EXHIBIT 1.1
2,256,000 Shares
NCO GROUP, INC.
Common Stock
UNDERWRITING AGREEMENT
______________, 1997
XXXXXXXXXX SECURITIES
XXXXXX XXXXXXXXXX XXXXX INC.
THE XXXXXXXX-XXXXXXXX COMPANY, INC.
c/x XXXXXXXXXX SECURITIES
000 Xxxxxxxxxx Xxxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Dear Sirs:
SECTION 1. Introductory. NCO Group, Inc., a Pennsylvania
corporation (the "Company"), proposes to issue and sell 1,200,000 shares of its
authorized but unissued Common Stock (the "Common Stock") and the shareholders
of the Company named in Schedule B (collectively, the "Selling Stockholders")
severally propose to sell an aggregate of 1,056,000 shares of Common Stock to
the several underwriters named in Schedule A annexed hereto (the
"Underwriters"). Said aggregate of 2,256,000 shares are herein called the "Firm
Common Shares." In addition, certain stockholders of the Company named in
Schedule B annexed hereto (the "Option Selling Stockholders") propose to grant
to the Underwriters an option to purchase up to 338,400 additional shares of
Common Stock (the "Optional Common Shares"), as provided in Section 5 hereof.
The Firm Common Shares and, to the extent such option is exercised, the Optional
Common Shares are hereinafter collectively referred to as the "Common Shares."
You have advised the Company and the Selling Stockholders that
the Underwriters propose to make a public offering of their respective portions
of the Common Shares on the effective date of the registration statement
hereinafter referred to, or as soon thereafter as in your judgment is advisable.
The Company and each of the Selling Stockholders hereby
confirm their respective agreements with respect to the purchase of the Common
Shares by the Underwriters as follows:
SECTION 2. Representations and Warranties of the Company and
the Selling Stockholders. The Company and, to the best of their knowledge, each
of the Selling Stockholders (with the exception of the Other Selling
Stockholders (as defined on Schedule B hereto) severally represent and warrant
to the several Underwriters that:
(a) A registration statement on Form S-1 (File No.
333-_________) with respect to the Common Shares has been prepared by
the Company in conformity with the requirements of the Securities Act
of 1933, as amended (the "Act"), and the rules and regulations (the
"Rules and Regulations") of the Securities and Exchange Commission (the
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"Commission") thereunder, and has been filed with the Commission. The
Company has prepared and has filed or proposes to file prior to the
effective date of such registration statement an amendment or
amendments to such registration statement, which amendment or
amendments have been or will be similarly prepared. There have been
delivered to you two copies of such registration statement and
amendments, together with two copies of each exhibit filed therewith.
Conformed copies of such registration statement and amendments (but
without exhibits) and of the related preliminary prospectus have been
delivered to you in such reasonable quantities as you have requested
for each of the Underwriters. The Company will next file with the
Commission one of the following: (i) prior to effectiveness of such
registration statement, a further amendment thereto, including the form
of final prospectus, (ii) a final prospectus in accordance with Rules
430A and 424(b) of the Rules and Regulations. As filed, such amendment
and form of final prospectus, or such final prospectus, shall include
all Rule 430A Information and, except to the extent that you shall
agree in writing to a modification, shall be in all substantive
respects in the form furnished to you prior to the date and time that
this Agreement was executed and delivered by the parties hereto, or, to
the extent not completed at such date and time, shall contain only such
specific additional information and other changes (beyond that
contained in the latest form furnished to you) as the Company shall
have previously advised you in writing would be included or made
therein.
The term "Registration Statement" as used in this Agreement
shall mean such registration statement at the time such registration
statement becomes effective and, in the event any post-effective
amendment thereto becomes effective prior to the First Closing Date (as
hereinafter defined), shall also mean such registration statement as so
amended; provided, however, that such term shall also include (i) all
Rule 430A Information deemed to be included in such registration
statement at the time such registration statement becomes effective as
provided by Rule 430A of the Rules and Regulations and (ii) any
registration statement filed pursuant to 462(b) of the Rules and
Regulations relating to the Common Shares. The term "Preliminary
Prospectus" shall mean any preliminary prospectus referred to in the
preceding paragraph and any preliminary prospectus included in the
Registration Statement at the time it becomes effective that omits Rule
430A Information. The term "Prospectus" as used in this Agreement shall
mean either (i) the prospectus relating to the Common Shares in the
form in which it is first filed with the Commission pursuant to Rule
424(b) of the Rules and Regulations or (ii) if no filing pursuant to
Rule 424(b) of the Rules and Regulations is required, shall mean the
form of final prospectus included in the Registration Statement at the
time such registration statement becomes effective. The term "Rule 430A
Information" means information with respect to the Common Shares and
the offering thereof permitted to be omitted from the Registration
Statement when it becomes effective pursuant to Rule 430A of the Rules
and Regulations.
(b) The Commission has not issued any order preventing or
suspending the use of any Preliminary Prospectus, and each Preliminary
Prospectus has conformed in all material respects to the requirements
of the Act and the Rules and Regulations and, as of its date, has not
included any untrue statement of a material fact or omitted to state a
material fact necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading; and at
the time the Registration Statement becomes effective, and at all times
subsequent thereto up to and including each Closing Date hereinafter
mentioned, the Registration Statement and the Prospectus, and any
amendments or supplements thereto, will contain all material statements
and information required to be included therein by the Act and the
Rules and Regulations and will in all material respects conform to the
requirements of the Act and the Rules and Regulations, and neither the
Registration Statement nor the Prospectus, nor any amendment or
supplement thereto, will include any untrue statement of a material
fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided,
however, no representation or warranty contained in this subsection
2(b) shall be applicable to information contained in or omitted from
any Preliminary Prospectus, the Registration Statement, the Prospectus
or any such amendment or supplement in reliance upon and in conformity
with written information furnished to the Company by or on behalf of
any Underwriter, directly or through the Underwriters, specifically for
use in the preparation thereof.
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(c) The Company does not own more than a majority of the
outstanding capital stock or other equity interest in, or control,
directly or indirectly, any corporation, association or other entity
other than the subsidiaries listed in Exhibit 21 to the Registration
Statement. The Company and each of its subsidiaries have been duly
incorporated and are validly existing as corporations in good standing
under the laws of their respective jurisdictions of incorporation, with
full power and authority (corporate and other) to own and lease their
properties and conduct their respective businesses as described in the
Prospectus; the Company owns all of the outstanding capital stock of
its subsidiaries free and clear of all claims, liens, charges and
encumbrances except that the stock of its subsidiaries is pledged to
Mellon Bank, N.A. to secure the Company's obligations under the Amended
and Restated Credit Agreement with Mellon Bank, N.A. dated September 5,
1996, as amended (the "Credit Agreement"); the Company and each of its
subsidiaries are in possession of and operating in compliance with all
authorizations, licenses, permits, consents, certificates and orders
necessary to the conduct of their respective businesses, all of which
are valid and in full force and effect, except where the failure to so
possess or comply or maintain such authorizations, licenses, permits,
consents, certificates or orders in full force and effect would not,
singly or in the aggregate, have a material adverse effect on the on
the business, financial condition, results of operations or prospects
of the Company and its subsidiaries taken as a whole (a "Material
Adverse Effect"); the Company and each of its subsidiaries are duly
qualified to do business and in good standing as foreign corporations
in each jurisdiction in which the ownership or leasing of properties or
the conduct of their respective businesses requires such qualification,
except for jurisdictions in which the failure to so qualify would not
have a Material Adverse Effect; and no proceeding has been instituted
in any such jurisdiction, revoking, limiting or curtailing, or seeking
to revoke, limit or curtail, such power and authority or qualification.
(d) The Company has an authorized and outstanding capital
stock as set forth under the heading "Capitalization" in the
Prospectus; the issued and outstanding shares of Common Stock have been
duly authorized and validly issued, are fully paid and nonassessable,
have been issued in compliance, in all material respects, with all
federal and state securities laws, were not issued in violation of or
subject to any preemptive rights or other rights to subscribe for or
purchase securities, and conform, in all material respects, to the
description thereof contained in the Prospectus. All issued and
outstanding shares of capital stock of each subsidiary of the Company
have been duly authorized and validly issued and are fully paid and
nonassessable. Except as disclosed in or contemplated by the Prospectus
and the financial statements of the Company, and the related notes
thereto, included in the Prospectus, neither the Company nor any
subsidiary has outstanding any options to purchase, or any preemptive
rights or other rights to subscribe for or to purchase, any securities
or obligations convertible into, or any contracts or commitments to
issue or sell, shares of its capital stock or any such options, rights,
convertible securities or obligations. The description of the Company's
stock option, stock bonus and other stock plans or arrangements, and
the options or other rights granted and exercised thereunder, set forth
in the Prospectus accurately and fairly presents the information
required to be shown with respect to such plans, arrangements, options
and rights in all material respects.
(e) The Common Shares to be sold by the Company have been duly
authorized and, when issued, delivered and paid for in the manner set
forth in this Agreement, will be validly issued, fully paid and
nonassessable, and will conform, in all material respects, to the
description thereof contained in the Prospectus. No preemptive rights
or other rights to subscribe for or purchase exist with respect to the
issuance and sale of the Common Shares by the Company pursuant to this
Agreement. No stockholder of the Company has any right which has not
been waived to require the Company to register the sale of any shares
owned by such stockholder under the Act in the public offering
contemplated by this Agreement. No further approval of, or
authorization by, the stockholders or the Board of Directors of the
Company will be required for the issuance and sale of the Common Shares
to be sold by the Company or the transfer and sale of the Common Shares
to be sold by the Selling Stockholders as contemplated herein.
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(f) The Company has full legal right, power and authority to
enter into this Agreement and perform the transactions contemplated
hereby, assuming that the Registration Statement is declared effective
by the Commission and assuming compliance with applicable state
securities or "blue sky" laws. This Agreement has been duly authorized,
executed and delivered by the Company and, assuming due authorization,
execution and delivery by the other parties hereto, constitutes a valid
and binding obligation of the Company in accordance with its terms
except as enforceability may be limited by general equitable
principles, bankruptcy, insolvency, reorganization, moratorium or other
laws affecting creditors' rights generally and, to the extent that this
Agreement provides for indemnification or contribution for liabilities
arising under federal or state securities laws or under this Agreement,
except as rights to indemnification or contribution may be limited by
federal or state securities laws and the public policy underlying such
laws. The making and performance of this Agreement by the Company and
the consummation of the transactions herein contemplated will not
violate any provisions of the articles of incorporation or bylaws, or
other organizational documents, of the Company or any of its
subsidiaries, and will not conflict with, result in the breach or
violation of, or constitute, either by itself or upon notice or the
passage of time or both, a default under any agreement, mortgage, deed
of trust, lease, franchise, license, indenture, permit or other
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 its
respective properties may be bound or affected, any statute or any
authorization, judgment, decree, order, rule or regulation of any court
or any regulatory body, administrative agency or other governmental
body applicable to the Company or any of its subsidiaries or any of its
respective properties. No consent, approval, authorization or other
order of any court, regulatory body, administrative agency or other
governmental body is required for the execution and delivery of this
Agreement or the consummation of the transactions contemplated by this
Agreement, except for compliance with the Act, the Blue Sky laws
applicable to the public offering of the Common Shares by the several
Underwriters and the clearance of such offering with the National
Association of Securities Dealers, Inc. (the "NASD").
(g) Coopers & Xxxxxxx, who have expressed their opinion with
respect to the financial statements and schedules of the Company [and
Management Adjustment Bureau, Inc. ("MAB")] filed with the Commission
as a part of the Registration Statement and included in the Prospectus
and in the Registration Statement, are independent accountants as
required by the Act and the Rules and Regulations. Xxxxxx Xxxxxxxx LLP,
who have expressed their opinion with respect to the financial
statements and schedules of the Collection Division of CRW Financial,
Inc. ("CRWCD") filed with the Commission as a part of the Registration
Statement and included in the Prospectus and in the Registration
Statement, are independent accountants as required by the Act and the
Rules and Regulations.
(h) The financial statements of the Company, and the related
notes thereto, included in the Registration Statement and the
Prospectus present fairly the financial position of the Company as of
the respective dates of such financial statements, and the results of
operations and changes in financial position of the Company for the
respective periods covered thereby. The financial statements of CRWCD,
and the related notes thereto, included in the Registration Statement
and the Prospectus present fairly the financial position of CRWCD as of
the respective dates of such financial statements, and the results of
operations and changes in financial position of CRWCD for the
respective periods covered thereby. The financial statements of MAB,
the related notes thereto, included in the Registration Statement and
the Prospectus present fairly the financial position of MAB as of the
respective dates of such financial statements, and the results of
operations and changes in financial position of MAB for the respective
periods covered thereby. Such statements and related notes have been
prepared in accordance with generally accepted accounting principles
applied on a consistent basis as certified by the independent
accountants named in subsection 2(g). The selected financial data set
forth in the Prospectus under the captions "Capitalization" and
"Selected Financial and Operating Data" fairly present the information
set forth therein on the basis stated in the Registration Statement.
(i) The pro forma consolidated financial statements and other
pro forma financial information of the Company included in the
Prospectus have been prepared in accordance with the Commission's rules
and guidelines with respect to pro forma financial statements, have
been properly compiled on the pro forma basis described therein, and,
in the opinion of the Company, the assumptions used in the preparation
thereof are reasonable and the adjustments used therein are appropriate
to give effect to the transactions or circumstances referred to
therein.
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(j) Except as disclosed in the Prospectus, neither the Company
nor any of its subsidiaries is in violation or default of any provision
of its articles of incorporation or bylaws, or other organizational
documents, or, except as to defaults which individually or in the
aggregate would have not a Material Adverse Effect, is in breach of or
default with respect to any provision of any agreement, judgment,
decree, order, mortgage, deed of trust, lease, franchise, license,
indenture, permit or other instrument to which it is a party or by
which it or any of its properties are bound; and there does not exist
any state of facts which constitutes an event of default on the part of
the Company or any such subsidiary as defined in such documents or
which, with notice or lapse of time or both, would constitute such an
event of default.
(k) There are no contracts or other documents required to be
described in the Registration Statement or to be filed as exhibits to
the Registration Statement by the Act or by the Rules and Regulations
which have not been described or filed as required. The contracts so
described in the Prospectus are accurate and complete in all material
respects; all such contracts are in full force and effect on the date
hereof; and neither the Company nor any of its subsidiaries, nor to the
best of the Company's knowledge, any other party is in breach of or
default under any of such contracts.
(l) There are no legal or governmental actions, suits or
proceedings pending to which the Company or any of its subsidiaries is
a party or of which property owned or leased by the Company or any of
its subsidiaries is subject, or related to environmental or
discrimination matters and there are no legal or governmental actions,
suits or proceedings, to the best of the Company's knowledge,
threatened to which the Company or any of its subsidiaries may be a
party or of which property owned or leased by the Company or any of its
subsidiaries may be the subject, or related to environmental or
discrimination matters, all of which actions, suits or proceedings
will, individually or in the aggregate, prevent or adversely affect the
transactions contemplated by this Agreement or result in a material
adverse change in the condition (financial or otherwise), properties,
business, results of operations or prospects of the Company and its
subsidiaries taken as a whole; and no labor disturbance by the
employees of the Company or any of its subsidiaries exists or, to the
knowledge of the Company, is threatened which will materially and
adversely affect such condition, properties, business, results of
operations or prospects. Neither the Company nor any of its
subsidiaries is a party or subject to the provisions of any material
injunction, judgment, decree or order of any court, regulatory body,
administrative agency or other governmental body.
(m) The Company or the applicable subsidiary has good and
marketable title to all the properties and assets reflected as owned in
the financial statements hereinabove described (or elsewhere in the
Prospectus), subject to no lien, mortgage, pledge, charge or
encumbrance of any kind except (i) those, if any, reflected in such
financial statements (or elsewhere in the Prospectus), or (ii) those
which are not material in amount and do not adversely affect the use
made and proposed to be made of such property by the Company and its
subsidiaries. The Company or the applicable subsidiary holds its leased
properties under valid and binding leases, with such exceptions as are
not materially significant in relation to the business of the Company.
(n) Since the respective dates as of which information is
given in the Registration Statement and Prospectus, and except as
described in or contemplated by the Prospectus: (i) the Company and its
subsidiaries have not incurred any material liabilities or obligations,
indirect, direct or contingent, or entered into any material verbal or
written agreement or other transaction which is not in the ordinary
course of business; (ii) the Company and its subsidiaries have not
sustained any material loss or interference with their respective
businesses or properties from fire, flood, windstorm, accident or other
calamity, whether or not covered by insurance; (iii) the Company has
not paid or declared any dividends or other distributions with respect
to its capital stock and the Company and its subsidiaries are not in
default in the payment of principal or interest on any outstanding debt
obligations; (iv) there has not been any change in the capital stock
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(other than upon the sale of the Common Shares hereunder or as a result
of the exercise of outstanding options and warrants or the conversion
of convertible notes disclosed in the Prospectus) or indebtedness
material to the Company and its subsidiaries (other than in the
ordinary course of business); and (v) there has not been any material
adverse change in the condition (financial or otherwise), business,
properties, results of operations or prospects of the Company and its
subsidiaries taken as a whole.
(o) Except as disclosed in or specifically contemplated by the
Prospectus, the Company and its subsidiaries own or have the right to
use all material trademarks, trade names, patent rights, mask works,
copyrights, licenses, approvals and governmental authorizations to
conduct their businesses as now conducted; the expiration of any
trademarks, trade names, patent rights, mask works, copyrights,
licenses, approvals or governmental authorizations would not have a
Material Adverse Effect; and the Company has no knowledge of any
material infringement by it or its subsidiaries of trademark, trade
name rights, patent rights, mask works, copyrights, licenses, trade
secret or other similar rights of others, and there is no claim being
made against the Company or its subsidiaries regarding trademark, trade
name, patent, mask work, copyright, license, trade secret or other
infringement, which, in either case, would have a Material Adverse
Effect.
(p) The Company has not been advised, and has no reason to
believe, that either it or any of its subsidiaries is not conducting
business in compliance with all applicable laws, rules and regulations
of the jurisdictions in which it is conducting business, including,
without limitation, the federal Fair Debt Collection Practices Act, the
federal Fair Credit Reporting Act, the federal Telemarketing and
Consumer Fraud and Abuse Prevention Act of 1994, the federal Telephone
Consumer Protection Act of 1991, related state and local statutes and
regulations and all applicable local, state and federal environmental
laws and regulations; except where failure to be so in compliance would
not have a Material Adverse Effect.
(q) The Company and its subsidiaries have filed all necessary
federal, state and foreign income and franchise tax returns and have
paid all taxes shown as due thereon to the extent such taxes have
become due and are not being contested in good faith; and the Company
has no knowledge of any tax deficiency which has been or is reasonably
likely to be asserted or threatened against the Company or its
subsidiaries which would materially and adversely affect the business,
operations or properties of the Company and its subsidiaries.
(r) The Company is not, and will not become as a result of the
consummation of the transactions contemplated by this Agreement and
application of the net proceeds therefrom as described in the
Prospectus, an "investment company" within the meaning of the
Investment Company Act of 1940, as amended and the rules and
regulations of the Commission thereunder.
(s) The Company has not distributed and will not distribute
prior to the First Closing Date any offering material in connection
with the offering and sale of the Common Shares other than the
Prospectus, the Registration Statement and the other materials
permitted by the Act.
(t) Each of the Company and its subsidiaries maintain
insurance of the types and in the amounts generally deemed adequate for
its business, including, but not limited to, insurance covering real
and personal property owned or leased by the Company and its
subsidiaries against theft, damage, destruction, acts of vandalism and
all other risks customarily insured against, all of which insurance is
in full force and effect.
(u) To the Company's knowledge, neither the Company nor any of
its subsidiaries has at any time during the last five years (i) made
any unlawful contribution to any candidate for foreign office, or
failed to disclose fully any contribution in violation of law, or (ii)
made any payment to any federal or state governmental officer or
official, or other person charged with similar public or quasi-public
duties, other than payments required or permitted by the laws of the
United States or any jurisdiction thereof.
(v) The Company has not taken and will not take prior to the
earlier of (i) the termination of this Agreement or (ii) the Second
Closing Date, directly or indirectly, any action designed to or that
might be reasonably expected to cause or result in stabilization or
manipulation of the price of the Common Stock to facilitate the sale or
resale of the Common Shares.
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(w) The transaction pursuant to which the shareholders of NCO
Financial Systems, Inc. ("NCO Financial") exchanged each of their
shares of NCO Financial for one share of Common Stock of the Company
has been consummated. As a result of such transaction, NCO Financial
became a wholly-owned subsidiary of the Company and NCO Financial's
status as a Subchapter S Corporation terminated.
(x) The agreements necessary to effect the acquisition of MAB,
CRWCD, and each other company included in the Company's pro forma
balance sheet included in the Prospectus and Registration Statement
have been duly authorized, executed and delivered by each of the
parties thereto and constitute the valid, legal and binding agreements
of each such party, and the acquisition of all of the capital stock or
assets of the respective acquired company by the Company and the
related transactions contemplated thereby have been consummated
pursuant to the terms described in the Prospectus.
SECTION 3. Representations, Warranties and Covenants of the
Selling Stockholders.
(a) Each of the Selling Stockholders, severally and not
jointly, represents and warrants to, and agrees with, the several
Underwriters that:
(i) Such Selling Stockholder has, or has the right to acquire,
and on the Closing Date hereinafter mentioned will have, good and
marketable title to the Common Shares proposed to be sold by such
Selling Stockholder hereunder on such Closing Date and full right,
power and authority to enter into this Agreement and to sell, assign,
transfer and deliver such Common Shares hereunder, free and clear of
all voting trust arrangements, liens, encumbrances, equities, security
interests, restrictions and claims whatsoever; and upon delivery of and
payment for such Common Shares hereunder, the Underwriters will acquire
good and marketable title thereto, free and clear of all liens,
encumbrances, equities, claims, restrictions, security interests,
voting trusts or other defects of title whatsoever.
(ii) Such Selling Stockholder has executed and delivered a
Power of Attorney and caused to be executed and delivered on his behalf
a Custody Agreement (hereinafter collectively referred to as the
"Stockholders Agreement") and in connection herewith such Selling
Stockholder further represents, warrants and agrees that such Selling
Stockholder deposited under the Stockholders Agreement, with the agent
named therein (the "Agent" or "Custodian") as custodian, certificates
in negotiable form for the Common Shares to be sold hereunder by such
Selling Stockholder, for the purpose of further delivery pursuant to
this Agreement. Such Selling Stockholder agrees that the Common Shares
to be sold by such Selling Stockholder and to be on deposit with the
Agent are subject to the interests of the Company and the Underwriters,
that the arrangements made for such custody are to that extent
irrevocable, and that the obligations of such Selling Stockholder
hereunder shall not be terminated, except as provided in this Agreement
or in the Stockholders Agreement, by any act of such Selling
Stockholder, by operation of law, by the death or incapacity of such
Selling Stockholder or by the occurrence of any other event. If the
Selling Stockholder should die or become incapacitated, or if any other
event should occur, before the delivery of the Common Shares hereunder,
the documents evidencing Common Shares then on deposit with the Agent
shall be delivered by the Agent in accordance with the terms and
conditions of this Agreement as if such death, incapacity or other
event had not occurred, regardless of whether or not the Agent shall
have received notice thereof. This Agreement and the Stockholders
Agreement have been duly executed and delivered by or on behalf of such
Selling Stockholder and the form of such Stockholders Agreement has
been delivered to you.
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(iii) The performance of this Agreement and the
Stockholders Agreement and the consummation of the transactions
contemplated hereby and by the Stockholders Agreement will not result
in a breach or violation by such Selling Stockholder of any of the
terms or provisions of, or constitute a default by such Selling
Stockholder under, any material indenture, mortgage, deed of trust,
trust (constructive or other), loan agreement, lease, franchise,
license or other material agreement or instrument to which such Selling
Stockholder is a party or by which such Selling Stockholder or any of
its properties is bound, any statute, or any judgment, decree, order,
rule or regulation of any court or governmental agency or body
applicable to such Selling Stockholder or any of its properties.
(iv) Such Selling Stockholder has not taken and will
not take prior to the Second Closing Date, directly or indirectly, any
action designed to or which has constituted or which might reasonably
be expected to cause or result in stabilization or manipulation of the
price of any security of the Company to facilitate the sale or resale
of the Common Shares.
(v) Each Preliminary Prospectus and the Prospectus,
insofar as it has related to such Selling Stockholder has conformed in
all material respects to the requirements of the Act and the Rules and
Regulations and has not included any untrue statement of a material
fact or omitted to state a material fact necessary to make the
statements therein, in the light of the circumstances under which they
were made, not misleading in light of the circumstances under which
they were made; and neither the Registration Statement nor the
Prospectus, nor any amendment or supplement thereto, as it relates to
such Selling Stockholder, will include any untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading.
(b) The Other Selling Stockholders, severally and not jointly,
represent and warrant to the several Underwriters that such Other
Selling Stockholder is not aware that any of the representations or
warranties set forth in Section 2 above is untrue or inaccurate in any
material respect.
(c) Each of the Selling Stockholders agrees with the Company
and the Underwriters not to offer to sell, sell or contract to sell or
otherwise dispose of any shares of Common Stock or securities
convertible into or exchangeable for any shares of Common Stock, for a
period of 90 days after the first date that any of the Common Shares
are released by you for sale to the public, without the prior written
consent of Xxxxxxxxxx Securities, which consent may be withheld at the
sole discretion of Xxxxxxxxxx Securities; provided, however that, the
provisions of this paragraph shall not preclude the Selling
Stockholders from: (a) exercising any warrant or stock option provided,
that it is prohibited from selling, offering to sell or otherwise
disposing of the securities upon exercise thereof except as provided in
this paragraph or (b) transferring shares of Common Stock, warrants,
options or other securities of the Company by gift, by will or laws of
descent and distribution to any person or entity provided such person
or entity agrees in writing to be bound by the provisions of this
paragraph or (c) pledging shares of Common Stock to secure bona fide
loans provided that the pledgee agrees in writing to be bound by the
provisions of this paragraph.
SECTION 4. Representations and Warranties of the Underwriters. The
Underwriters, represent and warrant to the Company and to the Selling
Stockholders that the information set forth (i) on the cover page of the
Prospectus with respect to price, underwriting discounts and commissions and
terms of offering, (ii) the last paragraph of the inside front cover page of the
Prospectus and (iii) under "Underwriting" in the Prospectus was furnished to the
Company by and on behalf of the Underwriters for use in connection with the
preparation of the Registration Statement and the Prospectus and is correct in
all material respects. The Underwriters represent and warrant that they have
been authorized to enter into this Agreement on its behalf and to act for it in
the manner herein provided.
SECTION 5. Purchase, Sale and Delivery of Common Shares.
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Upon the terms herein set forth, (i) the Company agrees to issue and
sell to the several Underwriters an aggregate of 1,200,000 Common Shares and
(ii) the Selling Stockholders agree to sell to the several Underwriters an
aggregate of 1,056,000 Firm Common Shares, each Selling Stockholder selling the
number of Firm Common Shares set forth opposite such Selling Stockholder's name
on Schedule B. On the basis of the representations, warranties and agreements
herein contained, and upon the terms but subject to the conditions herein set
forth, the Underwriters agree, severally and not jointly, to purchase from the
Company and the Selling Stockholders the respective number of Firm Common Shares
set forth opposite their names on Schedule A. The purchase price per Firm Common
Share to be paid by the several Underwriters to the Company and the Selling
Stockholders shall be $[___] per share.
Delivery of certificates for the Firm Common Shares to be
purchased by the Underwriters and payment therefor shall be made at the offices
of Xxxxxxxxxx Securities, 000 Xxxxxxxxxx Xxxxxx, Xxx Xxxxxxxxx, Xxxxxxxxxx (or
such other place as may be agreed to by the Company and the Representative) at
6:00 a.m. San Francisco time, on [___], 1997 or such other time and date not
later than 10:30 a.m. San Francisco time, on [___], 1997 as the Representative
shall designate by notice to the Company (the time and date of such closing are
called the "First Closing Date"). The Company and the Selling Stockholders
hereby acknowledge that circumstances under which the Representative may provide
notice to postpone the First Closing Date as originally scheduled include, but
are in no way limited to, any determination by the Company, the Selling
Stockholders or the Representative to recirculate to the public copies of an
amended or supplemented Prospectus or a delay as contemplated by the provisions
of Section 12.
In addition, on the basis of the representations, warranties and
agreements herein contained, and upon the terms but subject to the conditions
herein set forth, the Option Selling Stockholders hereby grant an option to the
several Underwriters to purchase, severally and not jointly, up to an aggregate
of 338,400 Optional Common Shares from such Option Selling Stockholders at the
purchase price per share to be paid by the Underwriters for the Firm Common
Shares. The option granted hereunder is for use by the Underwriters solely in
covering any over-allotments in connection with the sale and distribution of the
Firm Common Shares. The option granted hereunder may be exercised at any time
(but not more than once) upon notice by the Representative to such Option
Selling Stockholders (with a copy to the Company), which notice may be given at
any time within 30 days from the date of this Agreement. Such notice shall set
forth (i) the aggregate number of Optional Common Shares as to which the
Underwriters are exercising the option, (ii) the names and denominations in
which the certificates for the Optional Common Shares are to be registered and
(iii) the time, date and place at which such certificates will be delivered
(which time and date may be simultaneous with, but not earlier than, the First
Closing Date; and in such case the term "First Closing Date" shall refer to the
time and date of delivery of certificates for the Firm Common Shares and the
Optional Common Shares). Such time and date of delivery, if subsequent to the
First Closing Date, is called the "Second Closing Date" and shall be determined
by the Representative and shall not be earlier than three nor later than five
full business days after delivery of such notice of exercise. If any Optional
Common Shares are to be purchased, (a) each Underwriter agrees, severally and
not jointly, to purchase the number of Optional Common Shares (subject to such
adjustments to eliminate fractional shares as the Representative may determine)
that bears the same proportion to the total number of Optional Common Shares to
be purchased as the number of Firm Common Shares set forth on Schedule A
opposite the name of such Underwriter bears to the total number of Firm Common
Shares and (b) each Option Selling Stockholder agrees, severally and not
jointly, to sell the number of Optional Common Shares (subject to such
adjustments to eliminate fractional shares as the Representative may determine)
that bears the same proportion to the total number of Optional Common Shares to
be sold as the number of Optional Common Shares set forth in Schedule B opposite
the name of such Selling Stockholder. The Representative may cancel the option
at any time prior to its expiration by giving written notice of such
cancellation to such Option Selling Stockholders (with a copy to the Company).
Payment for the Common Shares to be sold by the Company shall be made
at the First Closing Date by wire transfer of immediately available funds to the
order of the Company. Payment for the Common Shares to be sold by the Selling
Stockholders shall be made at the First Closing Date (and, if applicable, at the
Second Closing Date) by wire transfer of immediately available funds to the
order of the Custodian.
- 9 -
It is understood that the Representative has been authorized, for its
own account and the accounts of the several Underwriters, to accept delivery of
and receipt for, and make payment of the purchase price for, the Firm Common
Shares and any Optional Common Shares the Underwriters have agreed to purchase.
Xxxxxxxxxx Securities, individually and not as the Representative of the
Underwriters, may (but shall not be obligated to) make payment for any Common
Shares to be purchased by any Underwriter whose funds shall not have been
received by the Representative by the First Closing Date or the Second Closing
Date, as the case may be, for the account of such Underwriter, but any such
payment shall not relieve such Underwriter from any of its obligations under
this Agreement.
Each Selling Stockholder hereby agrees that (i) it will pay all stock
transfer taxes, stamp duties and other similar taxes, if any, payable upon the
sale or delivery of the Common Shares to be sold by such Selling Stockholder to
the several Underwriters, or otherwise in connection with the performance of
such Selling Stockholder's obligations hereunder and (ii) the Custodian is
authorized to deduct for such payment any such amounts from the proceeds to such
Selling Stockholder hereunder and to hold such amounts for the account of such
Selling Stockholder with the Custodian under the Custody Agreement.
The Company and the Selling Stockholders shall deliver, or cause to be
delivered, to the Representative for the accounts of the several Underwriters
certificates for the Firm Common Shares to be sold by them at the First Closing
Date, against the irrevocable release of a wire transfer of immediately
available funds for the amount of the purchase price therefor. The Company and
the Selling Stockholders shall also deliver, or cause to be delivered, to the
Representative for the accounts of the several Underwriters, certificates for
the Optional Common Shares the Underwriters have agreed to purchase from them at
the First Closing Date or the Second Closing Date, as the case may be, against
the irrevocable release of a wire transfer of immediately available funds for
the amount of the purchase price therefor. The certificates for the Common
Shares shall be in definitive form and registered in such names and
denominations as the Representative shall have requested at least two full
business days prior to the First Closing Date (or the Second Closing Date, as
the case may be) and shall be made available for inspection on the business day
preceding the First Closing Date (or the Second Closing Date, as the case may
be) at a location in New York City as the Representative may designate. Time
shall be of the essence, and delivery at the time and place specified in this
Agreement is a further condition to the obligations of the Underwriters.
Not later than 12:00 p.m. on the second business day following the date
the Common Shares of released by the Underwriters for sale to the public, the
Company shall delivery or cause to be delivered copies of the Prospectus in such
quantities and at such places as the Representative shall request.
SECTION 6. Covenants of the Company. The Company covenants and agrees
that:
(a) The Company will use its best efforts to cause the
Registration Statement and any amendment thereof, if not effective at
the time and date that this Agreement is executed and delivered by the
parties hereto, to become effective. If the Registration Statement has
become or becomes effective pursuant to Rule 430A of the Rules and
Regulations, or the filing of the Prospectus is otherwise required
under Rule 424(b) of the Rules and Regulations, the Company will file
the Prospectus, properly completed, pursuant to the applicable
paragraph of Rule 424(b) of the Rules and Regulations within the time
period prescribed and will provide evidence satisfactory to you of such
timely filing. The Company will promptly advise you in writing (i) of
the receipt of any comments of the Commission, (ii) of any request of
the Commission for amendment of or supplement to the Registration
Statement (either before or after it becomes effective), any
Preliminary Prospectus or the Prospectus or for additional information,
(iii) when the Registration Statement shall have become effective, and
(iv) of the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or of the institution of
any proceedings for that purpose. If the Commission shall enter any
such stop order at any time, the Company will use its best efforts to
obtain the lifting of such order at the earliest possible moment. The
Company will not file any amendment or supplement to the Registration
Statement (either before or after it becomes effective), any
Preliminary Prospectus or the Prospectus of which you have not been
furnished with a copy a reasonable time prior to such filing or to
which you reasonably object or which is not in compliance with the Act
and the Rules and Regulations.
- 10 -
(b) The Company will prepare and file with the Commission,
promptly upon your request, any amendments or supplements to the
Registration Statement or the Prospectus which in your judgment may be
necessary or advisable to enable the several Underwriters to continue
the distribution of the Common Shares and will use its best efforts to
cause the same to become effective as promptly as possible. The Company
will fully and completely comply with the provisions of Rule 430A of
the Rules and Regulations with respect to information omitted from the
Registration Statement in reliance upon such Rule.
(c) If at any time prior to the final date on which a
prospectus relating to the Common Shares is required by law to be
delivered by an Underwriter or dealer, any event occurs, as a result of
which the Prospectus, including any amendments or supplements, would
include an untrue statement of a material fact, or omit to state any
material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they
were made, not misleading, or if it is necessary at any time to amend
the Prospectus, including any amendments or supplements, to comply with
the Act or the Rules and Regulations, the Company will promptly advise
you thereof and will promptly prepare and file with the Commission, at
its own expense, an amendment or supplement which will correct such
statement or omission or an amendment or supplement which will effect
such compliance and will use its best efforts to cause the same to
become effective as soon as possible; and, in case any Underwriter is
required to deliver a prospectus after such nine-month period, the
Company upon request, but at the expense of such Underwriter, will
promptly prepare such amendment or amendments to the Registration
Statement and such Prospectus or Prospectuses as may be necessary to
permit compliance with the requirements of Section 10(a)(3) of the Act.
(d) As soon as practicable, but not later than 45 days after
the end of the first quarter ending after one year following the
"effective date of the Registration Statement" (as defined in Rule
158(c) of the Rules and Regulations), the Company will make generally
available to its security holders an earnings statement (which need not
be audited) covering a period of 12 consecutive months beginning after
the effective date of the Registration Statement which will satisfy the
provisions of the last paragraph of Section 11(a) of the Act.
(e) During such period as a prospectus is required by law to
be delivered in connection with sales by an Underwriter or dealer, the
Company, at its expense, will furnish to you and the Selling
Stockholders or mail to your order copies of the Registration
Statement, the Prospectus, the Preliminary Prospectus and all
amendments and supplements to any such documents in each case as soon
as available and in such quantities as you and the Selling Stockholders
may request, for the purposes contemplated by the Act.
(f) The Company shall cooperate with you and your counsel in
order to qualify or register the Common Shares for sale under (or
obtain exemptions from the application of) the Blue Sky laws of such
jurisdictions as you designate, will comply with such laws and will
continue such qualifications, registrations and exemptions in effect so
long as reasonably required for the distribution of the Common Shares.
The Company shall not be required to qualify as a foreign corporation
or to file a general consent to service of process in any such
jurisdiction where it is not presently qualified or where it would be
subject to taxation as a foreign corporation. The Company will advise
you promptly of the suspension of the qualification or registration of
(or any such exemption relating to) the Common Shares for offering,
sale or trading in any jurisdiction or any initiation or threat of any
proceeding for any such purpose, and in the event of the issuance of
any order suspending such qualification, registration or exemption, the
Company, with your cooperation, will use its best efforts to obtain the
withdrawal thereof.
(g) During the period of five years hereafter, the Company
will furnish to the Underwriters: (i) as soon as practicable after the
end of each fiscal year, copies of the Annual Report of the Company
- 11 -
containing the balance sheet of the Company as of the close of such
fiscal year and statements of income, stockholders' equity and cash
flows for the year then ended and the opinion thereon of the Company's
independent public accountants; (ii) as soon as practicable after the
filing thereof, copies of each proxy statement, Annual Report on Form
10-K, Quarterly Report on Form 10-Q, Current Report on Form 8-K or
other report filed by the Company with the Commission, the NASD or any
securities exchange; and (iii) as soon as available, copies of any
report or communication of the Company mailed generally to holders of
its Common Stock.
(h) During the period of 90 days after the first date that any
of the Common Shares are released by you for sale to the public,
without the prior written consent of Xxxxxxxxxx Securities, which
consent may be withheld at the sole discretion of Xxxxxxxxxx
Securities, the Company will not issue, offer, sell, grant options to
purchase or otherwise dispose of any of the Company's equity securities
or any other securities convertible into or exchangeable with its
Common Stock or other equity security except for (a) issuances of
Common Stock pursuant to this Agreement, (b) grants of options to the
Company's employees, directors and consultants under the Company's
stock option plans as disclosed in the Prospectus, (c) issuances of
Common Stock upon the exercise or conversion of reserved, authorized or
outstanding stock options, warrants or convertible notes disclosed in
the Prospectus, (d) issuances of the Company's Common Stock or other
equity securities or any other securities convertible into or
exchangeable for its Common Stock or other equity securities as full or
partial consideration for any bona fide loan to the Company or for any
bona fide merger or acquisition transaction.
(i) The Company will apply the net proceeds of the sale of the
Common Shares sold by it substantially in accordance with its
statements under the caption "Use of Proceeds" in the Prospectus.
(j) The Company will use its best efforts to qualify or
register its Common Stock for sale in non-issuer transactions under (or
obtain exemptions from the application of) the Blue Sky laws of the
State of California (and thereby permit market making transactions and
secondary trading in the Company's Common Stock in California), will
comply with such Blue Sky laws and will continue such qualifications,
registrations and exemptions in effect for a period of five years after
the date hereof.
(k) The Company will use its best efforts to cause the Common
Shares to be listed for quotation as a national market system security
on the Nasdaq National Market.
You may, in your sole discretion, waive in writing the
performance by the Company of any one or more of the foregoing
covenants or extend the time for their performance.
SECTION 7. Payment of Expenses. Whether or not the transactions
contemplated hereunder are consummated or this Agreement becomes effective or is
terminated, the Company shall pay all costs, fees and expenses incurred in
connection with the performance of the obligations of the Company and of the
Selling Stockholders hereunder and in connection with the transactions
contemplated hereby, including without limiting the generality of the foregoing,
(i) all expenses incident to the issuance and delivery of the Common Shares
(including all printing and engraving costs), (ii) all fees and expenses of the
registrar and transfer agent of the Common Stock, (iii) all necessary issue,
transfer and other stamp taxes in connection with the issuance and sale of the
Common Shares to the Underwriters, (iv) all fees and expenses of the Company's
counsel and the Company's independent accountants, (v) all costs and expenses
incurred in connection with the printing, filing, shipping and distribution of
the Registration Statement, each Preliminary Prospectus and the Prospectus
(including all exhibits and financial statements) and all amendments and
supplements provided for herein, this Agreement, the Agreement Among
Underwriters, the Selected Dealers Agreement, the Underwriters' Questionnaire,
the Underwriters' Power of Attorney and the Blue Sky memorandum, (vi) all filing
fees, attorneys' fees and expenses incurred by the Company or the Underwriters
in connection with qualifying or registering (or obtaining exemptions from the
qualification or registration of) all or any part of the Common Shares for offer
and sale under the Blue Sky laws, (vii) the filing fee of the National
- 12 -
Association of Securities Dealers, Inc., and (viii) all other fees, costs and
expenses referred to in Item 13 of the Registration Statement. Except as
provided in this Section 7, Section 9 and Section 11 hereof, the Underwriters
shall pay all of their own expenses, including the fees and disbursements of
their counsel (excluding those relating to qualification, registration or
exemption under the Blue Sky laws and the Blue Sky memorandum referred to
above). The Company and the Selling Stockholders 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. This Section 7 shall not affect any
agreements relating to the payment of expenses between the Company and the
Selling Stockholders.
The Selling Stockholders will pay (directly or by reimbursement) all
fees and expenses incident to the performance of their obligations under this
Agreement which are not otherwise specifically provided for herein, including
but not limited to (i) any fees and expenses of separate counsel for such
Selling Stockholders; (ii) any fees and expenses of the Agent; and (iii) any
issue, transfer and other stamp taxes incident to the sale and delivery of the
Common Shares to be sold by such Selling Stockholders to the Underwriters
hereunder.
SECTION 8. Conditions of the Obligations of the Underwriters. The
obligations of the several Underwriters to purchase and pay for the Firm Common
Shares on the First Closing Date and the Optional Common Shares on the Second
Closing Date shall be subject to the accuracy of the representations and
warranties on the part of the Company and the Selling Stockholders herein set
forth as of the date hereof and as of the First Closing Date or the Second
Closing Date, as the case may be, to the accuracy of the statements of Company
officers and the Selling Stockholders made pursuant to the provisions hereof, to
the performance by the Company and the Selling Stockholders of their respective
obligations hereunder, and to the following additional conditions:
(a) The Registration Statement shall have become effective not
later than 5:00 P.M. (or, in the case of a registration statement filed
pursuant to Rule 462(b) of the Rules and Regulations relating to the
Common Shares, not later than 10 P.M.), Washington, D.C. Time, on the
date of this Agreement, or at such later time as shall have been
consented to by you; if the filing of the Prospectus, or any supplement
thereto, is required pursuant to Rule 424(b) of the Rules and
Regulations, the Prospectus shall have been filed in the manner and
within the time period required by Rule 424(b) of the Rules and
Regulations; and prior to such Closing Date, no stop order suspending
the effectiveness of the Registration Statement shall have been issued
and no proceedings for that purpose shall have been instituted or shall
be pending or, to the knowledge of the Company, the Selling
Stockholders or you, shall be contemplated by the Commission; and any
request of the Commission for inclusion of additional information in
the Registration Statement, or otherwise, shall have been complied with
to your satisfaction.
(b) You shall be reasonably satisfied that since the
respective dates as of which information is given in the Registration
Statement and Prospectus and except as described in or contemplated by
the Prospectus, (i) there shall not have been any change in the capital
stock (other than upon the sale of the Common Shares hereunder or as a
result of the exercise of outstanding options and warrants or the
conversion of convertible notes disclosed in the Prospectus) of the
Company or any of its subsidiaries or any material change in the
indebtedness (other than in the ordinary course of business) of the
Company or any of its subsidiaries, (ii) no material verbal or written
agreement or other transaction shall have been entered into by the
Company or any of its subsidiaries which is not in the ordinary course
of business, (iii) no loss or damage (whether or not insured) to the
property of the Company or any of its subsidiaries shall have been
sustained which materially and adversely affects the condition
(financial or otherwise), business, results of operations or prospects
of the Company and its subsidiaries taken as a whole, (iv) no legal or
governmental action, suit or proceeding affecting the Company or any of
its subsidiaries which will have a Material Adverse Effect or which
adversely affects the transactions contemplated by this Agreement shall
have been instituted or threatened, and (v) there shall not have been
any material adverse change in the condition (financial or otherwise),
business, management, results of operations or prospects of the Company
and its subsidiaries taken as a whole which makes it impractical or
inadvisable in the reasonable judgment of the Underwriters to proceed
with the public offering or purchase the Common Shares as contemplated
hereby.
- 13 -
(c) There shall have been furnished to you, as Underwriters,
on each Closing Date, in form and substance satisfactory to you, except
as otherwise expressly provided below:
(i) An opinion of Blank Rome Xxxxxxx & XxXxxxxx, counsel for
the Company and certain of the Selling Stockholders, addressed to the
Underwriters and dated the First Closing Date, or the Second Closing
Date (in the latter case with respect to the Selling Stockholders
only), as the case may be, to the effect that:
(1) Each of the Company, NCO Financial
Systems, Inc., CRWF Acquisition, Inc. and K&K Acquisition, Inc. is a
corporation duly organized and presently subsisting under the laws of
the Commonwealth of Pennsylvania. Each of the Company's other
subsidiaries has been duly incorporated and is validly existing as a
corporation in good standing under the laws of its jurisdiction of
incorporation. Each of the Company and its subsidiaries is duly
qualified to do business as a foreign corporation and is in good
standing in all other jurisdictions where the ownership or leasing of
properties or the conduct of its business requires such qualification,
except for jurisdictions in which the failure to so qualify would not
have a Material Adverse Effect and has full corporate power and
authority to own its properties and conduct its business as described
in the Registration Statement;
(2) The authorized, issued and outstanding
capital stock of the Company is as set forth under the caption
"Capitalization" in the Prospectus; all necessary and proper corporate
proceedings have been taken in order to authorize validly such
authorized Common Stock; all outstanding shares of Common Stock
(including any Optional Common Shares) have been duly and validly
issued, are fully paid and nonassessable, have been issued in
compliance, in all material respects, with federal and state securities
laws, were not issued in violation of or subject to any statutory
preemptive rights or, to the knowledge of counsel, other preemptive or
other rights to subscribe for or purchase any securities and conform,
in all material respects, to the description thereof contained in the
Prospectus; without limiting the foregoing, there are no statutory
preemptive rights or, to the knowledge of counsel, other preemptive or
other rights to subscribe for or purchase any of the Common Shares to
be sold by the Company hereunder;
(3) All of the issued and outstanding shares
of the Company's subsidiaries have been duly and validly authorized and
issued, are fully paid and nonassessable and are owned of record and,
to such counsel's knowledge, beneficially by the Company or another
wholly-owned subsidiary of the Company free and clear of any adverse
claims (within the meaning of the Uniform Commercial Code) or voting
trusts;
(4) The certificates evidencing the Common
Shares to be delivered hereunder are in due and proper form under
Pennsylvania law, and when duly countersigned by the Company's transfer
agent and registrar, and delivered to you or upon your order against
payment of the agreed consideration therefor in accordance with the
provisions of this Agreement, the Common Shares represented thereby
will be duly authorized and validly issued, fully paid and
nonassessable, will not have been issued in violation of or subject to
any statutory preemptive rights or, to the knowledge of counsel, other
preemptive or other rights to subscribe for or purchase such securities
and will conform in all material respects to the description thereof
contained in the Prospectus;
(5) Except as disclosed in or specifically
contemplated by the Prospectus, to such counsel's knowledge, there are
no outstanding options, warrants or other rights calling for the
issuance of, and no legally binding commitments, plans or arrangements
to issue, any shares of capital stock of the Company or any security
convertible into or exchangeable for capital stock of the Company;
(6) (a) The Registration Statement has
become effective under the Act, and, to such counsel's knowledge, no
stop order suspending the effectiveness of the Registration Statement
or preventing the use of the Prospectus has been issued and no
proceedings for that purpose have been instituted or are pending or
- 14 -
threatened by the Commission; any required filing of the Prospectus and
any supplement thereto pursuant to Rule 424(b) of the Rules and
Regulations has been made in the manner and within the time period
required by such Rule 424(b);
(b) The Registration Statement, the
Prospectus and each amendment or supplement thereto (except
for the financial statements, schedules and other financial
and statistical information included therein as to which such
counsel need express no opinion) comply as to form in all
material respects with the requirements of the Act and the
Rules and Regulations;
(c) To such counsel's knowledge, there are
no franchises, leases, contracts, agreements or documents of a
character required to be disclosed in the Registration
Statement or Prospectus or to be filed as exhibits to the
Registration Statement which are not disclosed or filed, as
required;
(d) To such counsel's knowledge, there are
no legal or governmental actions, suits or proceedings pending or
threatened against the Company which are required to be described in
the Prospectus which are not described as required; and
(7) The Company has full right, power and
authority to enter into this Agreement and to sell and deliver the
Common Shares to be sold by it to the several Underwriters; this
Agreement has been duly and validly authorized by all necessary
corporate action by the Company, has been duly and validly executed and
delivered by and on behalf of the Company, and, assuming due
authorization, execution and delivery by the other parties thereto, is
a valid and binding agreement of the Company enforceable in accordance
with its terms, except as enforceability may be limited by general
equitable principles, bankruptcy, insolvency, reorganization,
moratorium or other laws affecting creditors' rights generally and
except as to those provisions relating to indemnity or contribution for
liabilities arising under the Act or under this Agreement as to which
no opinion need be expressed; and no approval, authorization, order,
consent, registration, filing, qualification, license or permit of or
with any court, regulatory, administrative or other governmental body
is required for the execution and delivery of this Agreement by the
Company or the consummation of the transactions contemplated by this
Agreement, except such as have been obtained and are in full force and
effect under the Act and such as may be required under applicable Blue
Sky laws in connection with the purchase and distribution of the Common
Shares by the Underwriters, as to which such counsel need not express
an opinion, and the clearance of such offering with the NASD, as to
which such counsel need not express an opinion;
(8) The execution and performance of this
Agreement and the consummation of the transactions herein contemplated
will not conflict with, result in the breach of, or constitute, either
by itself or upon notice or the passage of time or both, a default
under, any agreement, mortgage, deed of trust, lease, franchise,
license, indenture, permit or other instrument known to such counsel 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 or their property may
be bound or affected which conflict, breach or default would have a
Material Adverse Effect, or violate any of the provisions of the
articles of incorporation or bylaws, or other organizational documents,
of the Company or any of its subsidiaries or, violate any statute,
judgment, decree, order, rule or regulation known to such counsel of
any court or governmental body having jurisdiction over the Company or
any of its subsidiaries or any of its or their property;
(9) Neither the Company nor any subsidiary
is in violation of its articles of incorporation or bylaws, or other
organizational documents, or such counsel's knowledge, in breach of or
default with respect to any provision of any agreement, mortgage, deed
of trust, lease, franchise, license, indenture, permit or other
instrument known to such counsel to which the Company or any such
subsidiary is a party or by which it or any of its properties may be
bound or affected, except where such default would not have a Material
Adverse Effect; and, to such counsel's knowledge, the Company and its
subsidiaries are in compliance with all laws, rules, regulations,
judgments, decrees, orders and statutes of any court or jurisdiction to
which they are subject, except where noncompliance would not have a
Material Adverse Effect;
- 15 -
(10) To such counsel's knowledge, no holders
of securities of the Company have rights which have not been waived to
the registration of shares of Common Stock or other securities, because
of the filing of the Registration Statement by the Company or the
offering contemplated hereby;
(11) To such counsel's knowledge, this
Agreement and the Stockholders Agreement have been executed and
delivered by or on behalf of each of the Selling Stockholders; the
Agent has been duly and validly authorized to act as the custodian of
the Common Shares to be sold by each such Selling Stockholder; and the
performance of this Agreement and the Stockholders Agreement and the
consummation of the transactions herein contemplated by the Selling
Stockholders will not result in a breach of, or constitute a default
under, any indenture, mortgage, deed of trust, trust (constructive or
other), loan agreement, lease, franchise, license or other agreement or
instrument to which any of the Selling Stockholders is a party or by
which any of the Selling Stockholders or any of their properties may be
bound which is material to such Selling Stockholder, or violate any
statute, judgment, decree, order, rule or regulation known to such
counsel of any court or governmental body having jurisdiction over any
of the Selling Stockholders or any of their properties; and to such
counsel's knowledge, no approval, authorization, order or consent of
any court, regulatory body, administrative agency or other governmental
body is required for the execution and delivery of this Agreement or
the Stockholders Agreement or the consummation by the Selling
Stockholders of the transactions contemplated by this Agreement, except
such as have been obtained and are in full force and effect under the
Act and such as may be required under the rules of the NASD and
applicable Blue Sky laws (as to which such counsel need not express an
opinion);
(12) To such counsel's knowledge, the
Selling Stockholders have full right, power and authority to enter into
this Agreement and the Stockholders Agreement and to sell, transfer and
deliver the Common Shares to be sold on such Closing Date by such
Selling Stockholders hereunder and good and marketable title to such
Common Shares so sold, free and clear of any adverse claims (within the
meaning of the Uniform Commercial Code) or voting trusts, has been
transferred to the Underwriters (whom counsel may assume to be bona
fide purchasers within the meaning of the Uniform Commercial Code) who
have purchased such Common Shares hereunder;
(13) To such counsel's knowledge, this
Agreement and the Stockholders Agreement are valid and binding
agreements of each of the Selling Stockholders in accordance with their
terms except as enforceability may be limited by general equitable
principles, bankruptcy, insolvency, reorganization, moratorium or other
laws affecting creditors' rights generally and except with respect to
those provisions relating to indemnities or contributions for
liabilities under the Act or under this Agreement, as to which no
opinion need be expressed;
(14) The transaction pursuant to which the
shareholders of NCO Financial exchanged each of their shares of NCO
Financial for one share of the Company has been consummated. As a
result of such transaction, NCO Financial became a wholly-owned
subsidiary of the Company and NCO Financial's status as a Subchapter S
Corporation terminated; and
(15) The agreements necessary to effect the
acquisitions of MAB, CRWCD, and each other company included in the
Company's Pro Forma Financial Statements contained in the Prospectus
have been duly authorized, executed and delivered by each of the
parties thereto and constitute the valid, legal and binding agreements
of each of such party, and the acquisition of all of the capital stock
or assets of each of such companies by the Company and the related
transactions contemplated thereby have been consummated as described in
the Prospectus.
- 16 -
In rendering such opinion, such counsel may rely as to matters
of local law, on opinions of local counsel, and as to matters of fact
or mixed questions of fact and law, on certificates of the Selling
Stockholders and of officers of the Company and of governmental
officials, in which case their opinion is to state that they are so
doing and that the Underwriters are justified in relying on such
opinions or certificates and copies of said opinions or certificates
are to be attached to the opinion. In rendering an opinion as to the
matters set forth in subparagraphs (11), (12) and (13), counsel may
rely as to matters of fact and mixed questions of fact and law with
respect to each Selling Stockholder, upon the representations of such
Selling Stockholder contained in this Agreement, the Stockholders
Agreement and/or in certificates of the Selling Stockholder. Such
counsel shall also include a statement to the effect that nothing has
come to such counsel's attention that would lead such counsel to
believe that either at the effective date of the Registration Statement
or at the applicable Closing Date the Registration Statement or the
Prospectus, or any such amendment or supplement, contains any untrue
statement of a material fact or omits to state a material fact required
to be stated therein or necessary to make the statements therein, in
the light of the circumstances under which they were made, not
misleading (except that said counsel need not express any opinion or
make any statement with respect to the financial statements, schedules
and other financial and statistical information included therein). With
respect to such statement, counsel may state that their belief is based
upon the procedures set forth therein, but is without independent check
and verification;
(ii) Such opinion or opinions of Piper & Marbury
L.L.P., counsel for the Underwriters dated the First Closing Date or
the Second Closing Date, as the case may be, with respect to the
incorporation of the Company, the sufficiency of all corporate
proceedings and other legal matters relating to this Agreement, the
validity of the Common Shares, the Registration Statement and the
Prospectus and other related matters as you may reasonably require, and
the Company and the Selling Stockholders shall have furnished to such
counsel such documents and shall have exhibited to them such papers and
records as they may reasonably request for the purpose of enabling them
to pass upon such matters. In connection with such opinions, such
counsel may rely on representations or certificates of officers of the
Company and governmental officials.
(iii) A certificate of the Company executed by the
President and the chief financial or accounting officer of the Company
(on behalf of the Company and not in an individual capacity), dated the
First Closing Date or the Second Closing Date, as the case may be, to
the effect that:
(1) The representations and warranties of
the Company set forth in Section 2 of this Agreement are true and
correct as of the date of this Agreement and as of the First Closing
Date or the Second Closing Date, as the case may be, and the Company
has complied with all the agreements and satisfied all the conditions
on its part to be performed or satisfied on or prior to such Closing
Date;
(2) The Commission has not issued any order
preventing or suspending the use of the Prospectus or any Preliminary
Prospectus filed as a part of the Registration Statement or any
amendment thereto; no stop order suspending the effectiveness of the
Registration Statement has been issued; and to the best of the
knowledge of the respective signers, no proceedings for that purpose
have been instituted or are pending or contemplated under the Act;
(3) As of the effective date of the
Registration Statement, the statements contained in the Registration
Statement and the Prospectus and any amendments or supplements thereto
regarding the Company and its subsidiaries were true and correct; and
neither the Registration Statement nor the Prospectus nor any amendment
or supplement thereto includes any untrue statement of a material fact
or omits to state any material fact required to be stated therein or
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
- 17 -
(4) Since the initial date on which the
Registration Statement was filed, no agreement, written or oral,
transaction or event has occurred which should have been set forth in
an amendment to the Registration Statement or in a supplement to or
amendment of any prospectus which has not been disclosed in such a
supplement or amendment;
(5) Since the respective dates as of which
information is given in the Registration Statement and the Prospectus,
and except as disclosed in or contemplated by the Prospectus: (i) there
has not been any material adverse change or a development involving a
material adverse change in the condition (financial or otherwise),
business, properties, results of operations, management or prospects of
the Company and its subsidiaries taken as a whole; (ii) no legal or
governmental action, suit or proceeding is pending or, to the knowledge
of the respective signers, threatened against the Company or any of its
subsidiaries which will have a Material Adverse Effect or which
adversely affects the transactions contemplated by this Agreement;
(iii) no material verbal or written agreement or other transaction has
been entered into by the Company or any of its subsidiaries which is
not in the ordinary course of business; (iv) there has not been any
change in the capital stock (other than upon the sale of the Common
Shares hereunder or as a result of the exercise of outstanding options
and warrants or the conversion of convertible notes disclosed in the
Prospectus) of the Company or any of its subsidiaries or any change in
the indebtedness material to the Company and its subsidiaries (other
than in the ordinary course of business); and (v) the Company has not
declared or paid any dividend, or made any other distribution, upon its
outstanding capital stock payable to stockholders of record on a date
prior to the First Closing Date or Second Closing Date; and
(6) Since the respective dates as of which
information is given in the Registration Statement and the Prospectus
and except as disclosed in or contemplated by the Prospectus, the
Company and its subsidiaries have not sustained a material loss or
material damage by strike, fire, flood, windstorm, accident or other
calamity (whether or not insured).
(iv) On the Second Closing Date, a certificate, dated
such Closing Date and addressed to you, signed by or on behalf of each
of the Selling Stockholders to the effect that the representations and
warranties of such Selling Stockholder in this Agreement are true and
correct, as if made at and as of the Second Closing Date, and such
Selling Stockholder has complied with all the agreements and satisfied
all the conditions on his part to be performed or satisfied prior to
the Second Closing Date.
(v) On the date before this Agreement is executed and
also on the First Closing Date and the Second Closing Date a letter
addressed to you, as Underwriters, from Coopers & Xxxxxxx and Xxxxxx
Xxxxxxxx LLP, independent accountants, the first one to be dated the
day before the date of this Agreement (the receipt and satisfactory
form of which letter the Underwriters hereby acknowledge), the second
one to be dated the First Closing Date and the third one (in the event
of a Second Closing) to be dated the Second Closing Date, in form and
substance satisfactory to you.
(vi) On or before the First Closing Date, letters
from each of the Selling Stockholders and each director and executive
officer of the Company, in form and substance satisfactory to you,
confirming that for a period of 90 days after the first date that any
of the Common Shares are released by you for sale to the public, such
person will not directly or indirectly sell or offer to sell or
otherwise dispose of any shares of Common Stock or any right to acquire
such shares without the prior written consent of either Xxxxxxxxxx
Securities or each of the Underwriters which consent may be withheld at
the sole discretion of Xxxxxxxxxx Securities or each of the
Underwriters, as the case may be; provided, however that, the
provisions of such agreement shall not preclude such persons from: (a)
exercising any warrant or stock option provided that it is prohibited
from selling, offering to sell or otherwise disposing of the securities
upon exercise thereof except as provided in this paragraph or (b)
transferring shares of Common Stock, warrants, options or other
securities of the Company by gift, by will or laws of descent and
distribution to any person or entity provided that such person or
entity agrees in writing to be bound by the provisions of this
paragraph or (c) pledging shares of Common Stock to secure bona fide
loans provided that the pledgee agrees in writing to be bound by the
provisions of this paragraph.
-18 -
All such opinions, certificates, letters and documents shall be in
compliance with the provisions hereof only if they are reasonably satisfactory
to you and to Piper & Marbury L.L.P., counsel for the Underwriters. The Company
shall furnish you with such manually signed or conformed copies of such
opinions, certificates, letters and documents as you request. Any certificate
signed by any officer of the Company and delivered to the Underwriters or to
counsel for the Underwriters shall be deemed to be a representation and warranty
by the Company to the Underwriters as to the statements made therein.
If any condition to the Underwriters' obligations hereunder to be
satisfied prior to or at the First Closing Date is not so satisfied, this
Agreement at your election will terminate upon notification by you as
Underwriters to the Company and the Selling Stockholders without liability on
the part of any Underwriter, the Company or the Selling Stockholders except for
the expenses to be paid or reimbursed by the Company and by the Selling
Stockholders pursuant to Sections 7 and 9 hereof and except to the extent
provided in Section 11 hereof.
SECTION 9. Reimbursement of Underwriters' Expenses. Notwithstanding any
other provisions hereof, if this Agreement shall be terminated by you pursuant
to Section 8 or if the sale to the Underwriters of the Common Shares at the
First Closing is not consummated because of any refusal, inability or failure on
the part of the Company or the Selling Stockholders to perform any agreement
herein or to comply with any provision hereof, unless such refusal, inability or
failure is due to the breach of any material terms or conditions of this
Agreement by the Underwriters, the Company agrees to reimburse you as the
Underwriters upon demand for all out-of-pocket expenses that shall have been
reasonably incurred by you in connection with the proposed purchase and the sale
of the Common Shares, including but not limited to fees and disbursements of
counsel, printing expenses, travel expenses, postage, telegraph charges and
telephone charges relating directly to the offering contemplated by the
Prospectus. Any such termination shall be without liability of any party to any
other party except that the provisions of this Section, Section 7 and Section 11
shall at all times be effective and shall apply. For purposes of this Agreement,
the Company and the Selling Stockholders 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.
SECTION 10. Effectiveness of Registration Statement. You, the Company
and the Selling Stockholders will use your, its and their best efforts to cause
the Registration Statement to become effective, to prevent the issuance of any
stop order suspending the effectiveness of the Registration Statement and, if
such stop order be issued, to obtain as soon as possible the lifting thereof.
SECTION 11. Indemnification. (a) The Company and each of the Selling
Stockholders, severally and not jointly, agrees to indemnify and hold harmless
each Underwriter and each person, if any, who controls any Underwriter within
the meaning of the Act against any losses, claims, damages, liabilities or
expenses, joint or several, to which such Underwriter or such controlling person
may become subject, under the Act, the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), or other federal or state statutory law or
regulation, or at common law or otherwise (including in settlement of any
litigation, if such settlement is effected with the written consent of the
Company, which consent will not be unreasonably withheld or delayed), insofar as
such losses, claims, damages, liabilities or expenses (or actions in respect
thereof as contemplated below) arise out of or are based upon (i) any untrue
statement or alleged untrue statement of any material fact contained in the
Registration Statement, any Preliminary Prospectus, the Prospectus, or any
amendment or supplement thereto, (ii) arise out of or are based upon the
omission or alleged omission to state in any of them a material fact required to
be stated therein or necessary to make the statements in any of them, in light
of the circumstances under which they were made, not misleading, or (iii) arise
out of or are based in whole or in part on any inaccuracy in the representations
and warranties of the Company or the Selling Stockholders contained herein or
any failure of the Company or the Selling Stockholders to perform their
- 19 -
respective obligations hereunder or under law; and will reimburse each
Underwriter and each such controlling person for any legal and other expenses as
such expenses are reasonably incurred by such Underwriter or such controlling
person in connection with investigating, defending, settling, compromising or
paying (if such settlement, compromise or payment is effected with the written
consent of the Company, which consent will not be unreasonably withheld or
delayed) any such loss, claim, damage, liability, expense or action; provided,
however, that (i) neither the Company nor the Selling Stockholders will be
liable in any such case to the extent that any such loss, claim, damage,
liability or expense arises out of or is based upon an untrue statement or
alleged untrue statement or omission or alleged omission made in the
Registration Statement, any Preliminary Prospectus, the Prospectus or any
amendment or supplement thereto in reliance upon and in conformity with the
information furnished to the Company as described in Section 4 hereof, (ii) with
respect to any untrue statement or alleged untrue statement or omission or
alleged omission made in any preliminary prospectus, such indemnity in this
subsection (a) shall not inure to the benefit of any Underwriter (or to the
benefit of any person controlling such Underwriter) if the person asserting any
such loss, claim, damage or liability who purchased the Common Shares which are
the subject thereof did not receive a copy of an amended preliminary prospectus
or the Prospectus (or the Prospectus as amended or supplemented) at or prior to
the written confirmation of the sale of such Common Shares to such person and
the untrue statement or alleged untrue statement or omission or alleged omission
of a material fact made in such preliminary prospectus was corrected in the
amended preliminary prospectus or the Prospectus (or the Prospectus as amended
and supplemented), and (iii) with respect to clause (iii) above, an Other
Selling Stockholder shall not be liable for a breach of a representation,
warranty, or covenant of the Company or another Selling Stockholder.
The Company and the Selling Stockholders may agree, as among themselves
and without limiting the rights of the Underwriters under this Agreement, as to
the respective amounts of such liability for which they each shall be
responsible. In no event, however, shall the liability of any Selling
Stockholder for indemnification or contribution under this Section 11 exceed the
proceeds received by such Selling Stockholder from the Underwriters in the
offering. Notwithstanding any thing to the contrary in this Section 11(a), each
underwriter and each person who controls such Underwriter agrees not to assert
its rights to indemnity under this Section 11(a) against the Selling
Stockholders unless and until (i) such Underwriter or controlling person has
requested indemnification and reimbursement from the Company for such losses,
claims, damages or liabilities (including any legal or other expenses reasonably
incurred) and (ii) the Company does not within thirty (30) days of such request
(A) agree to so indemnify such Underwriter or controlling person and (B)
reimburse in full such Underwriter or controlling person for any such losses,
damages or liabilities (including legal or other expenses) incurred. In the
event that litigation between the parties with respect to the Section 11 results
in a joint or several judgment against the Company and the Selling Stockholders,
each Underwriter and each person who controls such Underwriter, agrees that it
will not attempt to enforce such judgment against the Selling Stockholders
unless and until any part of such judgment shall remain unsatisfied by the
Company for more than thirty (30) days.
(b) Each Underwriter will severally indemnify and hold harmless the
Company, each of its directors, each of its officers who signed the Registration
Statement, the Selling Stockholders and each person, if any, who controls the
Company or any Selling Stockholder within the meaning of the Act, against any
losses, claims, damages, liabilities or expenses to which the Company, or any
such director, officer, Selling Stockholder or controlling person may become
subject, under the Act, the Exchange Act, or other federal or state statutory
law or regulation, or at common law or otherwise (including in settlement of any
litigation, if such settlement is effected with the written consent of such
Underwriter), insofar as such losses, claims, damages, liabilities or expenses
(or actions in respect thereof as contemplated below) arise out of or are based
upon: (i) any untrue or alleged untrue statement of any material fact contained
in the Registration Statement, any Preliminary Prospectus, the Prospectus, or
any amendment or supplement thereto, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in the Registration
Statement, any Preliminary Prospectus, the Prospectus, or any amendment or
supplement thereto, in reliance upon and in conformity with the information
furnished to the Company as described in Section 4 hereof or (ii) the failure of
any Underwriter at or prior to the written confirmation of the sale of shares to
send or deliver a copy of an amended Preliminary Prospectus or the Prospectus
(or the Prospectus as amended or supplemented) to the person asserting any such
losses, claims, damages, liabilities or expenses who purchased the Shares which
is the subject thereof and the untrue statement or omission of a material fact
- 20 -
contained in such Preliminary Prospectus was corrected in the amended
Preliminary Prospectus or Prospectus (or the Prospectus as amended or
supplemented); and will reimburse the Company, or any such director, officer,
Selling Stockholder or controlling person for any legal and other expense
reasonably incurred by the Company, or any such director, officer, Selling
Stockholder or controlling person in connection with investigating, defending,
settling, compromising or paying any such loss, claim, damage, liability,
expense or action. 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
of notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against an indemnifying party under this
Section, notify the indemnifying party in writing 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 for contribution or
otherwise than under the indemnity agreement contained in this Section or to the
extent it is not prejudiced as a result of such failure. In case any such action
is brought against any indemnified party and such indemnified party notifies the
indemnifying party of the commencement thereof, the indemnifying party will be
entitled to participate in, and, to the extent that it may wish, jointly with
all other indemnifying parties similarly notified, to assume the defense thereof
with counsel reasonably satisfactory to such indemnified party; provided,
however, if the defendants in any such action include both the indemnified party
and the indemnifying party and the representation of both parties by the same
counsel would be inappropriate due to conflicts of interest between the
positions of the indemnifying party and the indemnified party in conducting the
defense of any such action or because there may be legal defenses available to
it and/or other indemnified parties which are different from or additional to
those available to the indemnifying party, the indemnified party or parties
shall have the right to select separate counsel to assume such legal defenses
and to otherwise participate in the defense of such action on behalf of such
indemnified party or parties. Upon receipt of notice from the indemnifying party
to such indemnified party of its election so to assume the defense of such
action and approval by the indemnified party of counsel appointed to defend such
action, the indemnifying party will not be liable to such indemnified party
under this Section for any legal or other expenses subsequently incurred by such
indemnified party in connection with the defense thereof unless (i) the
indemnified party shall have employed such counsel in connection with the
assumption of legal defenses in accordance with the proviso to the next
preceding sentence (it being understood, however, that the indemnifying party
shall not be liable for the expenses of more than one separate counsel, approved
by the Underwriters in the case of paragraph (a), representing the indemnified
parties who are parties to such action) or (ii) the indemnifying party shall not
have employed counsel reasonably satisfactory to the indemnified party to
represent the indemnified party within a reasonable time after notice of
commencement of the action, in each of which cases the fees and expenses of
counsel shall be at the expense of the indemnifying party.
(d) If the indemnification provided for in this Section 11 is required
by its terms but is for any reason held to be unavailable to or otherwise
insufficient to hold harmless an indemnified party under paragraphs (a), (b) or
(c) in respect of any losses, claims, damages, liabilities or expenses referred
to herein, except by reason of the exceptions set forth in clauses (i) and (ii)
of Section 11(a) or for the failure of the indemnified party to give notice as
required in Section 11(c) (provided that the indemnifying party was unaware of
the proceeding to which such notice would have related and was prejudiced by the
failure to give such notice), then each applicable indemnifying party shall
contribute to the amount paid or payable by such indemnified party as a result
of any losses, claims, damages, liabilities or expenses referred to herein (i)
in such proportion as is appropriate to reflect the relative benefits received
by the Company, the Selling Stockholders and the Underwriters from the offering
of the Common Shares or (ii) if the allocation provided by clause (i) above is
not permitted by applicable law, in such proportion as is appropriate to reflect
not only the relative benefits referred to in clause (i) above but also the
relative fault of the Company, the Selling Stockholders and the Underwriters in
connection with the statements or omissions or inaccuracies in the
representations and warranties herein which resulted in such losses, claims,
damages, liabilities or expenses, as well as any other relevant equitable
considerations. The respective relative benefits received by the Company, the
Selling Stockholders and the Underwriters shall be deemed to be in the same
proportion, in the case of the Company and the Selling Stockholders, as the
total price paid to the Company and to the Selling Stockholders (in the case of
the Selling Stockholders, the proceeds received by such Selling Stockholders
from the Underwriters in the Offering for the Common Shares sold by them to the
Underwriters (net of underwriting commissions but before deducting expenses)
- 21 -
bears to the total price to the public set forth on the cover of the Prospectus,
and in the case of the Underwriters as the underwriting commissions received by
them bears to the total price to the public set forth on the cover of the
Prospectus. The relative fault of the Company, the Selling Stockholders and the
Underwriters 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 or the inaccurate or the alleged
inaccurate representation and/or warranty relates to information supplied by the
Company, the Selling Stockholders or the Underwriters and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission and any other equitable considerations appropriate in
the circumstances. The amount paid or payable by a party as a result of the
losses, claims, damages, liabilities and expenses referred to above shall be
deemed to include, subject to the limitations set forth in subparagraph (c) of
this Section 11, any legal or other fees or expenses reasonably incurred by such
party in connection with investigating or defending any action or claim. The
provisions set forth in subparagraph (c) of this Section 11 with respect to
notice of commencement of any action shall apply if a claim for contribution is
to be made under this subparagraph (d); provided, however, that no additional
notice shall be required with respect to any action for which notice has been
given under subparagraph (c) for purposes of indemnification. The Company, the
Selling Stockholders and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this Section 11 were determined solely 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 account
of the equitable considerations referred to in the immediately preceding
paragraph. Notwithstanding the provisions of this Section 11(d), (i) no
Underwriter shall be required to contribute any amount in excess of the amount
of the total underwriting commissions received by such Underwriter in connection
with the Common Shares underwritten by it and distributed to the public, (ii) 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 and (iii) no Selling Stockholder
shall be required to contribute any amount in excess of the proceeds received by
such Selling Stockholder from the Underwriters in the offering. The
Underwriters' obligations to contribute pursuant to this Section 11(d) are
several in proportion to their respective underwriting commitments and not
joint.
SECTION 12. Default of Underwriters. It shall be a condition to the
obligation of the Company and the Selling Stockholders to sell and deliver the
Common Shares hereunder, that, except as hereinafter in this paragraph provided,
each of the Underwriters shall purchase and pay for all the Common Shares agreed
to be purchased by such Underwriter hereunder upon tender to the Underwriters of
all such shares in accordance with the terms hereof. If any Underwriter or
Underwriters default in their obligations to purchase Common Shares hereunder on
either the First or Second Closing Date and the aggregate number of Common
Shares which such defaulting Underwriter or Underwriters agreed but failed to
purchase on such Closing Date does not exceed 10% of the total number of Common
Shares which the Underwriters are obligated to purchase on such Closing Date,
the non-defaulting Underwriters shall be obligated severally, in proportion to
their respective commitments hereunder, to purchase the Common Shares which such
defaulting Underwriters agreed but failed to purchase on such Closing Date. If
any Underwriter or Underwriters so default and the aggregate number of Common
Shares with respect to which such default occurs is more than the above
percentage and arrangements satisfactory to the Underwriters and the Company for
the purchase of such Common Shares by other persons 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 or the Selling Stockholders
except for the expenses to be paid by the Company and the Selling Stockholders
pursuant to Section 7 hereof and except to the extent provided in Section 11
hereof.
In the event that Common Shares to which a default relates are to be
purchased by the non-defaulting Underwriters or by another party or parties, the
Underwriters or the Company shall have the right to postpone the First or Second
Closing Date, as the case may be, for not more than five business days in order
that the necessary changes in the Registration Statement, Prospectus and any
other documents, as well as any other arrangements, may be effected. As used in
this Agreement, the term "Underwriter" includes any person substituted for an
Underwriter under this Section.
Nothing herein will relieve a defaulting Underwriter from liability for its
default.
SECTION 13. Effective Date. This Agreement shall become effective (i)
if at the time of execution and delivery of this Agreement the Registration
Statement has not become effective, simultaneously with the effectiveness of the
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Registration Statement, or (ii) immediately if at the time of execution and
delivery of this Agreement the Registration Statement has been declared
effective, but this Agreement shall nevertheless become effective at such
earlier time after the Registration Statement becomes effective as you may
determine on and by notice to the Company or by release of any of the Common
Shares for sale to the public. For the purposes of this Section 13, the Common
Shares shall be deemed to have been so released upon the release for publication
of any newspaper advertisement relating to the Common Shares or upon the release
by you of telegrams (i) advising Underwriters that the Common Shares are
released for public offering, or (ii) offering the Common Shares for sale to
securities dealers, whichever may occur first.
SECTION 14. Termination. Without limiting the right to terminate this
Agreement pursuant to any other provision hereof:
(a) This Agreement may be terminated by the Company by notice
to you and the Selling Stockholders or by you by notice to the Company
and the Selling Stockholders at any time prior to the time this
Agreement shall become effective and any such termination shall be
without liability on the part of the Company or the Selling
Stockholders to any Underwriter (except for the expenses to be paid or
reimbursed by the Company and the Selling Stockholders pursuant to
Sections 7 and 9 hereof and except to the extent provided in Section 11
hereof) or of any Underwriter to the Company or the Selling
Stockholders (except to the extent provided in Section 11 hereof).
(b) This Agreement may also be terminated by you prior to the
First Closing Date by notice to the Company (i) if additional material
governmental restrictions, not in force and effect on the date hereof,
shall have been imposed upon trading in securities generally (other
than general limitations on hours or number of days of trading) or if
minimum or maximum prices shall have been generally established on the
New York Stock Exchange or on the American Stock Exchange or in the
over the counter market by the NASD, or trading in securities generally
shall have been suspended on either such Exchange or in the over the
counter market by the NASD, or a general banking moratorium shall have
been established by federal, New York or California authorities, (ii)
if an outbreak of major hostilities or other national or international
calamity or any substantial change in political, financial or economic
conditions shall have occurred or shall have accelerated or escalated
to such an extent, as, in the judgment of the Underwriters, to affect
adversely the marketability of the Common Shares, (iii) if any adverse
event shall have occurred or shall exist which makes untrue or
incorrect in any material respect any statement or information
contained in the Registration Statement or Prospectus or which is not
reflected in the Registration Statement or Prospectus but should be
reflected therein in order to make the statements or information
contained therein not misleading in any material respect or (iv) except
as described in or contemplated by the Prospectus, if there shall be
any pending or threatened action, suit or proceeding affecting the
Company or any of its subsidiaries which will have a Material Adverse
Effect or which materially and adversely affects the transactions
contemplated by this Agreement, or there shall have been any
development involving particularly the business or properties or
securities of the Company or any of its subsidiaries or the
transactions contemplated by this Agreement, which, in the reasonable
judgment of the Underwriters, is reasonably likely to materially and
adversely affect the Company's business or earnings and makes it
impracticable or inadvisable to offer or sell the Common Shares. Any
termination pursuant to this subsection (b) shall without liability on
the part of any Underwriter to the Company or the Selling Stockholders
or on the part of the Company or the Selling Stockholders to any
Underwriter (except for expenses to be paid or reimbursed by the
Company and the Selling Stockholders pursuant to Sections 7 and 9
hereof and except to the extent provided in Section 11 hereof).
(c) This Agreement shall also terminate at 5:00 P.M.,
California time, on the tenth full business day after the Registration
Statement shall have become effective if the public offering price of
the Common Shares shall not then as yet have been determined as
provided in Section 5 hereof. Any termination pursuant to this
subsection (c) shall without liability on the part of any Underwriter
to the Company or the Selling Stockholders or on the part of the
Company or the Selling Stockholders to any Underwriter (except for
expenses to be paid or reimbursed by the Company and the Selling
Stockholders pursuant to Sections 7 and 9 hereof and except to the
extent provided in Section 11 hereof).
- 23 -
SECTION 15. Failure of the Selling Stockholders to Sell and Deliver. If
one or more of the Selling Stockholders shall fail to sell and deliver to the
Underwriters the Common Shares to be sold and delivered by such Selling
Stockholders at the Second Closing Date under the terms of this Agreement, then
the Underwriters may at their option, by written notice from you to the Company
and the Selling Stockholders, either (i) rescind such exercise of the option
without any liability on the part of any Underwriter, the Company or the other
non-breaching Selling Stockholders except as provided in Sections 7, 9 and 11
hereof, or (ii) purchase the shares which the Company and other Selling
Stockholders have agreed to sell and deliver in accordance with the terms
hereof. In the event of a failure by one or more of the Selling Stockholders to
sell and deliver as referred to in this Section, either you or the Company shall
have the right to postpone the Second Closing Date for a period not exceeding
seven business days in order that the necessary changes in the Registration
Statement, Prospectus and any other documents, as well as any other
arrangements, may be effected.
SECTION 16. Representations and Indemnities to Survive Delivery. The
respective indemnities, agreements, representations, warranties and other
statements of the Company, of its officers, of the Selling Stockholders and of
the several Underwriters set forth in or made pursuant to this Agreement will
remain in full force and effect, regardless of any investigation made by or on
behalf of any Underwriter or the Company or any of its or their partners,
officers or directors or any controlling person, or the Selling Stockholders, as
the case may be, and will survive delivery of and payment for the Common Shares
sold hereunder and any termination of this Agreement.
SECTION 17. Notices. All communications hereunder shall be in writing
and, if sent to the Underwriters shall be mailed, delivered or telegraphed and
confirmed to you at 000 Xxxxxxxxxx Xxxxxx, Xxx Xxxxxxxxx, Xxxxxxxxxx 00000,
Attention: Xx. Xxxxx X. Xxxxxxx, with a copy to Piper & Marbury L.L.P., 00 X.
Xxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxx 00000, Attention, Xxxxx X. Xxxx, Esquire;
and if sent to the Company or the Selling Stockholders shall be mailed,
delivered or telegraphed and confirmed to the Company at 0000 Xxxxxx Xxxx, Xxxx
Xxxx, Xxxxxxxxxxxx 00000-0000, or, effective as of July 7, 1997, 000
Xxxxxxxxxxxx Xxxxxx, Xxxx Xxxxxxxxxx, Xxxxxxxxxxxx 00000, Attention: Xx. Xxxxxxx
X. Xxxxxxx with a copy to Blank Rome Xxxxxxx & XxXxxxxx, 0000 Xxxx Xxxx Xxxxxx
Xxxxx, Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000, Attention: Xxxxxxx X. Xxxxx, Esquire.
The Company, the Selling Stockholders or you may change the address for receipt
of communications hereunder by giving notice to the others.
SECTION 18. Successors. This Agreement will inure to the benefit of and
be binding upon the parties hereto, including any substitute Underwriters
pursuant to Section 12 hereof, and to the benefit of the officers and directors
and controlling persons referred to in Section 11, and in each case their
respective successors, personal representatives and assigns, and no other person
will have any right or obligation hereunder. No such assignment shall relieve
any party of its obligations hereunder. The term "successors" shall not include
any purchaser of the Common Shares as such from any of the Underwriters merely
by reason of such purchase.
SECTION 19. Representation of Underwriters. You will act as
Underwriters in connection with all dealings hereunder, and any action under or
in respect of this Agreement taken by you jointly or by Xxxxxxxxxx Securities,
will be binding upon all the Underwriters.
SECTION 20. Partial Unenforceability. The invalidity or
unenforceability of any Section, paragraph or provision of this Agreement shall
not affect the validity or enforceability of any other Section, paragraph or
provision hereof. If any Section, paragraph or provision of this Agreement is
for any reason determined to be invalid or unenforceable, there shall be deemed
to be made such minor changes (and only such minor changes) as are necessary to
make it valid and enforceable.
SECTION 21. Applicable Law. This Agreement shall be governed by and
construed in accordance with the internal laws (and not the laws pertaining to
conflicts of laws) of the State of California.
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SECTION 22. General. This Agreement constitutes the entire agreement of
the parties to this Agreement and supersedes all prior written or oral and all
contemporaneous oral agreements, understandings and negotiations with respect to
the subject matter hereof. This Agreement may be executed in several
counterparts, each one of which shall be an original, and all of which shall
constitute one and the same document.
In this Agreement, the masculine, feminine and neuter genders and the
singular and the plural include one another. The section headings in this
Agreement are for the convenience of the parties only and will not affect the
construction or interpretation of this Agreement. This Agreement may be amended
or modified, and the observance of any term of this Agreement may be waived,
only by a writing signed by the Company, the Selling Stockholders and you.
Each Selling Stockholder executing and delivering this Agreement
represents by so doing that he or she has duly appointed Xxxxxxx X. Xxxxxxx as
Attorney-in-fact for such Selling Stockholder pursuant to a validly existing and
binding Power of Attorney. Any action taken under this Agreement by any of the
Attorneys-in-fact will be binding on all the Selling Stockholders.
- 25 -
If the foregoing is in accordance with your understanding of our
agreement, kindly sign and return to us the enclosed copies hereof, whereupon it
will become a binding agreement among the Company, the Selling Stockholders and
the several Underwriters including you, all in accordance with its terms.
Very truly yours,
NCO GROUP, INC.
By:
-------------------------------------------
Xxxxxxx X. Xxxxxxx, President
SELLING STOCKHOLDERS
The foregoing Underwriting Agreement
is hereby confirmed and accepted by
us in San Francisco, California as of
the date first above written.
XXXXXXXXXX SECURITIES
XXXXXX XXXXXXXXXX XXXXX INC.
THE XXXXXXXX-XXXXXXXX COMPANY, INC.
By XXXXXXXXXX SECURITIES
By:
- 26 -
SCHEDULE A
Number of Firm
Common Shares
Name of Underwriter to be Purchased
------------------- ---------------
Xxxxxxxxxx Securities...................................
Xxxxxx Xxxxxxxxxx Xxxxx Inc.............................
The Xxxxxxxx-Xxxxxxxx Company, Inc......................
------------------------
TOTAL............... 2,256,000
========================
- 27 -
SCHEDULE B
Number of Firm
Common Shares to
be Sold by Selling
Name of Selling Stockholder Stockholders
--------------------------- ------------------
Name of Other Selling Stockholder
---------------------------------
TOTAL
Number of Optional
Common Shares to be
Sold by Option
Name of Option Selling Stockholder Selling Stockholders
----------------------------------- --------------------
- 28 -
SCHEDULE C
_____________, 1997
PRICE DETERMINATION AGREEMENT
Referring to Section 5 of the Underwriting Agreement dated
___________, 1997, among the Company, the Selling Stockholders and the
Underwriters as therein defined with respect to the purchase and sale of the
Common Shares, we hereby confirm our agreement that the public offering price of
the Common Shares shall be $______ per share; that the underwriting discount
shall be $_____ per share; and that the purchase price to be paid by the several
Underwriters for the Common Shares to be purchased from the Company and the
Selling Stockholders shall be $_____ per share.
This Agreement may be executed in various counterparts which
together shall constitute one and the same Agreement.
XXXXXXXXXX SECURITIES
XXXXXX XXXXXXXXXX XXXXX INC.
THE XXXXXXXX-XXXXXXXX COMPANY, INC.
By Xxxxxxxxxx Securities
Acting as the several Underwriters named in
Schedule A to the Underwriting Agreement
By
-------------------------------------------------
NCO GROUP, INC.
By
Xxxxxxx X. Xxxxxxx, President
SELLING STOCKHOLDERS
By
-------------------------------------------------
[Insert Name]
Acting on behalf of the Selling Stockholders
- 29 -
