correct.
(g) Officer's Certificate. On the Closing Date, the Underwriters shall
---------------------
have received a certificate, dated the Closing Date, of the principal executive
officer and the principal financial or accounting officer of the Company, on
behalf of the Company, to the effect that each of such persons has carefully
examined the Registration Statement and the Prospectus and any amendments or
supplements thereto and this Agreement, and that, to the best knowledge of such
person:
(i) The representations and warranties of the Company in this
Agreement are true and correct, as if made on and as
-19-
of the Closing Date, and the Company has complied with all agreements and
covenants and satisfied all conditions contained in this Agreement on its
part to be performed or satisfied at or prior to the Closing Date;
(ii) No stop order suspending the effectiveness of the Registration
Statement has been issued, and no proceedings for that purpose have been
instituted or are pending or, to the best knowledge of each of such
persons, are contemplated or threatened under the 1933 Act and any and all
filings required by Rule 424 and Rule 430A have been timely made;
(iii) The Registration Statement and Prospectus and, if any, each
amendment and each supplement thereto, contain all statements and
information required to be included therein, and none of the Registration
Statement nor any amendment thereto includes 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 and
neither the Prospectus (or any supplement thereto) or any Preliminary
Prospectus included 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, in light of the circumstances under which they were
made, not misleading; and
(iv) Subsequent to the respective dates as of which information is
given in the Registration Statement and the Prospectus up to and including
the Closing Date (and except as disclosed in or contemplated by the
Prospectus), neither the Company nor any of the Subsidiaries has incurred,
other than in the ordinary course of its business, any material liabilities
or obligations, direct or contingent; neither the Company nor any of its
Subsidiaries has purchased any of its outstanding capital stock or paid or
declared any dividends or other distributions on its capital stock (except
as described in Exhibit 10.2 to the Registration Statement); neither the
Company nor any of the Subsidiaries has entered into any transactions not
in the ordinary course of business; and there has not been any change in
the capital stock or consolidated long-term debt or any increase in the
consolidated short-term borrowings (other than any increase in short-term
borrowings in the ordinary course of business) of the Company or any
material adverse change to the business, properties, assets, net worth,
condition (financial or other), results of operations or prospects of the
Company and its Subsidiaries taken as a whole; neither the Company nor any
of the Subsidiaries has sustained any material loss or damage to its
property or assets, whether or not insured; there is no litigation which is
pending or threatened against the Company or any of its Subsidiaries which
is required to be set forth in an amended or supplemented Prospectus which
has not been set forth; and
-20-
there has not occurred any event required to be set forth in an amended or
supplemented Prospectus which has not been set forth.
References to the Registration Statement and the Prospectus in this
paragraph (g) are to such documents as amended and supplemented at the date of
the certificate.
(h) No Changes in Business. Subsequent to the respective dates as of which
----------------------
information is given in the Registration Statement and the Prospectus up to and
including the Closing Date there has not been (i) any change or decrease
specified in the letter or letters referred to in paragraph (f) of this Section
8 ("Conditions of the Underwriters' Obligations") or (ii) any change, or any
development involving a prospective change, in the business or properties of the
Company or its Subsidiaries (in either case, other than those changes or
developments disclosed in or contemplated by the Prospectus) which change or
decrease in the case of clause (i) or change or development in the case of
clause (ii) which makes it impractical or inadvisable in the Representatives'
judgment to proceed with the public offering or the delivery of the Shares as
contemplated by the Prospectus.
(i) No Suspension Orders. No order suspending the sale of the Shares
--------------------
prior to the Closing Date in any jurisdiction designated by you pursuant to
Section 6(f) hereof ("Covenants of the Company--Blue Sky Qualifications") hereof
has been issued on or prior to the Closing Date and no proceedings for that
purpose have been instituted or, to your knowledge or that of the Company, have
been or are contemplated.
(j) Additional Documents. The Company shall have furnished the
--------------------
Underwriters with such further opinions, letters, certificates or documents as
you or counsel for the Underwriters may reasonably request. All opinions,
certificates, letters and documents to be furnished by the Company will comply
with the provisions hereof only if they are reasonably satisfactory in all
material respects to the Underwriters and to counsel for the Underwriters. The
Company shall furnish the Underwriters with conformed copies of such opinions,
certificates, letters and documents in such quantities as you reasonably
request. The certificates delivered under this Section 8 ("Conditions of the
Underwriters' Obligations") shall constitute representations, warranties and
agreements of the Company as to all matters set forth therein as fully and
effectively as if such matters had been set forth in Section 2 ("Representations
and Warranties") of this Agreement.
(k) Approval of Listing. At the Closing Time the Securities shall have
-------------------
been approved for inclusion in the Nasdaq NMS, subject only to official notice
of issuance.
(l) Lock-up Agreements. At the date of this Agreement, the
------------------
Representatives shall have received an agreement substantially in
-21-
the form of Exhibit B hereto signed by the persons listed on Schedule II
hereto.
(m) Conditions to Purchase of Additional Shares. In the event that the
-------------------------------------------
Underwriters exercise their option provided in Section 4 hereof ("Over-
Allotment") to purchase all or any portion of the Additional Shares, the
representations and warranties of the Company contained herein and the
statements in any certificates furnished by the Company hereunder shall be true
and correct as of the Option Closing Date and, at the Option Closing Date, the
Representatives shall have received:
(i) Officer's Certificate. A certificate, dated the Option Closing
---------------------
Date, of the chief executive officer of the Company and of the chief
financial or chief accounting officer of the Company confirming that the
certificate delivered at the Closing Date pursuant to Section 8(g) hereof
("Officer's Certificate") remains true and correct as of the Option Closing
Date.
(ii) Opinions of Counsel to the Company. The opinion of Xxxxxxxx &
----------------------------------
Xxxxx, counsel to the Company, and of Xxxxx Xxxxxxx, Esq., in-house counsel
to the Company, in substantially the form of Exhibits C and D hereto,
respectively, with such changes as are necessary to reflect that such
opinions are being delivered at the Option Closing Date with respect to the
Additional Shares dated the Option Closing Date, relating to the Additional
Shares to be purchased on such Option Closing Date.
(iii) Opinion of Counsel to the Underwriters. The favorable
--------------------------------------
opinion of Xxxxxxx Xxxx & Xxxxxxxxx, counsel to the Underwriters, dated the
Option Closing Date, relating to the Additional Shares to be purchased on
the Option Closing Date and otherwise to the same effect as the opinion
required by Section 8(c) hereof.
(iv) Bring-down Comfort Letter. A letter from KPMG Peat Marwick LLP,
-------------------------
in form and substance satisfactory to the Representatives and dated the
Option Closing Date, substantially in the same form and substance as the
letter furnished to the Representatives pursuant to Section 8(f) hereof,
except that the "specified date" on the letter furnished pursuant to this
paragraph shall be a date not more than five days prior to the Option
Closing Date.
(n) Termination of Agreement. If any condition specified in this Section
------------------------
shall not have been fulfilled when and as required to be fulfilled, this
Agreement, or, in the case of any condition to the purchase of Additional Shares
on the Option Closing Date which is after the Closing Date, the obligations of
the several Underwriters to purchase the relevant Additional Shares, may be
terminated by the Representatives by notice to the Company at any time at or
prior to Closing Date or the Option Closing Date, as the case may be, and such
termination shall be without liability of any party to any other party except as
provided in Section 7 hereof ("Expenses") and except that Section
-22-
2 ("Representations and Warranties"), Section 9 ("Indemnification") and
specifically Section 9(d) ("Contribution") shall survive any such termination
and remain in full force and effect.
SECTION 9. Indemnification.
(a) Indemnification of the Underwriters. The Company agrees to indemnify
-----------------------------------
and hold harmless each Underwriter and each person, if any, who controls such
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act, against any and all losses, claims, damages, expenses or
liabilities, joint or several (and actions in respect thereof), to which such
Underwriter or such controlling person may become subject, under the 1933 Act or
other federal or state statutory law or regulation, at common law or otherwise,
insofar as such losses, claims, damages, expenses, liabilities or actions arise
out of or are based upon any untrue statement or alleged untrue statement or any
material fact contained in the Registration Statement or the Prospectus or any
Preliminary Prospectus, or any amendment or supplement thereto, or any Blue Sky
application or other document executed by the Company specifically for the
purpose of qualifying, or based upon written information furnished by the
Company filed in any state or other jurisdiction in order to qualify, any or all
of the Shares under the securities or Blue Sky laws thereof (any such
application, document or information being hereinafter called a "Blue Sky
Application"), 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, in light of the circumstances under which they
were made, not misleading and will reimburse, as incurred, such Underwriter or
such controlling persons for any reasonable legal or other expenses incurred by
such Underwriter or such controlling persons in connection with investigating,
defending or appearing as a third party witness in connection with any such
loss, claim, damage, liability or action; provided, however, that the Company
-------- -------
will not be liable in any such case to the extent that any such loss, claim,
damage, liability or action arises out of or is based upon any untrue statement
or alleged untrue statement or omission or alleged omission made in any of such
documents in reliance upon and in conformity with written information furnished
to the Company by such Underwriter through the Representatives expressly for use
therein, and provided, further, that such indemnity with respect to any
-------- -------
Preliminary Prospectus shall not inure to the benefit of any Underwriter (or to
the benefit of any person controlling such Underwriter) from whom the person
asserting any such loss, claim, damage or liability purchased Shares which are
the subject thereof if such Underwriter failed to send or give a copy of the
Prospectus (as amended or supplemented) to such person at or prior to the
confirmation of the sale of such Shares to such person in any case where such
delivery is required by the 1933 Act and the untrue statement or omission of a
material fact contained in such Preliminary Prospectus was corrected in the
-23-
Prospectus (as amended and supplemented), unless such failure resulted from non-
compliance by the Company with Section 6(d) hereof ("Delivery of Prospectuses").
The indemnity agreement in this paragraph (a) shall be in addition to any
liability which the Company may have at common law or otherwise.
(b) Indemnification of the Company. Each of the Underwriters agrees
------------------------------
severally, but not jointly, to indemnify and hold harmless the Company, each of
its directors, each of its officers who has signed the Registration Statement,
each person, if any, who controls the Company within the meaning of Section 15
of the 1933 Act or Section 20 of the 1934 Act against any and all losses,
claims, damages, expenses or liabilities (and actions in respect thereof) to
which the Company or any director, officer, or controlling person may become
subject, under the 1933 Act or other federal or state statutory law or
regulation, at common law or otherwise, insofar as such losses, claims, damages,
expenses, liabilities or actions arise out of or are based upon any untrue
statement or alleged untrue statement of any material fact contained in the
Registration Statement or the Prospectus or any Preliminary Prospectus, or any
amendment or supplement thereto or in any Blue Sky Application, or arise out of
or are based upon the omission or the alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
in light of the circumstances under which they were made, 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 reliance
upon and in conformity with written information furnished by that Underwriter
through the Representatives expressly for use therein; and will reimburse, as
incurred, all legal or other expenses reasonably incurred by the Company or any
director, officer, controlling person in connection with investigating or
defending any such loss, claim, damage, liability or action. The Company
acknowledges that the statements with respect to the public offering of the
Shares set forth under the heading "Underwriting" and the stabilization legend
in the Prospectus have been furnished by the Underwriters through the
Representatives expressly for use therein and constitute the only information
furnished in writing by or on behalf of the Underwriters for inclusion in the
Prospectus. The indemnity agreement contained in this subsection (b) shall be in
addition to any liability which the Underwriters may have at common law or
otherwise.
(c) Actions against Parties; Notification. Promptly after receipt by an
-------------------------------------
indemnified party under this Section 9 of notice of the commencement of any
action, such indemnified party will, if a claim in respect thereof is to be made
against one or more indemnifying parties under this Section 9, notify such
indemnifying party or parties of the commencement thereof; but the omission so
to notify the indemnifying party will not relieve it from any liability which it
may have to any indemnified party
-24-
otherwise than under subsection (a) or (b) of this Section 9 or to the extent
that the indemnifying party was not adversely affected by such omission. In case
any such action is brought against an indemnified party and it notifies an
indemnifying party or parties of the commencement thereof, the indemnifying
party or parties against which a claim is to be made will be entitled to
participate therein and, to the extent that it or they may wish, to assume the
defense thereof, with counsel reasonably satisfactory to such indemnified party;
provided, however, that if the defendants in any such action include both the
-------- -------
indemnified party and the indemnifying party and the indemnified party has
reasonably concluded that there may be legal defenses available to it and/or
other indemnified parties which are different from or additional to those
available to the indemnifying party, the indemnified party or parties shall have
the right to select separate counsel (only one separate counsel plus necessary
local counsel for all indemnified parties) to assume such legal defenses and
otherwise to participate in the defense of such action on behalf of such
indemnified party or parties. Upon receipt of notice from the indemnifying party
to such indemnified party of its election so to assume the defense of such
action and approval by the indemnified party of counsel, the indemnifying party
will not be liable to such indemnified party under this Section 9 for any legal
or other expenses (other than the reasonable costs of investigation)
subsequently incurred by such indemnified party in connection with the defense
thereof unless (i) the indemnified party has employed such counsel in connection
with the assumption of such different or additional legal defenses in accordance
with the proviso to the immediately preceding sentence, (ii) the indemnifying
party has not employed counsel reasonably satisfactory to the indemnified party
to represent the indemnified party within a reasonable time after notice of
commencement of the action, or (iii) the indemnifying party has authorized in
writing the employment of counsel for the indemnified party at the expense of
the indemnifying party. The indemnified party shall not agree to settle any
action or claim for which it intends to seek indemnification or contribution
hereunder without the prior written consent of the indemnifying party which
consent shall not be unreasonably withheld.
(d) Contribution. If the indemnification provided for in this Section 9
------------
is unavailable to hold harmless an indemnified party under paragraph (a) or (b)
above in respect of any losses, claims, damages, expenses or liabilities (or
actions in respect thereof) referred to therein, then each indemnifying party
shall contribute to the amount paid as a result of such losses, claims, damages,
expenses or liabilities (or actions in respect thereof) (i) in such proportion
as is appropriate to reflect the relative benefits received by each of the
contributing parties, on the one hand, and the party to be indemnified on the
other hand, from the offering of the Shares or (ii) if the allocation provided
by clause (i) above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i)
above but also the relative
-25-
fault of each of the contributing parties, on the one hand, and the party to be
indemnified on the other hand in connection with the statements or omissions
that resulted in such losses, claims, damages, expenses or liabilities, as well
as any other relevant equitable considerations. In any case where the Company is
contributing party and the Underwriters are the indemnified party, the relative
benefits received by the Company on the one hand, and the Underwriters, on the
other, shall be deemed to be in the same proportion as the total net proceeds
from the offering of the Shares (before deducting expenses) bear to the total
underwriting discounts received by the Underwriters hereunder, in each case as
set forth in the table on the Cover Page of the Prospectus. 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 or by the
Underwriters, and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such untrue statement or omission. The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages, expenses or liabilities (or actions in respect thereof)
referred to above in this subdivision (d) shall be deemed to include any legal
or other expenses reasonably incurred by such indemnified party in connection
with investigating or defending any such action or claim. Notwithstanding the
provisions of this paragraph (d), the Underwriters shall not be required to
contribute any amount in excess of the underwriting discount applicable to the
Shares purchased by the Underwriters hereunder. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the 0000 Xxx) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. For purposes of this paragraph (d), (i) each person, if any,
who controls an Underwriter within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act shall have the same rights to contribution as such
Underwriter and each director of the Company, each officer of the Company who
has signed the Registration Statement, and each person, if any, who controls the
Company within the meaning of Section 15 of the 1933 Act or Section 20 of the
1934 Act shall have the same rights to contribution as the Company, subject in
each case to this subparagraph (d). Any party entitled to contribution will,
promptly after receipt of notice of commencement of any action, suit or
proceeding against such party in respect to which a claim for contribution may
be made against another party or parties under this subparagraph (d), notify
such party or parties from whom contribution may be sought, but the omission so
to notify such party or parties shall not relieve the party or parties from whom
contribution may be sought from any other obligation it or they may have
hereunder or otherwise than under this subparagraph (d), or to the extent that
such party or parties were not adversely affected by such omission. The
contribution agreement
-26-
set forth above shall be in addition to any liabilities which any indemnifying
party may have at common law or otherwise.
SECTION 10. Representations, etc. to Survive Delivery.
The respective representations, warranties, agreements, covenants,
indemnities and statements of, and on behalf of, the Company and its officers
and the Underwriters, respectively, set forth in or made pursuant to this
Agreement will remain in full force and effect, regardless of any investigation
made by or on behalf of the Underwriters, and will survive delivery of and
payment for the Shares. Any successors to any indemnified party shall be
entitled to the indemnity, contribution and reimbursement agreements contained
in this Agreement.
SECTION 11. Termination.
(a) This Agreement, except for the provisions of Sections 7 ("Expenses")
and 9 ("Indemnification") hereof, may be terminated by the Representatives by
notice to the Company in the event that the Company has failed to comply in any
material respect with any of the provisions of this Agreement to be performed at
or prior to the Closing Date or the Option Closing Date, or if any of the
representations or warranties are not accurate in any material respect or the
covenants, agreements or conditions of, or applicable to the Company herein
contained have not been complied with in any material respect or satisfied
within the time specified at or prior to the Closing Date or the Option Closing
Date, respectively, or if prior to the Closing Date or the Option Closing Date:
(i) the Company or any of its Subsidiaries shall have sustained a
loss by strike, fire, flood, accident or other calamity of such a character
as to interfere materially with the conduct of the business and operations
of the Company and its Subsidiaries taken as a whole regardless of whether
or not such loss was insured;
(ii) trading in the Common Stock shall have been suspended by the
Commission or the Nasdaq NMS, or the Nasdaq NMS shall have been suspended
or minimum or maximum prices shall have been established on such market
system;
(iii) a banking moratorium shall have been declared by New York or
United States authorities;
(iv) there shall have been an outbreak or escalation of hostilities
between the United States and any foreign power or an outbreak or
escalation of any other insurrection or armed conflict involving the United
States; or
(v) there shall have been a material adverse change in (A) general
economic, political or financial conditions or (B) the present or
prospective business or condition
-27-
(financial or other) of the Company and its Subsidiaries taken as a whole
that in the Representatives' judgment makes it impracticable or inadvisable
to make or consummate a public offering of the Company's Stock.
(b) Termination of this Agreement under this Section 11 or Section 12
("Substitution of Underwriters") after the Initial Shares have been purchased by
the Underwriters hereunder shall be applicable only to the Additional Shares.
Termination of this Agreement shall be without liability of any party to any
other party other than as provided in Section 7 ("Expenses") and Section 9
("Indemnification") hereof.
SECTION 12. Substitution of Underwriters.
If one or more of the Underwriters shall fail or refuse (otherwise than for
a reason sufficient to justify the termination of this Agreement under the
provisions of Section 8 ("Conditions of the Underwriters' Obligations") or
Section 11 ("Termination") hereof) to purchase and pay for (a) in the case of
the Closing Date, the number of Initial Shares agreed to be purchased by such
Underwriter or Underwriters upon tender to you of such Initial Shares in
accordance with the terms hereof or (b) in the case of the Option Closing Date,
the number of Additional Shares agreed to be purchased by such Underwriter or
Underwriters upon tender to you of such Additional Shares in accordance with the
terms hereof, and the number of such Shares shall not exceed 10% of the Initial
Shares or Additional Shares required to be purchased on the Closing Date or the
Option Closing Date, as the case may be, then, each of the non-defaulting
Underwriters shall purchase and pay for (in addition to the number of such
Shares which it has severally agreed to purchase hereunder) that proportion of
the number of Shares which the defaulting Underwriter or Underwriters shall have
so failed or refused to purchase on such Closing Date or Option Closing Date, as
the case may be, which the number of Shares agreed to be purchased by such non-
defaulting Underwriter bears to the aggregate number of Shares so agreed to be
purchased by all such non-defaulting Underwriters on such Closing Date or Option
Closing Date, as the case may be. In such case, you shall have the right to
postpone the Closing Date specified in Section 3 ("Purchase, Sale and Delivery
of the Shares") and Section 4 ("Over-Allotment") hereof to a date not exceeding
seven full business days after the date originally fixed as such Closing Date
pursuant to said Sections 3 and 4 in order that any necessary changes in the
Registration Statement, the Prospectus or any other documents or arrangements
may be made.
If one or more of the Underwriters shall fail or refuse (otherwise than for
a reason sufficient to justify the termination of this Agreement under the
provisions of Section 8--"Conditions of the Underwriters' Obligations" or
Section 11--"Termination" hereof) to purchase and pay for (a) in the case of the
Closing Date, the number of Initial Shares agreed to be
-28-
purchased by such Underwriter or Underwriters upon tender to you of such Initial
Shares in accordance with the terms hereof or (b) in the case of the Option
Closing Date, the number of Additional Shares agreed to be purchased by such
Underwriter or Underwriters upon tender to you of such Additional Shares in
accordance with the terms hereof, and the number of such Shares shall exceed 10%
of the Initial Shares or Additional Shares required to be purchased by all the
Underwriters on the Closing Date or the Option Closing Date, as the case may be,
then (unless within 48 hours after such default arrangements to your
satisfaction shall have been made for the purchase of the defaulted Shares by an
Underwriter or Underwriters) and subject to the provisions of Section 11(b)
("Termination") hereof, this Agreement will terminate without liability on the
part of any non-defaulting Underwriter or on the part of the Company except as
otherwise provided in Section 7 ("Expenses") and Section 9 ("Indemnification")
hereof. As used in this Agreement, the term "Underwriter" includes any person
substituted for an Underwriter under this paragraph. Nothing in this Section
12, and no action taken hereunder, shall relieve any defaulting Underwriter from
liability in respect of any default of such Underwriter under this Agreement.
SECTION 13. Notices.
All communications hereunder shall be in writing and if sent to the
Representatives shall be mailed or delivered or faxed and confirmed to x/x
Xxxxxx Xxxx LLC at 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention:
Syndicate Department, with a copy to Xxxxxxx X. Xxxxx, Xx., Esq., Xxxxxxx Xxxx &
Xxxxxxxxx, 000 X. 00xx Xxxxxx, Xxx Xxxx, XX 00000, or, if sent to the Company,
shall be mailed or delivered or faxed and confirmed to Xxxxx X. Xxxxxx, Esq.,
Executive Vice President and Chief Financial Officer, LINC Capital, Inc., 000
Xxxx Xxxxxx Xxxxx, Xxxxx 0000, Xxxxxxx, XX 00000, with a copy to Xxxxxx X.
Xxxxxxx, Esq., Xxxxxxxx & Xxxxx, 000 Xxxx Xxxxxxxx, Xxxxxx 0000 - 0000, Xxxxxxx,
XX 00000.
SECTION 14. Successors.
This Agreement shall inure to the benefit of and be binding upon the
Company and each Underwriter and the Company's and each Underwriter's respective
successors and legal representatives, and nothing expressed or mentioned in this
Agreement is intended or shall be construed to give any other person any legal
or equitable right, remedy or claim under or in respect of this Agreement, or
any provisions herein contained, this Agreement and all conditions and
provisions hereof being intended to be and being for the sole and exclusive
benefit of such persons and for the benefit of no other person, except that the
representations, warranties, indemnities and contribution agreements of the
Company contained in this Agreements shall also be for the benefit of any person
or persons, if any, who control any Underwriter within the meaning of Section 15
of the 1933 Act or
-29-
Section 20 of the 1934 Act, and except that the Underwriters' indemnity and
contribution agreements shall also be for the benefit of the directors of the
Company, the officers of the Company who have signed the Registration Statement,
and any person or persons, if any, who control the Company within the meaning of
Section 15 of the 1933 Act or Section 20 of the 1934 Act. No purchaser of
Shares from the Underwriters will be deemed a successor because of such
purchase.
SECTION 15. Applicable Law; Jurisdiction.
This Agreement shall be governed by and construed in accordance with the
laws of the State of New York, without giving effect to the choice of law or
conflict of law principles thereof. Each party hereto consents to the
jurisdiction of each court in which any action is commenced seeking indemnity or
contribution pursuant to Section 9 above and agrees to accept, either directly
or through an agent, service of process of each such court.
SECTION 16. Counterparts.
This Agreement may be executed in any number of counterparts, each of which
shall be deemed to be an original, and all of which together shall be deemed to
be one and the same instrument.
-30-
If the foregoing correctly sets forth our understanding, please
indicate the Underwriters' acceptance thereof in the space provided below for
that purpose, whereupon this letter shall constitute a binding agreement between
us.
Very truly yours,
LINC CAPITAL, INC.
By:
----------------------------------------
Name:
Title:
Accepted as of the date first
above written:
XXXXXX XXXX LLC
EVEREN SECURITIES, INC.
By: XXXXXX XXXX LLC
By:
----------------------------
Name:
Title:
For themselves and as Representatives
of the other Underwriters named in
Schedule I hereto
-31-
