NAL FINANCIAL GROUP INC.
2,500,000 Shares*
Common Stock
UNDERWRITING AGREEMENT
_____________, 1996
PRUDENTIAL SECURITIES INCORPORATED
XXXXX XXXXXXX INC.
XXXXX BROTHERS & CO., LTD.
As Representatives of the several Underwriters
c/o Prudential Securities Incorporated
Xxx Xxx Xxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
NAL Financial Group Inc., a Delaware corporation (the
"Company"), and the stockholders of the Company named in Schedule 2 hereto (the
"Selling Stockholders") hereby confirm their respective agreements with the
several underwriters named in Schedule 1 hereto (the "Underwriters"), for whom
you have been duly authorized to act as representatives (in such capacities, the
"Representatives"), as set forth below. If you are the only Underwriters, all
references herein to the Representatives shall be deemed to be to the
Underwriters.
1. Securities. Subject to the terms and conditions herein
contained, the Company proposes to issue and sell to the several Underwriters an
aggregate of 2,218,855 shares (the "Company's Firm Securities") of the Company's
Common Stock, par value $0.15 per share ("Common Stock") and the Selling
Stockholders severally (and not jointly) propose to sell to the several
Underwriters an aggregate of 218,145 shares of Common Stock (the "Selling
Stockholders' Firm Securities") as indicated on Schedule 2 hereto. Collectively,
the Company's Firm Securities and the Selling Stockholders' Firm Securities are
hereinafter referred to as the "Firm Securities." The Company also proposes to
issue and sell to the several Underwriters not more than 375,000 additional
shares of Common Stock in the aggregate if requested by the Representatives as
provided in Section 3 of this Agreement. Any and all shares of Common Stock to
be purchased by the Underwriters pursuant to such option are referred to herein
as the "Option Securities", and the Firm Securities and any Option Securities
are collectively referred to herein as the "Securities".
---------------
* Plus an option to purchase fom NAL Financial Group Inc. up to an aggregate
of 375,000 additional shares to cover over-allotments.
2. Representations and Warranties.
(a) The Company represents and warrants to, and agrees with,
each of the several Underwriters as set forth below in this Section 2:
(i) The Company meets the requirements for use of
Form SB-2 under the Securities Act of 1933, as amended (the "Act"). A
registration statement on such Form (File No. ) with respect to the
Securities, including a prospectus subject to completion, has been
filed by the Company with the Securities and Exchange Commission (the
"Commission") under the Act, and one or more amendments to such
registration statement may have been so filed. After the execution of
this Agreement, the Company will file with the Commission either (A) if
such registration statement, as it may have been amended, has been
declared by the Commission to be effective under the Act, either (i) if
the Company relies on Rule 434 under the Act, a Term Sheet (as
hereinafter defined) relating to the Securities, that shall identify
the Preliminary Prospectus (as hereinafter defined) that it
supplements, containing such information as is required or permitted by
Rule 434, 430A and 424(b) under the Act or (ii) if the Company does not
rely on Rule 434 under the Act, a prospectus in the form most recently
included in an amendment to such registration statement (or, if no such
amendment shall have been filed, in such registration statement), with
such changes or insertions as are required by Rule 430A under the Act
or permitted by Rule 424(b) under the Act, and in the case of clause
(A)(i) or (A)(ii) of this sentence as have been provided to and
approved by the Representatives prior to the execution of this
Agreement, or (B) if such registration statement, as it may have been
amended, has not been declared by the Commission to be effective under
the Act, an amendment to such registration statement, including a form
of prospectus, a copy of which amendment has been furnished to and
approved by the Representatives prior to the execution of this
Agreement. The Company may also file a related registration statement
with the Commission pursuant to Rule 462(b) under the Act for the
purpose of registering certain additional Securities, which
registration shall be effective upon filing with the Commission. As
used in this Agreement, the term "Original Registration Statement"
means the registration statement initially filed relating to the
Securities, as amended at the time when it was or is declared
effective, including (A) all financial schedules and exhibits thereto,
(B) all documents (or portions thereof) incorporated by reference
therein filed under the Securities Exchange Act of 1934, as amended
(the "Exchange Act") and (C) any information omitted therefrom pursuant
to Rule 430A under the Act and included in the Prospectus (as
hereinafter defined); the term "Rule 462(b) Registration Statement"
means any registration statement filed with the Commission pursuant to
Rule 462(b) under the Act (including the Registration Statement and any
Preliminary Prospectus or Prospectus incorporated therein at the time
such Registration Statement becomes effective); the term "Registration
Statement" includes both the Original Registration Statement and any
Rule 462(b) Registration Statement; the term "Preliminary Prospectus"
means each prospectus subject to completion filed with such
registration statement or any amendment thereto (including the
prospectus subject to completion, if any, included in the Registration
Statement or any amendment thereto at the time it was or is declared
effective), including all documents (or portions thereof) incorporated
by reference therein filed under the Exchange Act; the term
"Prospectus" means: (1) if the Company relies on Rule 434 under the
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Act, the Term Sheet relating to the Securities that is first
filed pursuant to Rule 424(b)(7) under the Act, together with
the preliminary Prospectus identified therein that such Term
Sheet supplements; (2) if the Company does not rely on Rule 434
under the Act, the prospectus first filed with the Commission
pursuant to Rule 424(b) under the Act; or (3) if the Company
does not rely on Rule 434 under the Act and if no prospectus is
required to be filed pursuant to Rule 424(b) under the Act, the
prospectus included in the Registration Statement, including,
in the case of clauses (1), (2) or (3) of this sentence, all
documents (or portions thereof) incorporated by reference
therein filed under the Exchange Act; and the term "Term Sheet"
means any term sheet that satisfies the requirements of Rule
434 under the Act. Any reference in this Agreement to an
"amendment or supplement" to any Preliminary Prospectus or the
Prospectus or an "amendment" to any registration statement
(including the Registration Statement) shall be deemed to
include any document incorporated by reference therein that is
filed with the Commission under the Exchange Act after the date
of such Preliminary Prospectus, Prospectus or registration
statement, as the case may be. Any reference herein to the
"date" of a Prospectus that includes a Term Sheet shall mean
the date of such Term Sheet. For purposes of the preceding
sentence, any reference to the "effective date" of an amendment
to a registration statement shall, if such amendment is
effected by means of the filing with the Commission under the
Exchange Act of a document incorporated by reference in such
registration statement, be deemed to refer to the date on which
such document was so filed with the Commission.
(ii) The Commission has not issued any order
preventing or suspending the use of any Preliminary Prospectus. When
any Preliminary Prospectus was filed with the Commission it
(A) contained all statements required to be stated therein in
accordance with, and complied in all material respects with the
requirements of, the Act, the Exchange Act and the respective rules and
regulations of the Commission thereunder 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, in the light of the
circumstances under which they were made, not misleading. When the
Registration Statement or any amendment thereto was or is declared
effective, it (A) contained or will contain all statements required to
be stated therein in accordance with, and complied or will comply in
all material respects with the requirements of, the Act, the Exchange
Act and the respective rules and regulations of the Commission
thereunder 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 Term
Sheet that is a part thereof or any amendment or supplement to the
Prospectus is filed with the Commission pursuant to Rule 424(b) (or, if
the Prospectus or part thereof or such amendment or supplement is not
required to be so filed, when the Registration Statement or the
amendment thereto containing such amendment or supplement to the
Prospectus was or is declared effective), on the date when the
Prospectus is otherwise amended or supplemented and on the Firm Closing
Date and any Option Closing Date (both as hereinafter defined), the
Prospectus, as amended or supplemented at any such time, (A) contained
or will contain all statements required to be stated therein in
accordance with, and
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complied or will comply in all material respects with the requirements
of, the Act, the Exchange Act and the respective rules and regulations
of the Commission thereunder 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. The foregoing
provisions of this paragraph (ii) do not apply to statements or
omissions made in any Preliminary Prospectus, the Registration
Statement or any amendment thereto or the Prospectus or any amendment
or supplement thereto in reliance upon and in conformity with written
information furnished to the Company by any Underwriter through the
Representatives specifically for use therein.
(iii) If the Company has elected to rely on Rule
462(b) and the Rule 462(b) Registration has not been declared effective
(A) the Company has filed a Rule 462(b) Registration Statement in
compliance with and that is effective upon filing pursuant to Rule
462(b) and has received confirmation of its receipt and (B) the Company
has given irrevocable instructions for transmission of the applicable
filing fee in connection with the filing of the Rule 462(b)
Registration Statement, in compliance with Rule 111 promulgated under
the Act or the Commission has received payment of such filing fee.
(iv) The Company and each of its subsidiaries have
been duly organized and are validly existing as corporations in good
standing under the laws of their respective jurisdictions of
incorporation and are duly qualified to transact business as foreign
corporations and are in good standing under the laws of all other
jurisdictions where the ownership or leasing of their respective
properties or the conduct of their respective businesses requires such
qualification, except where the failure to be so qualified does not
amount to a material liability or disability to the Company and its
subsidiaries, taken as a whole.
(v) The Company and each of its subsidiaries have
full power (corporate and other) to own or lease their respective
properties and conduct their respective businesses as described in the
Registration Statement and the Prospectus (or, if the Prospectus is not
in existence, the most recent Preliminary Prospectus); and the Company
has full power (corporate and other) to enter into this Agreement and
to carry out all the terms and provisions hereof to be carried out by
it.
(vi) The issued shares of capital stock of each of
the Company's subsidiaries have been duly authorized and validly
issued, are fully paid and nonassessable and, except for directors'
qualifying shares and as otherwise set forth in the Prospectus (or, if
the Prospectus is not in existence, the most recent Preliminary
Prospectus), are owned beneficially by the Company free and clear of
any security interests, liens, encumbrances, equities or claims.
(vii) The Company has an authorized, issued and
outstanding capitalization as set forth in the Prospectus or, if the
Prospectus is not in existence, the most recent Preliminary Prospectus.
All of the issued shares of capital stock of the Company have been duly
authorized and validly issued and are fully paid and nonassessable. The
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Firm Securities and the Option Securities have been duly authorized and
at the Firm Closing Date or the related Option Closing Date (as the
case may be), after payment therefor in accordance herewith, will be
validly issued, fully paid and nonassessable. 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 Securities, and
no holder of securities of the Company has any right which has not been
fully exercised or waived to require the Company to register the offer
or sale of any securities owned by such holder under the Act in the
public offering contemplated by this Agreement.
(viii) No options or rights by the Company to
acquire Common Stock have been exercised since ________________.
(ix) The capital stock of the Company conforms to
the description thereof contained in the Prospectus (or, if the
Prospectus is not in existence, the most recent Preliminary
Prospectus).
(x) Except as disclosed in the Prospectus (or, if
the Prospectus is not in existence, the most recent Preliminary
Prospectus), there are no outstanding (A) securities or obligations of
the Company or any of its subsidiaries convertible into or exchangeable
for any capital stock of the Company or any such subsidiary,
(B) warrants, rights or options to subscribe for or purchase from the
Company or any such subsidiary any such capital stock or any such
convertible or exchangeable securities or obligations, or
(C) obligations of the Company or any such subsidiary to issue any
shareS of capital stock, any such convertible or exchangeable
securities or obligations, or any such warrants, rights or options.
(xi) The consolidated financial statements and
schedules of the Company and its consolidated subsidiaries included in
the Registration Statement and the Prospectus (or, if the Prospectus is
not in existence, the most recent Preliminary Prospectus) fairly
present the financial position of the Company and its consolidated
subsidiaries and the results of operations and changes in financial
condition as of the dates and periods therein specified. Such financial
statements and schedules have been prepared in accordance with
generally accepted accounting principles consistently applied
throughout the periods involved (except as otherwise noted therein).
The selected financial data set forth under the caption "Selected
Financial Information" in the Prospectus (or, if the Prospectus is not
in existence, the most recent Preliminary Prospectus) fairly present,
on the basis stated in the Prospectus (or such Preliminary Prospectus),
the information included therein.
(xii) Price Waterhouse LLP, who have certified
certain financial statements of the Company and its consolidated
subsidiaries and delivered their report with respect to the audited
consolidated financial statements and schedules included in the
Registration Statement and the Prospectus (or, if the Prospectus is not
in existence, the most recent Preliminary Prospectus), are independent
public accountants as required by the Act, the Exchange Act and the
applicable rules and regulations thereunder.
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(xiii) The execution and delivery of this Agreement
have been duly authorized by the Company and this Agreement has been
duly executed and delivered by the Company, and is the valid and
binding agreement of the Company, enforceable against the Company in
accordance with its terms.
(xiv) No legal or governmental proceedings are
pending to which the Company or any of its subsidiaries is a party or
to which the property of the Company or any of its subsidiaries is
subject that are required to be described in the Registration Statement
or the Prospectus and are not described therein (or, if the Prospectus
is not in existence, the most recent Preliminary Prospectus), and no
such proceedings have been threatened against the Company or any of its
subsidiaries or with respect to any of their respective properties; and
no contract or other document is required to be described in the
Registration Statement or the Prospectus or to be filed as an exhibit
to the Registration Statement that is not described therein (or, if the
Prospectus is not in existence, the most recent Preliminary Prospectus)
or filed as required.
(xv) The issuance, offering and sale of the
Securities to the Underwriters by the Company pursuant to this
Agreement, the compliance by the Company with the other provisions of
this Agreement and the consummation of the other transactions herein
contemplated do not (A) require the consent, approval, authorization,
registration or qualification of or with any governmental authority,
except such as have been obtained, such as may be required under state
securities or blue sky laws and, if the registration statement filed
with respect to the Securities (as amended) is not effective under the
Act as of the time of execution hereof, such as may be required (and
shall be obtained as provided in this Agreement) under the Act, or
(B) conflict with or result in a breach or violation of any of the
terms and provisions of, or constitute a default under, any indenture,
mortgage, deed of trust, lease or other agreement or instrument to
which the Company or any of its subsidiaries is a party or by which the
Company or any of its subsidiaries or any of their respective
properties are bound, or the charter documents or by-laws of the
Company or any of its subsidiaries, or any statute or any judgment,
decree, order, rule or regulation of any court or other governmental
authority or any arbitrator applicable to the Company or any of its
subsidiaries.
(xvi) Subsequent to the respective dates as of which
information is given in the Registration Statement and the Prospectus
(or, if the Prospectus is not in existence, the most recent Preliminary
Prospectus), neither the Company nor any of its subsidiaries has
sustained any material loss or interference with their respective
businesses or properties from fire, flood, hurricane, accident or other
calamity, whether or not covered by insurance, or from any labor
dispute or any legal or governmental proceeding and there has not been
any material adverse change, or any development involving a prospective
material adverse change, in the condition (financial or otherwise),
management, business prospects, net worth, or results of operations of
the Company or any of its subsidiaries, except in each case as
described in or contemplated by the Prospectus or, if the Prospectus is
not in existence, the most recent Preliminary Prospectus.
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(xvii) The Company has not, directly or indirectly,
(A) taken any action designed to cause or to result in, or that has
constituted or which might reasonably be expected to constitute, the
stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of the Securities or (B) since
the filing of the Registration Statement (1) sold, bid for, purchased,
or paid anyone any compensation for soliciting purchases of, the
Securities or (2) paid or agreed to pay to any person any compensation
for soliciting another to purchase any other securities of the Company
(except for the sale of Securities by the Selling Stockholders under
this Agreement).
(xviii) The Company has not distributed and, prior
to the later of (A) the Closing Date and (B) the completion of the
distribution of the Securities, will not distribute any offering
material in connection with the offering and sale of the Securities
other than the Registration Statement or any amendment thereto, any
Preliminary Prospectus or the Prospectus or any amendment or supplement
thereto, or other materials, if any, permitted by the Act.
(xix) The Company and each of its subsidiaries have
good and marketable title in fee simple to all items of real property
and marketable title to all personal property owned by each of them, in
each case free and clear of any security interests, liens,
encumbrances, equities, claims and other defects, except such as do not
materially and adversely affect the value of such property and do not
interfere with the use made or proposed to be made of such property by
the Company or such subsidiary, and any real property and buildings
held under lease by the Company or any such subsidiary are held under
valid, subsisting and enforceable leases, with such exceptions as are
not material and do not interfere with the use made or proposed to be
made of such property and buildings by the Company or such subsidiary,
in each case except as described in or contemplated by the Prospectus
(or, if the Prospectus is not in existence, the most recent Preliminary
Prospectus).
(xx) No labor dispute with the employees of the
Company or any of its subsidiaries exists or, to the best of the
Company's knowledge, is threatened or imminent that could result in a
material adverse change in the condition (financial or otherwise),
business prospects, net worth or results of operations of the Company
and its subsidiaries, except as described in or contemplated by the
Prospectus (or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus).
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(xxi) The Company and its subsidiaries own, possess
or have the right to use, or can acquire on reasonable terms, all
material patents, patent applications, trademarks, service marks, trade
names, licenses, copyrights and proprietary or other confidential
information currently employed by them in connection with their
respective businesses, and neither the Company nor any such subsidiary
has received any notice of infringement of or conflict with asserted
rights of any third party with respect to any of the foregoing which,
singly or in the aggregate, if the subject of an unfavorable decision,
ruling or finding, could result in a material adverse change in the
condition (financial or otherwise), business prospects, net worth or
results of operations of the Company and its subsidiaries, except as
described in or contemplated by the Prospectus (or, if the Prospectus
is not in existence, the most recent Preliminary Prospectus).
(xxii) The Company and each of its subsidiaries are
insured by insurers of recognized financial responsibility against such
losses and risks and in such amounts as are prudent and customary in
the businesses in which they are engaged; neither the Company nor any
such subsidiary has been refused any insurance coverage sought or
applied for; and neither the Company nor any such subsidiary has any
reason to believe that it will not be able to renew its existing
insurance coverage as and when such coverage expires or to obtain
similar coverage from similar insurers as may be necessary to continue
its business at a cost that would not materially and adversely affect
the condition (financial or otherwise), business prospects, net worth
or results of operations of the Company and its subsidiaries, except as
described in or contemplated by the Prospectus (or, if the Prospectus
is not in existence, the most recent Preliminary Prospectus).
(xxiii) 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).
(xxiv) The Company and its subsidiaries possess all
certificates, authorizations, licenses and permits issued by the
appropriate federal, state or foreign regulatory authorities necessary
to conduct their respective businesses, and neither the Company nor any
such subsidiary has received any notice of proceedings relating to the
revocation or modification of any such certificate, authorization,
license or permit which, singly or in the aggregate, if the subject of
an unfavorable decision, ruling or finding, would result in a material
adverse change in the condition (financial or otherwise), business
prospects, net worth or results of operations of the Company and its
subsidiaries, except as described in or contemplated by the Prospectus
(or, if the Prospectus is not in existence, the most recent Preliminary
Prospectus).
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(xxv) The Company will conduct its operations in a
manner that will not subject it to registration as an investment
company under the Investment Company Act of 1940, as amended, and the
transactions contemplated hereby will not cause the Company to become
an investment company subject to registration under such Act.
(xxvi) The Company has filed all foreign, federal,
state and local tax returns that are required to be filed or has
requested extensions thereof (except in any case in which the failure
so to file would not have a material adverse effect on the Company and
its subsidiaries, taken as a whole) and has paid all taxes required to
be paid by it and any other assessment, fine or penalty levied against
it, to the extent that any of the foregoing is due and payable, except
for any such assessment, fine or penalty that is currently being
contested in good faith or as described in or contemplated by the
Prospectus (or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus).
(xxvii) Each certificate signed by any officer of
the Company and delivered to the Representatives or counsel for the
Underwriters shall be deemed to be a representation and warranty by the
Company to each Underwriter as to the matters covered thereby.
(xxviii) Except for the shares of capital stock of
each of the subsidiaries owned by the Company and such subsidiaries,
neither the Company nor any such subsidiary owns any shares of stock or
any other equity securities of any corporation or has any equity
interest in any firm, partnership, association or other entity, except
as described in or contemplated by the Prospectus (or, if the
Prospectus is not in existence, the most recent Preliminary
Prospectus).
(xxix) The Company and each of its subsidiaries
maintain a system of internal accounting controls sufficient to provide
reasonable assurance that (A) transactions are executed in accordance
with management's general or specific authorizations; (B) transactions
are recorded as necessary to permit preparation of financial statements
in conformity with generally accepted accounting principles and to
maintain asset accountability; (C) access to assets is permitted only
in accordance with management's general or specific authorization; and
(D) the recorded accountability for assets is compared with the
existing assets at reasonable intervals and appropriate action is taken
with respect to any differences.
(xxx) No default exists, and no event has occurred
which, with notice or lapse of time or both, would constitute a default
in the due performance and observance of any term, covenant or
condition of any indenture, mortgage, deed of trust, lease or other
agreement or instrument to which the Company or any of its subsidiaries
is a party or by which the Company or any of its subsidiaries or any of
their respective properties is bound or may be affected in any material
adverse respect with regard to the property, business or operations of
the Company and its subsidiaries, taken as a whole.
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(xxxi) Neither the Company nor any of its
subsidiaries is in violation of its articles of incorporation or
by-laws. Neither the Company nor any of its subsidiaries is in
violation in any respect of any statute, law, governmental rule,
regulation, order or decree of any court or governmental agency or body
to which it or its property is subject or by which it or its property
may be affected in any material adverse respect with regard to the
property, business or operations of the Company and its subsidiaries,
taken as a whole.
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(b) Each Selling Stockholder severally represents and warrants
to, and agrees with, the Company and each of the several Underwriters that:
(i) Such Selling Stockholder has full power to enter
into this Agreement and to sell, assign, transfer and deliver to the
Underwriters the Securities to be sold by such Selling Stockholder
hereunder in accordance with the terms of this Agreement; this
Agreement has been duly executed and delivered by such Selling
Stockholder, and is the valid and binding agreement of such Selling
Stockholder, subject to applicable bankruptcy, insolvency and similar
laws affecting creditors' rights generally, and subject, as to
enforceability, to general principles of equity (regardless of whether
enforcement is sought in a proceeding in equity or at law).
(ii) Such Selling Stockholder has duly executed and
delivered a power of attorney and custody agreement (with respect to
such Selling Stockholder, the "Power of Attorney" and the "Custody
Agreement", respectively), each in the form heretofore delivered to the
Representatives, appointing __________________________, as such Selling
Stockholder's attorney-in-fact (the "Attorney-in-Fact") with authority
to execute, deliver and perform this Agreement on behalf of such
Selling Stockholder and appointing ________________ as custodian
thereunder (the "Custodian"). Certificates in negotiable form, endorsed
in blank or accompanied by blank stock powers duly executed, with
signatures appropriately guaranteed, representing the Securities to be
sold by such Selling Stockholder hereunder have been deposited with the
Custodian pursuant to the Custody Agreement for the purpose of delivery
pursuant to this Agreement. Such Selling Stockholder has full power to
enter into the Custody Agreement and the Power of Attorney and to
perform its obligations under the Custody Agreement. The Custody
Agreement and the Power of Attorney have been duly executed and
delivered by such Selling Stockholder and, assuming due authorization,
execution and delivery by the Custodian, are the legal, valid, binding
and enforceable instruments of such Selling Stockholder, subject to
applicable bankruptcy, insolvency and similar laws affecting creditors'
rights generally, and subject, as to enforceability, to general
principles of equity (regardless of whether enforcement is sought in a
proceeding in equity or at law). Such Selling Stockholder agrees that
each of the Securities represented by the certificates deposited by
such Selling Stockholder with the Custodian is subject to the interests
of the Underwriters hereunder, that the arrangements made by such
Selling Stockholder for such custody, the appointment by such Selling
Stockholder of each Attorney-in-Fact and the right, power and authority
of each Attorney-in-Fact to execute and deliver this Agreement on
behalf of such Selling Stockholder, to agree on the price at which the
Securities (including such Selling Stockholder's Securities) are to be
sold to the Underwriters, and to carry out the terms of this Agreement,
are to that extent irrevocable and that the obligations of such Selling
Stockholder hereunder shall not be terminated, except as provided in
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this Agreement or the Custody Agreement, by any act of such Selling
Stockholder, by operation of law or otherwise, whether in the case of
any individual Selling Stockholder by the death or incapacity of such
Selling Stockholder, in the case of a trust or estate by the death of
the trustee or trustees or the executor or executors or the termination
of such trust or estate, or in the case of a corporate or partnership
Selling Stockholder by its liquidation or dissolution or by the
occurrence of any other event. If any individual Selling Stockholder,
trustee or executor should die or become incapacitated or any such
trust should be terminated, or if any corporate or partnership Selling
Stockholder shall liquidate or dissolve, or if any other event should
occur, before the delivery of such Securities hereunder, the
certificates for such Securities deposited with the Custodian shall be
delivered by the Custodian in accordance with the respective terms and
conditions of this Agreement as if such death, incapacity, termination,
liquidation, dissolution or other event had not occurred, regardless of
whether or not the Custodian or the Attorneys-in-Fact shall have
received notice thereof.
(iii) Such Selling Stockholder is the lawful owner
of the Securities to be sold by such Selling Stockholder hereunder and
upon sale and delivery of, and payment for, such Securities, as
provided herein, such Selling Stockholder will convey good and
marketable title to such Securities, free and clear of any security
interests, liens, encumbrances, equities, claims or other defects.
(iv) Such Selling Stockholder has not, directly or
indirectly, (A) taken any action designed to cause or result in, or
that has constituted or which might reasonably be expected to
constitute, the stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of the
Securities or (B) since the filing of the Registration Statement
(1) sold, bid for, purchased or paid anyone any compensation for
soliciting purchases of, the Securities or (2) paid or agreed to pay to
any person any compensation for soliciting another to purchase any
other securities of the Company (except for the sale of Securities
under this Agreement).
(v) Such Selling Stockholder has reviewed the
Prospectus (or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus) and the Registration Statement, and the
information regarding such Selling Stockholder set forth therein under
the captions "Selling Stockholders" and "Principal Stockholders" is
complete and accurate.
(vi) The sale by such Selling Stockholder of
Securities pursuant hereto is not prompted by any adverse information
concerning the Company that is not set forth in the Registration
Statement or the Prospectus (or, if the Prospectus is not in existence,
the most recent Preliminary Prospectus).
(vii) The sale of the Securities to the Underwriters
by such Selling Stockholder pursuant to this Agreement, the compliance
by such Selling Stockholder with the other provisions of this
Agreement, the Custody Agreement and the consummation of the other
12
transactions herein contemplated do not (A) require the consent,
approval, authorization, registration or qualification of or with any
governmental authority, except such as have been obtained, such as may
be required under state securities or blue sky laws and, if the
registration statement filed with respect to the Securities (as
amended) is not effective under the Act as of the time of execution
hereof, such as may be required (and shall be obtained as provided in
this Agreement) under the Act and the Exchange Act, or (B) conflict
with or result in a breach or violation of any of the terms and
provisions of, or constitute a default under any indenture, mortgage,
deed of trust, lease or other agreement or instrument to which such
Selling Stockholder is a party, or by which such Selling Stockholder,
or any of such Selling Stockholder's properties, are bound, or any
statute or any judgment, decree, order, rule or regulation of any court
or other governmental authority or any arbitrator applicable to such
Selling Stockholder.
(viii) Such Selling Stockholder has not distributed
and, prior to the later of (A) the last Option Closing Date or, if no
Option Securities are purchased, the Firm Closing Date and (B) the
completion of the distribution of the Securities, will not distribute
any offering material in connection with the offering and sale of the
Securities other than the Registration Statement or any amendment
thereto, any Preliminary Prospectus or the Prospectus or any amendment
or supplement thereto, or other materials, if any, permitted by the
Act.
(ix) Such Selling Stockholder does not have any
right or has irrevocably waived any such right to have any securities
registered under the Registration Statement in excess of the number of
securities of such Selling Stockholder actually so registered.
3. Purchase, Sale and Delivery of the Securities.
(a) On the basis of the representations, warranties,
agreements and covenants herein contained and subject to the terms and
conditions herein set forth, (A) the Company agrees to issue and sell to each of
the Underwriters, and each of the Underwriters, severally (and not jointly),
agrees to purchase from the Company, at a purchase price of $_______ per share
(the "Purchase Price"), the number of Firm Securities set forth opposite the
name of such Underwriter in column (a) of Schedule 1 hereto and (B) each of the
Selling Stockholders severally (and not jointly), agrees to sell to the
Underwriters, the number of Firm Securities set forth opposite the name of such
Selling Stockholder in Schedule 2 hereto, and each of the Underwriters,
severally (and not jointly), agrees to purchase from such Selling Stockholders,
at the Purchase Price per share, the number of Firm Securities set forth
opposite the name of such Underwriter in column (b) of Schedule 1 hereto. One or
more certificates in definitive form for the Firm Securities that the several
Underwriters have agreed to purchase hereunder, and in such denomination or
denominations and registered in such name or names as the Representatives
request upon notice to the Company and such Selling Stockholders at least 48
hours prior to the Firm Closing Date, shall be delivered by or on behalf of the
Company and such Selling Stockholders to the Representatives for the respective
accounts of the Underwriters, against payment by or on behalf of the
Underwriters of the purchase price therefor by wire transfer in same-day funds
(the "Wired Funds") to the order of the Company and such Selling Stockholders.
Such delivery of and payment for the Firm Securities shall be made at the
13
offices of Cleary, Gottlieb, Xxxxx & Xxxxxxxx, Xxx Xxxxxxx Xxxxx, Xxx Xxxx, Xxx
Xxxx at 9:30 A.M., New York time, on ____________________, 1996, or at such
other place, time or date as the Representatives and the Company may agree
upon or as the Representatives may determine pursuant to Section 9 hereof,
such time and date of delivery against payment being herein referred to as the
"Firm Closing Date." The Company and such Selling Stockholders will make such
certificate or certificates for the Firm Securities available for checking and
packaging by the Representatives at the offices in New York, New York of the
Company's transfer agent or registrar or of Prudential Securities Incorporated
at least 24 hours prior to the Firm Closing Date.
(b) For the purpose of covering any over-allotments in
connection with the distribution and sale of the Firm Securities as contemplated
by the Prospectus, the Company hereby grants to the several Underwriters an
option to purchase, severally and not jointly, the Option Securities. The
purchase price to be paid for any Option Securities shall be the same price per
share as the price per share for the Firm Securities set forth above in
paragraph (a) of this Section 3, plus, if the purchase and sale of any Option
Securities takes place after the Firm Closing Date and after the Firm Securities
are trading "ex-dividend", an amount equal to the dividends payable on such
Option Securities. The option granted hereby may be exercised as to all or any
part of the Option Securities from time to time within [thirty] days after the
date of the Prospectus (or, if such [30th] day shall be a Saturday or Sunday or
a holiday, on the next business day thereafter when the Nasdaq Stock Market's
National Market (the "Nasdaq National Market") is open for trading). The
Underwriters shall not be under any obligation to purchase any of the Option
Securities prior to the exercise of such option. The Representatives may from
time to time exercise the option granted hereby by giving notice in writing or
by telephone (confirmed in writing) to the Company setting forth the aggregate
number of Option Securities as to which the several Underwriters are then
exercising the option and the date and time for delivery of and payment for such
Option Securities. Any such date of delivery shall be determined by the
Representatives but shall not be earlier than two business days or later than
seven business days after such exercise of the option and, in any event, shall
not be earlier than the Firm Closing Date. The time and date set forth in such
notice, or such other time on such other date as the Representatives and the
Company may agree upon or as the Representatives may determine pursuant to
Section 9 hereof, is herein called the "Option Closing Date" with respect to
such Option Securities. Upon exercise of the option as provided herein, the
Company shall become obligated to sell to each of the several Underwriters, and,
subject to the terms and conditions herein set forth, each of the Underwriters
(severally and not jointly) shall become obligated to purchase from the Company,
the same percentage of the total number of the Option Securities as to which the
several Underwriters are then exercising the option as such Underwriter is
obligated to purchase of the aggregate number of Firm Securities, as adjusted by
the Representatives in such manner as they deem advisable to avoid fractional
shares. If the option is exercised as to all or any portion of the Option
Securities, one or more certificates in definitive form for such Option
Securities, and payment therefor, shall be delivered on the related Option
Closing Date in the manner, and upon the terms and conditions, set forth in
14
paragraph (a) of this Section 3, except that reference therein to the Firm
Securities and the Firm Closing Date shall be deemed, for purposes of this
paragraph (b), to refer to such Option Securities and Option Closing Date,
respectively.
(c) The Company hereby acknowledges that the wire transfer by
or on behalf of the Underwriters of the purchase price for any Shares does not
constitute closing of a purchase and sale of the Shares. Only execution and
delivery of a receipt for Shares by the Underwriters indicates completion of the
closing of a purchase of the Shares from the Company. Furthermore, in the event
that the Underwriters wire funds to the Company prior to the completion of the
closing of a purchase of Shares, the Company hereby acknowledges that until the
Underwriters execute and deliver a receipt for the Shares, by facsimile or
otherwise, the Company will not be entitled to the wired funds and shall return
the wired funds to the Underwriters as soon as practicable (by wire transfer of
same-day funds) upon demand. In the event that the closing of a purchase of
Shares is not completed and the wire funds are not returned by the Company to
the Underwriters on the same day the wired funds were received by the Company,
the Company agrees to pay to the Underwriters in respect of each day the wire
funds are not returned by it, in same-day funds, interest on the amount of such
wire funds in an amount representing the Underwriters' cost of financing as
reasonably determined by Prudential Securities Incorporated.
(d) It is understood that any of you, individually and not as
one of the Representatives, may (but shall not be obligated to) make payment on
behalf of any Underwriter or Underwriters for any of the Securities to be
purchased by such Underwriter or Underwriters. No such payment shall relieve
such Underwriter or Underwriters from any of its or their obligations hereunder.
4. Offering by the Underwriters. Upon your authorization of
the release of the Firm Securities, the several Underwriters propose to offer
the Firm Securities for sale to the public upon the terms set forth in the
Prospectus.
5. Covenants.
(a) The Company covenants and agrees with each of the
Underwriters that:
(i) The Company will use its best efforts to cause
the Registration Statement, if not effective at the time of execution
of this Agreement, and any amendments thereto to become effective as
promptly as possible. If required, the Company will file the Prospectus
or any Term Sheet that constitutes a part thereof and any amendment or
supplement thereto with the Commission in the manner and within the
time period required by Rules 434 and 424(b) under the Act. During any
time when a prospectus relating to the Securities is required to be
delivered under the Act, the Company (A) will comply with all
requirements imposed upon it by the Act and the Exchange Act and the
respective rules and regulations of the Commission thereunder to the
extent necessary to permit the continuance of sales of or dealings in
the Securities in accordance with the provisions hereof and of the
Prospectus, as then amended or supplemented, and (B) will not file with
the Commission the prospectus, Term Sheet or the amendment referred to
in the second sentence of Section 2(a) hereof, any amendment or
supplement to such prospectus, Term Sheet or any amendment to the
Registration Statement or any Rule 462(b) Registration Statement of
which the Representatives shall not previously have been advised and
furnished with a copy for a reasonable period of time prior to the
proposed filing and as to which filing the Representatives shall not
have given their consent. The Company will prepare and file with the
Commission, in accordance with the rules and regulations of the
15
Commission, promptly upon request by the Representatives or counsel for
the Underwriters, any amendments to the Registration Statement or
amendments or supplements to the Prospectus that may be necessary or
advisable in connection with the distribution of the Securities by the
several Underwriters, and will use its best efforts to cause any such
amendment to the Registration Statement to be declared effective by the
Commission as promptly as possible. The Company will advise the
Representatives, promptly after receiving notice thereof, of the time
when the Registration Statement or any amendment thereto has been filed
or declared effective or the Prospectus or any amendment or supplement
thereto has been filed and will provide evidence satisfactory to the
Representatives of each such filing or effectiveness.
(ii) The Company will advise the Representatives,
promptly after receiving notice or obtaining knowledge thereof, of
(A) the issuance by the Commission of any stop order suspending the
effectiveness of the Original Registration Statement or any Rule 462(b)
Registration Statement or any amendment thereto or any order preventing
or suspending the use of any Preliminary Prospectus or the Prospectus
or any amendment or supplement thereto, (B) the suspension of the
qualification of the Securities for offering or sale in any
jurisdiction, (C) the institution, threatening or contemplation of any
proceeding for any such purpose or (D) any request made by the
Commission for amending the Original Registration Statement or any Rule
462(b) Registration Statement, for amending or supplementing the
Prospectus or for additional information. The Company will use its best
efforts to prevent the issuance of any such stop order and, if any such
stop order is issued, to obtain the withdrawal thereof as promptly as
possible.
(iii) The Company will arrange for the qualification
of the Securities for offering and sale under the securities or blue
sky laws of such jurisdictions as the Representatives may designate and
will continue such qualifications in effect for as long as may be
necessary to complete the distribution of the Securities, provided,
however, that in connection therewith the Company shall not be required
to qualify as a foreign corporation or to execute a general consent to
service of process in any jurisdiction.
(iv) If, at any time prior to the later of (A) the
final date when a prospectus relating to the Securities is required to
be delivered under the Act or (B) the Option Closing Date, any event
occurs as a result of which the Prospectus, as then amended or
supplemented, would include any untrue statement of a material fact or
omit to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made,
not misleading, or if for any other reason it is necessary at any time
16
to amend or supplement the Prospectus to comply with the Act or the
rules or regulations of the Commission thereunder, the Company will
promptly notify the Representatives thereof and, subject to Section
5(a) hereof, will prepare and file with the Commission, at the
Company's expense, an amendment to the Registration Statement or an
amendment or supplement to the Prospectus that corrects such statement
or omission or effects such compliance.
(v) The Company will, without charge, provide (A) to
the Representatives and to counsel for the Underwriters a signed copy
of the registration statement originally filed with respect to the
Securities and each amendment thereto (in each case including exhibits
thereto), (B) to each other Underwriter, a conformed copy of such
registration statement or any Rule 462(b) Registration Statement and
each amendment thereto (in each case without exhibits thereto) and
(C) so long as a prospectus relating to the Securities is required to
be delivered under the Act, as many copies of each Preliminary
Prospectus or the Prospectus or any amendment or supplement thereto as
the Representatives may reasonably request; without limiting the
application of clause (C) of this sentence, the Company, not later than
(1) 6:00 P.M., New York City time, on the date of determination of the
public offering price, if such determination occurred at or prior to
10:00 A.M., New York City time on such date or (2) 6:00 P.M., New York
City time, on the business day following the date of determination of
the public offering price, if such determination occurred after 10:00
A.M., New York City time, on such date, will deliver to the
Underwriters, without charge, as many copies of the Prospectus and any
amendment or supplement thereto as the Representatives may reasonably
request for purposes of confirming orders that are expected to settle
on the Firm Closing Date.
(vi) The Company, as soon as practicable, will make
generally available to its securityholders and to the Representatives a
consolidated earnings statement of the Company and its subsidiaries
that satisfies the provisions of Section 11(a) of the Act and Rule 158
thereunder.
(vii) The Company will apply the net proceeds from
the sale of the Securities as set forth under "Use of Proceeds" in the
Prospectus.
(viii) The Company will not, directly or indirectly,
without the prior written consent of Prudential Securities
Incorporated, on behalf of the Underwriters, offer, sell, offer to
sell, contract to sell, pledge, grant any option to purchase or
otherwise sell or dispose (or announce any offer, sale, offer of sale,
contract of sale, pledge, grant of any option to purchase or other sale
or disposition) of any shares of Common Stock or any securities
convertible into, or exchangeable or exercisable for, shares of Common
Stock for a period of 180 days after the date hereof, except pursuant
to this Agreement.
17
(ix) The Company will not, directly or indirectly,
(A) take any action designed to cause or to result in, or that has
constituted or which might reasonably be expected to constitute, the
stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of the Securities or
(B)(1) sell, bid for, purchase, or pay anyone any compensation for
soliciting purchases of, the Securities or (2) pay or agree to pay to
any person any compensation for soliciting another to purchase any
other securities of the Company (except for the sale of Securities by
the Selling Securityholders under this Agreement).
(x) The Company will obtain the agreements described
in Section 7(f) hereof prior to the Firm Closing Date.
(xi) If at any time during the 25-day period after
the Registration Statement becomes effective or the period prior to the
Option Closing Date, any rumor, publication or event relating to or
affecting the Company shall occur as a result of which in your opinion
the market price of the Common Stock has been or is likely to be
materially affected (regardless of whether such rumor, publication or
event necessitates a supplement to or amendment of the Prospectus, the
Company will, after notice from you advising the Company to the effect
set forth above, forthwith prepare, consult with you concerning the
substance of, and disseminate a press release or other public
statement, reasonably satisfactory to you, responding to or commenting
on such rumor, publication or event.
(xii) If the Company elects to rely on Rule 462(b),
the Company shall both file a Rule 462(b) Registration Statement with
the Commission in compliance with Rule 462(b) and pay the applicable
fees in accordance with Rule 111 promulgated under the Act by the
earlier of (A) 10:00 P.M. Eastern time on the date of this Agreement
and (B) the time confirmations are sent or given, as specified by Rule
462(b)(2).
(xiii) The Company will cause the Securities to be
duly included for quotation on the Nasdaq National Market prior to the
Firm Closing Date. The Company will ensure that the Securities remain
included for quotation on the Nasdaq National Market following the Firm
Closing Date.
(b) Each of the Selling Stockholders, severally (and not
jointly) covenants and agrees with each of the Underwriters that:
(i) Such Selling Stockholder will not, directly or
indirectly, without the prior written consent of Prudential Securities
Incorporated, on behalf of the Underwriters, offer, sell, offer to
sell, contract to sell, pledge, grant any option to purchase or
otherwise sell or dispose (or announce any offer, sale, offer of sale,
contract of sale, pledge, grant of any option to purchase or other sale
or disposition) of any shares of Common Stock or other capital stock of
the Company substantially similar thereto or any securities convertible
into, or exchangeable or exercisable for, any shares of Common Stock or
other capital stock of the Company for a period of
18
180 days after the date hereof, except pursuant to this Agreement and
except for bona fide gifts and transfers by will or by the laws of
descent and distribution, provided that the donee, heir or legatee
agrees in writing to be bound by the terms of this Section 5(b)(i).
(ii) Such Selling Stockholder will not, directly or
indirectly, (A) take any action designed to cause or result in, or that
has constituted or which might reasonably be expected to constitute,
the stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of the Securities or
(B) (1) sell, bid for, purchase, or pay anyone any compensation for
soliciting purchases of, the Securities or (2) pay or agree to pay to
any person any compensation for soliciting another to purchase any
other securities of the Company (except for the sale of Securities
under this Agreement).
(iii) As soon as such Selling Stockholder is advised
thereof, such Selling Stockholder will advise the Representatives (and
immediately thereafter confirm such advice in writing) (A) of receipt
by such Selling Stockholder or by any representative or agent of such
Selling Stockholder of any communication from the Commission relating
to the Registration Statement, the Prospectus or any Preliminary
Prospectus, or any notice or order of the Commission relating to the
Company or the Selling Stockholders in connection with the transactions
contemplated by this Agreement and (B) of the happening of any event
which makes or may make any statement made in the Registration
Statement, the Prospectus or any Preliminary Prospectus untrue or that
requires the making of any change in the Registration Statement, the
Prospectus or Preliminary Prospectus, as the case may be, in order to
make such statement, in light of the circumstances in which it was
made, not misleading.
6. Expenses. The Company will pay all costs and expenses
incident to the performance of its obligations under this Agreement, whether or
not the transactions contemplated herein are consummated or this Agreement is
terminated pursuant to Section 11 hereof, including all costs and expenses
incident to (i) the printing or other production of documents with respect to
the transactions, including any costs of printing the registration statement
originally filed with respect to the Securities and any amendment thereto, any
Rule 462(b) Registration Statement, any Preliminary Prospectus and the
Prospectus and any amendment or supplement thereto, this Agreement and any blue
sky memoranda, (ii) all arrangements relating to the delivery to the
Underwriters of copies of the foregoing documents, (iii) the fees and
disbursements of the counsel, the accountants and any other experts or advisors
retained by the Company or the Selling Stockholders, (iv) preparation, issuance
and delivery to the Underwriters of any certificates evidencing the Securities,
including transfer agent's and registrar's fees, (v) the qualification of the
Securities under state securities and blue sky laws, including filing fees and
fees and disbursements of counsel for the Underwriters relating thereto,
(vi) the filing fees of the Commission and the National Association of
Securities Dealers, Inc. relating to the Securities, (vii) any quotation of the
Securities on the Nasdaq National Market and (viii) any meetings with
prospective investors in
19
the Securities (other than as shall have been specifically approved by the
Representatives to be paid for by the Underwriters). If the sale of the
Securities provided for herein is not consummated because any condition to the
obligations of the Underwriters set forth in Section 7 hereof is not satisfied,
because this Agreement is terminated pursuant to Section 11 hereof or because of
any failure, refusal or inability on the part of the Company or any Selling
Stockholder to perform all obligations and satisfy all conditions on its part to
be performed or satisfied hereunder by the Company or such Selling Stockholder
other than by reason of a default by any of the Underwriters, the Company will
reimburse the Underwriters severally upon demand for all out-of-pocket expenses
(including counsel fees and disbursements) that shall have been incurred by them
in connection with the proposed purchase and sale of the Securities. The Company
shall not in any event be liable to any of the Underwriters for the loss of
anticipated profits from the transactions covered by this Agreement.
7. Conditions of the Underwriters' Obligations. The
obligations of the several Underwriters to purchase and pay for the Firm
Securities shall be subject, in the Representatives' sole discretion, to the
accuracy of the representations and warranties of the Company and the Selling
Stockholders contained herein as of the date hereof and as of the Firm Closing
Date, as if made on and as of the Firm Closing Date, to the accuracy of the
statements of the Company's officers and the Selling Stockholders made pursuant
to the provisions hereof, to the performance by the Company and the Selling
Stockholders of their respective covenants and agreements hereunder and to the
following additional conditions:
(a) If the Original Registration Statement or any amendment
thereto filed prior to the Firm Closing Date has not been declared effective as
of the time of execution hereof, the Original Registration Statement or such
amendment and, if the Company has elected to rely upon 462(b), the Rule 462(b)
Registration Statement shall have been declared effective not later than the
earlier of (i) 11:00 A.M., New York time, on the date on which the amendment to
the registration statement originally filed with respect to the Securities or to
the Registration Statement, as the case may be, containing information regarding
the initial public offering price of the Securities has been filed with the
Commission and (ii) the time confirmations are sent or given as specified by
Rule 462(b)(2), or with respect to the Original Registration Statement, or such
later time and date as shall have been consented to by the Representatives; if
required, the Prospectus or any Term Sheet that constitutes a part thereof and
any amendment or supplement thereto shall have been filed with the Commission in
the manner and within the time period required by Rules 434 and 424(b) under the
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 threatened 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) The Representatives shall have received an opinion, dated
the Firm Closing Date, of Xxxxxxxx Xxxxxxxxx Professional Corporation, counsel
for the Company, to the effect that:
20
(i) the Company and each of its subsidiaries listed
in Exhibit 21 to the Registration Statement (the "Subsidiaries") have
been duly organized and are validly existing as corporations in good
standing under the laws of their respective jurisdictions of
incorporation and are duly qualified to transact business as foreign
corporations and are in good standing under the laws of all other
jurisdictions where the ownership or leasing of their respective
properties or the conduct of their respective businesses requires such
qualification, except where the failure to be so qualified does not
amount to a material liability or disability to the Company and the
Subsidiaries, taken as a whole;
(ii) the Company and each of the Subsidiaries have
corporate power to own or lease their respective properties and conduct
their respective businesses as described in the Registration Statement
and the Prospectus, and the Company has corporate power to enter into
this Agreement and to carry out all the terms and provisions hereof to
be carried out by it;
(iii) the issued shares of capital stock of each of
the Subsidiaries have been duly authorized and validly issued, are
fully paid and nonassessable and, except for directors' qualifying
shares and as otherwise set forth in the Prospectus, are owned
beneficially by the Company free and clear of any perfected security
interests or, to the best knowledge of such counsel, any other security
interests, liens, encumbrances, equities or claims;
(iv) the Company has an authorized, issued and
outstanding capitalization as set forth in the Prospectus; all of the
issued shares of capital stock of the Company (including the Option
Securities) have been duly authorized and validly issued and are fully
paid and nonassessable, have been issued in compliance with all
applicable federal and state securities laws and were not issued in
violation of or subject to any preemptive rights or other rights to
subscribe for or purchase securities; the Firm Securities have been
duly authorized by all necessary corporate action of the Company and,
when issued and delivered to and paid for by the Underwriters pursuant
to this Agreement, will be validly issued, fully paid and
nonassessable; the Securities have been duly included for trading on
the Nasdaq National Market; 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 Securities; and no holders of
securities of the Company are entitled to have such securities
registered under the Registration Statement;
(v) the statements set forth under the heading
"Description of Securities" in the Prospectus, insofar as such
statements purport to summarize certain provisions of the capital stock
of the Company, provide a fair summary of such provisions; and the
statements set forth under the headings "Business of the Company--Legal
Proceedings," "Management; Certain Transactions" and "Certain
Transactions" in the Prospectus, insofar as such statements constitute
21
a summary of the legal matters, documents or proceedings referred to
therein, provide a fair summary of such legal matters, documents and
proceedings;
(vi) the execution and delivery of this Agreement
have been duly authorized by all necessary corporate action of the
Company and this Agreement has been duly executed and delivered by the
Company;
(vii) (A) no legal or governmental proceedings are
pending to which the Company or any of the Subsidiaries is a party or
to which the property of the Company or any of the Subsidiaries is
subject that are required to be described in the Registration Statement
or the Prospectus and are not described therein, and, to the best
knowledge of such counsel, no such proceedings have been threatened
against the Company or any of the Subsidiaries or with respect to any
of their respective properties and (B) no contract or other document is
required to be described in the Registration Statement or the
Prospectus or to be filed as an exhibit to the Registration Statement
that is not described therein or filed as required;
(viii) the issuance, offering and sale of the
Securities to the Underwriters by the Company pursuant to this
Agreement, the compliance by the Company with the other provisions of
this Agreement and the consummation of the other transactions herein
contemplated do not (A) require the consent, approval, authorization,
registration or qualification of or with any governmental authority,
except such as have been obtained and such as may be required under
state securities or blue sky laws, or (B) conflict with or result in a
breach or violation of any of the terms and provisions of, or
constitute a default under, any indenture, mortgage, deed of trust,
lease or other agreement or instrument, known to such counsel, to which
the Company or any of the Subsidiaries is a party or by which the
Company or any of the Subsidiaries or any of their respective
properties are bound, or the charter documents or by-laws of the
Company or any of the Subsidiaries, or any statute or any judgment,
decree, order, rule or regulation of any court or other governmental
authority or any arbitrator known to such counsel and applicable to the
Company or any of the Subsidiaries;
(ix) the Registration Statement is effective under
the Act; any required filing of the Prospectus, or any Term Sheet that
constitutes a part thereof, pursuant to Rules 434 and 424(b) has been
made in the manner and within the time period required by Rules 434 and
424(b); and no stop order suspending the effectiveness of the
Registration Statement or any amendment thereto has been issued, and no
proceedings for that purpose have been instituted or threatened or, to
the best knowledge of such counsel, are contemplated by the Commission;
and
(x) the Registration Statement originally filed with
respect to the Securities and each amendment thereto, any Rule 462(b)
Registration Statement and the Prospectus (in each case, other than the
financial statements and other financial information contained therein,
as to which such counsel need express no opinion)
22
comply as to form in all material respects with the applicable
requirements of the Act and the rules and regulations of the Commission
thereunder.
(xi) if the Company elects to rely on Rule 434, the
Prospectus is not "materially different", as such term is used in Rule
434, from the prospectus included in the Registration Statement at the
time of its effectiveness or an effective post-effective amendment
thereto (including such information that is permitted to be omitted
pursuant to Rule 430A).
Such counsel shall also state that they have no reason to
believe that the Registration Statement, as of its effective date, contained any
untrue statement of a material fact or omitted to state any material fact
required to be stated therein or necessary to make the statements therein not
misleading or that the Prospectus, as of its date or the date of such opinion,
included or includes any untrue statement of a material fact or omitted or omits
to state a material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading.
In rendering any such opinion, such counsel may rely, as to
matters of fact, to the extent such counsel deems proper, on certificates of
responsible officers of the Company and public officials and, as to matters
involving the application of laws of any jurisdiction other than the State of
Delaware or the United States, to the extent satisfactory in form and scope to
counsel for the Underwriters, upon the opinion of other counsel of good
standing. The foregoing opinion shall also state that the Underwriters are
justified in relying upon such opinion of such other counsel of good standing,
and copies of such opinion shall be delivered to the Representatives and counsel
for the Underwriters.
References to the Registration Statement and the Prospectus in
this paragraph (b) shall include any amendment or supplement thereto at the date
of such opinion.
23
(c) The Representatives shall have received an opinion, dated
the Firm Closing Date, of Cleary, Gottlieb, Xxxxx & Xxxxxxxx, counsel for the
Underwriters, with respect to the issuance and sale of the Firm Securities, the
Registration Statement and the Prospectus, and such other related matters as the
Representatives may reasonably require, and the Company shall have furnished to
such counsel such documents as they may reasonably request for the purpose of
enabling them to pass upon such matters.
(d) The Representatives shall have received from Price
Waterhouse LLP a letter or letters dated, respectively, the date hereof and the
Firm Closing Date, in form and substance satisfactory to the Representatives, to
the effect that:
24
(i) they are independent accountants with respect to the
Company and its consolidated subsidiaries within the meaning of the Act
and the applicable rules and regulations thereunder;
(ii) in their opinion, the audited consolidated financial
statements and schedules examined by them and included in the
Registration Statement and the Prospectus comply in form in all
material respects with the applicable accounting requirements of the
Act and the related published rules and regulations;
(iii) on the basis of a reading of the latest available
interim unaudited consolidated condensed financial statements of the
Company and its consolidated subsidiaries carrying out certain
specified procedures (which do not constitute an examination made in
accordance with generally accepted auditing standards) that would not
necessarily reveal matters of significance with respect to the comments
set forth in this paragraph (iii), a reading of the minute books of the
shareholders, the board of directors and any committees thereof of the
Company and each of its consolidated subsidiaries, and inquiries of
certain officials of the Company and its consolidated subsidiaries who
have responsibility for financial and accounting matters of the Company
and its Subsidiaries as to transactions and events subsequent to
[ , 199_], nothing came to their attention that caused them to believe
that:
(A) the unaudited consolidated condensed financial
statements of the Company and its consolidated subsidiaries
included in the Registration Statement and the Prospectus do
not comply in form in all material respects with the
applicable accounting requirements of the Act and the related
published rules and regulations thereunder or are not in
conformity with generally accepted accounting principles
applied on a basis substantially consistent with that of the
audited consolidated financial statements included in the
Registration Statement and the Prospectus;
(B) the unaudited amounts for sales, net revenues and
total and per share amounts of net income and other items
included in the Registration Statement and the Prospectus do
not agree with the amounts set forth in any unaudited
consolidated financial statements for those same periods or
were not determined on a basis substantially consistent with
that of the corresponding amounts in the audited consolidated
financial statements included in the Registration Statement
and the Prospectus; and
(C) at a specific date not more than five business
days prior to the date of such letter, there were any changes
in the capital stock or long-term debt of the Company and its
consolidated subsidiaries or any decreases in net current
assets or stockholders' equity of the Company and its
consolidated subsidiaries, in each case compared with amounts
shown on the [insert date of the most recent consolidated
(condensed) balance sheet] consolidated condensed balance
sheet included in the Registration Statement and the
Prospectus, or for the
25
period from [insert date one day after the date inserted
above] to such specified date there were any decreases, as
compared with [insert appropriate comparative period or, if no
appropriate period exists, insert dollar amounts for each
item], in sales, net revenues, net income before income taxes
or total or per share amounts of net income of the Company and
its consolidated subsidiaries [conform the above list of items
to line items in financial statements and add other line items
as appropriate], except in all instances for changes,
decreases or increases set forth in such letter;
(iv) they have carried out certain specified
procedures, not constituting an audit, with respect to certain amounts,
percentages and financial information that are derived from the general
accounting records of the Company and its consolidated subsidiaries and
are included in the Registration Statement and the Prospectus and in
Exhibit 11 to the Registration Statement, and have compared such
amounts, percentages and financial information with such records of the
Company and its consolidated subsidiaries and with information derived
from such records and have found them to be in agreement, excluding any
questions of legal interpretation; and
(v) on the basis of a reading of the unaudited pro
forma consolidated condensed financial statements included in the
Registration Statement and the Prospectus, carrying out certain
specified procedures that would not necessarily reveal matters of
significance with respect to the comments set forth in this paragraph
(v), inquiries of certain officials of the Company and its consolidated
who have responsibility for financial and accounting matters and
proving the arithmetic accuracy of the application of the pro forma
adjustments to the historical amounts in the unaudited pro forma
consolidated condensed financial statements, nothing came to their
attention that caused them to believe that the unaudited pro forma
consolidated condensed financial statements do not comply in form in
all material respects with the applicable accounting requirements of
Rule 11-02 of Regulation S-X or that the pro forma adjustments have not
been properly applied to the historical amounts in the compilation of
such statements.
In the event that the letters referred to above set forth any
such changes, decreases or increases, it shall be a further condition to the
obligations of the Underwriters that (A) such letters shall be accompanied by a
written explanation of the Company as to the significance thereof, unless the
Representatives deem such explanation unnecessary, and (B) such changes,
decreases or increases do not, in the sole judgment of the Representatives, make
it impractical or inadvisable to proceed with the purchase and delivery of the
Securities as contemplated by the Registration Statement, as amended as of the
date hereof.
References to the Registration Statement and the Prospectus in
this paragraph (d) with respect to either letter referred to above shall include
any amendment or supplement thereto at the date of such letter.
26
(e) The Representatives shall have received a certificate,
dated the Firm Closing Date, of Xxxxxx X. Xxxxxxxxx, the President and Chief
Executive Officer of the Company and Xxxxxx X. Xxxxxxx, Vice President of
Finance and Chief Accounting Officer of the Company to the effect that:
(i) the representations and warranties of the
Company in this Agreement are true and correct as if made on and as of
the Firm Closing Date; the Registration Statement, as amended as of the
Firm Closing Date, does not include any untrue statement of a material
fact or omit to state any material fact necessary to make the
statements therein not misleading, and the Prospectus, as amended or
supplemented as of the Firm Closing Date, does 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; and the
Company has performed all covenants and agreements and satisfied all
conditions on its part to be performed or satisfied at or prior to the
Firm Closing Date;
(ii) no stop order suspending the effectiveness of
the Registration Statement or any amendment thereto has been issued,
and no proceedings for that purpose have been instituted or threatened
or, to the best of the Company's knowledge, are contemplated by the
Commission; and
(iii) subsequent to the respective dates as of which
information is given in the Registration Statement and the Prospectus,
neither the Company nor any of its subsidiaries has sustained any
material loss or interference with their respective businesses or
properties from fire, flood, hurricane, accident or other calamity,
whether or not covered by insurance, or from any labor dispute or any
legal or governmental proceeding, and there has not been any material
adverse change, or any development involving a prospective material
adverse change, in the condition (financial or otherwise), management,
business prospects, net worth or results of operations of the Company
or any of its subsidiaries, except in each case as described in or
contemplated by the Prospectus (exclusive of any amendment or
supplement thereto).
(f) The Representatives shall have received from each person
who is a director or officer of the Company or who owns more than % of the
outstanding shares of Common Stock and from each of the holders of any of the
Company's outstanding convertible securities an agreement to the effect that
such person will not, directly or indirectly, without the prior written consent
of the Prudential Securities Incorporated, on behalf of the Underwriters, offer,
sell, offer to sell, contract to sell, pledge, grant any option to purchase or
otherwise sell or dispose (or announce any offer, sale, offer of sale, contract
of sale, pledge, segrant of an option to purchase or other sale or disposition)
of any shares of Common Stock or any securities convertible into, or
exchangeable or exercisable for, shares of Common Stock for a period of 180 days
after the date of this Agreement.
27
(g) On or before the Firm Closing Date, the Representatives
and counsel for the Underwriters shall have received such further certificates,
documents or other information as they may have reasonably requested from the
Company.
(h) Prior to the commencement of the offering of the
Securities, the Securities shall have been included for trading on the Nasdaq
National Market.
All opinions, certificates, letters and documents delivered
pursuant to this Agreement will comply with the provisions hereof only if they
are reasonably satisfactory in all material respects to the Representatives and
counsel for the Underwriters. The Company shall furnish to the Representatives
such conformed copies of such opinions, certificates, letters and documents in
such quantities as the Representatives and counsel for the Underwriters shall
reasonably request.
The respective obligations of the several Underwriters to
purchase and pay for any Option Securities shall be subject, in their
discretion, to each of the foregoing conditions to purchase the Firm Securities,
except that all references to the Firm Securities and the Firm Closing Date
shall be deemed to refer to such Option Securities and the related Option
Closing Date, respectively.
8. Indemnification and Contribution. (a) The Company agrees
to indemnify and hold harmless each Underwriter and each person, if any, who
controls any Underwriter within the meaning of Section 15 of the Act or Section
20 of the Securities Exchange Act of 1934 (the "Exchange Act"), against any
losses, claims, damages or liabilities, joint or several, to which such
Underwriter or such controlling person may become subject under the Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon:
(i) any untrue statement or alleged untrue statement
made by the Company in Section 2 of this Agreement,
(ii) any untrue statement or alleged untrue
statement of any material fact contained in (A) the Registration
Statement or any amendment thereto, any Preliminary Prospectus or the
Prospectus or any amendment or supplement thereto or (B) any
application or other document, or any amendment or supplement thereto,
executed by the Company or based upon written information furnished by
or on behalf of the Company filed in any jurisdiction in order to
qualify the Securities under the securities or blue sky laws thereof or
filed with the Commission or any securities association or securities
exchange (each an "Application"),
(iii) the omission or alleged omission to state in
the Registration Statement or any amendment thereto, any Preliminary
Prospectus or the Prospectus or any amendment or supplement thereto, or
any Application a material fact required to be stated therein or
necessary to make the statements therein not misleading or
28
(iv) any untrue statement or alleged untrue
statement of any material fact contained in any audio or visual
materials used in connection with the marketing of the Securities,
including without limitation, slides, videos, films, tape recordings,
and will reimburse, as incurred, each Underwriter and each such controlling
person for any legal or other expenses reasonably incurred by such Underwriter
or such controlling person in connection with investigating, defending against
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 or
liability arises out of or is based upon any untrue statement or alleged untrue
statement or omission or alleged omission made in such registration statement or
any amendment thereto, any Preliminary Prospectus or the Prospectus or any
amendment or supplement thereto, or any Application in reliance upon and in
conformity with written information furnished to the Company by any Underwriter
through the Representatives specifically for use therein. This indemnity
agreement will be in addition to any liability which the Company may otherwise
have. The Company will not, without the prior written consent of the Underwriter
or Underwriters purchasing, in the aggregate, more than fifty percent (50%) of
the Securities, settle or compromise or consent to the entry of any judgment in
any pending or threatened claim, action, suit or proceeding in respect of which
indemnification may be sought hereunder (whether or not any such Underwriter or
any person who controls any such Underwriter within the meaning of Section 15 of
the Act or Section 20 of the Exchange Act is a party to such claim, action, suit
or proceeding), unless such settlement, compromise or consent includes an
unconditional release of all of the Underwriters and such controlling persons
from all liability arising out of such claim, action, suit or proceeding.
(b) Each Underwriter, severally and not jointly, will
indemnify and hold harmless the Company, each of its directors, each of its
officers who signed the Registration Statement and each person, if any, who
controls the Company within the meaning of Section 15 of the Act or Section 20
of the Exchange Act against any losses, claims, damages or liabilities to which
the Company or any such director, officer or controlling person may become
subject under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon
(i) any untrue statement or alleged untrue statement of any material fact
contained in the Registration Statement or any amendment thereto, any
Preliminary Prospectus or the Prospectus or any amendment or supplement thereto,
or any Application or (ii) the omission or the alleged omission to state therein
a material fact required to be stated in the Registration Statement or any
amendment thereto, any Preliminary Prospectus or the Prospectus or any amendment
or supplement thereto, or any Application or necessary to make the statements
therein not misleading, in each case to the extent, but only to the extent, that
such untrue statement or alleged untrue statement or omission or alleged
omission was made in reliance upon and in conformity with written information
furnished to the Company by such Underwriter through the Representatives
29
specifically for use therein; and, subject to the limitation set forth
immediately preceding this clause, will reimburse, as incurred, any legal or
other expenses reasonably incurred by the Company or any such director, officer
or controlling person in connection with investigating or defending any such
loss, claim, damage, liability or any action in respect thereof. This indemnity
agreement will be in addition to any liability which such Underwriter may
otherwise have.
(c) Promptly after receipt by an indemnified party under this
Section 8 of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against the indemnifying party
under this Section 8, notify the indemnifying party 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 otherwise than under
this Section 8. In case any such action is brought against any indemnified
party, and it notifies the indemnifying party of the commencement thereof, the
indemnifying party will be entitled to participate therein and, to the extent
that it may wish, jointly with any other indemnifying party similarly notified,
to assume the defense thereof, with counsel 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 shall
have reasonably concluded that there may be one or more legal defenses available
to it and/or other indemnified parties which are different from or additional to
those available to the indemnifying party, the indemnifying party shall not have
the right to direct the defense of such action on behalf of such indemnified
party or parties and such indemnified party or parties shall have the right to
select separate counsel to defend such action on behalf of such indemnified
party or parties. After notice from the indemnifying party to such indemnified
party of its election so to assume the defense thereof and approval by such
indemnified party of counsel appointed to defend such action, the indemnifying
party will not be liable to such indemnified party under this Section 8 for any
legal or other expenses, other than reasonable costs of investigation,
subsequently incurred by such indemnified party in connection with the defense
thereof, unless (i) the indemnified party shall have employed separate counsel
in accordance with the proviso to the next preceding sentence (it being
understood, however, that in connection with such action the indemnifying party
shall not be liable for the expenses of more than one separate counsel (in
addition to local counsel) in any one action or separate but substantially
similar actions in the same jurisdiction arising out of the same general
allegations or circumstances, designated by the Representatives in the case of
paragraph (a) of this Section 8, representing the indemnified parties under such
paragraph (a) who are parties to such action or actions) or (ii) the
indemnifying party does not promptly retain counsel satisfactory to the
indemnified party or (iii) the indemnifying party has authorized the employment
of counsel for the indemnified party at the expense of the indemnifying party.
After such notice from the indemnifying party to such indemnified party, the
indemnifying party will not be liable for the costs and expenses of any
settlement of such action effected by such indemnified party without the consent
of the indemnifying party.
(d) In circumstances in which the indemnity agreement provided
for in the preceding paragraphs of this Section 8 is unavailable or
insufficient, for any reason, to hold harmless an indemnified party in respect
of any losses, claims, damages or liabilities
30
(or actions in respect thereof), each indemnifying party, in order to provide
for just and equitable contribution, shall contribute to the amount paid or
payable by such indemnified party as a result of such losses, claims, damages or
liabilities (or actions in respect thereof) in such proportion as is appropriate
to reflect (i) the relative benefits received by the indemnifying party or
parties on the one hand and the indemnified party on the other from the offering
of the Securities or (ii) if the allocation provided by the foregoing clause (i)
is not permitted by applicable law, not only such relative benefits but also the
relative fault of the indemnifying party or parties on the one hand and the
indemnified party on the other in connection with the statements or omissions or
alleged statements or omissions that resulted in such losses, claims, damages or
liabilities (or actions in respect thereof), as well as any other relevant
equitable considerations. The relative benefits received by the Company on the
one hand and the Underwriters on the other shall be deemed to be in the same
proportion as the total proceeds from the offering (before deducting expenses)
received by the Company bear to the total underwriting discounts and commissions
received by the Underwriters. The relative fault of the parties 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 the
Underwriters, the parties' relative intents, knowledge, access to information
and opportunity to correct or prevent such statement or omission, and any other
equitable considerations appropriate in the circumstances. The Company and the
Underwriters agree that it would not be equitable if the amount of such
contribution were determined by pro rata or per capita allocation (even if the
Underwriters were treated as one entity for such purpose) or by any other method
of allocation that does not take into account the equitable considerations
referred to above in this paragraph (d). Notwithstanding any other provision of
this paragraph (d), no Underwriter shall be obligated to make contributions
hereunder that in the aggregate exceed the total public offering price of the
Securities purchased by such Underwriter under this Agreement, less the
aggregate amount of any damages that such Underwriter has otherwise been
required to pay in respect of the same or any substantially similar claim, and
no person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The Underwriters' obligations to
contribute hereunder are several in proportion to their respective underwriting
obligations and not joint, and contributions among Underwriters shall be
governed by the provisions of the Prudential Securities Incorporated Master
Agreement Among Underwriters. For purposes of this paragraph (d), each person,
if any, who controls an Underwriter within the meaning of Section 15 of the Act
or Section 20 of the Exchange Act shall have the same rights to contribution as
such Underwriter, and each director of the Company, each officer of the Company
who signed the Registration Statement and each person, if any, who controls the
Company within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act, shall have the same rights to contribution as the Company.
9. Default of Underwriters. If one or more Underwriters
default in their obligations to purchase Firm Securities or Option Securities
hereunder and the aggregate number of such Securities that such defaulting
Underwriter or Underwriters agreed but failed to purchase is ten percent or less
of the aggregate number of Firm Securities or Option Securities to be purchased
by all of the Underwriters at such time hereunder, the other
31
Underwriters may make arrangements satisfactory to the Representatives for the
purchase of such Securities by other persons (who may include one or more of the
non-defaulting Underwriters, including the Representatives), but if no such
arrangements are made by the Firm Closing Date or the related Option Closing
Date, as the case may be, the other Underwriters shall be obligated severally in
proportion to their respective commitments hereunder to purchase the Firm
Securities or Option Securities that such defaulting Underwriter or Underwriters
agreed but failed to purchase. If one or more Underwriters so default with
respect to an aggregate number of Securities that is more than ten percent of
the aggregate number of Firm Securities or Option Securities, as the case may
be, to be purchased by all of the Underwriters at such time hereunder, and if
arrangements satisfactory to the Representatives are not made within 36 hours
after such default for the purchase by other persons (who may include one or
more of the non-defaulting Underwriters, including the Representatives) of the
Securities with respect to which such default occurs, this Agreement will
terminate without liability on the part of any non-defaulting Underwriter or the
Company other than as provided in Section 10 hereof. In the event of any default
by one or more Underwriters as described in this Section 9, the Representatives
shall have the right to postpone the Firm Closing Date or the Option Closing
Date, as the case may be, established as provided in Section 3 hereof for not
more than seven business days in order that any necessary changes may be made in
the arrangements or documents for the purchase and delivery of the Firm
Securities or Option Securities, as the case may be. As used in this Agreement,
the term "Underwriter" includes any person substituted for an Underwriter under
this Section 9. Nothing herein shall relieve any defaulting Underwriter from
liability for its default.
10. Survival. The respective representations, warranties,
agreements, covenants, indemnities and other statements of the Company, its
officers and the several Underwriters set forth in this Agreement or made by or
on behalf of them, respectively, pursuant to this Agreement shall remain in full
force and effect, regardless of (i) any investigation made by or on behalf of
the Company, any of its officers or directors, any Underwriter or any
controlling person referred to in Section 8 hereof and (ii) delivery of and
payment for the Securities. The respective agreements, covenants, indemnities
and other statements set forth in Sections 6 and 8 hereof shall remain in full
force and effect, regardless of any termination or cancellation of this
Agreement.
11. Termination. (a) This Agreement may be terminated with
respect to the Firm Securities or any Option Securities in the sole discretion
of the Representatives by notice to the Company given prior to the Firm Closing
Date or the related Option Closing Date, respectively, in the event that the
Company shall have failed, refused or been unable to perform all obligations and
satisfy all conditions on its part to be performed or satisfied hereunder at or
prior thereto or, if at or prior to the Firm Closing Date or such Option Closing
Date, respectively,
(i) the Company or any of its subsidiaries shall
have, in the sole judgment of the Representatives, sustained any
material loss or interference with their respective businesses or
properties from fire, flood, hurricane, accident or other calamity,
whether or not covered by insurance, or from any labor dispute or any
32
legal or governmental proceeding or there shall have been any material
adverse change, or any development involving a prospective material
adverse change (including without limitation a change in management or
control of the Company), in the condition (financial or otherwise),
business prospects, net worth or results of operations of the Company
and its subsidiaries, except in each case as described in or
contemplated by the Prospectus (exclusive of any amendment or
supplement thereto);
(ii) trading in the Common Stock shall have been
suspended by the Commission or the Nasdaq National Market or trading in
securities generally on the New York Stock Exchange or Nasdaq National
Market shall have been suspended or minimum or maximum prices shall
have been established on any such exchange or market system;
(iii) a banking moratorium shall have been declared
by New York or United States authorities; or
(iv) there shall have been (A) an outbreak or
escalation of hostilities between the United States and any foreign
power, (B) an outbreak or escalation of any other insurrection or armed
conflict involving the United States or (C) any other calamity or
crisis or material adverse change in general economic, political or
financial conditions having an effect on the U.S. financial markets
that, in the sole judgment of the Representatives, makes it impractical
or inadvisable to proceed with the public offering or the delivery of
the Securities as contemplated by the Registration Statement, as
amended as of the date hereof.
(b) Termination of this Agreement pursuant to this Section 11
shall be without liability of any party to any other party except as provided in
Section 10 hereof.
12. Information Supplied by Underwriters. The statements set
forth in the last paragraph on the front cover page and under the heading
"Underwriting" in any Preliminary Prospectus or the Prospectus (to the extent
such statements relate to the Underwriters) constitute the only information
furnished by any Underwriter through the Representatives to the Company for the
purposes of Sections 2(a)(ii) and 8 hereof. The Underwriters confirm that such
statements (to such extent) are correct.
13. Notices. All communications hereunder shall be in writing
and, if sent to any of the Underwriters, shall be delivered or sent by mail,
telex or facsimile transmission and confirmed in writing to Prudential
Securities Incorporated, Xxx Xxx Xxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention: Equity Transactions Group; and if sent to the Company or the Selling
Stockholders, shall be delivered or sent by mail, telex or facsimile
transmission and confirmed in writing to the Company at 000 Xxxxxxx Xxxxx Xxxx
Xxxx, Xxxxx 000, Xxxx Xxxxxxxxxx, XX 00000, Attn: Xxxxxx X. Xxxxxxxxx.
14. Successors. This Agreement shall inure to the benefit of
and shall be binding upon the several Underwriters, the Company and their
respective successors and legal representatives, and nothing expressed or
mentioned in this Agreement is intended or shall be
33
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 (i) the indemnities of the Company contained in
Section 8 of this Agreement shall also be for the benefit of any person or
persons who control any Underwriter within the meaning of Section 15 of the Act
or Section 20 of the Exchange Act and (ii) the indemnities of the Underwriters
contained in Section 8 of this Agreement 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 who control the Company within
the meaning of Section 15 of the Act or Section 20 of the Exchange Act. No
purchaser of Securities from any Underwriter shall be deemed a successor because
of such purchase.
15. Applicable Law. The validity and interpretation of this
Agreement, and the terms and conditions set forth herein, shall be governed by
and construed in accordance with the laws of the State of New York, without
giving effect to any provisions relating to conflicts of laws.
16. Consent to Jurisdiction and Service of Process. All
judicial proceedings arising out of or relating to this Agreement may be brought
in any state or federal court of competent jurisdiction in the State of New
York, and by execution and delivery of this Agreement, such Selling Shareholder
accepts for itself and in connection with its properties, generally and
unconditionally, the nonexclusive jurisdiction of the aforesaid courts and
waives any defense of forum non conveniens and irrevocably agrees to be bound by
any judgment rendered thereby in connection with this Agreement. Each Selling
Shareholder designates and appoints ___________________, and such other persons
as may hereafter by selected by such Selling Shareholder irrevocably agreeing in
writing to so serve, as its agent to receive on its behalf service of all
process in any such proceedings in any such court, such service being hereby
acknowledged by such Selling Shareholder to be effective and binding service in
every respect. A copy of any such process so served shall be mailed by
registered mail to such Selling Stockholder at the Company's address provided in
Section 13 hereof; provided, however, that, unless otherwise provided by
applicable law, any failure to mail such copy shall not affect the validity of
service of such process. If any agent appointed by such Selling Shareholder
refuses to accept service, such Selling Shareholder hereby agrees that service
of process sufficient for personal jurisdiction in any action against such
Selling Shareholder in the State of New York may be made by registered or
certified mail, return receipt requested, to such Selling Shareholder at the
Company's address provided in Section 13 hereof, and such Selling Shareholder
hereby acknowledges that such service shall be effective and binding in every
respect. Nothing herein shall affect the right to serve process in any other
manner permitted by law or shall limit the right of any Underwriter to bring
proceedings against such Selling Shareholder in the courts of any other
jurisdiction.
17. Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
34
If the foregoing correctly sets forth our understanding,
please indicate your acceptance thereof in the space provided below for that
purpose, whereupon this letter shall constitute an agreement binding the
Company, each of the Selling Stockholders and each of the several Underwriters.
Very truly yours,
NAL FINANCIAL GROUP INC.
By:
------------------------------------
Name: Xxxxxx X. Xxxxxxxxx
Title: Chief Executive Officer
SELLING STOCKHOLDERS:
Xxxxxx X. Xxxx, DDS and
Xxxxxx Xxxxxxx, DDS Profit
Sharing Trust dated 5/1/76 APP Investments, Inc.
By: By:
------------------------------------ ------------------------------------
Name: Name:
Title: Title:
Centaur Financial Corp. Cranbourne Investments, Inc.
By: By:
------------------------------------ ------------------------------------
Name: Name:
Title: Title:
Diamond Import Group, Inc.
By: By:
------------------------------------ ------------------------------------
Name: Name: Xxxxx Xxxxxxxx
Title: Title:
By: By:
------------------------------------ ------------------------------------
Name: Xxxxxx X. Xxxxx Name: Xxxxx Xxxxxx
Title: Title:
35
The foregoing Agreement is hereby
confirmed and accepted as of the date
first above written.
PRUDENTIAL SECURITIES INCORPORATED
XXXXX XXXXXXX INC.
SANDS BROTHERS & CO., LTD.
By PRUDENTIAL SECURITIES INCORPORATED
By
-------------------------------------
Name: Xxxx-Xxxxxx Canfin
Title: Director
For itself and on behalf of the Representatives.
36
SCHEDULE 1
UNDERWRITERS
(b)
(a) Number of Firm
Number of Firm Securities to be
Securities to be Purchased from
Purchased from Selling
Underwriter Company Stockholders
----------- ------------------ ------------------
Prudential Securities Incorporated..............
Xxxxx Xxxxxxx Inc. .............................
Sands Brothers & Co., Ltd. .....................
Total: .........................................
----------- ------------
37
SCHEDULE 2
SELLING STOCKHOLDERS
Number of Firm Number of Option
Name Securties to be Sold Securities to be Sold
---- -------------------- ---------------------
Xxxxxx X. Xxxx, DDS and Xxxxxx
Xxxxxxx, DDS Profit Sharing
Trust dated 5/1/76............... 5,500
APP Investments, Inc. ............. 58,000
Centaur Financial Corp. ........... 58,000
Cranbourne Investments, Inc. ...... 20,000
Diamond Import Group, Inc.......... 5,500
Xxxxx Xxxxxxxx..................... 1,645
Xxxxxx X. Xxxxx.................... 64,000
Xxxxx Xxxxxx....................... 5,500
-------
Total: ............................ 218,145
=======
38
