EXHIBIT 1.1
LEASING SOLUTIONS, INC.
$50,000,000/1/
---
__% Convertible Subordinated
Notes due 2003
UNDERWRITING AGREEMENT
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_____________, 1996
PRUDENTIAL SECURITIES INCORPORATED
XXXXX XXXXXX INC.
As a Representatives of the several Underwriters
c/o Prudential Securities Incorporated
Xxx Xxx Xxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
Leasing Solutions, Inc., a California corporation (the "Company"),
hereby confirms its agreement with the several underwriters named in Schedule I
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. Notes. Subject to the terms and conditions herein contained, the
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Company proposes to issue and sell to the several Underwriters $62,500,000
aggregate principal amount of its __% Convertible Subordinated Notes due 2003
(the "Firm Notes") The Company also proposes to issue and sell to the several
Underwriters not more than an additional $9,375,000 aggregate principal amount
of its __% Convertible Subordinated Notes due 2003 if requested by the
Representatives as provided in Section 3 of this Agreement. Any and all notes
to be purchased by the Underwriters pursuant to such option are referred to
herein as the "Option Notes", and the Firm Notes and any Option Notes are
collectively referred to herein as the "Notes". The Notes will be convertible
into shares of Common Stock, par value $.001 per share, of the Company at a
conversion price of $_____ per share. The Notes are to be issued pursuant to an
Indenture (the "Indenture") to be entered into between the Company and
Bankers Trust, as trustee, the form of which has been filed as an exhibit
to the Registration Statement (as defined below). This is to confirm the
agreement concerning the purchase of the Notes from the Company by the
Underwriters.
2. Representations and Warranties of the Company. The Company represents
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and warrants to, and agrees with, each of the several Underwriters that:
(a) The Company meets the requirements for use of Form S-3 under the
Securities Act of 1933, as amended (the "Act"). A registration statement on
such Form (File No. 333--) with respect to the Notes, 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 (i) if such
registration statement, as it may have been amended, has been declared by the
Commission to be effective under the Act, either (A) if the Company relies on
Rule 434 under the Act, a Term Sheet (as hereinafter defined) relating to the
Notes that shall identify the Preliminary Prospectus (as hereinafter defined)
that it supplements and, if reacquired to be filed pursuant to Rules 434(c)(2)
and 424(b), an Integrated prospectus (as hereinafter defined), in either case,
containing such information as is required or permitted by Rule 434, 430A and
424(b) under the Act or (B) if the Company does not rely on Rule 434
----------------------
/1/ Plus an option to purchase from Leasing Solutions, Inc. up to $9,375,000
principal amount to cover over-allotments.
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 (i)(A) or (i)(B) of this sentence as have been provided to and
approved by the Representatives prior to the execution of this Agreement, or
(ii) 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 Notes, which registration shall be
effective upon filing with the Commission. The Indenture has been qualified
under the Trust Indenture Act of 1939 (the "Trust Indenture Act"). As used in
this Agreement, the term "Original Registration Statement" means the
registration statement initially filed relating to the Notes, as amended at the
time when it was or is declared effective, including (A) all financial schedules
and exhibits thereto, (B) all documents 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) or, if required to be filed
pursuant to Rule 434(c)(2) and 424(b), in the Integrated Prospectus; 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 incorporated by reference therein
filed under the Exchange Act; the term "Prospectus" means:
(A) if the Company relies on Rule 434 under the Act, the Term Sheet
relating to the Notes 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:
(B) 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
(C) 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 (A), (B) or (C) of this sentence, all documents
incorporated by reference therein filed under the Exchange Act; the term
"Integrated Prospectus" means a prospectus first filed with the Commission
pursuant to Rules 434(c)(2) and 424(b) under the Act; and the term "Term
Sheet" means any abbreviated 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, the Prospectus or any Integrated
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,
Integrated 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,
the Prospectus or an "amendment" to any registration statement (including
the Registration Statement) shall be deemed to include any amendment or
supplement to a report to security holders or Form 10-Q being distributed
pursuant to Item 11 of Form S-2. For purposes of the preceding sentence,
any reference to the "effective date" of an amendment to a
2.
registration statement shall be deemed to refer to the date of any such
amendment or supplement to a report to security holders or Form 10-Q being
distributed pursuant to Item 11 of Form S-2.
(b) The Commission has not issued any order preventing or suspending the
use of any Preliminary Prospectus. When any Preliminary Prospectus and any
amendment or supplement thereto was filed with the Commission, it (i) 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 (ii) 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
(i) 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 (ii) 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 Integrated Prospectus 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), each of the Prospectus, and, if required to be
filed pursuant to Rules 434(c)(2) and 424(b) under the Act, the Integrated
Prospectus as amended or supplemented at any such time, (i) 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 (ii) 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 (b) do not
apply to statements or omissions made in any Preliminary Prospectus or any
amendment or supplement thereto, the Registration Statement or any amendment
thereto, the Prospectus or, if required to be filed pursuant to Rules 434(c)(2)
and 424(b) and the Act, the Integrated 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 or as to the Statement of Eligibility of the Trustee on Form T-1 filed
with the Commission as part of the Registration Statement.
(c) If the Company has elected to rely on Rule 462(b) and the Rule 462(b)
Registration has not been declared effective (i) 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
(ii) 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.
(d) The Company has filed all forms, reports and documents required to be
filed with the Commission since March 30, 1993 (the "LSI SEC Reports"). The LSI
SEC Reports heretofore filed, when they were filed (or, if any amendment with
respect to any such document was filed, when such amendment was filed),
conformed in all material respects with the requirements of the Exchange Act and
the rules and regulations thereunder; no such document when it was filed (or, if
an amendment with respect to any such document was filed, when such amendment
was filed), contained an untrue statement of a material fact or omitted to state
a material fact required to be stated therein or necessary in order to make the
statements therein not misleading.
(e) The Company and each of its subsidiaries (as defined in Rule 405 of
the Act) (collectively, 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
3.
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.
(f) 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, each of the
Prospectus and any Integrated Prospectus or, if the Prospectus and any required
Integrated Prospectus are 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.
(g) 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 as otherwise set forth in each of the Prospectus and any
Integrated Prospectus or, if the Prospectus and any required Integrated
Prospectus are 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.
(h) The Company has an authorized, issued and outstanding capitalization
as set forth in each of the Prospectus and any Integrated Prospectus or, if the
Prospectus and any required Integrated Prospectus are 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.
(i) The capital stock of the Company conforms to the description thereof
contained in each of the Prospectus and any Integrated Prospectus or, if the
Prospectus and any required Integrated Prospectus are not in existence, the most
recent Preliminary Prospectus.
(j) Except as disclosed in each of the Prospectus and any Integrated
Prospectus (or, if the Prospectus and any required Integrated Prospectus are not
in existence, the most recent Preliminary Prospectus), there are not 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.
(k) 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 and any
Integrated Prospectus (or, if the Prospectus and any required Integrated
Prospectus not in existence, the most recent Preliminary Prospectus).
(l) The consolidated financial statements and schedules of the Company and
its consolidated Subsidiaries included or incorporated by reference in the
Registration Statement and each of the Prospectus and any Integrated Prospectus
(or, if the Prospectus and any required Integrated Prospectus are 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 each of the Prospectus and any Integrated Prospectus (or, if the
Prospectus and any required Integrated Prospectus are not in existence, the most
recent Preliminary Prospectus) and in the Company's Annual Report on Form 10-K
for the fiscal year ended December 31, 1995, fairly present, on the basis stated
in each of the Prospectus and any Integrated Prospectus (or such Preliminary
Prospectus) and such Annual Report, the information included therein.
4.
(m) Deloitte & Touche 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 of each the Prospectus and Integrated Prospectus
(or, if the Prospectus and any required Integrated Prospectus are not in
existence, the most recent Preliminary Prospectus), are independent public
accountants as required by the Act, the Exchange Act and the related published
rules and regulations thereunder.
(n) The Notes have been duly authorized and, when executed and
authenticated in accordance with the provisions of the Indenture and delivered
and paid for as provided herein, will be duly and validly issued and
outstanding, and will constitute valid and binding obligations of the Company
entitled to the benefits of the Indenture and enforceable in accordance with
their terms, subject to the effects of bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and other similar laws relating to or
affecting creditors' rights generally, general equitable principles (whether
considered in a proceeding in equity or at law) or an implied covenant of good
faith and fair dealing; and the Notes, when issued and delivered, will conform
to the description thereof contained in the Prospectus.
(o) All of the shares of Common Stock issuable upon conversion of the
Notes have been duly and validly authorized and reserved for issuance upon such
conversion and, when issued and delivered in accordance with the terms of the
Indenture, will be duly and validly issued, fully paid and non-assessable and
will not be subject to any preemptive rights or similar rights to subscribe for
or to purchase pursuant to the Company's Certificate of Incorporation or bylaws
or any agreement to which the Company or any of its subsidiaries is a party or
by which it is bound.
(p) The Indenture has been duly authorized, and when duly executed by the
proper officers of the Company (assuming due execution and delivery by the
Trustee) and delivered by the Company will constitute a valid and binding
agreement of the Company enforceable against the Company in accordance with its
terms, subject to the effects of bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws relating to or affecting
creditors' rights generally, general equitable principles (whether considered in
a proceeding in equity or at law) or an implied covenant of good faith and fair
dealing.
(q) The execution and delivery of, and the performance by the Company of
its obligations under, this Agreement have been duly and validly authorized by
the Company, and this Agreement has been duly executed and delivered by the
Company, and is the valid and legally binding agreement of the Company,
enforceable against the Company in accordance with its terms, except as rights
to indemnity and contribution hereunder may be limited by federal or state
securities laws.
(r) 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 each of the Prospectus and any required Integrated
Prospectus (or, if the Prospectus and any required Integrated Prospectus are 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, the
Prospectus or any Integrated Prospectus or to be filed as an exhibit to the
Registration Statement that is not described therein (or, if the Prospectus and
any required Integrated Prospectus are not in existence, the most recent
Preliminary Prospectus) or filed as required.
(s) Neither the Company nor any of the Subsidiaries is in violation of its
certificate or articles of incorporation or bylaws, or other organizational
documents, or of any law, ordinance, administrative or governmental rule or
regulation applicable to the Company or any of the Subsidiaries or of any decree
of any court or governmental agency or body having jurisdiction over the Company
or any of the Subsidiaries, or in default in any material respect in the
performance of any obligation, agreement or condition contained in any bond,
debenture, note or any other evidence of indebtedness or in any material
agreement, indenture, lease
5.
or other instrument to which the Company or any of the Subsidiaries is a party
or by which any of them or any of their respective properties may be bound.
(t) The issuance, offering and sale of the Notes to the Underwriters by
the Company pursuant to this Agreement and the Indenture, the issuance and
delivery of the Common Stock issuable upon conversion of the Notes, the
compliance by the Company with the other provisions of this Agreement and the
Indenture and the consummation of the other transactions herein and therein
contemplated do not (i) 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 Notes and
the Common Stock issuable upon conversion of the Notes (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
(ii) 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, or will
result in the creation or imposition of any lien, charge or encumbrance upon any
property or assets of the Company or any of the Subsidiaries pursuant to the
terms of any agreement or instrument to which any of them is a party or by which
any of them may be bound or to which any of the property or assets of any of
them is subject.
(u) Subsequent to the respective dates as of which information is given in
the Registration Statement, the Prospectus or any Integrated Prospectus or, if
the Prospectus and any required Integrated Prospectus are not in existence, the
most recent Preliminary Prospectus, neither the Company nor any of its
Subsidiaries has incurred any material liability or obligation, direct or
contingent, nor entered into any material transaction not in the ordinary course
of business, or 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 or declared or paid any dividend on its
capital stock and there has not been any material change in the capital stock,
short-term debt or long-term debt of the Company and its consolidated
Subsidiaries, or 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 each of the Prospectus and any Integrated Prospectus or, if the
Prospectus and any required Integrated Prospectus are not in existence, the most
recent Preliminary Prospectus.
(v) 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 in each of the Prospectus and any Integrated Prospectus (or, if
the Prospectus and any required Integrated Prospectus are not in existence, the
most recent Preliminary Prospectus).
(w) The Company has not, directly or indirectly, (i) 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
Notes or (ii) since the filing of the Registration Statement (A) sold, bid for,
purchased, or paid anyone any compensation for
6.
soliciting purchases of, the Notes or (B) paid or agreed to pay to any person
any compensation for soliciting another to purchase any other securities of the
Company.
(x) The Company has not distributed and, prior to the later of (i) the
Closing Date and (ii) the completion of the distribution of the Notes, will not
distribute any offering material in connection with the offering and sale of the
Notes 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.
(y) The Company and its Subsidiaries own or possess, 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, 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 each of the Prospectus
and any Integrated Prospectus (or, if the Prospectus and any required Integrated
Prospectus is not in existence, the most recent Preliminary Prospectus).
(z) The Company and its Subsidiaries possess all certificates,
authorizations 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 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 each of the Prospectus and any Integrated
Prospectus (or, if the Prospectus and any required Integrated Prospectus is not
in existence, the most recent Preliminary Prospectus).
(aa) 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) 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 each of the Prospectus and any
Integrated Prospectus (or, if the Prospectus and any required Integrated
Prospectus is not in existence, the most recent Preliminary Prospectus).
(bb) There are no holders of securities of the Company, who, by reason of
the filing of the Registration Statement, have the right (and have not waived
such right) to request the Company to register under the Act, or to include in
the Registration Statement, securities held by them.
(cc) The Company and each of its Subsidiaries maintain a system of internal
accounting controls sufficient to provide reasonable assurance that (1)
transactions are executed in accordance with management's general or specific
authorizations; (2) transactions are recorded as necessary to permit preparation
of financial statements in conformity with generally accepted accounting
principles and to maintain asset accountability; (3) access to assets is
permitted only in accordance with management's general or specific
authorization; and (4) the recorded accountability for assets is compared with
the existing assets at reasonable intervals and appropriate action is taken with
respect to any differences.
(dd) 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 any reason to believe
that it will not be able to renew its existing insurance coverage as and when
such coverage expires
7.
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 prospectus, 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).
(ee) No labor dispute with the employees of the Company or any of its
Subsidiaries exists or to the knowledge of the Company, 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).
(ff) The Company has not distributed and, prior to the later of (i) the
Firm Closing Date and (ii) the completion of the distribution of the Notes, will
not distribute any offering material in connection with the offering and sale of
the Notes 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.
(gg) The Company has complied with all provisions of Florida Statutes,
(S)517.075, relating to issuers doing business with Cuba, to the extent, if any,
that such provisions are applicable to the Company.
3. Purchase, Sale and Delivery of the Notes. (a) On the basis of the
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representations, warranties, agreements and covenants herein contained and
subject to the terms and conditions herein set forth, the Company agrees to sell
$62,500,000 aggregate principal amount of the Firm Notes to the several
Underwriters, and each of the Underwriters, severally and not jointly, agrees to
purchase from the Company, the principal amount of Firm Notes set forth opposite
the name of such Underwriter in Schedule 1 hereto. The Firm Notes that the
several Underwriters have agreed to purchase hereunder, in such denomination or
denominations and registered in such name or names as the Representatives
request upon notice to the Company at least 48 hours prior to the Firm Closing
Date, shall be delivered by or on behalf of the Company 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 account of the Company. Such delivery of and
payment for the Firm Notes shall be made at the offices of Xxxxxxx, Xxxxxxx &
Xxxxxxxx LLP, Two Embarcadero Place, 2200 Geng Road, Palo Alto, California, at
9:30 A.M., New York time, on October, 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 will make such Firm Notes 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 Notes as contemplated by the Prospectus, the
Company hereby grants to the several Underwriters an option to purchase,
severally and not jointly, up to $9,375,000 aggregate principal amount of the
Option Notes. The price of the Option Notes shall be 100% of the principal
amount thereof, plus accrued interest, if any, from ____________________. The
option granted hereby may be exercised as to all or any part of the Option Notes
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 New York Stock Exchange is open for trading). The
Underwriters shall not be under any obligation to purchase any of the Option
Notes 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
principal amount of Option Notes as to which the several Underwriters are then
exercising the option and the date and time for delivery of and payment for such
Option Notes. Any such date of delivery shall be determined by the
Representatives but shall not be earlier than two business days or later than
five 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
8.
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 Notes. 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 Option Notes as to which the several
Underwriters are then exercising the option as such Underwriter is obligated to
purchase of the aggregate principal amount of Firm Notes, as adjusted by the
Representatives in such manner as they deem advisable to avoid fractional
purchases. If the option is exercised as to all or any portion of the Option
Notes, such Option Notes, and payment therefor, shall be delivered on the
related Option Closing Date in the manner, and upon the terms and conditions,
set forth in paragraph (a) of this Section 3, except that reference therein to
the Firm Notes and the Firm Closing Date shall be deemed, for purposes of this
paragraph (b), to refer to such Option Notes 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 Notes does not constitute
closing of a purchase and sale of the Notes. Only execution and delivery of a
receipt for Notes by the Underwriters indicates completion of the closing of a
purchase of the Notes 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 Notes, the Company hereby acknowledges that until the Underwriters
execute and deliver a receipt for the Notes, 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 Notes 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 either 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 Notes 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 Notes, the several Underwriters propose to offer the Firm Notes for
sale to the public upon the terms set forth in the Prospectus.
5. Covenants of the Company. The Company covenants and agrees with each
------------------------
of the Underwriters that:
(a) 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 or, each of the Prospectus and any amendment or supplement thereto with
the Commission in the manner and within the time period required by Rule 434 and
424(b) under the Act. During any time when a prospectus relating to the Notes
is required to be delivered under the Act, the Company (i) will comply with all
requirements imposed upon it by the Act, the Exchange Act and the Trust
Indenture 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 Notes in accordance with the provisions hereof and of each of
the Prospectus and any Integrated Prospectus, as then amended or supplemented,
and (ii) will not file with the Commission the prospectus or the amendment
referred to in the third sentence of Section 2(a) hereof, any amendment or
supplement to such prospectus 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,
9.
in accordance with the rules and regulations of the 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 and
any Integrated Prospectus that may be necessary or advisable in connection with
the distribution of the Notes 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 and any Integrated Prospectus or any amendment or
supplement thereto has been filed and will provide evidence satisfactory to the
Representatives of each such filing or effectiveness.
(b) The Company will advise the Representatives, promptly after receiving
notice or obtaining knowledge thereof, of (i) 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 post-effective
amendment thereto or any order directed at any document incorporated by
reference in the Registration Statement or the Prospectus and any required
Integrated Prospectus or any amendment or supplement thereto or any order
preventing or suspending the use of any Preliminary Prospectus, the Prospectus
and any Integrated Prospectus or any amendment or supplement thereto, (ii) the
suspension of the qualification of the Notes for offering or sale in any
jurisdiction, (iii) the institution, threatening or contemplation of any
proceeding for any such purpose or (iv) any request made by the Commission for
amending the Original Registration Statement or any Rule 462(b) Registration
Statement, for amending or supplementing any Preliminary Prospectus, the
Prospectus and any Integrated 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.
(c) The Company will arrange for the qualification of the Notes and the
Common Stock issuable upon conversion of the Notes 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 Notes, 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.
(d) If, at any time prior to the later of (i) the final date when a
prospectus relating to the Notes is required to be delivered under the Act or
(ii) the Option Closing Date, any event occurs as a result of which each of the
Prospectus and any Integrated 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 to amend or supplement each of the Prospectus
and any Integrated Prospectus to comply with the Act, the Exchange Act or the
respective 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 or any Integrated Prospectus that corrects such statement or omission
or effects such compliance.
(e) The Company will, without charge, provide (i) to the Representatives
and to counsel for the Underwriters a signed copy of the registration statement
originally filed with respect to the Notes and each amendment thereto (in each
case including exhibits thereto) and such number of conformed copies of the
registration statement originally filed with respect to the Notes and each
amendment thereto (in each case without exhibits) or any Rule 462(b)
Registration Statement, certified by the Secretary or an Assistant Secretary of
the Company to be true and complete copies thereof as filed with the Commission
by electronic transmission, as the Representatives may reasonably request, (ii)
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) (iii) to the Representations, any document
incorporated by reference in the Prospectus (excluding exhibits thereto) and
(iv) so long as a prospectus relating to the Notes is required
10.
to be delivered under the Act, as many copies of each Preliminary Prospectus,
the Prospectus or any Integrated Prospectus or any amendment or supplement
thereto as the Representatives may reasonably request; without limiting the
application of clause (iii) of this sentence, the Company, not later than (A)
6:00 PM, New York City time, on the date of determination of the public offering
price, if such determination occurred at or prior to 10:00 AM, New York City
time on such date of (B) 2:00 PM, 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 AM, 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.
(f) 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.
(g) For a period of five years hereafter, to furnish to the Representative
copies of all materials furnished by the Company to its shareholders and all
public reports and all reports and financial statements furnished by the Company
to the principal national securities exchange upon which the Notes may be listed
or national quotation system on which the Notes may be quoted pursuant to
requirements of or agreements with such exchange or to the Commission pursuant
to the Exchange Act or any rule or regulation of the Commission thereunder.
(h) The Company will apply the net proceeds from the sale of the Notes as
set forth under "Use of Proceeds" in the Prospectus or any Integrated
Prospectus.
(i) 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 90 days after the date hereof, except pursuant to this Agreement and
except for shares granted, options granted or share issuances pursuant to the
exercise of employee stock options outstanding on the date hereof, pursuant to
the Company's 1986 Stock Option Plan, 1995 Stock Option and Incentive Plan
and/or 1994 Employee Stock Purchase Plan or pursuant to the terms of convertible
securities of the Company outstanding on the date hereof.
(j) The Company has furnished or will furnish to you "lock-up" letters, in
form and substance satisfactory to you, signed by each of its current officers
and directors and each of its shareholders designated by you.
(k) The Company will not, directly or indirectly, (i) 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
Notes or (ii) Notes (A) sell, bid for, purchase, or pay anyone any compensation
for soliciting purchases of, the Notes or (B) pay or agree to pay to any person
any compensation for soliciting another to purchase any other securities of the
Company.
(l) The Company will obtain the agreements described in Section 7(f)
hereof prior to the Firm Closing Date.
(m) 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
and any Integrated Prospectus), the Company will, after
11.
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.
(n) 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 (i) 10:00 P.M. Eastern time on the date of this
Agreement and (ii) the time confirmations are sent or given, as specified by
Rule 462(b)(2).
(o) The Company will use its best efforts to include the shares of Common
Stock issuable upon conversion of the Notes for quotation on the Nasdaq Stock
Market's National Market (the "Nasdaq National Market") prior to the initial
issuance of such Common Stock.
(p) To take such steps as shall be necessary to ensure that neither the
Company nor any subsidiary shall become an "investment company" within the
meaning of such term under the United States Investment Company Act of 1940 and
the rules and regulations of the Commission thereunder.
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 Notes and any amendment thereto, any Rule 462(b) Registration
Statement, any Preliminary Prospectus, the Prospectus and any Integrated
Prospectus and any amendment or supplement thereto or any document incorporated
by reference therein, 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,
accountants and any other experts or advisors retained by the Company, (iv)
preparation, issuance and delivery to the Underwriters of the Notes, including
transfer agent's and registrar's fees, (v) the qualification of the Notes 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 Notes Dealers, Inc.)
relating to the Notes, (vii) any applicable listing or other fees and (viii)
meetings with prospective investors in the Notes (other than shall have been
specifically approved by the Representatives to be paid for by the
Underwriters). If the sale of the Notes 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 to perform all obligations and satisfy all conditions on its part
to be performed or satisfied hereunder 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 fees and disbursements of
counsel) that shall have been incurred by them in connection with the proposed
purchase and sale of the Notes. 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 Notes shall be subject, in
the Representatives' sole discretion, to the accuracy of the representations and
warranties of the Company 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 made pursuant to the
provisions hereof, to the performance by the Company of its 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, Original Registration Statement or such amendment and, if the
Company has elected to rely upon Rule 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 Notes or to
12.
the Registration Statement, as the case may be, containing information regarding
the initial public offering price of the Notes 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 Integrated Prospectus and any amendment or supplement thereto shall have
been filed with the Commission in the manner and within the time period required
by Rule 434 and 424(b) under the Act; no stop order suspending the effectiveness
of the Registration Statement or any post-effective amendment thereto and no
order directed at any document incorporated by reference in the Registration
Statement or the Prospectus or any Integrated Prospectus or any amendment or
supplement 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, the Prospectus or any
Integrated Prospectus or otherwise).
(b) The Representatives shall have received an opinion, dated the Firm
Closing Date, of Xxxxx & Xxxx, P.A., counsel for the Company, to the effect
that:
(i) the Company and each of its subsidiaries listed in Exhibit 21
to the Registration Statement (the "Subsidiaries") have been duly
incorporated 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 or
any Integrated Prospectus, and the Company has corporate power to enter
into this Agreement and to carry out all the terms and provisions hereof
and thereof 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 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 under the caption "Capitalization" in each
of the Prospectus or any Integrated 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, 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; all of the shares of Common Stock
issuable upon conversion of the Notes 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; 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 Notes; and no
holders of securities of the Company are entitled to have such securities
registered under the Registration Statement;
(v) the Indenture and the Notes conform in all material respects
to the descriptions thereof continued in the Prospectus;
13.
(vi) the statements set forth under the heading "Description of
Capital Stock" in each of the Prospectus and any Integrated 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 heading "Certain Federal Income Tax
Considerations," in each of the Prospectus and any Integrated Prospectus
insofar as they describe federal statutes, rules and regulations,
constitute a fair summary thereof;
(vii) this Agreement has been duly authorized, executed and
delivered by the Company and constitutes a valid and binding agreement of
the Company enforceable against the Company in accordance with its terms,
subject to the effects of bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws relating to or affecting
creditors' rights generally, general equitable principles (whether
considered in a proceeding in equity or at law) or an implied covenant of
good faith and fair dealing;
(viii) the Indenture has been duly authorized, and when duly executed
by the proper officers of the Company (assuming due execution and delivery
by the Trustee) and delivered by the Company will constitute a valid and
binding agreement of the Company enforceable against the Company in
accordance with its terms, subject to the effects of bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and other
similar laws relating to or affecting creditors' rights generally, general
equitable principles (whether considered in a proceeding in equity or at
law) or an implied covenant of good faith and fair dealing;
(ix) neither the Company nor any of the Subsidiaries is in
violation of its respective certificate or articles of incorporation or
bylaws, or other organizational documents, or to the best knowledge of such
counsel after reasonable inquiry, is in default in the performance of any
material obligation, agreement or condition contained in any bond,
debenture, note or other evidence of indebtedness, except as may be
disclosed in the Prospectus;
(x) 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, the Prospectus and any Integrated
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 no contract or other document is required to be described
in the Registration Statement, the Prospectus and any Integrated Prospectus
or to be filed as an exhibit to the Registration Statement that is not
described therein or filed as required;
(xi) to the best knowledge of such counsel after reasonable
inquiry, neither the Company nor any of the Subsidiaries is in violation of
any law, ordinance, administrative or governmental rule or regulation
applicable to the Company or any of the Subsidiaries or of any decree of
any court or governmental agency or body having jurisdiction over the
Company or any of the Subsidiaries, a violation of which 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 each of the
Prospectus and any Integrated Prospectus (or, if the Prospectus and any
required Integrated Prospectus is not in existence, the most recent
Preliminary Prospectus);
(xii) the issuance, offering and sale of the Notes to the
Underwriters by the Company pursuant to this Agreement, the compliance by
the Company with the other provisions of this Agreement and the Indenture
and the consummation of the other transactions herein and therein
contemplated and the issuance and delivery of the Common Stock issuable
upon conversion of the Notes 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
14.
as may be required under state securities or blue sky laws and, except for
the registration of the Notes and the Common Stock issuable upon conversion
of the Notes under the Securities Act and such consents, approvals,
authorizations, registrations or qualifications as may be required under
the Exchange Act, the Securities Act or the Trust Indenture Act and
applicable state securities laws in connection with the purchase and
distribution of the Notes by the Underwriters, 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;
(xiii) the Registration Statement is effective under the Act and the
Indenture was qualified under the Trust Indenture Act as of the date and
time specified in such opinion; any required filing of the Prospectus, or
any Term Sheet that constitutes a part thereof, and any Integrated
Prospectus 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 post-
effective amendment thereto and no order directed at any document
incorporated by reference in the Registration Statement or the Prospectus
and any Integrated Prospectus or any amendment or supplement 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;
(xiv) the Registration Statement originally filed with respect to
the Notes and each amendment thereto and any Rule 462(b) Registration
Statement, the Prospectus and any Integrated Prospectus (in each case,
including the documents incorporated by reference therein but not including
the financial statements and other financial information contained therein,
as to which such counsel need express no opinion) comply as to form in all
material respects with the applicable requirements of the Act, the Exchange
Act and the respective rules and regulations of the Commission thereunder;
and the Indenture conforms in all material respects to the requirements of
the Trust Indenture Act and the applicable rules and regulations
thereunder;
(xv) 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 any effective post-effective amendment thereto (including
such information that is permitted to be omitted pursuant to Rule 430A);
(xvi) upon delivery of the Notes and the Common Stock issuable upon
conversion of the Notes pursuant to this Agreement and payment therefor as
contemplated herein the Underwriters will acquire good and marketable title
to the Notes and the Common Stock issuable upon conversion of the Notes
free and clear of any lien, claim, security interest, or other encumbrance,
restriction on transfer or other defect in title; and
(xvii) to such counsel's knowledge, there are no contracts,
agreements or understandings between the Company and any person granting
such person the right to require the Company (a) to file a registration
statement under the Securities Act with respect to any securities of the
Company owned or to be owned by such person or to require the Company to
15.
include such securities in any securities being registered pursuant to any
registration statement (other than the Registration Statement) filed by the
Company under the Securities Act, or (b) to include any securities of the
Company owned or to be owned by such person in the securities being
registered pursuant to the Registration Statement other than rights that
have been waived or satisfied.
Such counsel shall also state that they have no reason to believe that (i) 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, (ii) that
the Prospectus and any Integrated Prospectus (other than the financial
statement, including notes and supporting schedules and other financial and
statistical information derived therefrom, included or incorporated by reference
in the Registration Statement or Prospectus or the Form T-1 filed as an exhibit
tot he Registration Statement, as to which such counsel need express no
comment), 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, or (iii) any document
incorporated by reference in the Prospectus or any further amendment or
supplement to any such incorporated document made by the Company prior to such
Delivery Date, as modified or superseded by the Prospectus, contained an untrue
statement of a material fact or omitted to state a material fact necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading. With respect to such statement, such counsel
may state that their belief is based upon the procedures and matters set forth
in the opinion but is without independent check or verification.
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 California, the
United States and, solely with respect to the opinion as to the enforceability
of the Indenture set forth in paragraph (___), the laws of the State of New
York, to the extent satisfactory in form and scope to counsel for the
Underwriters, upon the opinion of counsel retained by them or the Company,
provided that (1) each such local counsel is acceptable to the Representatives,
(2) such reliance is expressly authorized by each opinion so relied upon and a
copy of each such opinion is delivered to the Representatives and is, in form
and substance satisfactory to them and their counsel, and (3) counsel shall
state in their opinion that they believe that they and the Underwriters are
justified in relying thereon.
References to the Registration Statement and the Prospectus and any
Integrated Prospectus in this paragraph (b) shall include any amendment or
supplement thereto at the date of such opinion.
(c) You shall have received on the Closing Date, an opinion of Xxxxxxx
Xxxxxxxx, special counsel to the Company, dated the Closing Date and addressed
to you, as Representatives of the several Underwriters, to the effect that:
(i) The Company and each of the Subsidiaries has full corporate
power and authority, and all necessary governmental authorizations,
approvals, orders, licenses, certificates, franchises and permits of and
from all governmental regulatory officials and bodies (except where the
failure so to have any such authorizations, approvals, orders, licenses,
certificates, franchises or permits, individually or in the aggregate,
would not have a material adverse effect on the business, properties,
operations or financial condition of the Company and the Subsidiaries taken
as a whole), to own their respective properties and to conduct their
respective businesses as now being conducted, as described in the
Prospectus;
(ii) Except as disclosed in the Prospectus, the Company owns of
record, directly or indirectly, all the outstanding shares of capital stock
of each of the Subsidiaries free and clear of any lien, adverse claim,
security interest, equity, or other encumbrance;
16.
(iii) Other than as described or contemplated in the Prospectus (or
any supplement thereto), there are no legal or governmental proceedings
pending or threatened against the Company or any of the Subsidiaries, or to
which the Company or any of the Subsidiaries, or any of their property, is
subject, which are required to be described in the Registration Statement
or Prospectus (or any amendment or supplement thereto);
(iv) There are no agreements, contracts, indentures, leases or
other instruments, that are required to be described in the Registration
Statement or the Prospectus (or any amendment or supplement thereto) or to
be filed as an exhibit to the Registration Statement that are not described
or filed as required, as the case may be;
(v) The Company and the Subsidiaries own all patents, trademarks,
trademark registrations, service marks, service xxxx registrations, trade
names, copyrights, licenses, inventions, trade secrets and rights described
in the Prospectus as being owned by them or any of them or necessary for
the conduct of their respective businesses, and Xxxxxxx Xxxxxxxx is not
aware of any claim to the contrary or any challenge by any other person to
the rights of the Company and the Subsidiaries with respect to the
foregoing;
(vi) Neither the Company nor any of the Subsidiaries is in
violation of any law, ordinance, administrative or governmental rule or
regulation applicable to the Company or any of the Subsidiaries or of any
decree of any court or governmental agency or body having jurisdiction over
the Company or any of the Subsidiaries;
(vii) Except as described in the Prospectus, there are no
outstanding options, warrants or other rights calling for the issuance of,
and such counsel does not know of any commitment, plan or arrangement to
issue, any shares of capital stock of the Company or any security
convertible into or exchangeable or exercisable for capital stock of the
Company; and
(viii) Except as described in the Prospectus, there is no holder of
any security of the Company or any other person who has the right,
contractual or otherwise, to cause the Company to sell or otherwise issue
to them, or to permit them to underwrite the sale of, the Notes of the
Common Stock issuable upon conversion of the Notes, or the right to have
any Common Stock or other securities of the Company included in the
registration statement or the right, as a result of the filing of the
registration statement, to require registration under the Act of any shares
of Common Stock or other securities of the Company.
(d) The Representatives shall have received an opinion, dated the Firm
Closing Date, of Xxxxxxx, Phleger & Xxxxxxxx LLP, counsel for the Underwriters,
with respect to the issuance and sale of the Firm Notes, the Registration
Statement, the Prospectus or any Integrated 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.
(e) The Representatives shall have received from Deloitte & Touche LLP,
independent Certified Public Accountants, 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:
(i) they are independent accountants with respect to the Company
and its consolidated subsidiaries within the meaning of the Act, the
Exchange 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, the Prospectus and any Integrated Prospectus comply in form in
all material respects with the applicable accounting
17.
requirements of the Act, the Exchange Act and the related published rules
and regulations thereunder;
(iii) on the basis of their limited review in accordance with
standards established by the American Institute of Certified Public
Accountants of any interim unaudited consolidated financial statements of
the Company and its consolidated subsidiaries as indicated in their reports
incorporated in the Registration Statement, the Prospectus and any
Integrated Prospectus, 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, 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, the Prospectus and any Integrated Prospectus do not comply
in form in all material respects with the applicable accounting
requirements of the Act, the Exchange 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, the
Prospectus and any Integrated Prospectus; and
(B) 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 [August 31, 1996] unaudited consolidated balance sheet
included in the Registration Statement, the Prospectus and any
Integrated Prospectus, or for the period from [September 1, 1996] to
such specified date there were any decreases, as compared with the
period from _______ to ________, 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 except in all instances for
changes, decreases or increases set forth in such letter; and
(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, the Prospectus and any Integrated Prospectus under
the captions __________, in Exhibit II to the Registration Statement or
under ___________ incorporated by reference in the Registration Statement,
the Prospectus and any Integrated Prospectus, 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.
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
Notes as contemplated by the Registration Statement, as amended as of the date
hereof.
18.
References to the Registration Statement, the Prospectus and any Integrated
Prospectus in this paragraph (g) with respect to either letter referred to
above shall include any amendment or supplement thereto at the date of such
letter.
(f) The Representatives shall have received a certificate, dated the Firm
Closing Date, of the principal executive officer and the principal financial or
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,
the Prospectus and any Integrated 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 post-effective amendment thereto and no order directed at
any document incorporated by reference in the Registration Statement or the
Prospectus or any amendment or supplement 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, the Prospectus and any Integrated
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 and any Integrated Prospectus.
(g) The Representatives shall have received from each person who is a
director or officer of the Company or a 5% or greater shareholder an
agreement to the effect that such person 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
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 90 days after the date of this
Agreement.
(h) 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.
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.
19.
The respective obligations of the several Underwriters to purchase and pay
for any Option Notes shall be subject, in their discretion, to each of the
foregoing conditions to purchase the Firm Notes, except that all references to
the Firm Notes and the Firm Closing Date shall be deemed to refer to such Option
Notes 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 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, the Exchange 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, the Prospectus and any Integrated
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 Notes 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, the
Prospectus and any Integrated 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
(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 Notes, 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
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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, the Prospectus or any
Integrated Prospectus or any amendment or supplement thereto, or any Application
in reliance upon and in conformity with written information furnished to the
Company by such Underwriter through the Representatives specifically for use
therein; and provided, further, that the Company will not be liable to any
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Underwriter or any person controlling such Underwriter with respect to any such
untrue statement or omission made in any Preliminary Prospectus that is
corrected in the Prospectus (or any amendment or supplement thereto) if the
person asserting any such loss, claim, damage or liability purchased Notes from
such Underwriter but was not sent or given a copy of the Prospectus (as amended
or supplemented), other than the documents incorporated by reference therein, at
or prior to the written confirmation of the sale of such Notes to such person in
any case where such delivery of the Prospectus (as amended or supplemented) is
required by the Act, unless such failure to deliver the Prospectus (as amended
or supplemented) was a result of noncompliance by the Company with Section 5(d)
and (a) of this Agreement. 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 Notes, settle or compromise
20.
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, the
Exchange 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, the Prospectus or any Integrated 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, the
Prospectus or any Integrated 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 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
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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,
21.
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 (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 Notes 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 rate 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 Notes 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 Notes or Option Notes hereunder and the aggregate
number of such Notes that such defaulting Underwriter or Underwriters agreed but
failed to purchase is ten percent or less of the aggregate number of Firm Notes
or Option Notes to be purchased by all of the Underwriters at such time
hereunder, the other Underwriters may make arrangements satisfactory to the
Representatives for the purchase of such Notes by other persons (who may include
one or more of the non-defaulting Underwriters, including the
22.
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 Notes or Option Notes 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 Notes that is
more than ten percent of the aggregate number of Firm Notes or Option Notes, 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 Notes 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 Notes or Option Notes, 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 Notes.
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 Notes or any Option Notes 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 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 and in the Notes shall have been
suspended by the Commission or the Nasdaq National Market or trading in
securities generally on the New York Stock Exchange or the Nasdaq National
Market shall have been suspended or minimum or maximum prices shall have
been established on either 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 Notes as contemplated by the
Registration Statement, as amended as of the date hereof.
(a) 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.
23.
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 or any Integrated 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(b) 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
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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, shall be delivered or sent by
mail, telex or facsimile transmission and confirmed in writing to the Company at
Leasing Solutions, Inc., 00 Xxxxxxx Xxxxxxxxx, Xxxxx 0000, Xxx Xxxx, Xxxxxxxxxx
00000-0000.
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 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 Notes 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. 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.
24.
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 and each of the
several Underwriters.
Very truly yours,
LEASING SOLUTIONS, INC.
By ____________________________
[Title]
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
PRUDENTIAL SECURITIES INCORPORATED
XXXXX XXXXXX, INC.
BY PRUDENTIAL SECURITIES INCORPORATED
By ______________________________________
Xxxx-Xxxxxx Canfin
Director
For itself and on behalf of the Representatives.
25.
SCHEDULE 1
UNDERWRITERS
Principal Amount of
Underwriter Firm Notes to be Purchased
----------- --------------------------
Prudential Securities Incorporated.................................. $__________
Xxxxx Xxxxxx Inc.................................................... $__________
Total............................................................... $62,500,000
26.
