8,125,000 Shares
COMPUCREDIT CORPORATION
Common Stock
UNDERWRITING AGREEMENT
April __, 1999
PAINEWEBBER INCORPORATED
NATIONSBANC XXXXXXXXXX SECURITIES LLC
BEAR, XXXXXXX & CO. INC.
As Representatives of the
several Underwriters
c/o PaineWebber Incorporated
1285 Avenue
of the Americas
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
CompuCredit Corporation, a Georgia corporation (the
"Company"), proposes to sell an aggregate of 5,000,000 shares (the "Firm
Shares") of the Company's Common Stock, no par value (the "Common Stock"), to
you and to the other underwriters named in Schedule I (collectively, the
"Underwriters"), for whom you are acting as representatives (the
"Representatives"). The Company has also agreed to grant to you and the other
Underwriters an option (the "Option") to purchase up to an additional 750,000
shares of Common Stock (the "Option Shares") on the terms and for the purposes
set forth in Section l(b). The Firm Shares and the Option Shares are hereinafter
collectively referred to as the "Shares."
The initial public offering price per share for the Shares and
the purchase price per share for the Shares to be paid by the several
Underwriters shall be agreed upon, by the Company and the Representatives,
acting on behalf of the several Underwriters, and such agreement shall be set
forth in a separate written instrument substantially in the form of Exhibit A
hereto (the "Price Determination Agreement"). The Price Determination Agreement
may take the form of an exchange of any standard form of written
telecommunication among the Company and the Representatives and shall specify
such applicable information as is indicated in Exhibit A hereto. The offering of
the Shares will be governed by this Agreement, as supplemented by the Price
Determination Agreement. From and after the date of the execution and delivery
of the Price Determination Agreement, this Agreement shall be deemed to
incorporate, and, unless the context otherwise indicates, all references
contained herein to "this Agreement" and to the phrase "herein" shall be deemed
to include the Price Determination Agreement.
The Company confirms as follows its agreements with the
Representatives and the several other Underwriters.
1. AGREEMENT TO SELL AND PURCHASE.
(a). On the basis of the representations, warranties
and agreements of the Company herein contained and subject to all the terms and
conditions of this Agreement, the Company agrees to sell to each Underwriter
named below, and each Underwriter, severally and not jointly, agrees to purchase
from the Company at the purchase price per share for the Firm Shares to be
agreed upon by the Representatives and the Company in accordance with Section
l(c) or l(d) hereof and set forth in the Price Determination Agreement, the
number of Firm Shares set forth opposite the name of such Underwriter in
Schedule 1, plus such additional number of Firm Shares which such Underwriter
may become obligated to purchase pursuant to Section 8 hereof.
(b). Subject to all the terms and conditions
of this Agreement, the Company grants the Option to the several Underwriters to
purchase, severally and not jointly, up to 750,000 Option Shares from the
Company at the same price per share as the Underwriters shall pay for the Firm
Shares. The Option may be exercised only to cover over-allotments in the sale of
the Firm Shares by the Underwriters and may be exercised in whole or in part at
any time (but not more than once) on or before the 30th day after the date of
this Agreement (or, if the Company has elected to rely on Rule 430A, on or
before the 30th day after the date of the Price Determination Agreement), upon
written or telegraphic notice (the "Option Shares Notice") by the
Representatives to the Company no later than 12:00 noon, New York City time, at
least two and no more than five business days before the date specified for
closing on the Option Shares Notice (the "Option Closing Date") setting forth
the aggregate number of Option Shares to be purchased and the time and date for
such purchase. On the Option Closing Date, the Company will issue and sell to
the Underwriters the number of Option Shares set forth in the Option Shares
Notice, and each Underwriter will purchase such percentage of the Option Shares
as is equal to the percentage of Firm Shares that such Underwriter is
purchasing, as adjusted by the Representatives in such manner as they deem
advisable to avoid fractional shares.
(c). The initial public offering price per share for
the Firm Shares and the purchase price per share for the Firm Shares to be paid
by the several Underwriters shall be agreed upon and set forth in the Price
Determination Agreement, if the Company has elected to rely on Rule 430A. In the
event such price has not been agreed upon and the Price Determination Agreement
has not been executed by the close of business on the fourteenth business day
following the date on which the Registration Statement (as hereinafter defined)
becomes effective, this Agreement shall terminate forthwith, without liability
of any party to any other party except that Section 6 shall remain in effect.
(d). If the Company has elected not to rely on Rule
430A, the initial public offering price per share for the Firm Shares and the
purchase price per share for the Firm Shares to be paid by the several
Underwriters shall be agreed upon and set forth in the Price Determination
Agreement, which shall be dated the date hereof, and an amendment to the
Registration Statement containing such per share price information shall be
filed before the Registration Statement becomes effective.
2. DELIVERY AND PAYMENT. Delivery of the Firm Shares shall be
made to the Representatives for the accounts of the Underwriters at the office
of Xxxxxx, Xxxxxxxxxx & Xxxxxxxxx LLP, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000, against payment of the purchase price by wire transfer of Federal Funds
or similar same day funds to an account designated in writing by the Company to
PaineWebber Incorporated at least one business day prior to the Closing Date (as
hereinafter defined). Such payment shall be made at 10:00 a.m., New York City
time, on the third business day (or fourth business day, if the Price
Determination Agreement is executed after 4:30 p.m.) after the date on which the
first bona fide offering of the Shares to the public is made by the Underwriters
or at such time on such other date, not later than ten business days after such
date, as may be agreed upon by the Company and the Representatives (such date is
hereinafter referred to as the "Closing Date").
To the extent the Option is exercised, delivery of
the Option Shares against payment by the Underwriters (in the manner specified
above) will take place at the offices specified above for the Closing Date at
the time and date (which may be the Closing Date) specified in the Option Shares
Notice.
Certificates evidencing the Shares shall be in
definitive form and shall be registered in such names and in such denominations
as the Representatives shall request at least two business days prior to the
Closing Date or the Option Closing Date, as the case may be, by written notice
to the Company. For the purpose of expediting the checking and packaging of
certificates for the Shares, the Company agrees to make such certificates
available for inspection at least 24 hours prior to the Closing Date or the
Option Closing Date, as the case may be.
The cost of original issue tax stamps, if any, in
connection with the issuance and delivery of the Firm Shares and Option Shares
by the Company to the respective Underwriters shall be borne by the Company. The
Company will pay and save each Underwriter and any subsequent holder of the
Shares harmless from any and all liabilities with respect to or resulting from
any failure or delay in paying Federal and state stamp and other transfer taxes,
if any, which may be payable or determined to be payable in connection with the
original issuance or sale to such Underwriter of the Firm Shares and Option
Shares.
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The
Company represents, warrants and covenants to each Underwriter that:
(a). A registration statement (Registration No.
333-69879) on Form S-1 relating to the Shares, including a preliminary
prospectus and such amendments to such registration statement as may have been
required to the date of this Agreement, has been prepared by the Company under
the provisions of the Securities Act of 1933, as amended (the "Act"), and the
rules and regulations (collectively referred to as the "Rules and Regulations")
of the Securities and Exchange Commission (the "Commission") thereunder, and has
been filed with the Commission. The term "preliminary prospectus" as used herein
means a preliminary prospectus as contemplated by Rule 430 or Rule 430A ("Rule
430A") of the Rules and Regulations included at any time as part of the
registration statement. Copies of such registration statement and amendments and
of each related preliminary prospectus have been delivered to the
Representatives. The term "Registration Statement" means the registration
statement as amended
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at the time it becomes or became effective (the "Effective Date"), including
financial statements and all exhibits and any information deemed to be included
by Rule 430A or Rule 434 of the Rules and Regulations. The term "Prospectus"
means the prospectus as first filed with the Commission pursuant to Rule 424(b)
of the Rules and Regulations or, if no such filing is required, the form of
final prospectus included in the Registration Statement at the Effective Date.
(b). The Commission has not issued any order preventing
or suspending the use of any preliminary prospectus. On the Effective Date, the
date the Prospectus is first filed with the Commission pursuant to Rule 424(b)
(if required), at all times subsequent to and including the Closing Date and, if
later, the Option Closing Date and when any post-effective amendment to the
Registration Statement becomes effective or any amendment or supplement to the
Prospectus is filed with the Commission, the Registration Statement and the
Prospectus (as amended or as supplemented if the Company shall have filed with
the Commission any amendment or supplement thereto), including the financial
statements included in the Prospectus, did or will comply with all applicable
provisions of the Act and the Rules and Regulations and will contain all
statements required to be stated therein in accordance with the Act and the
Rules and Regulations. On the Effective Date and when any post-effective
amendment to the Registration Statement becomes effective, no part of the
Registration Statement as amended through such date or any such amendment did or
will contain any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary in order to make the statements
therein not misleading. At the Effective Date, the date the Prospectus or any
amendment or supplement to the Prospectus is filed with the Commission and at
the Closing Date and, if later, the Option Closing Date, the Prospectus, as
amended or supplemented through such date, did not or will not contain any
untrue statement of a material fact or omit to state a material fact necessary
to make the statements therein, in the light of the circumstances under which
they were made, not misleading. The foregoing representations and warranties in
this Section 3(b) do not apply to any statements or omissions made in reliance
on and in conformity with information relating to any Underwriter furnished in
writing to the Company by the Representatives specifically for inclusion in the
Registration Statement or Prospectus or any amendment or supplement thereto. For
all purposes of this Agreement, the statements set forth in the Prospectus (i)
on the cover page with respect to price, underwriting discounts and commissions
and (ii) under the heading "Underwriting" in any Preliminary Prospectus or the
Prospectus (to the extent such statements relate to the Underwriters) constitute
the only information furnished by or on behalf of the Underwriters to the
Company for use in connection with the preparation of the Registration Statement
and the Prospectus. The Company has not distributed any offering material in
connection with the offering or sale of the Shares other than the Registration
Statement, the preliminary prospectus, the Prospectus or any other materials, if
any, permitted by the Act.
(c). The only subsidiaries (as defined in the Rules and
Regulations) of the Company are the subsidiaries listed on Exhibit 21 to the
Registration Statement (the "Subsidiaries"). The Company and each of its
Subsidiaries is, and at the Closing Date will be, a corporation duly organized,
validly existing and in good standing under the laws of its jurisdiction of
incorporation. The Company and each of its Subsidiaries has, and at the Closing
Date will have, full power and authority to conduct all the activities conducted
by it, to own or
lease all the assets owned or leased by it and to conduct its business as
described in the Registration Statement and the Prospectus. The Company and each
of its Subsidiaries is, and at the Closing Date will be, duly licensed or
qualified to do business and in good standing as a foreign corporation in all
jurisdictions in which the nature of the activities conducted by it or the
character of the assets owned or leased by it makes such licensing or
qualification necessary, except where the failure to be so licensed or qualified
would not have a material adverse effect on the financial condition or results
of operations of the Company and its Subsidiaries taken as a whole. All of the
outstanding shares of capital stock of the Subsidiaries have been duly
authorized and validly issued and are fully paid and non-assessable and are
owned by the Company free and clear of all liens, encumbrances and claims
whatsoever. Except for the stock of the Subsidiaries and as disclosed in the
Registration Statement, the Company does not own, and at the Closing Date will
not own, directly or indirectly, any shares of stock or any other equity or
long-term debt securities of any corporation or have any equity interest in any
firm, partnership, joint venture, association or other entity. Complete and
correct copies of the certificate of incorporation and of the by-laws of the
Company and each of its Subsidiaries and all amendments thereto have been
delivered to the Representatives, and no changes therein will be made subsequent
to the date hereof and prior to the Closing Date or, if later, the Option
Closing Date.
(d). The Company has, and at the Closing Date will
have, an authorized, issued and outstanding capitalization as set forth in the
Registration Statement and the Prospectus. The outstanding shares of Common
Stock have been, and the Shares to be issued and sold by the Company upon such
issuance will be, duly authorized, validly issued, fully paid and nonassessable
and will not be subject to any preemptive or similar right. The description of
the Common Stock in the Registration Statement and the Prospectus at the Closing
Date will be complete and accurate in all respects. Except as set forth in the
Prospectus, the Company does not have outstanding, and at the Closing Date will
not have outstanding, any options to purchase, or any rights or warrants to
subscribe for, or any securities or obligations convertible into, or any
contracts or commitments to issue or sell, any shares of Common Stock, any
shares of capital stock of any Subsidiary or any such warrants, convertible
securities or obligations.
(e). The financial statements and schedules included in
the Registration Statement and the Prospectus present fairly the consolidated
financial condition of the Company as of the respective dates thereof and the
consolidated results of operations and cash flows of the Company for the
respective periods covered thereby, all in conformity with generally accepted
accounting principles applied on a consistent basis throughout the entire period
involved, except as otherwise disclosed in the Prospectus. No other financial
statements or schedules of the Company are required by the Act or the Rules and
Regulations to be included in the Registration Statement or the Prospectus.
Ernst & Young LLP (the "Accountants") who have reported on the Company's audited
financial statements and schedules, are independent accountants with respect to
the Company as required by the Act and the Rules and Regulations. The statements
included in the Registration Statement with respect to the Accountants pursuant
to Rule 509 of Regulation S-K of the Rules and Regulations are true and correct
in all material respects.
(f). The Company maintains a system of internal
accounting controls sufficient to provide reasonable assurance that (i)
transactions are executed in accordance with
5
management's general or specific authorization; (ii) transactions are recorded
as necessary to permit preparation of financial statements in conformity with
generally accepted accounting principles and to maintain accountability for
assets; (iii) access to assets is permitted only in accordance with management's
general or specific authorization; and (iv) the recorded accountability for
assets is compared with existing assets at reasonable intervals and appropriate
action is taken with respect to any differences.
(g). Subsequent to the respective dates as of which
information is given in the Registration Statement and the Prospectus and prior
to the Closing Date, except as set forth in or contemplated by the Registration
Statement and the Prospectus, (i) there has not been and will not have been any
material change in the capitalization of the Company, or in the business,
properties, business prospects, condition (financial or otherwise) or results
of operations of the Company and its Subsidiaries, arising for any reason
whatsoever, (ii) neither the Company nor any of its Subsidiaries has incurred
nor will it incur any material liabilities or obligations, direct or
contingent, nor has it entered into nor will it enter into any material
transactions other than pursuant to this Agreement and the transactions
referred to herein and (iii) the Company has not and will not have paid or
declared any dividends or other distributions of any kind on any class of its
capital stock.
(h). The Company is not an "investment company" or an
"affiliated person" of, or "promoter" or "principal underwriter" for, an
"investment company," as such terms are defined in the Investment Company Act of
1940, as amended.
(i). Except as set forth in the Registration Statement
and the Prospectus, there are no actions, suits or proceedings pending or to the
Company's knowledge, threatened against or affecting the Company or any of its
Subsidiaries or any of their respective officers in their capacity as such,
before or by any Federal, state or local court, commission, regulatory body,
administrative agency or other governmental body, domestic or foreign, wherein
an unfavorable ruling, decision or finding which, in any such case, might
reasonably be expected to materially and adversely affect the Company and any of
its Subsidiaries or its business, properties, business prospects, condition
(financial or otherwise) or results of operations.
(j). The Company and each of its Subsidiaries has, and
at the Closing Date will have, (i) all governmental licenses, permits, consents,
orders, approvals and other authorizations necessary to carry on its business as
contemplated in the Prospectus, and all such licenses, permits and other
governmental authorizations are and will be in full force and effect, in each
case except where the failure to have any such license, permit, consent,
order, approval or other authorization or the failure of any such license,
permit or other governmental authorization to be in full force and effect
would not have a material adverse effect on the Company and its subsidiaries,
taken as a whole, and each of the Company and the Subsidiaries is in all
material respects complying therewith; and, except as disclosed in the
Registration Statement and Prospectus, neither the Company nor any of its
Subsidiaries has received notice of any proceeding or action relating to the
revocation or modification of any such license, permit or other governmental
authorization, (ii) complied in all material respects with all laws,
regulations and orders applicable to it or its business and (iii) performed
all its obligations required to be performed by it, and is not, and at the
Closing Date will not be, in default, under any material provision of any
indenture, mortgage, deed of trust, voting trust agreement, loan agreement,
bond, debenture, note agreement, lease, contract or other agreement or
instrument (collectively, a "contract or other agreement") to which it is a
party or
by which its property is bound or affected. To the best knowledge of the Company
and each of its Subsidiaries, no other party under any contract or other
agreement to which it is a party is in default in any material respect
thereunder. Neither the Company nor any of its Subsidiaries is, nor at the
Closing Date will any of them be, in violation of any provision of its
certificate of incorporation or by-laws.
(k). No consent of any person and no license, approval,
authorization, exemption by notice or report to or order of, or any filing or
declaration with, any court or governmental agency or body is required in
connection with the authorization, issuance, transfer, sale or delivery of the
Shares by the Company, in connection with the execution, delivery and
performance of this Agreement by the Company or in connection with the taking by
the Company of any action contemplated hereby, except such as have been obtained
under the Act or the Rules and Regulations and such as may be required under
state securities or Blue Sky laws or the by-laws and rules of the National
Association of Securities Dealers, Inc. (the "NASD") in connection with the
purchase and distribution by the Underwriters of the Shares.
(l). Columbus Bank and Trust Company is a bank duly
organized, validly existing and in good standing under the laws of the State of
Georgia and is a licensed principal member of VISA, U.S.A. Inc.
(m). All terms of the Aspire Visa accounts and
cardholder agreements, and all solicitation materials and other documents,
materials and agreements supplied or communicated by or on behalf of the Company
in any form to cardholders or persons solicited by or on behalf of the Company
to become cardholders comply and will comply in all material respects with all
applicable laws and regulations and all applicable rules and regulations of
VISA, U.S.A. Inc.
(n). The Company has full corporate power and authority
to enter into this Agreement. This Agreement has been duly authorized, executed
and delivered by the Company and constitutes a valid and binding agreement of
the Company and is enforceable against the Company in accordance with the terms
hereof. The performance of this Agreement and the consummation of the
transactions contemplated hereby and the application of the net proceeds from
the offering and sale of the Shares in the manner set forth in the Prospectus
under "Use of Proceeds" will not result in the creation or imposition of any
lien, charge or encumbrance upon any of the assets of the Company or any of its
Subsidiaries pursuant to the terms or provisions of, or result in a breach or
violation of any of the terms or provisions of, or constitute either by itself
or upon notice or the passage of time or both, a default under, or give any
other party a right to terminate any of its obligations under, or result in the
acceleration of any obligation under, the certificate of incorporation or
by-laws of the Company or any of its Subsidiaries, any contract or other
agreement 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 its properties is bound or
affected, or violate or conflict with any judgment, ruling, decree, order,
statute, rule or regulation of any court or other governmental agency or body
applicable to the business or properties of the Company or any of its
Subsidiaries, except for such breaches, violations or defaults which would not
materially and adversely affect the Company and its Subsidiaries, taken as a
whole.
7
(o). The Company and each of its Subsidiaries has good
and marketable title to all properties and assets described in the Prospectus as
owned by it, free and clear of all liens, charges, encumbrances or restrictions,
except such as are described in the Prospectus or are not material to the
business of the Company or its Subsidiaries. The Company and each of its
Subsidiaries has valid, subsisting and enforceable leases for the properties
described in the Prospectus as leased by it, with such exceptions as are not
material and do not materially interfere with the use made and proposed to be
made of such properties by the Company and such Subsidiaries.
(p). There is no document or contract of a character
required to be described in the Registration Statement or the Prospectus or to
be filed as an exhibit to the Registration Statement which is not described or
filed as required. All such contracts to which the Company or any Subsidiary is
a party have been duly authorized, executed and delivered by the Company or such
Subsidiary, constitute valid and binding agreements of the Company or such
Subsidiary and are enforceable against the Company or such Subsidiary in
accordance with the terms thereof.
(q). No statement, representation, warranty or covenant
made by the Company in this Agreement or made in any certificate or document
required by this Agreement to be delivered to the Representatives was or will
be, when made, inaccurate, untrue or incorrect.
(r). Neither the Company nor any of its directors,
officers or controlling persons has taken, directly or indirectly, any action
intended, or which might reasonably be expected, to cause or result, under the
Act or otherwise, in, or which has constituted, stabilization or manipulation of
the price of any security of the Company to facilitate the sale or resale of the
Shares.
(s). Other than as disclosed in the Prospectus, no
holder of securities of the Company has rights to the registration of any
securities of the Company because of the filing of the Registration Statement.
(t). Prior to the Closing Date, the Shares will be duly
authorized for listing on the Nasdaq National Market upon official notice of
issuance.
(u). The Company and its Subsidiaries are in compliance
with all federal, state and local employment and labor laws, including, but not
limited to, laws relating to nondiscrimination in hiring, promotion and pay of
employees, except for such non-compliance that would not materially and
adversely affect the Company and its Subsidiaries; no labor dispute with the
employees of the Company or any Subsidiary exists or, to the knowledge of the
Company, is imminent or threatened; and the Company is not aware of any
existing, imminent or threatened labor disturbance by the employees of any of
its principal suppliers, service providers or contractors that could result in a
material adverse effect on the condition (financial or otherwise) or on the
earnings, business, properties, business prospects or operations of the Company
and its Subsidiaries, taken as a whole.
(v). Except as set forth in the Prospectus, the Company
and its Subsidiaries own, or are licensed or otherwise have the full exclusive
right to use, the material patents, patent rights, licenses, inventions,
copyrights, know-how (including trade secrets and other unpatented and/or
unpatentable proprietary or confidential information, systems or procedures),
trademarks, services marks and trade names (collectively, "patent and
proprietary rights") presently employed by them or which are necessary in
connection with the conduct of the business now operated by them, and neither
the Company nor any of its Subsidiaries has received any written notice or
otherwise has actual knowledge of any infringement of or conflict with asserted
rights of others or any other claims with respect to any patent or proprietary
rights, or of any basis for rendering any patent and proprietary rights invalid
or inadequate to protect the interest of the Company or any of its Subsidiaries.
(w). Neither the Company nor any of its Subsidiaries
nor, to the Company's knowledge, any employee or agent of the Company or any
Subsidiary has made any payment of funds of the Company or any Subsidiary or
received or retained any funds in violation of any law, rule or regulation,
which payment, receipt or retention of funds is of a character required to be
disclosed in the Prospectus.
(x). The Company has complied, and until the completion
of the distribution of the Shares will comply, with all of the provisions of
(including, without limitation, filing all forms required by) Section 517.075 of
the Florida Securities and Investor Protection Act and Regulation 3E-900.001
issued thereunder with respect to the offering and sale of the Shares.
(y). The Company maintains insurance with respect to
its properties and business of the types and in amounts generally deemed
adequate for its business and consistent with insurance coverage maintained by
similar companies and businesses, all of which insurance is in full force and
effect.
(z). The Company has filed all material federal, state
and foreign income and franchise tax returns and has paid all taxes shown as due
thereon, other than taxes which are being contested in good faith and for which
adequate reserves have been established in accordance with generally accepted
accounting principles ("GAAP"); and the Company has no knowledge of any tax
deficiency which has been or might be asserted or threatened against the
Company. There are no tax returns of the Company or any of its Subsidiaries that
are currently being audited by state, local or federal taxing authorities or
agencies (and with respect to which the Company or any Subsidiary has received
notice), where the findings of such audit, if adversely determined, would result
in a material adverse effect on the condition (financial or otherwise) or on the
earnings, business, properties, business prospects or operations of the Company
and its Subsidiaries, taken as a whole.
(aa). With respect to each employee benefit plan,
program and arrangement (including, without limitation, any "employee benefit
plan" as defined in Section 3(3) of the Employee Retirement Income Security Act
of 1974, as amended ("ERISA")) maintained or contributed to by the Company, or
with respect to which the Company could incur any liability under ERISA
(collectively, the "Benefit Plans"), no event has occurred and, to the
9
best knowledge of the Company, there exists no condition or set of
circumstances, in connection with which the Company could be subject to any
liability under the terms of such Benefit Plan, applicable law (including,
without limitation, ERISA and the Internal Revenue Code of 1986, as amended) or
any applicable agreement that could materially adversely affect the business,
properties, business prospects, condition (financial or otherwise) or results of
operations of the Company and its Subsidiaries, taken as a whole.
(bb). YEAR 2000 COMPLIANCE. The Company has (i)
initiated a review and assessment of all areas within its and each of its
Subsidiaries; business and operations (including those affected by suppliers,
vendors and customers) that could be materially adversely affected by the risk
that any computer hardware, software, imbedded systems or applications used by
the Company or any of its Subsidiaries (or suppliers, vendors and customers) may
be unable to recognize and perform properly date-sensitive functions involving
certain dates prior to and any date after December 31, 1999 (the "Year 2000
Problem"), (ii) developed a plan and timeline for addressing the Year 2000
problem on a timely basis (the "Year 2000 Plan"), and (iii) to date, implemented
the Year 2000 Plan in accordance with that timetable. Based on the foregoing,
the Company believes that all computer hardware, software imbedded systems or
applications (including those of suppliers, vendors and customer) that are
material to its or any of its Subsidiaries' business and operations are
reasonably expected on a timely basis to be able to perform properly
date-sensitive functions for all dates before and after January 1, 2000, except
to the extent that a failure to do so would not have a material adverse effect
on the condition (financial or otherwise) or on the earnings, business,
properties, business prospects or operations of the Company and its
Subsidiaries, taken as a whole.
4. AGREEMENTS OF THE COMPANY. The Company agrees with the
several Underwriters as follows:
(a). The Company will not, either prior to the
Effective Date or thereafter during such period as the Prospectus is required by
law to be delivered in connection with sales of the Shares by an Underwriter or
dealer, file any amendment or supplement to the Registration Statement or the
Prospectus, unless a copy thereof shall first have been submitted to the
Representatives within a reasonable period of time prior to the filing thereof
and the Representatives shall not have objected thereto in good faith.
(b). The Company will use its best efforts to cause the
Registration Statement to become effective, and will notify the Representatives
promptly, and will confirm such advice in writing, (1) when the Registration
Statement has become effective and when any post-effective amendment thereto
becomes effective, (2) of any request by the Commission for amendments or
supplements to the Registration Statement or the Prospectus or for additional
information, (3) of the issuance by the Commission of any stop order suspending
the effectiveness of the Registration Statement or the initiation of any
proceedings for that purpose or the threat thereof, (4) of the happening of any
event during the period mentioned in the second sentence of Section 4(e) that in
the judgment of the Company makes any statement made in the Registration
Statement or the Prospectus untrue or that requires the making of any changes in
the Registration Statement or the Prospectus in order to make the statements
therein, in light of the circumstances in which they are made, not misleading
and (5) of receipt by the Company or any
representative or attorney of the Company of any other communication from the
Commission relating to the Registration Statement, any preliminary prospectus or
the Prospectus. If at any time the Commission shall issue any order suspending
the effectiveness of the Registration Statement, the Company will make every
reasonable effort to obtain the withdrawal of such order at the earliest
possible moment. The Company will use its best efforts to comply with the
provisions of and make all requisite filings with the Commission pursuant to
Rule 430A and to notify the Representatives promptly of all such filings.
(c). The Company will furnish to the Representatives,
without charge, two signed copies of the Registration Statement and of any
post-effective amendment thereto, including financial statements and schedules,
and all exhibits thereto and will furnish to the Representatives, without
charge, for transmittal to each of the other Underwriters, a copy of the
Registration Statement and any post-effective amendment thereto, including
financial statements and schedules but without exhibits.
(d). The Company will comply with all the provisions of
any undertakings contained in the Registration Statement.
(e). On the Effective Date, and thereafter from time to
time, the Company will deliver to each of the Underwriters, without charge, as
many copies of the Prospectus or any amendment or supplement thereto as the
Representatives may reasonably request. The Company consents to the use of the
Prospectus, as amended or supplemented by any amendment or supplement thereto,
by the several Underwriters and by all dealers to whom the Shares may be sold,
both in connection with the offering or sale of the Shares and for any period of
time thereafter during which the Prospectus is required by law to be delivered
in connection therewith. If during such period of time any event shall occur
which in the judgment of the Company or counsel to the Underwriters should be
set forth in the Prospectus in order to make any statement therein, in the light
of the circumstances under which it was made, not misleading, or if it is
necessary to supplement or amend the Prospectus to comply with law, the Company
will forthwith prepare and duly file with the Commission an appropriate
supplement or amendment thereto, and will deliver to each of the Underwriters,
without charge, such number of copies thereof as the Representatives may
reasonably request.
(f). Prior to any public offering of the Shares by the
Underwriters, the Company will cooperate with the Representatives and counsel to
the Underwriters in connection with the registration or qualification of the
Shares for offer and sale under the securities or Blue Sky laws of such
jurisdictions as the Representatives may request; provided, that in no event
shall the Company be obligated to qualify to do business in any jurisdiction
where it is not now so qualified or to take any action which would subject it to
general service of process in any jurisdiction where it is not now so subject.
(g). During the period of five years commencing on the
Effective Date, the Company will furnish to the Representatives and each other
Underwriter who may so request copies of such financial statements and other
periodic and special reports as the Company may from time to time distribute
generally to the holders of its Common Stock, and will furnish to the
11
Representatives and each other Underwriter who may so request a copy of each
annual or other report it shall be required to file with the Commission.
(h). The Company will make generally available to
holders of its securities as soon as may be practicable but in no event later
than the last day of the fifteenth full calendar month following the calendar
quarter in which the Effective Date falls, an earnings statement (which need not
be audited but shall be in reasonable detail) for a period of 12 months
commencing after the Effective Date, and satisfying the provisions of Section
11(a) of the Act (including Rule 158 of the Rules and Regulations).
(i). Whether or not the transactions contemplated by
this Agreement are consummated or this Agreement is terminated, the Company will
pay, or reimburse if paid by the Representatives, all costs and expenses
incident to the performance of the obligations of the Company under this
Agreement, including but not limited to costs and expenses of or relating to (1)
the preparation, printing and filing of the Registration Statement and exhibits
to it, each preliminary prospectus, the Prospectus and any, amendment or
supplement to the Registration Statement or the Prospectus, (2) the preparation
and delivery of certificates representing the Shares, (3) the word processing,
printing and reproduction of this Agreement, the Agreement Among Underwriters,
any Dealer Agreements and any Underwriters' Questionnaire, (4) furnishing
(including costs of shipping, mailing and courier) such copies of the
Registration Statement, the Prospectus and any preliminary prospectus, and all
amendments and supplements thereto, as may be reasonably requested for use in
connection with the offering and sale of the Shares by the Underwriters or by
dealers to whom Shares may be sold, (5) the listing of the Shares on the Nasdaq
National Market, (6) any filings required to be made by the Underwriters with
the NASD, and the fees, disbursements and other charges of counsel for the
Underwriters in connection therewith), (7) the registration or qualification of
the Shares for offer and sale under the securities or Blue Sky laws of such
jurisdictions designated pursuant to Section 4(f), including the fees,
disbursements and other charges of counsel to the Underwriters in connection
therewith), and the preparation and printing of preliminary, supplemental and
final Blue Sky memoranda, (8) counsel to the Company, (9) the transfer agent for
the Shares and (10) the Accountants.
(j). If this Agreement shall be terminated by the
Company pursuant to any of the provisions hereof (otherwise than pursuant to
Section 8) or if for any reason the Company shall be unable to perform its
obligations hereunder, the Company will reimburse the several Underwriters for
all out-of-pocket expenses (including the fees, disbursements and other charges
of counsel to the Underwriters) reasonably incurred by them in connection
herewith.
(k). The Company will not at any time, directly or
indirectly, take any action intended, or which might reasonably be expected, to
cause or result in, or which will constitute, stabilization of the price of the
shares of Common Stock to facilitate the sale or resale of any of the Shares.
(l). The Company will apply the net proceeds from the
offering and sale of the Shares to be sold by the Company in the manner set
forth in the Prospectus under "Use of Proceeds" and shall file such reports with
the Commission with respect to the sale of the
Shares and the application of the proceeds therefrom as may be required in
accordance with Rule 463 under the Act.
(m). The Company will not, and will cause each of its
executive officers, directors and request each beneficial owner of more than 5%
of the outstanding shares of Common Stock to enter into agreements with the
Representatives in the form set forth in Exhibit B to the effect that they will
not, for a period of 365 days from the date of the Prospectus, without the prior
written consent of PaineWebber Incorporated, sell, contract to sell or otherwise
dispose of any shares of Common Stock or rights to acquire such shares (other
than pursuant to employee stock option plans or agreements or the exercise of
options granted thereunder or in connection with other employee incentive
compensation arrangements or in connection with the sale of all of the
outstanding capital stock of the Company to, or merger of the Company with, an
unaffiliated third party).
(n). YEAR 2000 COMPLIANCE. The Company will continue to
follow the Year 2000 Plan in accordance with the timeline set for such plan as
of the date hereof.
5. CONDITIONS OF THE OBLIGATIONS OF THE UNDERWRITERS. In
addition to the execution and delivery of the Price Determination Agreement, the
obligations of each Underwriter hereunder are subject to the following
conditions:
(a). Notification that the Registration Statement has
become effective shall be received by the Representatives not later than 5:00
p.m., New York City time, on the date of this Agreement or at such later date
and time as shall be consented to in writing by the Representatives and all
filings required by Rule 424 of the Rules and Regulations and Rule 430A shall
have been made.
(b). (i) No stop order suspending the effectiveness of
the Registration Statement shall have been issued and no proceedings for that
purpose shall be pending or threatened by the Commission, (ii) no order
suspending the effectiveness of the Registration Statement or the qualification
or registration of the Shares under the securities or Blue Sky laws of any
jurisdiction shall be in effect and no proceeding for such purpose shall be
pending before or threatened or contemplated by the Commission or the
authorities of any such jurisdiction, (iii) any request for additional
information on the part of the staff of the Commission or any such authorities
shall have been complied with to the satisfaction of the staff of the Commission
or such authorities and (iv) after the date hereof no amendment or supplement to
the Registration Statement or the Prospectus shall have been filed unless a copy
thereof was first submitted to the Representatives and the Representatives did
not object thereto in good faith, and the Representatives shall have received
certificates, dated the Closing Date and, if applicable, the Option Closing Date
and signed by the Chief Executive Officer or the Chairman of the Board of
Directors of the Company and the Chief Financial Officer of the Company (who
may, as to proceedings threatened, rely upon the best of their information and
belief), to the effect of clauses (i), (ii) and (iii).
(c). Since the respective dates as of which information
is given in the Registration Statement and the Prospectus, (i) there shall not
have been, and no development
13
shall have occurred which could reasonably be expected to result in, a material
adverse change in the general affairs, business, business prospects, properties,
management, condition (financial or otherwise) or results of operations of the
Company and its Subsidiaries, taken as a whole, whether or not arising from
transactions in the ordinary course of business, in each case other than as set
forth in or contemplated by the Registration Statement and the Prospectus and
(ii) neither the Company nor any of its Subsidiaries shall have sustained any
material loss or interference with its business or properties from fire,
explosion, flood or other casualty, whether or not covered by insurance, or from
any labor dispute or any court or legislative or other governmental action,
order or decree, which is not set forth in the Registration Statement and the
Prospectus, if in the judgment of the Representatives any such development makes
it impracticable or inadvisable to consummate the sale and delivery of the
Shares by the Underwriters at the initial public offering price.
(d). Each of the representations and warranties of the
Company contained herein shall be true and correct in all material respects at
the Closing Date and, with respect to the Option Shares, at the Option Closing
Date, as if made at the Closing Date and, with respect to the Option Shares, as
if made at the Option Closing Date, and all covenants and agreements herein
contained to be performed on the part of the Company and all conditions herein
contained to be fulfilled or complied with by the Company at or prior to the
Closing Date and, with respect to the Option Shares, at or prior to the Option
Closing Date, shall have been duly performed, fulfilled or complied with.
(e). The Representatives shall have received
opinions dated the Closing Date and, with respect to the Option Shares, the
Option Closing Date, and satisfactory in form and substance to counsel for
the Underwriters, from Xxxxx X. Xxxxxxxxx, General Counsel to the Company,
Xxxxxxxx Xxxxxxx LLP, counsel to the Company and Lionel, Xxxxxx & Xxxxxxx,
special Nevada counsel to the Company.
(f). The Representatives shall have received an
opinion, dated the Closing Date and the Option Closing Date, Xxxxxx, Xxxxxxxxxx
& Xxxxxxxxx LLP, counsel to the Underwriters, with respect to the Registration
Statement, the Prospectus and this Agreement, which opinion shall be
satisfactory in all respects to the Representatives.
(g). On the date of the Prospectus, the Accountants
shall have furnished to the Representatives a letter, dated the date of its
delivery, addressed to the Representatives and in form and substance
satisfactory to the Representatives, confirming that they are independent
accountants with respect to the Company as required by the Act and the Rules and
Regulations and with respect to the financial and other statistical and
numerical information contained in the Registration Statement. At the Closing
Date and, as to the Option Shares, the Option Closing Date, the Accountants
shall have furnished to the Representatives a letter, dated the date of its
delivery, which shall confirm, on the basis of a review in accordance with the
procedures set forth in the letter from the Accountants, that nothing has come
to their attention during the period from the date of the letter referred to in
the prior sentence to a date (specified in the letter) not more than five days
prior to the Closing Date and the Option Closing Date which would require any
change in their letter dated the date of the Prospectus, if it were required to
be dated and delivered at the Closing Date and the Option Closing Date.
(h). At the Closing Date and, as to the Option Shares,
the Option Closing Date, there shall be furnished to the Representatives an
accurate certificate, dated the date of its delivery, signed by each of the
Chief Executive Officer and the Chief Financial Officer of the Company, in form
and substance satisfactory to the Representatives, to the effect that:
(i). Each signer of such certificate has carefully examined the
Registration Statement and the Prospectus and (A) as of the date of such
certificate, such documents are true and correct in all material respects and do
not omit to state a material fact required to be stated therein or necessary in
order to make the statements therein not untrue or misleading and (B) since the
Effective Date, no event has occurred as a result of which it is necessary to
amend or supplement the Prospectus in order to make the statements therein not
untrue or misleading in any material respect;
(ii). Each of the representations and warranties of the Company
contained in this Agreement were, when originally made, and are, at the time
such certificate is delivered, true and correct in all material respects;
(iii). Each of the covenants required herein to be performed by
the Company on or prior to the delivery of such certificate has been duly,
timely and fully performed and each condition herein required to be complied
with by the Company on or prior to the date of such certificate has been duly,
timely and fully complied with; and
(iv). Since the respective dates as of which information is given
in the Registration Statement and the Prospectus, (A) there has not been, and no
development has occurred which could reasonably be expected to result in, a
material adverse change in the general affairs, business, business prospects,
properties, management, condition (financial or otherwise) or results of
operations of the Company and its Subsidiaries, taken as a whole, whether or not
arising from transactions in the ordinary course of business, in each case other
than as set forth in or contemplated by the Registration Statement and the
Prospectus and (B) neither the Company nor any of its Subsidiaries has sustained
any material loss or interference with its business or properties from fire,
explosion, flood or other casualty, whether or not covered by insurance, or from
any labor dispute or any court or legislative or other governmental action,
order or decree, which is not set forth in the Registration Statement and the
Prospectus, and such other matters as the Representatives may reasonably
request.
(i). On or prior to the Closing Date, the
Representatives shall have received the executed agreements referred to in
Section 4(n).
(j). The Shares shall be qualified for sale in such
states as the Representatives may reasonably request, each such qualification
shall be in effect and not subject to any stop order or other proceeding on the
Closing Date and the Option Closing Date.
(k). Prior to the Closing Date, the Shares shall have
been duly authorized for listing by the Nasdaq National Market upon official
notice of issuance.
15
(l). The National Association of Securities Dealers,
Inc. shall have approved the underwriting terms and arrangements and such
approval shall not have been withdrawn or limited.
(m). The Company shall have furnished to the
Representatives such certificates, in addition to those specifically mentioned
herein, as the Representatives may have reasonably requested as to the accuracy
and completeness at the Closing Date and the Option Closing Date of any
statement in the Registration Statement or the Prospectus as to the accuracy at
the Closing Date and the Option Closing Date of the representations and
warranties of the Company herein, as to the performance by the of its
obligations hereunder, or as to the fulfillment of the conditions concurrent and
precedent to the obligations hereunder of the Representatives.
6. INDEMNIFICATION.
(a). The Company will indemnify and hold harmless each
Underwriter, the directors, officers, employees and agents of each Underwriter
and each person, if any, who controls each Underwriter within the meaning of
Section 15 of the Act or Section 20 of the Securities Exchange Act of 1934, as
amended (the "Exchange Act") from and against any and all losses, claims,
liabilities, expenses and damages (including, but not limited to, any and all
investigative, legal and other expenses reasonably incurred in connection with,
and any and all amounts paid in settlement of (subject to the indemnifying
party's right to consent thereto as set forth herein), any action, suit or
proceeding between any of the indemnified parties and any indemnifying parties
or between any indemnified party and any third party, or otherwise, or any claim
asserted), as and when incurred, to which any Underwriter, or any such person,
may become subject under the Act, the Exchange Act or other Federal or state
statutory law or regulation, at common law or otherwise, insofar as such losses,
claims, liabilities, expenses or damages arise out of or are based on (i) any
untrue statement or alleged untrue statement of a material fact contained in any
preliminary prospectus, the Registration Statement or the Prospectus or any
amendment or supplement to the Registration Statement or the Prospectus or in
any application or other document executed by or on behalf of the Company or
based on written information furnished by or on behalf of the Company filed in
any jurisdiction in order to qualify the Shares under the Securities Laws
thereof or filed with the Commission, (ii) the omission or alleged omission to
state in such document a material fact required to be stated in it or necessary
to make the statements in it not misleading or ( iii) any act or failure to act
or any alleged act or failure to act by any Underwriter in connection with, or
relating in any manner to, the Shares or the offering contemplated hereby, and
which is included as part of or referred to in any loss, claim, liability,
expense or damage arising out of or based upon matters covered by clause (i) or
(ii) above (provided that the Company shall not be liable under this clause
(iii) to the extent it is finally judicially determined by a court of competent
jurisdiction that such loss, claim, liability, expense or damage resulted
directly from any such acts or failures to act undertaken or omitted to be taken
by such underwriter through its gross negligence or willful misconduct);
provided that the Company will not be liable to the extent that such loss,
claim, liability, expense or damage (A) arises from the sale of the Shares in
the public offering to any person by an Underwriter and is based on an untrue
statement or omission or alleged untrue statement or
omission made in reliance on and in conformity with information relating to any
Underwriter furnished in writing to the Company by the Representatives on behalf
of any Underwriter expressly for inclusion in the Registration Statement, any
preliminary prospectus or the Prospectus or (B) results from an untrue
statement of a material fact contained in, or the omission of a material fact
from, such preliminary prospectus, which untrue statement or omission was
completely corrected in the Prospectus (as then amended or supplemented) if
the Underwriters sold Shares to the person alleging such loss, claim,
liability, expense or damage without sending or giving, at or prior to the
written confirmation of such sale, a copy of the Prospectus (as then amended
or supplemented) if the Company had previously furnished copies thereof to
the Underwriters within a reasonable amount of time prior to such sale or
such confirmation, and the Underwriters failed to deliver the corrected
Prospectus, if required by law to have so delivered it and if delivered would
have been a complete defense against the person asserting such loss, claim,
liability, expense or damage. This indemnity agreement will be in addition to
any liability that the Company might otherwise have.
(b). Each Underwriter will indemnify and hold harmless
the Company, each person, if any, who controls the Company within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act, each director of the
Company and each officer of the Company who signs the Registration Statement to
the same extent as the foregoing indemnity from the Company to each Underwriter,
but only insofar as losses, claims, liabilities, expenses or damages arise out
of or are based on any untrue statement or omission or alleged untrue statement
or omission made in reliance on and in conformity with information relating to
any Underwriter furnished in writing to the Company by the Representatives on
behalf of such Underwriter expressly for use in the Registration Statement, the
Preliminary Prospectus or the Prospectus. This indemnity will be in addition to
any liability that each Underwriter might otherwise have.
(c). Any party that proposes to assert the right to be
indemnified under this Section 6 will, promptly after receipt of notice of
commencement of any action against such party in respect of which a claim is to
be made against an indemnifying party or parties under this Section 6, notify
each such indemnifying party of the commencement of such action, enclosing a
copy of all papers served, but the omission so to notify such indemnifying party
will not relieve it from any liability that it may have to any indemnified party
under the foregoing provisions of this Section 6 unless, and only to the extent
that the indemnifying party is materially prejudiced. If any such action is
brought against any indemnified party and it notifies the indemnifying party of
its commencement, the indemnifying party will be entitled to participate in and,
to the extent that it elects by delivering written notice to the indemnified
party promptly after receiving notice of the commencement of the action from the
indemnified party, jointly with any other indemnifying party similarly notified,
to assume the defense of the action, with counsel satisfactory to the
indemnified party, and after notice from the indemnifying party to the
indemnified party of its election to assume the defense, the indemnifying party
will not be liable to the indemnified party for any legal or other expenses
except as provided below and except for the reasonable costs of investigation
subsequently incurred by the indemnified party in connection with the defense.
The indemnified party will have the right to employ its own
17
counsel in any such action, but the fees, expenses and other charges of such
counsel will be at the expense of such indemnified party unless (1) the
employment of counsel by the indemnified party has been authorized in writing
by the indemnifying party, (2) the indemnified party has reasonably concluded
(based on advice of counsel) that there may be legal defenses available to it
or other indemnified parties that are different from or in addition to those
available to the indemnifying party, (3) a conflict or potential conflict
exists (based on advice of counsel to the indemnified party) between the
indemnified party and the indemnifying party (in which case the indemnifying
party will not have the right to direct the defense of such action on behalf
of the indemnified party) or (4) the indemnifying party has not in fact
employed counsel to assume the defense of such action within a reasonable
time after receiving notice of the commencement of the action, in each of
which cases the reasonable fees, disbursements and other charges of counsel
will be at the expense of the indemnifying party or parties. It is understood
that the indemnifying party or parties shall not, in connection with any
proceeding or related proceedings in the same jurisdiction, be liable for the
reasonable fees, disbursements and other charges of more than one separate
firm admitted to practice in such jurisdiction at any one time for all such
indemnified party or parties. All such fees, disbursements and other charges
will be reimbursed by the indemnifying party promptly as they are incurred.
An indemnifying party will not be liable for any settlement of any action or
claim effected without its written consent (which consent will not be
unreasonably withheld). No indemnifying party shall, without the prior
written consent of each indemnified party, settle or compromise or consent to
the entry of any judgment in any pending or threatened claim, action or
proceeding relating to the matters contemplated by this Section 6 (whether or
not any indemnified party is a party thereto), unless such settlement,
compromise or consent includes an unconditional release of each indemnified
party from all liability arising or that may arise out of such claim, action
or proceeding. Notwithstanding any other provision of this Section 6(c), if
at any time an indemnified party shall have requested an indemnifying party
to reimburse the indemnified party for fees and expenses of counsel for which
the indemnified party is entitled to be reimbursed hereunder, such
indemnifying party agrees that it shall be liable for any settlement effected
without its written consent if (i) such settlement is entered into more than
45 days after receipt by such indemnifying party of the aforesaid request,
(ii) such indemnifying party shall have received notice of the terms of such
settlement at least 30 days prior to such settlement being entered into and
(iii) such indemnifying party shall not have reimbursed such indemnified
party in accordance with the terms of this Agreement prior to the date of
such settlement.
(d). In order to provide for just and equitable
contribution in circumstances in which the indemnification provided for in the
foregoing paragraphs of this Section 6 is applicable in accordance with its
terms but for any reason is held to be unavailable from the Company or the
Underwriters, the Company and the Underwriters will contribute to the total
losses, claims, liabilities, expenses and damages (including any investigative,
legal and other expenses reasonably incurred in connection with, and any amount
paid in settlement of, any action, suit or proceeding or any claim asserted, but
after deducting any contribution received by the Company from persons other than
the Underwriters, such as persons who control the Company within the meaning of
the Act, officers of the Company who signed the Registration Statement and
directors of the Company, who also may be liable for contribution) to which the
Company and any one or more of the Underwriters may be subject in such
proportion as shall be appropriate to reflect the relative benefits received by
the Company on the one hand and the Underwriters on the other. The relative
benefits received by the Company on the one hand and
the Underwriters on the other shall be deemed to be in the same proportion as
the total net proceeds from the offering (before deducting expenses) received by
the Company bear to the total underwriting discounts and commissions received by
the Underwriters, in each case as set forth in the table on the cover page of
the Prospectus. If, but only if, the allocation provided by the foregoing
sentence is not permitted by applicable law, the allocation of contribution
shall be made in such proportion as is appropriate to reflect not only the
relative benefits referred to in the foregoing sentence but also the relative
fault of the Company, on the one hand, and the Underwriters, on the other, with
respect to the statements or omissions which resulted in such loss, claim,
liability, expense or damage, or action in respect thereof, as well as any other
relevant equitable considerations with respect to such offering. Such relative
fault shall be determined by reference to whether the untrue or alleged untrue
statement of a material fact or omission or alleged omission to state a material
fact relates to information supplied by the Company or the Representatives on
behalf of the Underwriters, the intent of the parties and their relative
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The Company and the Underwriters agree that it would not
be just and equitable if contributions pursuant to this Section 6(d) were to be
determined by pro rata allocation (even if the Underwriters were treated as one
entity for such purpose) or by any other method of allocation which does not
take into account the equitable considerations referred to herein. The amount
paid or payable by an indemnified party as a result of the loss, claim,
liability, expense or damage, or action in respect thereof, referred to above in
this Section 6(d) shall be deemed to include, for purpose of this Section 6(d),
any legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 6(d), no Underwriter shall be
required to contribute any amount in excess of the underwriting discounts and
commissions received by it and no person found guilty of fraudulent
misrepresentation (within the meaning of Section 11(o) of the Act will be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations to contribute as provided in
this Section 6(d) are several in proportion to their respective underwriting
obligations and not joint. For purposes of this Section 6(d), any person who
controls a party to this Agreement within the meaning of the Act will have the
same rights to contribution as that party, and each officer of the Company who
signed the Registration Statement will have the same rights to contribution as
the Company, subject in each case to the provisions hereof. Any party entitled
to contribution, promptly after receipt of notice of commencement of any action
against such party in respect of which a claim for contribution may be made
under this Section 6(d), will notify any such party or parties from whom
contribution may be sought, but the omission so to notify will not relieve the
party or parties from whom contribution may be sought from any other obligation
it or they may have under this Section 6 (d). Except for a settlement entered
into pursuant to the last sentence of Section 6(c) hereof, no party will be
liable for contribution with respect to any action or claim settled without its
written consent (which consent will not be unreasonably withheld).
(e). The indemnity and contribution agreements
contained in this Section 6 and the representations and warranties of the
Company contained in this Agreement shall remain operative and in full force and
effect regardless of (i) any investigation made by or on behalf of the
Underwriters, (ii) acceptance of the Shares and payment therefore or (iii) any
termination of this Agreement.
19
7. TERMINATION. The obligations of the several Underwriters
under this Agreement may be terminated at any time on or prior to the Closing
Date (or, with respect to the Option Shares, on or prior to the Option Closing
Date), by notice to the Company from the Representatives, without liability on
the part of any Underwriter to the Company, if, prior to delivery and payment
for the Shares (or the Option Shares, as the case may be), in the sole judgment
of the Representatives, (i) there has been, since the respective dates as of
which information is given in the Registration Statement, any material adverse
change in the Company's business, properties, business prospects, condition
(financial or otherwise) or results of operations, (ii) trading in any of the
equity securities of the Company shall have been suspended by the Commission,
the NASD, by an exchange that lists the Shares or by the Nasdaq Stock Market,
(iii) trading in securities generally on the New York Stock Exchange or the
Nasdaq Stock Market shall have been suspended or limited or minimum or maximum
prices shall have been generally established on such exchange or over the
counter market, or additional material governmental restrictions, not in force
on the date of this Agreement, shall have been imposed upon trading in
securities generally by such exchange or by order of the Commission or the NASD
or any court or other governmental authority, (iv) a general banking moratorium
shall have been declared by either Federal or New York State authorities or (v)
any material adverse change in the financial or securities markets in the United
States or in political, financial or economic conditions in the United States or
any outbreak or material escalation of hostilities or declaration by the United
States of a national emergency or war or other calamity or crisis shall have
occurred the effect of any of which is such as to make it, in the sole judgment
of the Representatives, impracticable or inadvisable to market the Shares on the
terms and in the manner contemplated by the Prospectus.
8. SUBSTITUTION OF UNDERWRITERS. If any one or more of the
Underwriters shall fail or refuse to purchase any of the Firm Shares which it or
they have agreed to purchase hereunder, and the aggregate number of Firm Shares
which such defaulting Underwriter or Underwriters agreed but failed or refused
to purchase is not more than one-tenth of the aggregate number of Firm Shares,
the other Underwriters shall be obligated, severally, to purchase the Xxxx
Shares which such defaulting Underwriter or Underwriters agreed but failed or
refused to purchase, in the proportions which the number of Firm Shares which
they have respectively agreed to purchase pursuant to Section 1 bears to the
aggregate number of Firm Shares which all such non-defaulting Underwriters have
so agreed to purchase, or in such other proportions as the Representatives may
specify; provided that in no event shall the maximum number of Firm Shares which
any Underwriter has become obligated to purchase pursuant to Section 1 be
increased pursuant to this Section 8 by more than one-ninth of the number of
Firm Shares agreed to be purchased by such Underwriter without the prior written
consent of such Underwriter. If any Underwriter or Underwriters shall fail or
refuse to purchase any Firm Shares and the aggregate number of Firm Shares which
such defaulting Underwriter or Underwriters agreed but failed or refused to
purchase exceeds one-tenth of the aggregate number of the Firm Shares and
arrangements satisfactory to the Representatives and the Company for the
purchase of such Firm Shares are not made within 48 hours after such default,
this Agreement will terminate without liability on the part of any
non-defaulting Underwriter or the Company for the purchase or sale of any Shares
under this Agreement. In any such case either the Representatives or the Company
shall have the right to postpone the Closing Date, but in no event for longer
than seven days, in order that the required changes, if any, in the Registration
Statement and in the Prospectus or in
any other documents or arrangements may be effected. Any action taken pursuant
to this Section 8 shall not relieve any defaulting Underwriter from liability in
respect of any default of such Underwriter under this Agreement.
9. MISCELLANEOUS. Notice given pursuant to any of the
provisions of this Agreement shall be in writing and, unless otherwise
specified, shall be mailed or delivered (a) if to the Company, at the office of
the Company, Xxx Xxxxxxx Xxxxx, Xxxxx 0000, Xxxxxxx, Xx. 00000, Attention: Xxxxx
X. Xxxxxx, or (b) if to the Underwriters, to the Representatives at the offices
of PaineWebber Incorporated, 0000 Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, Xxx Xxxx
00000, Attention: Corporate Finance Department. Any such notice shall be
effective only upon receipt. Any notice under Section 7 or 8 may be made by
telex or telephone, but if so made shall be subsequently confirmed in writing.
This Agreement has been and is made solely for the benefit of
the several Underwriters and the Company and of the controlling persons,
directors and officers referred to in Section 6, and their respective successors
and assigns, and no other person shall acquire or have any right under or by
virtue of this Agreement. The term "successors and assigns" as used in this
Agreement shall not include a purchaser, as such purchaser, of Shares from any
of the several Underwriters.
All representations, warranties and agreements of the Company
contained herein or in certificates or other instruments delivered pursuant
hereto, shall remain operative and in full force and effect regardless of any
investigation made by or on behalf of any Underwriter or any of its controlling
persons and shall survive delivery of and payment for the Shares hereunder.
Any action required or permitted to be taken by the
Representatives under this Agreement may be taken by them jointly or by
PaineWebber Incorporated.
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO THE CONFLICT
OF LAWS PRINCIPLES OF SUCH STATE.
This Agreement may be signed in two or more counterparts with
the same effect as if the signatures thereto and hereto were upon the same
instrument.
In case any provision in this Agreement shall be invalid,
illegal or unenforceable, the validity, legality and enforceability of the
remaining provisions shall not in any way be affected or impaired thereby.
The Company and the Underwriters each hereby irrevocably waive
any right they may have to a trial by jury in respect of any claim based upon or
arising out of this Agreement or the transactions contemplated hereby.
This Agreement may not be amended or otherwise modified or any
provision hereof waived except by an instrument in writing signed by the
Representatives and the Company.
21
Please confirm that the foregoing correctly sets forth the
agreement among the Company and the several Underwriters.
Very truly yours,
COMPUCREDIT CORPORATION
By:
------------------------------------
Name:
Title:
Confirmed as of the date
first above mentioned:
PAINEWEBBER INCORPORATED
NATIONSBANC XXXXXXXXXX SECURITIES LLC
BEAR, XXXXXXX & CO. INC.
Acting on behalf of themselves and as the
Representatives of the
other several Underwriters
named in Schedule I hereof.
PAINEWEBBER INCORPORATED
By:
------------------------------------
Name:
Title:
NATIONSBANC XXXXXXXXXX SECURITIES LLC
By:
------------------------------------
Name:
Title:
BEAR, XXXXXXX & CO. INC.
By:
------------------------------------
Name:
Title:
23
SCHEDULE I
UNDERWRITERS
Number of
Name of Firm Shares
Underwriters to be Purchased
------------ ----------------
PaineWebber Incorporated
NationsBanc Xxxxxxxxxx Securities LLC
Bear, Xxxxxxx & Co. Inc.
Total.....................................................
-----------
--------
EXHIBIT A
COMPUCREDIT CORPORATION
PRICE DETERMINATION AGREEMENT
April __, 1999
PAINEWEBBER INCORPORATED
NATIONSBANC XXXXXXXXXX SECURITIES LLC
BEAR, XXXXXXX & CO. INC.
As Representatives of the
several Underwriters
c/o PaineWebber Incorporated
1285 Avenue
of the Americas
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
Reference is made to the Underwriting Agreement, dated April
__, 1999 (the "Underwriting Agreement"), among CompuCredit Corporation, a
Georgia corporation (the "Company") and the several Underwriters named in
Schedule I thereto or hereto (the "Underwriters"), for whom PaineWebber
Incorporated, NationsBanc Xxxxxxxxxx Securities LLC and Bear, Xxxxxxx & Co. Inc.
are acting as representatives (the "U.S. Representatives"). The Underwriting
Agreement provides for the purchase by the Underwriters from the Company,
subject to the terms and conditions set forth therein, of an aggregate of shares
(the "Firm Shares") of the Company's common stock, no par value per share. This
Agreement is the Price Determination Agreement referred to in the Underwriting
Agreement.
Pursuant to Section 1 of the Underwriting Agreement, the
undersigned agree with the Representatives as follows:
The initial public offering price per share for the Firm
Shares shall be $______.
25
The purchase price per share for the Firm Shares to be paid by
the several Underwriters shall be $__________ representing an amount equal to
the initial public offering price set forth above, less $__________ per share.
The Company represents and warrants to each of the
Underwriters that the representations and warranties of the Company set forth in
Section 3 of the Underwriting Agreement are accurate as though expressly made at
and as of the date hereof.
As contemplated by the Underwriting Agreement, attached as
Schedule I is a complete list of the several Underwriters, which shall be a part
of this Agreement and the Underwriting Agreement.
THIS AGREEMENT SHALL BE GOVERNED BY THE LAW OF THE STATE OF
NEW YORK WITHOUT REGARD TO THE CONFLICT OF LAWS PRINCIPLES OF SUCH STATE.
If the foregoing is in accordance with your understanding of the agreement among
the Underwriters and the Company, please sign and return to the Company a
counterpart hereof, whereupon this instrument along with all counterparts and
together with the Underwriting Agreement shall be a binding agreement among the
Underwriters and the Company in accordance with its terms and the terms of the
Underwriting Agreement.
Very truly yours,
COMPUCREDIT CORPORATION
By:
------------------------
Name:
Title:
Confirmed as of the date
first above mentioned:
PAINEWEBBER INCORPORATED
NATIONSBANC XXXXXXXXXX SECURITIES LLC
BEAR, XXXXXXX & CO. INC.
Acting on behalf of themselves
and as the Representatives
of the other several Underwriters
named in Schedule I hereof.
PAINEWEBBER INCORPORATED
By:
----------------------------------
Name:
Title:
NATIONSBANC XXXXXXXXXX SECURITIES LLC
By:
----------------------------------
Name:
Title:
BEAR XXXXXXX & CO. INC.
By:
----------------------------------
Name:
Title:
27
EXHIBIT B
_________, 1999
PAINEWEBBER INCORPORATED
NATIONSBANC XXXXXXXXXX SECURITIES LLC
BEAR, XXXXXXX & CO. INC.
As Representatives of the
several Underwriters
c/o PaineWebber Incorporated
1285 Avenue
of the Americas
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
In consideration of the agreement of the several Underwriters,
for which PaineWebber Incorporated, NationsBanc Xxxxxxxxxx Securities LLC and
Bear, Xxxxxxx & Co. (the "Representatives") intend to act as Representatives to
underwrite a proposed public offering (the "Offering") of shares of Common
Stock, no par value per share (the "Common Stock") of CompuCredit Corporation, a
Georgia corporation, as contemplated by a registration statement with respect to
such shares filed with the Securities and Exchange Commission on Form S-1
(Registration No. 333-69879), the undersigned hereby agrees that the undersigned
will not, for a period of 365 days after the commencement of the public offering
of such shares, without the prior written consent of PaineWebber Incorporated,
offer to sell, sell, contract to sell, grant any option to sell, or otherwise
dispose of, or require the Company to file with the Securities and Exchange
Commission a registration statement under the Securities Act of 1933 to register
any shares of Common Stock or securities convertible into or exchangeable for
Common Stock or warrants or other rights to acquire shares of Common Stock of
which the undersigned is now, or may in the future become, the beneficial owner
within the meaning of Rule 13d-3 under the Securities Exchange Act of 1934)
(other than pursuant to employee stock option plans or agreements or the
exercise of options granted thereunder or in connection with other employee
incentive compensation arrangements or in connection with the sale of all of the
outstanding capital stock of the Company to, or merger of the Company with, an
unaffiliated third party).
Very truly yours,
By:
-----------------------
Print Name:
---------------
