1
Exhibit 1.1
11,000,000 SHARES
QK HEALTHCARE, INC.
COMMON STOCK
UNDERWRITING AGREEMENT
March __, 2001
XXXXXX BROTHERS INC.
X.X. XXXXXX SECURITIES INC.
FIRST UNION SECURITIES, INC.
FIDELITY CAPITAL MARKETS,
A DIVISION OF NATIONAL FINANCIAL SERVICES LLC
As Representatives of the several
Underwriters named in Schedule 1,
c/x Xxxxxx Brothers Inc.
Three World Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
QK Healthcare, Inc., a Delaware corporation (the "COMPANY"),
proposes to sell 11,000,000 shares (the "FIRM STOCK") of the Company's Common
Stock, par value $.001 per share (the "COMMON STOCK"). In addition, the Company
proposes to grant to the Underwriters named on Schedule 1 hereto (the
"UNDERWRITERS") an option to purchase up to an additional 1,650,000 shares of
the Common Stock on the terms and for the purposes set forth in Section 3 (the
"OPTION STOCK"). The Firm Stock and the Option Stock, if purchased, are
hereinafter collectively called the "STOCK." As used in this agreement, the term
"PRINCIPAL STOCKHOLDERS" shall mean collectively the persons named on Schedule 2
hereto. This is to confirm the agreement concerning the purchase of the Stock
from the Company by the Underwriters.
Section 1. Representations, Warranties and Agreements of the
Company. The Company represents, warrants and agrees that:
(a) A registration statement on Form S-1 with respect to the
Stock has (i) been prepared by the Company in conformity with the requirements
of the United States Securities Act of 1933, as amended (the "SECURITIES ACT")
and the rules and regulations (the "RULE AND REGULATIONS") of the United States
Securities and Exchange Commission (the "COMMISSION") thereunder, (ii) been
filed with the Commission under the Securities Act and (iii) become effective
under the Securities Act. Copies of such registration statement and the
amendments thereto have been delivered by the Company to you as the
representatives (the "REPRESENTATIVES") of the Underwriters. As used in this
Agreement, "EFFECTIVE TIME" means the date and the time as of which
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such registration statement, or the most recent post-effective amendment
thereto, if any, was declared effective by the Commission; "EFFECTIVE DATE"
means the date of the Effective Time; "PRELIMINARY PROSPECTUS" means each
prospectus included in such registration statement, or amendments thereof,
before it became effective under the Securities Act and any prospectus filed
with the Commission by the Company with the consent of the Representatives
pursuant to Rule 424(a) of the Rules and Regulations; "REGISTRATION STATEMENT"
means such registration statement, as amended at the Effective Time, including
all information contained in the final prospectus filed with the Commission
pursuant to Rule 424(b) of the Rules and Regulations in accordance with Section
6 hereof and deemed to be a part of the registration statement as of the
Effective Time pursuant to paragraph (b) of Rule 430A of the Rules and
Regulations; and "PROSPECTUS" means such final prospectus, as first filed with
the Commission pursuant to paragraph (1) or (4) of Rule 424(b) of the Rules and
Regulations. The Commission has not issued any order preventing or suspending
the use of any Preliminary Prospectus.
(b) The Registration Statement conforms, and the Prospectus
and any further amendments or supplements to the Registration Statement or the
Prospectus will, when they become effective or are filed with the Commission, as
the case may be, conform in all respects to the requirements of the Securities
Act and the Rules and Regulations and do not and will not, as of the applicable
effective date (as to the Registration Statement and any amendment thereto) and
as of the applicable filing date (as to the Prospectus and any amendment or
supplement thereto) contain an 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 not misleading; provided that no representation or warranty
is made as to information contained in or omitted from the Registration
Statement or the Prospectus in reliance upon and in conformity with written
information furnished to the Company through the Representatives by or on behalf
of any Underwriter specifically for inclusion therein.
(c) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of its jurisdiction of
incorporation, is duly qualified to do business and is in good standing as a
foreign corporation in each jurisdiction in which its ownership or lease of
property or the conduct of its business requires such qualification, except
where the failure to register or qualify does not have a material adverse effect
on the condition (financial or other), business, prospects, properties, net
worth or results of operations of the Company and has all power and authority
necessary to own or hold its properties and to conduct the business in which it
is engaged; and the Company does not directly or indirectly own and has not made
any investment in any of the capital stock of, or any other proprietary interest
in, any individual, firm, corporation, partnership, trust, incorporated or
unincorporated association, joint venture, joint stock company, limited
liability company, governmental authority or other entity of any kind.
(d) The Company has an authorized capitalization as set forth
in the Prospectus, and all of the issued shares of capital stock of the Company
have been duly and validly authorized and issued, are fully paid and
non-assessable and conform to the description thereof contained in the
Prospectus.
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(e) The unissued shares of the Stock to be issued and sold by
the Company to the Underwriters hereunder have been duly and validly authorized
and, when issued and delivered against payment therefor as provided herein, will
be duly and validly issued, fully paid and non-assessable; and the Stock will
conform to the description thereof contained in the Prospectus.
(f) The Company has full corporate power and authority to
enter into this Agreement. This Agreement has been duly authorized, executed and
delivered by the Company.
(g) The execution, delivery and performance of this Agreement
by the Company, the consummation of the transactions contemplated hereby, and
the application of the net proceeds from the offering and sale of the Stock in
the manner set forth in the Prospectus under the caption "Use of Proceeds," will
not conflict with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, any material indenture, mortgage,
deed of trust, loan agreement or other agreement or instrument to which the
Company is a party or by which the Company is bound or to which any of the
property or assets of the Company are subject, nor will such actions result in
any violation of the provisions of the charter or by-laws of the Company or any
material statute or any material order, rule or regulation of any court or
governmental agency or body having jurisdiction over the Company or the
Company's properties or assets; and except for the registration of the Stock
under the Securities Act and such consents, approvals, authorizations,
registrations or qualifications as may be required under the Securities Exchange
Act of 1934 (the "EXCHANGE ACT") and applicable state securities laws in
connection with the purchase and distribution of the Stock by the Underwriters,
no consent, approval, authorization or order of, or filing or registration with,
any such court or governmental agency or body is required for the execution,
delivery and performance of this Agreement by the Company and the consummation
of the transactions contemplated hereby.
(h) The Company has full corporate power and authority to
enter into the Loan and Security Agreement, dated March __, 2001 (the "CREDIT
AGREEMENT"), among the Company, Fleet Capital Corporation, as Administrative
Agent, Mellon Bank, N.A., as Syndication Agent, Fleet Capital Corporation and
Mellon Bank, N.A., as Co-Arrangers, and each of the other Financial Institutions
party thereto, as Lenders. The Credit Agreement has been duly authorized,
executed and delivered by the Company, and constitutes a valid and binding
agreement of and is enforceable against the Company in accordance with its
terms, except as the enforceability thereof may be limited by applicable
bankruptcy, insolvency, reorganization and other laws affecting creditors'
rights generally and moratorium laws in effect from time to time and by
equitable principles restricting the availability of equitable remedies.
(i) The execution, delivery and performance of the Credit
Agreement by the Company, the consummation of the transactions contemplated
thereby, and the application of the net proceeds from the credit facility under
the Credit Agreement in the manner set forth in the Prospectus will not conflict
with or result in a breach or violation of any of the terms or provisions of, or
constitute a default under, any material indenture, mortgage, deed of trust,
loan agreement or other agreement or instrument to which the Company is a party
or by which the Company is bound or to
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which any of the property or assets of the Company are subject, nor will such
actions result in any violation of the provisions of the charter or by-laws of
or any material statute or any material order, rule or regulation of any court
or governmental agency or body having jurisdiction over the Company or any of
the Company's properties or assets; and no consent, approval, authorization or
order of, or filing or registration with, any such court or governmental agency
or body is required for the execution, delivery and performance of the Credit
Agreement by the Company and the consummation of the transactions contemplated
thereby.
(j) Each of the Company and the other parties to the following
agreements (collectively including the Company, the "REORGANIZATION PARTIES,"
and each individually, a "REORGANIZATION PARTY") has full corporate or other
applicable power and authority (to the extent that it is party to such
agreements) to enter into: (i) the Agreement and Plan of Corporate Separation
and Reorganization for QK Healthcare, Inc., dated February 22, 2001 (the
"COMPANY REORGANIZATION AGREEMENT"), among Quality King Distributors, Inc.
("QKD"), and each of the Principal Stockholders, (ii) the Agreement and Plan of
Corporate Separation for Pro's Choice Beauty Care, Inc., dated February 22, 2001
(the "PRO CHOICE REORGANIZATION AGREEMENT"), among QKD, Xxxx Xxxxxxxx and the
Estate of Xxxxxxx Xxxxxxxx, as represented by Xxxx Xxxxxxxx, (iii) the
Indemnification, Noncompetition and Tax Cooperation Agreement, dated February
22, 2000 (the "INDEMNITY AGREEMENT"), among the Company, QKD and Pro's Choice
Beauty Care, Inc., (iv) the Support Services Agreement, dated February 22, 2001
(the "SUPPORT SERVICES AGREEMENT"), between the Company and QKD, (v) the
Registration Rights Agreement, dated March ___, 2001 (the "REGISTRATION RIGHTS
AGREEMENT"), among the Company and the Principal Stockholders, (vi) the Sublease
Agreement, effective as of February 22, 2001 (the "SUBLEASE AGREEMENT"), between
the Company and QKD, and (vii) the Software License, dated February 22, 2001
(the "LICENSE"), between the Company and QKD. The Company Reorganization
Agreement, the Pro Choice Reorganization Agreement, the Indemnity Agreement, the
Support Services Agreement, the Registration Rights Agreement, the Sublease
Agreement and the License are collectively referred to as the "REORGANIZATION
AGREEMENTS," and each individually as a "REORGANIZATION AGREEMENT." The
transactions contemplated by the Reorganization Agreements and as described in
"RELATED PARTY TRANSACTIONS" in the Prospectus are referred to as the
"REORGANIZATION." Each of the Reorganization Agreements has been duly
authorized, executed and delivered by each of the Reorganization Parties party
thereto and constitutes a valid and binding agreement of and is enforceable
against each Reorganization Party party thereto in accordance with its terms,
except as the enforceability thereof may be limited by applicable bankruptcy,
insolvency, reorganization and other laws affecting creditors' rights generally
and moratorium laws in effect from time to time and by equitable principles
restricting the availability of equitable remedies.
(k) (i) The execution, delivery and performance of each
Reorganization Agreement by each Reorganization Party party thereto and the
consummation of the transactions contemplated thereby and by the Reorganization
do not and will not conflict with or result in a breach or violation of any of
the terms or provisions of, or constitute a default under, any material
indenture, mortgage, deed of
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trust, loan agreement or other agreement or instrument to which any
Reorganization Party is a party or by which any Reorganization Party is bound or
to which any of the property or assets of any Reorganization Party are subject,
nor do such actions nor will they result in any violation of the provisions of
the charter, by-laws or other organizational documents of any Reorganization
Party or any material statute or any material order, rule or regulation of any
court or governmental agency or body having jurisdiction over any Reorganization
Party or any Reorganization Party's properties or assets; (ii) no consent,
approval, authorization or order of, or filing or registration with, any such
court or governmental agency or body was or is required for the execution,
delivery and performance of each Reorganization Agreement by each Reorganization
Party party thereto and the consummation of the transactions contemplated
thereby and by the Reorganization; (iii) QKD has received a ruling by the
Internal Revenue Service (the "IRS RULING") to the effect that the transactions
contemplated by the Reorganization Agreements will qualify as (A) tax-free
reorganizations under Sections 361(a) and 368(a)(1)(D) of the Internal Revenue
Code of 1986, as amended, including the regulations and published
interpretations thereunder (the "CODE"), and (B) tax-free exchanges under
Section 355 of the Code, and has received no notification from the Internal
Revenue Service that such IRS Ruling has been or is anticipated to be amended,
revoked or withdrawn; (iv) the Reorganization has been consummated in conformity
with the description thereof contained in the Prospectus and as contemplated by
the IRS Ruling; and (v) each of QKD and Pro's Choice Beauty Care, Inc. is, after
the consummation of the Reorganization, Solvent. As used herein, the term
"SOLVENT" means, with respect to an entity on a particular date, that on such
date (P) the fair value of the assets of the entity at a fair valuation will
exceed the debts and liabilities, subordinated, contingent or otherwise, of the
entity, (Q) the present fair salable value of the entity's business taken as a
whole is greater than the amount that will be required to pay the probable
liabilities of the entity on its debts as they become absolute and matured, (R)
the entity is able to realize upon its assets and pay its debts and other
liabilities, including contingent obligations, as they mature, and (S) the
entity does not have unreasonably small capital. For all purposes of clauses (P)
through (S) in the preceding sentence, the amount of the contingent liabilities
at any time shall be computed as the amount that, in the light of all the facts
and circumstances existing at such time, represents the amount that can
reasonably be expected to become an actual or matured liability.
(l) Except as described in the Prospectus, there are no
contracts, agreements or understandings between the Company and any person
granting such person the right to require the Company to file a registration
statement under the Securities Act with respect to any securities of the Company
owned or to be owned by such person or to require the Company to include such
securities in the securities registered pursuant to the Registration Statement
or in any securities being registered pursuant to any other registration
statement filed by the Company under the Securities Act.
(m) Except as described in the Prospectus, the Company has not
sold or issued any shares of Common Stock during the six-month period preceding
the
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date of the Prospectus, including any sales pursuant to Rule 144A under, or
Regulations D or S of, the Securities Act.
(n) The Company has not sustained, since the date of the
latest audited financial statements included in the Prospectus, any material
loss or interference with its business from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor dispute or
court or governmental action, order or decree, otherwise than as set forth or
contemplated in the Prospectus; and, since such date, there has not been any
change in the capital stock or long-term debt of the Company or any material
adverse change, or any development involving a prospective material adverse
change, in or affecting the general affairs, management, financial position,
stockholders' equity, results of operations, business or prospects of the
Company, otherwise than as set forth or contemplated in the Prospectus.
(o) The financial statements (including the related notes and
supporting schedules) filed as part of the Registration Statement or included in
the Prospectus present fairly the financial condition and results of operations
of the entities purported to be shown thereby, at the dates and for the periods
indicated, and have been prepared in conformity with generally accepted
accounting principles applied on a consistent basis throughout the periods
involved; the pro forma financial statements included in the Prospectus have
been prepared on a basis consistent with the historical financial statements
included therein and in accordance with the Commission's rules and guidelines
with respect to pro forma financial statements, the assumptions used in
preparing the pro forma financial statements included in the Prospectus provide
a reasonable basis for presenting the significant effects directly attributable
to the transactions or events described therein, the related pro forma
adjustments give appropriate effect to those assumptions and the pro forma
columns therein reflect the proper application of those adjustments to the
corresponding historical financial statement amounts; and the other financial
and statistical information and data included in the Prospectus derived from the
historical and pro forma financial statements are accurately presented in all
material respects and prepared on a basis consistent with the financial
statements, historical and pro forma, included in the Prospectus and the books
and records of the Company.
(p) BDO Xxxxxxx, LLP, who have certified certain financial
statements of the Company, whose report appears in the Prospectus and who have
delivered the initial letter referred to in Section 9(h) hereof, are independent
public accountants as required by the Securities Act and the Rules and
Regulations.
(q) The Company owns no real property but has good and
marketable title in fee simple to all personal property owned by it, free and
clear of all liens, encumbrances and defects except such as are described in the
Prospectus or such as do not materially affect the value of such property and do
not materially interfere with the use made and proposed to be made of such
property by the Company; and all real property and buildings held under lease by
the Company are held by it under valid, subsisting and enforceable leases, with
such exceptions as are not material and do not
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interfere with the use made and proposed to be made of such property and
buildings by the Company.
(r) The Company carries, or is covered by, insurance in such
amounts and covering such risks as is adequate for the conduct of its business
and the value of its properties and as is customary for companies engaged in
similar businesses in similar industries.
(s) The Company owns or possesses adequate rights to use all
material patents, patent applications, trademarks, service marks, trade names,
trademark registrations, service xxxx registrations, copyrights and licenses
necessary for the conduct of its business and has no reason to believe that the
conduct of its business will conflict with, and has not received any notice of
any claim of conflict with, any such rights of others.
(t) There are no legal or governmental proceedings pending to
which the Company is a party or of which any property or assets of the Company
is the subject which, if determined adversely to the Company, might have a
material adverse effect on the general affairs, management, financial position,
stockholders' equity, results of operations, business or prospects of the
Company; and to the best of the Company's knowledge, no such proceedings are
threatened or contemplated by governmental authorities or threatened by others.
(u) There are no contracts or other documents which are
required to be described in the Prospectus or filed as exhibits to the
Registration Statement by the Securities Act or by the Rules and Regulations
which have not been described in the Prospectus or filed as exhibits to the
Registration Statement or incorporated therein by reference as permitted by the
Rules and Regulations.
(v) No relationship, direct or indirect, exists between or
among the Company on the one hand, and the directors, officers, stockholders,
customers or suppliers of the Company on the other hand, which is required to be
described in the Prospectus which is not so described.
(w) No labor disturbance by the employees of the Company
exists or, to the knowledge of the Company, is imminent which might be expected
to have a material adverse effect on the consolidated financial position,
stockholders' equity, results of operations, business or prospects of the
Company.
(x) The Company is in compliance in all material respects with
all presently applicable provisions of the Employee Retirement Income Security
Act of 1974, as amended, including the regulations and published interpretations
thereunder ("ERISA"); no "reportable event" (as defined in ERISA) has occurred
with respect to any "pension plan" (as defined in ERISA) for which the Company
would have any liability; the Company has not incurred and does not expect to
incur liability under (i) Title IV of ERISA with respect to termination of, or
withdrawal from, any "pension plan" or (ii) Sections 412 or 4971 of the Code;
and each "pension plan" for which the Company
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would have any liability that is intended to be qualified under Section 401(a)
of the Code is so qualified in all material respects and nothing has occurred,
whether by action or by failure to act, which would cause the loss of such
qualification.
(y) The Company has filed all federal, state and local income
and franchise tax returns and elections required to be filed through the date
hereof and has paid all taxes due thereon, and no tax deficiency has been
determined adversely to the Company which has had (nor does the Company have any
knowledge of any tax deficiency which, if determined adversely to the Company,
might have) a material adverse effect on the general affairs, management,
financial position, stockholders' equity, results of operations, business or
prospects of the Company.
(z) Since the date as of which information is given in the
Prospectus through the date hereof, and except as may otherwise be disclosed in
the Prospectus, the Company has not (i) issued or granted any securities, (ii)
incurred any liability or obligation, direct or contingent, other than
liabilities and obligations which were incurred in the ordinary course of
business, (iii) entered into any transaction not in the ordinary course of
business or (iv) declared or paid any dividend on its capital stock.
(aa) The Company (i) makes and keeps accurate books and
records and (ii) maintains internal accounting controls which provide reasonable
assurance that (A) transactions are executed in accordance with management's
authorization, (B) transactions are recorded as necessary to permit preparation
of its financial statements and to maintain accountability for its assets, (C)
access to its assets is permitted only in accordance with management's
authorization and (D) the recorded accountability for its assets is compared
with existing assets at reasonable intervals.
(bb) The Company is not (i) in violation of its charter or
by-laws, (ii) in default in any material respect, and no event has occurred
which, with notice or lapse of time or both, would constitute such a default, in
the due performance or observance of any term, covenant or condition contained
in any material indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument to which it is a party or by which it is bound or to
which any of its properties or assets is subject or (iii) in violation in any
material respect of any law, ordinance, governmental rule, regulation or court
decree to which it or its property or assets may be subject, including, but not
limited to, the Prescription Drug Marketing Act, the Controlled Substances Act,
the Federal Food, Drug and Cosmetic Act, the Occupational Safety and Health Act,
and any comparable or related state or local statutes or regulations and
applicable state laws regulating pharmacy or wholesaling practices and worker
safety (all such laws, statutes, orders, rules, regulations, policies,
guidelines, judgments, decisions and orders, collectively, "APPLICABLE LAWS").
Except as described in the Prospectus, the Company holds all licenses,
certificates, approvals and permits from all state, United States, and other
regulatory authorities (together, "PERMITS"), that are required for the conduct
of the business of the Company, all of which are valid and in full force and
effect; and there is no proceeding pending or, to the knowledge of the Company,
threatened which may cause any such Permit to be withdrawn, canceled, suspended
or not renewed. The Company has implemented procedures and controls reasonable
for the conduct of its
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business to ensure compliance with Applicable Laws, the requirements of any
Permits and any requirements of product manufacturers regarding the purchase,
sale, storage or shipping of such products.
(cc) Neither the Company, nor any director, officer, agent,
employee or other person associated with or acting on behalf of the Company, has
used any corporate funds for any unlawful contribution, gift, entertainment or
other unlawful expense relating to political activity; made any direct or
indirect unlawful payment to any foreign or domestic government official or
employee from corporate funds; violated or is in violation of any provision of
the Foreign Corrupt Practices Act of 1977; or made any bribe, rebate, payoff,
influence payment, kickback or other unlawful payment.
(dd) There has been no storage, disposal, generation,
manufacture, refinement, transportation, handling or treatment of toxic wastes,
medical wastes, hazardous wastes or hazardous substances by the Company (or, to
the knowledge of the Company, any of its predecessors in interest) at, upon or
from any of the property now or previously owned or leased by the Company in
violation of any applicable law, ordinance, rule, regulation, order, judgment,
decree or permit or which would require remedial action under any applicable
law, ordinance, rule, regulation, order, judgment, decree or permit, except for
any violation or remedial action which would not have, or could not be
reasonably likely to have, singularly or in the aggregate with all such
violations and remedial actions, a material adverse effect on the general
affairs, management, financial position, stockholders' equity, results of
operations, business or prospects of the Company; there has been no material
spill, discharge, leak, emission, injection, escape, dumping or release of any
kind onto such property or into the environment surrounding such property of any
toxic wastes, medical wastes, solid wastes, hazardous wastes or hazardous
substances due to or caused by the Company or with respect to which the Company
has knowledge, except for any such spill, discharge, leak, emission, injection,
escape, dumping or release which would not have or would not be reasonably
likely to have, singularly or in the aggregate with all such spills, discharges,
leaks, emissions, injections, escapes, dumpings and releases, a material adverse
effect on the general affairs, management, financial position, stockholders'
equity, results of operations, business or prospects of the Company; and the
terms "HAZARDOUS WASTES," "TOXIC WASTES," "HAZARDOUS SUBSTANCES" and "MEDICAL
WASTES" shall have the meanings specified in any applicable local, state,
federal and foreign laws or regulations with respect to environmental
protection.
(ee) The Company is not, and upon application of the proceeds
of the offering of the Stock as described in the Prospectus will not be, an
"investment company" within the meaning of such term under the Investment
Company Act of 1940, as amended, and the rules and regulations of the Commission
thereunder.
(ff) The Company has not taken and will not take, directly or
indirectly, any action which is designed to or which has constituted or which
might reasonably be expected to cause or result in the stabilization or
manipulation of the price of any security of the Company to facilitate the sale
or resale of the shares of the Stock.
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Section 2. Representations, Warranties and Agreements of the
Principal Stockholders. Each Principal Stockholder severally represents,
warrants and agrees that:
(a) The Principal Stockholder has full right, power and
authority to enter into this Agreement and each Reorganization Agreement to
which such Principal Stockholder is a party; each of this Agreement and the
Reorganization Agreements to which the Principal Stockholder is a party has been
duly authorized, executed and delivered by the Principal Stockholder and
constitutes a valid and binding agreement of and is enforceable against the
Principal Stockholder in accordance with its terms, except as the enforceability
hereof and thereof may be limited by applicable bankruptcy, insolvency,
reorganization and other laws affecting creditors' rights generally and
moratorium laws in effect from time to time and by equitable principles
restricting the availability of equitable remedies; the execution, delivery and
performance of this Agreement and such Reorganization Agreements by the
Principal Stockholder and the consummation by the Principal Stockholder of the
transactions contemplated hereby, thereby and by the Reorganization will not
conflict with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, any material indenture, mortgage,
deed of trust, loan agreement or other agreement or instrument to which the
Principal Stockholder is a party or by which the Principal Stockholder is bound
or to which any of the property or assets of the Principal Stockholder is
subject, nor will such actions result in any violation of the provisions of the
formation documents of the Principal Stockholder or any material statute or any
material order, rule or regulation of any court or governmental agency or body
having jurisdiction over the Principal Stockholder or the property or assets of
the Principal Stockholder; and, except for the registration of the Stock under
the Securities Act and such consents, approvals, authorizations, registrations
or qualifications as may be required under the Exchange Act and applicable state
securities laws in connection with the purchase and distribution of the Stock by
the Underwriters, no consent, approval, authorization or order of, or filing or
registration with, any such court or governmental agency or body is required for
the execution, delivery and performance of this Agreement and such
Reorganization Agreements by the Principal Stockholder and the consummation by
the Principal Stockholder of the transactions contemplated hereby, thereby and
by the Reorganization.
(b) Each of the trust indentures listed on Schedule 2 creates
a trust that is valid under New York law, and each trust indenture remains
valid, in force, existing and has not been amended or revoked since it was
originally signed. Each trustee of each Principal Stockholder is duly qualified
and duly acting as trustee under each of the trust indentures listed on Schedule
2, and has not resigned or been removed or replaced as trustee under any of such
trust indentures. Each of the trusts created by the trust indentures listed on
Schedule 2 owns no real property but has good and marketable title in fee simple
to all personal property owned by it, free and clear of all liens, encumbrances
and defects except such as are described in the Prospectus or such as do not
materially affect the value of such property.
(c) The Principal Stockholder has no reason to believe that
the representations and warranties of the Company contained in Section 1 hereof
are not true
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and correct, is familiar with the Registration Statement and the Prospectus (as
amended or supplemented) and has no knowledge of any material fact, condition or
information not disclosed in the Registration Statement, as of the effective
date, or the Prospectus (or any amendment or supplement thereto), as of the
applicable filing date, which has adversely affected or may reasonably be
expected to adversely affect the business of the Company and is not prompted to
enter into the Reorganization Agreements and cause the Company to offer the
shares of Common Stock by any information concerning the Company which is not
set forth in the Registration Statement and the Prospectus.
(d) The Principal Stockholder has not taken and will not take,
directly or indirectly, any action which is designed to or which has constituted
or which might reasonably be expected to cause or result in the stabilization or
manipulation of the price of any security of the Company to facilitate the sale
or resale of the shares of the Stock.
Section 3. Purchase of the Stock by the Underwriters. On the
basis of the representations and warranties contained in, and subject to the
terms and conditions of, this Agreement, the Company agrees to sell 11,000,000
shares of the Firm Stock to the several Underwriters and each of the
Underwriters, severally and not jointly, agrees to purchase the number of shares
of the Firm Stock set forth opposite that Underwriter's name in Schedule 1
hereto. The respective purchase obligations of the Underwriters with respect to
the Firm Stock shall be rounded among the Underwriters to avoid fractional
shares, as the Representatives may determine.
In addition, the Company grants to the Underwriters an option
to purchase up to 1,650,000 shares of Option Stock. Such option is granted
solely for the purpose of covering over-allotments in the sale of Firm Stock and
is exercisable as provided in Section 5 hereof. Shares of Option Stock shall be
purchased severally for the account of the Underwriters in proportion to the
number of shares of Firm Stock set opposite the name of such Underwriters in
Schedule 1 hereto. The respective purchase obligations of each Underwriter with
respect to the Option Stock shall be adjusted by the Representatives so that no
Underwriter shall be obligated to purchase Option Stock other than in 100 share
amounts.
The price of both the Firm Stock and any Option Stock shall be
$_____ per share.
The Company shall not be obligated to deliver any of the Stock
to be delivered on any Delivery Date (as hereinafter defined), as the case may
be, except upon payment for all the Stock to be purchased on such Delivery Date
as provided herein.
Section 4. Offering of Stock by the Underwriters.
Upon authorization by the Representatives of the release of
the Firm Stock, the several Underwriters propose to offer the Firm Stock for
sale upon the terms and conditions set forth in the Prospectus.
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Section 5. Delivery of and Payment for the Stock. Delivery of
and payment for the Firm Stock shall be made at the office of Xxxx, Weiss,
Rifkind, Xxxxxxx & Xxxxxxxx, 1285 Avenue of the Americas, New York, New York, at
10:00 A.M., New York City time, on the [fourth] full business day following the
date of this Agreement or at such other date or place as shall be determined by
agreement between the Representatives and the Company. This date and time are
sometimes referred to as the "FIRST DELIVERY DATE." On the First Delivery Date,
the Company shall deliver or cause to be delivered certificates representing the
Firm Stock to the Representatives for the account of each Underwriter against
payment to or upon the order of the Company of the purchase price by wire
transfer in immediately available funds. Time shall be of the essence, and
delivery at the time and place specified pursuant to this Agreement is a further
condition of the obligation of each Underwriter hereunder. Upon delivery, the
Firm Stock shall be registered in such names and in such denominations as the
Representatives shall request in writing not less than two full business days
prior to the First Delivery Date. For the purpose of expediting the checking and
packaging of the certificates for the Firm Stock, the Company shall make the
certificates representing the Firm Stock available for inspection by the
Representatives in New York, New York, not later than 2:00 P.M., New York City
time, on the business day prior to the First Delivery Date.
The option granted in Section 3 will expire 30 days after the
date of this Agreement and may be exercised in whole or in part from time to
time by written notice being given to the Company by the Representatives. Such
notice shall set forth the aggregate number of shares of Option Stock as to
which the option is being exercised, the names in which the shares of Option
Stock are to be registered, the denominations in which the shares of Option
Stock are to be issued and the date and time, as determined by the
Representatives, when the shares of Option Stock are to be delivered; provided,
however, that this date and time shall not be earlier than the First Delivery
Date nor earlier than the second business day after the date on which the option
shall have been exercised nor later than the fifth business day after the date
on which the option shall have been exercised. The date and time the shares of
Option Stock are delivered are sometimes referred to as the "SECOND DELIVERY
DATE" and the First Delivery Date and any Second Delivery Date are sometimes
each referred to as a "DELIVERY DATE").
Delivery of and payment for the Option Stock shall be made at
the place specified in the first sentence of the first paragraph of this Section
5 (or at such other place as shall be determined by agreement between the
Representatives and the Company) at 10:00 A.M., New York City time, on such
Second Delivery Date. On such Second Delivery Date, the Company shall deliver or
cause to be delivered the certificates representing the Option Stock to the
Representatives for the account of each Underwriter against payment to or upon
the order of the Company of the purchase price by wire transfer in immediately
available funds. Time shall be of the essence, and delivery at the time and
place specified pursuant to this Agreement is a further condition of the
obligation of each Underwriter hereunder. Upon delivery, the Option Stock shall
be registered in such names and in such denominations as the Representatives
shall request in the aforesaid written notice. For the purpose of expediting the
checking and packaging
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of the certificates for the Option Stock, the Company shall make the
certificates representing the Option Stock available for inspection by the
Representatives in New York, New York, not later than 2:00 P.M., New York City
time, on the business day prior to such Second Delivery Date.
Section 6. Further Agreements of the Company. The Company
agrees:
(a) To prepare the Prospectus in a form approved by the
Representatives and to file such Prospectus pursuant to Rule 424(b) under the
Securities Act not later than Commission's close of business on the second
business day following the execution and delivery of this Agreement or, if
applicable, such earlier time as may be required by Rule 430A(a)(3) under the
Securities Act; to make no further amendment or any supplement to the
Registration Statement or to the Prospectus except as permitted herein; to
advise the Representatives, promptly after it receives notice thereof, of the
time when any amendment to the Registration Statement has been filed or becomes
effective or any supplement to the Prospectus or any amended Prospectus has been
filed and to furnish the Representatives with copies thereof; to advise the
Representatives, promptly after it receives notice thereof, of the issuance by
the Commission of any stop order or of any order preventing or suspending the
use of any Preliminary Prospectus or the Prospectus, of the suspension of the
qualification of the Stock for offering or sale in any jurisdiction, of the
initiation or threatening of any proceeding for any such purpose, or of any
request by the Commission for the amending or supplementing of the Registration
Statement or the Prospectus or for additional information; and, in the event of
the issuance of any stop order or of any order preventing or suspending the use
of any Preliminary Prospectus or the Prospectus or suspending any such
qualification, to use promptly its best efforts to obtain its withdrawal;
(b) To furnish promptly to each of the Representatives and to
counsel for the Underwriters a signed copy of the Registration Statement as
originally filed with the Commission, and each amendment thereto filed with the
Commission, including all consents and exhibits filed therewith;
(c) To deliver promptly to the Representatives such number of
the following documents as the Representatives shall reasonably request: (i)
conformed copies of the Registration Statement as originally filed with the
Commission and each amendment thereto (in each case excluding exhibits other
than this Agreement) and (ii) each Preliminary Prospectus, the Prospectus and
any amended or supplemented Prospectus and, if the delivery of a prospectus is
required at any time after the Effective Time in connection with the offering or
sale of the Stock or any other securities relating thereto and if at such time
any events shall have occurred as a result of which the Prospectus as then
amended or supplemented would include an untrue statement of a material fact or
omit to state any material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made when such
Prospectus is delivered, not misleading, or, if for any other reason it shall be
necessary to amend or supplement the Prospectus in order to comply with the
Securities Act, to notify the Representatives and, upon their request, to
prepare and furnish without charge to each
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Underwriter and to any dealer in securities as many copies as the
Representatives may from time to time reasonably request of an amended or
supplemented Prospectus which will correct such statement or omission or effect
such compliance and in case any Underwriter is required to deliver a prospectus
in connection with sales of any of the Stock at any time nine months or more
after the time of issue of the Prospectus, upon your request but at the expense
of such Underwriter, to prepare and deliver to such Underwriter as many copies
as you may request of an amended or supplemented Prospectus complying with
Section 10(a)(3) of the Securities Act;
(d) To file promptly with the Commission any amendment to the
Registration Statement or the Prospectus or any supplement to the Prospectus
that may, in the judgment of the Company or the Representatives, be required by
the Securities Act or requested by the Commission;
(e) Prior to filing with the Commission any amendment to the
Registration Statement or supplement to the Prospectus or any Prospectus
pursuant to Rule 424 of the Rules and Regulations, to furnish a copy thereof to
the Representatives and counsel for the Underwriters and obtain the consent of
the Representatives to the filing, which consent will not be unreasonably
withheld;
(f) As soon as practicable after the Effective Date (it being
understood that the Company shall have until at least 410 days after the end of
the Company's current fiscal quarter), to make generally available to the
Company's security holders and to deliver to the Representatives an earnings
statement of the Company and its subsidiaries (which need not be audited)
complying with Section 11(a) of the Securities Act and the Rules and Regulations
(including, at the option of the Company, Rule 158);
(g) For a period of five years following the Effective Date,
to furnish to the Representatives copies of all materials furnished by the
Company to its shareholders and all reports and financial statements furnished
by the Company to the principal national securities exchange upon which the
Common Stock may be listed pursuant to requirements of or agreements with such
exchange or to the Commission pursuant to the Exchange Act or any rule or
regulation of the Commission thereunder;
(h) Promptly from time to time to take such action as the
Representatives may reasonably request to qualify the Stock for offering and
sale under the securities laws of such jurisdictions as the Representatives may
request and to comply with such laws so as to permit the continuance of sales
and dealings therein in such jurisdictions for as long as may be necessary to
complete the distribution of the Stock; provided that in connection therewith
the Company shall not be required to qualify as a foreign corporation or to file
a general consent to service of process in any jurisdiction;
(i) For a period of 360 days from the date of the Prospectus,
not to, directly or indirectly, (1) offer for sale, sell, pledge or otherwise
dispose of (or enter into any transaction or device which is designed to, or
could be expected to, result in the disposition by any person at any time in the
future of) any shares of Common
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Stock or securities convertible into or exchangeable for Common Stock (other
than the Stock and shares issued pursuant to employee benefit plans, qualified
stock option plans or other employee compensation plans existing on the date
hereof or pursuant to currently outstanding options, warrants or rights), or
sell or grant options, rights or warrants with respect to any shares of Common
Stock or securities convertible into or exchangeable for Common Stock (other
than the grant of options pursuant to option plans existing on the date hereof),
or (2) enter into any swap or other derivatives transaction that transfers to
another, in whole or in part, any of the economic benefits or risks of ownership
of such shares of Common Stock, whether any such transaction described in clause
(1) or (2) above is to be settled by delivery of Common Stock or other
securities, in cash or otherwise, in each case without the prior written consent
of Xxxxxx Brothers Inc. on behalf of the Underwriters; and to cause each officer
and director of the Company to furnish to the Representatives, prior to the
First Delivery Date, a letter or letters, in form and substance satisfactory to
counsel for the Underwriters, pursuant to which each such person shall agree not
to, directly or indirectly, (1) offer for sale, sell, pledge or otherwise
dispose of (or enter into any transaction or device which is designed to, or
could be expected to, result in the disposition by any person at any time in the
future of) any shares of Common Stock or securities convertible into or
exchangeable for Common Stock or (2) enter into any swap or other derivatives
transaction that transfers to another, in whole or in part, any of the economic
benefits or risks of ownership of such shares of Common Stock, whether any such
transaction described in clause (1) or (2) above is to be settled by delivery of
Common Stock or other securities, in cash or otherwise, in each case for a
period of 360 days from the date of the Prospectus, without the prior written
consent of Xxxxxx Brothers Inc. on behalf of the Underwriters;
(j) Prior to the Effective Date, to apply for the listing of
the Stock on the New York Stock Exchange, Inc. and to use its best efforts to
complete that listing, subject only to official notice of issuance and evidence
of satisfactory distribution, prior to the First Delivery Date;
(k) Prior to filing with the Commission any periodic report
filed pursuant to Section 13(a) or 15(d) of the Exchange Act that contains
information regarding the use of proceeds from the sale of the Stock being sold
by the Company pursuant to Rule 463 of the Rules and Regulations, to furnish a
copy thereof to the counsel for the Underwriters and receive and consider its
comments thereon, and to deliver promptly to the Representatives a signed copy
of each such periodic report filed by it with the Commission that contains the
information described above;
(l) To apply the net proceeds from the sale of the Stock being
sold by the Company as set forth in the Prospectus; and
(m) To take such steps as shall be necessary to ensure that
neither the Company nor any subsidiary shall become an "investment company"
within the meaning of such term under the Investment Company Act of 1940 and the
rules and regulations of the Commission thereunder.
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Section 7. Further Agreements of the Principal Stockholders.
Each Principal Stockholder agrees:
(a) For a period of 360 days from the date of the Prospectus,
not to, directly or indirectly, (1) offer for sale, sell, pledge or otherwise
dispose of (or enter into any transaction or device which is designed to, or
could be expected to, result in the disposition by any person at any time in the
future of) any shares of Common Stock or securities convertible into or
exchangeable for Common Stock (other than the Stock) or (2) enter into any swap
or other derivatives transaction that transfers to another, in whole or in part,
any of the economic benefits or risks of ownership of such shares of Common
Stock, whether any such transaction described in clause (1) or (2) above is to
be settled by delivery of Common Stock or other securities, in cash or
otherwise, in each case without the prior written consent of Xxxxxx Brothers
Inc. on behalf of the Underwriters.
Section 8. Expenses. The Company agrees to pay (a) the costs
incident to the authorization, issuance, sale and delivery of the Stock and any
taxes payable in that connection; (b) the costs incident to the preparation,
printing and filing under the Securities Act of the Registration Statement and
any amendments and exhibits thereto; (c) the costs of distributing the
Registration Statement as originally filed and each amendment thereto and any
post-effective amendments thereof (including, in each case, exhibits), any
Preliminary Prospectus, the Prospectus and any amendment or supplement to the
Prospectus, all as provided in this Agreement; (d) the costs of producing and
distributing this Agreement and any other related documents in connection with
the offering, purchase, sale and delivery of the Stock; (e) the filing fees
incident to securing any required review by the National Association of
Securities Dealers, Inc. of the terms of sale of the Stock (including related
reasonable fees and expenses of counsel to the Underwriters); (f) any applicable
listing or other fees; (g) the fees and expenses of qualifying the Stock under
the securities laws of the several jurisdictions as provided in Section 6(h) and
of preparing, printing and distributing a Blue Sky Memorandum (including related
reasonable fees and expenses of counsel to the Underwriters); (h) the costs and
expenses of the Company relating to investor presentations on any "ROAD SHOW"
undertaken in connection with the marketing of the offering of the Stock,
including, without limitation, expenses associated with the production of road
show slides and graphics, fees and expenses of any consultants engaged in
connection with the road show presentations with the prior approval of the
Company; and (i) all other costs and expenses incident to the performance of the
obligations of the Company under this Agreement; provided that, except as
provided in this Section 8 and in Section 14, the Underwriters shall pay their
own costs and expenses, including the costs and expenses of their counsel, any
transfer taxes on the Stock which they may sell and the expenses of advertising
any offering of the Stock made by the Underwriters.
Section 9. Conditions of Underwriters' Obligations. The
respective obligations of the Underwriters hereunder are subject to the
accuracy, when made and on each Delivery Date, of the representations and
warranties of the Company and the Principal Stockholders contained herein, to
the performance by the Company and the
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Principal Stockholders of their respective obligations hereunder, and to each of
the following additional terms and conditions:
(a) The Prospectus shall have been timely filed with the
Commission in accordance with Section 6(a); no stop order suspending the
effectiveness of the Registration Statement or any part thereof shall have been
issued and no proceeding for that purpose shall have been initiated or
threatened by the Commission; and any request of the Commission for inclusion of
additional information in the Registration Statement or the Prospectus or
otherwise shall have been complied with.
(b) No Underwriter shall have discovered and disclosed to the
Company on or prior to such Delivery Date that the Registration Statement or the
Prospectus or any amendment or supplement thereto contains an untrue statement
of a fact which, in the opinion of counsel for the Underwriters, is material or
omits to state a fact which, in the opinion of such counsel, is material and is
required to be stated therein or is necessary to make the statements therein not
misleading.
(c) All corporate proceedings and other legal matters incident
to the authorization, form and validity of this Agreement, the Reorganization
Agreements, the Credit Agreement, the Stock, the Registration Statement and the
Prospectus, and all other legal matters relating to this Agreement and the
transactions contemplated hereby shall be reasonably satisfactory in all
material respects to counsel for the Underwriters, and the Company shall have
furnished to such counsel all documents and information that they may reasonably
request to enable them to pass upon such matters.
(d) The Credit Agreement and the Reorganization Agreements, in
substantially the form reviewed by counsel for the Underwriters and filed as
exhibits to the Registration Statement, shall have been executed and delivered
by all of the parties thereto, all obligations of QKD with respect to its prior
credit facility assumed by the Company shall have been discharged in full, and
the new credit facility of the Company, the Reorganization Agreements and the
other transactions contemplated by such agreements and the Reorganization shall
have closed with no conditions to closing under any such agreements waived
without the prior written consent of the Representatives, and in conformity with
the descriptions thereof contained in the Prospectus, and, in the case of the
Reorganization, as contemplated by the IRS Ruling.
(e) Xxxxxxx & Xxxxxx, LLP shall have furnished to the
Representatives its written opinion, as counsel to the Company and the Principal
Stockholders, addressed to the Underwriters and dated such Delivery Date, in
form and substance reasonably satisfactory to the Representatives, to the effect
that:
(i) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of its
jurisdiction of incorporation, is duly qualified to do business and
is in good standing as a foreign corporation in each jurisdiction in
which its ownership or lease of property or the conduct of its
business requires such qualification except where the failure to
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register or qualify does not have a material adverse effect on the
condition (financial or other), business, prospects, properties, net
worth or results of operations of the Company, and has all power and
authority necessary to own or hold its properties and to conduct the
business in which it is engaged; and the Company has no subsidiaries;
(ii) The Company has an authorized capitalization as set forth
in the Prospectus, and all of the issued shares of capital stock of
the Company (including the shares of Stock being delivered on such
Delivery Date) have been duly and validly authorized and issued, are
fully paid and non-assessable and conform to the description thereof
contained in the Prospectus;
(iii) There are no preemptive or other rights to subscribe for
or to purchase, nor any restriction upon the voting or transfer of,
any shares of the Stock pursuant to the Company's charter or by-laws
or any agreement or other instrument known to such counsel;
(iv) All real property and buildings held under lease by the
Company is held by it under valid, subsisting and enforceable leases,
with such exceptions as are not material and do not interfere with
the use made and proposed to be made of such property and buildings
by the Company;
(v) To the best of such counsel's knowledge and other than as
set forth in the Prospectus, there are no legal or governmental
proceedings pending to which the Company is a party or of which any
property or assets of the Company are the subject which, if
determined adversely to the Company, might have a material adverse
effect on the financial position, stockholders' equity, results of
operations, business or prospects of the Company; and, to the best of
such counsel's knowledge, no such proceedings are threatened or
contemplated by governmental authorities or threatened by others;
(vi) The Registration Statement was declared effective under
the Securities Act as of the date and time specified in such opinion,
the Prospectus was filed with the Commission pursuant to the
subparagraph of Rule 424(b) of the Rules and Regulations specified in
such opinion on the date specified therein and no stop order
suspending the effectiveness of the Registration Statement has been
issued and, to the knowledge of such counsel, no proceeding for that
purpose is pending or threatened by the Commission;
(vii) The Registration Statement and the Prospectus and any
further amendments or supplements thereto made by the Company prior
to such Delivery Date (other than the financial statements and
related schedules therein, as to which such counsel need express no
opinion) comply as to form in all material respects with the
requirements of the Securities Act and the Rules and Regulations;
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(viii) The statements contained in the Prospectus under the
captions "Business - Government Regulation," "Business - Legal
Proceedings," "Related Party Transactions," "Management - Employment
Agreement" and "Management's Discussion and Analysis of Financial
Condition and Results of Operations - Liquidity and Capital Resources
- Capital Resources" insofar as they describe statutes, rules and
regulations, legal proceedings or summaries or descriptions of legal
agreements, constitute a fair summary thereof;
(ix) To the best of such counsel's knowledge, there are no
contracts or other documents that are required to be described in the
Prospectus or filed as exhibits to the Registration Statement by the
Securities Act or by the Rules and Regulations which have not been
described or filed as exhibits to the Registration Statement or
incorporated therein by reference as permitted by the Rules and
Regulations;
(x) This Agreement has been duly authorized, executed and
delivered by the Company and, assuming the accuracy of the Principal
Stockholders' representations in Section 2(b) above, each of the
Principal Stockholders;
(xi) The issue and sale of the shares of Stock being delivered
on such Delivery Date by the Company and the compliance by each of
the Company and the Principal Stockholders with all of the provisions
of this Agreement and the consummation of the transactions
contemplated hereby will not conflict with or result in a breach or
violation of any of the terms or provisions of, or constitute a
default under, any indenture, mortgage, deed of trust, loan agreement
or other agreement or instrument known to such counsel to which the
Company or any Principal Stockholder is a party or by which the
Company or any Principal Stockholder is bound or to which any of the
property or assets of the Company or any Principal Stockholder are
subject, nor will such actions result in any violation of the
provisions of the charter, by-laws or other formation documents of
the Company or any Principal Stockholder or any statute or any order,
rule or regulation known to such counsel of any court or governmental
agency or body having jurisdiction over the Company or any Principal
Stockholder or any of their respective properties or assets; and,
except for the registration of the Stock under the Securities Act and
such consents, approvals, authorizations, registrations or
qualifications as may be required under the Exchange Act and
applicable state securities laws in connection with the purchase and
distribution of the Stock by the Underwriters, no consent, approval,
authorization or order of, or filing or registration with, any such
court or governmental agency or body is required for the execution,
delivery and performance of this Agreement by the Company and each of
the Principal Stockholders and the consummation of the transactions
contemplated hereby;
(xii) Each of the Credit Agreement and each of the
Reorganization Agreements has been duly authorized, executed and
delivered by each Reorganization Party party thereto, and constitutes
a valid and binding
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agreement of such Reorganization Party enforceable against the
Reorganization Party in accordance with its terms, subject to the
effects of bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other laws relating to or affecting
creditors' rights generally, general equitable principles (whether
considered in a proceeding in equity or at law);
(xiii) The compliance by the Company with all of the
provisions of the Credit Agreement and by each Reorganization Party
with all of the provisions of the Reorganization Agreements to which
it is party and the consummation of the transactions contemplated
thereby and by the Reorganization do not and will not conflict with
or result in a breach or violation of any of the terms or provisions
of, or constitute a default under, any indenture, mortgage, deed of
trust, loan agreement or other agreement or instrument known to such
counsel to which any Reorganization Party is a party or by which any
Reorganization Party is bound or to which any of the property or
assets of any Reorganization Party are subject, nor do or will such
actions result in any violation of the provisions of the charter,
by-laws or other formation documents of any Reorganization Party or
any statute or any order, rule or regulation known to such counsel of
any court or governmental agency or body having jurisdiction over any
Reorganization Party or any of its properties or assets; and no
consent, approval, authorization or order of, or filing or
registration with, any such court or governmental agency or body was
or is required for the execution, delivery and performance of the
Credit Agreement and the Reorganization Agreements to which it is
party by each Reorganization Party and the consummation of the
transactions contemplated thereby and by the Reorganization;
(xiv) The Reorganization has been consummated in conformity
with the description thereof contained in the Prospectus and as
contemplated by the IRS Ruling;
(xv) To the best of such counsel's knowledge, there are no
contracts, agreements or understandings between the Company and any
person granting such person the right (other than as set forth in the
Prospectus) to require the Company to file a registration statement
under the Securities Act with respect to any securities of the
Company owned or to be owned by such person or to require the Company
to include such securities in the securities registered pursuant to
the Registration Statement or in any securities being registered
pursuant to any other registration statement filed by the Company
under the Securities Act; and
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(xvii) The Company is not an "investment company" as defined
in the Investment Company Act of 1940, as amended.
In rendering such opinion, such counsel may state that its
opinion is limited to matters governed by the Federal laws of the United States
of America, the laws of the State of New York and General Corporation Law of the
State of Delaware and that such counsel is not admitted in the State of
Delaware. Such counsel shall also have furnished to the Representatives a
written statement, addressed to the Underwriters and dated such Delivery Date,
in form and substance satisfactory to the Representatives, to the effect that
(x) such counsel has acted as counsel to the Company on a regular basis and has
acted as counsel to the Company in connection with the preparation of the
Registration Statement, and (y) based on the foregoing, no facts have come to
the attention of such counsel which lead it to believe that the Registration
Statement, as of the Effective Date, contained any untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary in order to make the statements therein not misleading, or that the
Prospectus contains any untrue statement of a material fact or omits to state a
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading. The foregoing opinion and statement may be qualified by a
statement to the effect that such counsel does not assume any responsibility for
the accuracy, completeness or fairness of the statements contained in the
Registration Statement or the Prospectus except for the statements identified in
paragraphs (iii) and (ix) above, insofar as such statements relate to the Stock
and concern legal matters.
(f) The Representatives shall have received from Xxxx, Weiss,
Rifkind, Xxxxxxx & Xxxxxxxx, counsel for the Underwriters, such opinion or
opinions, dated such Delivery Date, with respect to the issuance and sale of the
Stock, the Registration Statement, the Prospectus and other related matters as
the Representatives may reasonably require, and the Company shall have furnished
to such counsel such documents as it reasonably requests for the purpose of
enabling it to pass upon such matters.
(g) At the time of execution of this Agreement, the
Representatives shall have received from BDO Xxxxxxx, LLP a letter, in form and
substance satisfactory to the Representatives, addressed to the Underwriters and
dated the date hereof (i) confirming that they are independent public
accountants within the meaning of the Securities Act and are in compliance with
the applicable requirements relating to the qualification of accountants under
Rule 2-01 of Regulation S-X of the Commission, (ii) stating, as of the date
hereof (or, with respect to matters involving changes or developments since the
respective dates as of which specified financial information is given in the
Prospectus, as of a date not more than five days prior to the date hereof), the
conclusions and findings of such firm with respect to the financial
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information and other matters ordinarily covered by accountants' "comfort
letters" to underwriters in connection with registered public offerings.
(h) With respect to the letter of BDO Xxxxxxx, LLP referred to
in the preceding paragraph and delivered to the Representatives concurrently
with the execution of this Agreement (the "INITIAL LETTER"), the Company shall
have furnished to the Representatives a letter (the "BRING-DOWN LETTER") of such
accountants, addressed to the Underwriters and dated such Delivery Date (i)
confirming that they are independent public accountants within the meaning of
the Securities Act and are in compliance with the applicable requirements
relating to the qualification of accountants under Rule 2-01 of Regulation S-X
of the Commission, (ii) stating, as of the date of the bring-down letter (or,
with respect to matters involving changes or developments since the respective
dates as of which specified financial information is given in the Prospectus, as
of a date not more than three days prior to the date of the bring-down letter),
the conclusions and findings of such firm with respect to the financial
information and other matters covered by the initial letter and (iii) confirming
in all material respects the conclusions and findings set forth in the initial
letter.
(i) The Company shall have furnished to the Representatives a
certificate, dated such Delivery Date, of its Chairman of the Board, its
President or a Vice President and its chief financial officer stating that:
(i) The representations, warranties and agreements of the
Company in Section 1 are true and correct as of such Delivery Date;
the Company has complied with all its agreements contained herein;
and the conditions set forth in Sections 9(a) and 9(k) have been
fulfilled; and
(ii) They have carefully examined the Registration Statement
and the Prospectus and, in their opinion (A) as of the Effective
Date, the Registration Statement and Prospectus did not include any
untrue statement of a material fact and did not omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading, and (B) since the Effective Date
no event has occurred which should have been set forth in a
supplement or amendment to the Registration Statement or the
Prospectus.
(j) Each Principal Stockholder shall have furnished to the
Representatives on each Delivery Date a certificate, dated such Delivery Date,
signed by, or on behalf of, each Principal Stockholder stating that the
representations, warranties and agreements of such Principal Stockholder
contained herein are true and correct as of such Delivery Date and that such
Principal Stockholder has complied with all agreements contained herein to be
performed by such Principal Stockholder at or prior to such Delivery Date.
(k) (i) The Company shall not have sustained since the date of
the latest audited financial statements included in the Prospectus any loss or
interference with its business from fire, explosion, flood or other calamity,
whether or not covered by insurance, or from any labor dispute or court or
governmental action, order or decree,
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otherwise than as set forth or contemplated in the Prospectus or (ii) since such
date there shall not have been any change in the capital stock or long-term debt
of the Company or any change, or any development which could reasonably be
expected to involve a prospective change, in or affecting the general affairs,
management, financial position, stockholders' equity or results of operations of
the Company, otherwise than as set forth or contemplated in the Prospectus, the
effect of which, in any such case described in clause (i) or (ii), is, in the
judgment of the Representatives, so material and adverse as to make it
impracticable or inadvisable to proceed with the public offering or the delivery
of the Stock being delivered on such Delivery Date on the terms and in the
manner contemplated in the Prospectus.
(l) Subsequent to the execution and delivery of this Agreement
there shall not have occurred any of the following: (i) trading in securities
generally on the New York Stock Exchange or in the over-the-counter market, or
trading in any securities of the Company on any exchange or in the
over-the-counter market, shall have been suspended or minimum prices shall have
been established on any such exchange or such market by the Commission, by such
exchange or by any other regulatory body or governmental authority having
jurisdiction, (ii) a banking moratorium shall have been declared by Federal or
state authorities, (iii) the United States shall have become engaged in
hostilities, there shall have been an escalation in hostilities involving the
United States or there shall have been a declaration of a national emergency or
war by the United States or (iv) there shall have occurred such a material
adverse change in general economic, political or financial conditions (or the
effect of international conditions on the financial markets in the United States
shall be such) as to make it, in the judgment of a majority in interest of the
several Underwriters, impracticable or inadvisable to proceed with the public
offering or delivery of the Stock being delivered on such Delivery Date on the
terms and in the manner contemplated in the Prospectus.
(m) The New York Stock Exchange, Inc. shall have approved the
Stock for listing, subject only to official notice of issuance and evidence of
satisfactory distribution.
All opinions, letters, evidence and certificates mentioned
above or elsewhere in this Agreement shall be deemed to be in compliance with
the provisions hereof only if they are in form and substance reasonably
satisfactory to counsel for the Underwriters.
Section 10. Indemnification and Contribution.
(a) The Company shall indemnify and hold harmless each
Underwriter (including any Underwriter in its role as "Qualified Independent
Underwriter" under Rule 2720 of the Conduct Rules of the NASD), its officers and
employees and each person, if any, who controls any Underwriter within the
meaning of the Securities Act, from and against any loss, claim, damage or
liability, joint or several, or any action in respect thereof (including, but
not limited to, any loss, claim, damage, liability or action relating to
purchases and sales of Stock), to which that Underwriter, officer, employee or
controlling person may become subject, under the Securities Act or
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otherwise, insofar as such loss, claim, damage, liability or action arises out
of, or is based upon, (i) any untrue statement or alleged untrue statement of a
material fact contained (A) in any Preliminary Prospectus, the Registration
Statement or the Prospectus or in any amendment or supplement thereto, or (B) in
any materials or information provided to investors by, or with the approval of,
the Company in connection with the marketing of the offering of the Stock
("MARKETING MATERIALS"), including any roadshow or investor presentations made
to investors by the Company (whether in person or electronically), (ii) the
omission or alleged omission to state in any Preliminary Prospectus, the
Registration Statement or the Prospectus, or in any amendment or supplement
thereto, or in any Marketing Materials, or in any Blue Sky Application any
material fact required to be stated therein or necessary to make the statements
therein not misleading or (iii) any act or failure to act or any alleged act or
failure to act by any Underwriter in connection with, or relating in any manner
to, the Stock or the offering contemplated hereby, and which is included as part
of or referred to in any loss, claim, damage, liability or action arising out of
or based upon matters covered by clause (i) or (ii) above (provided that the
Company shall not be liable under this clause (iii) to the extent that it is
determined in a final judgment by a court of competent jurisdiction that such
loss, claim, damage, liability or action resulted directly from any such acts or
failures to act undertaken or omitted to be taken by such Underwriter through
its gross negligence or willful misconduct), and shall reimburse each
Underwriter and each such officer, employee or controlling person promptly upon
demand for any legal or other expenses reasonably incurred by that Underwriter,
officer, employee or controlling person in connection with investigating or
defending or preparing to defend against any such loss, claim, damage, liability
or action as such expenses are incurred; provided, however, that the Company
shall not be liable in any such case to the extent that any such loss, claim,
damage, liability or action arises out of, or is based upon, any untrue
statement or alleged untrue statement or omission or alleged omission made in
any Preliminary Prospectus, the Registration Statement or the Prospectus, or in
any such amendment or supplement, in reliance upon and in conformity with
written information concerning such Underwriter furnished to the Company through
the Representatives by or on behalf of any Underwriter specifically for
inclusion therein which information consists solely of the information specified
in Section 9(g); and provided further that the foregoing indemnity agreement
with respect to any Preliminary Prospectus, the Prospectus or in any amendment
or supplement thereto shall not inure to the benefit of any Underwriter from
whom the person asserting any such losses, claims, damages or liabilities
purchased Stock, or any person controlling such Underwriter, if a copy of the
Prospectus (as then amended or supplemented, if the Company shall have made any
amendments or supplements) was not sent or given by or on behalf of such
Underwriter to such person, if required by law so to have been delivered, at or
prior to the written confirmation of the sale of Stock to such person, and if
the Prospectus (as so amended or supplemented) would have cured the defect
giving rise to such loss, claim, damage or liability, unless such failure to
send or give was the result of noncompliance by the Company with Section 6(c)
hereof. The foregoing indemnity agreement is in addition to any liability which
the Company may otherwise have to any Underwriter or to any officer, employee or
controlling person of that Underwriter.
(b) The Principal Stockholders, jointly and severally, shall
indemnify and hold harmless each Underwriter (including any Underwriter in its
role as
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"Qualified Independent Underwriter" under Rule 2720 of the Conduct Rules of the
NASD), its officers and employees, and each person, if any, who controls any
Underwriter within the meaning of the Securities Act, from and against any loss,
claim, damage or liability, joint or several, or any action in respect thereof
(including, but not limited to, any loss, claim, damage, liability or action
relating to purchases and sales of Stock), to which that Underwriter, officer,
employee or controlling person may become subject, under the Securities Act or
otherwise, insofar as such loss, claim, damage, liability or action arises out
of, or is based upon, (i) any untrue statement or alleged untrue statement of a
material fact contained in (A) any Preliminary Prospectus, the Registration
Statement or the Prospectus or any amendment or supplement thereto, or (B) in
any Marketing Materials, including any roadshow or investor presentations made
to investors by the Company (whether in person or electronically), (ii) the
omission or alleged omission to state in any Preliminary Prospectus,
Registration Statement or the Prospectus, or in any amendment or supplement
thereto, or in any Marketing Materials or in any Blue Sky Application, any
material fact required to be stated therein or necessary to make the statements
therein not misleading, or (iii) any act or failure to act or any alleged act or
failure to act by any Underwriter in connection with, or relating in any manner
to, the Stock or the offering contemplated hereby, and which is included as part
of or referred to in any loss, claim, damage, liability or action arising out of
or based upon matters covered by clause (i) or (ii) above (provided that the
Principal Stockholders shall not be liable under this clause (iii) to the extent
that it is determined in a final judgment by a court of competent jurisdiction
that such loss, claim, damage, liability or action resulted directly from any
such acts or failures to act undertaken or omitted to be taken by such
Underwriter through its gross negligence or willful misconduct), and shall
reimburse each Underwriter, its officers and employees and each such controlling
person for any legal or other expenses reasonably incurred by that Underwriter,
its officers and employees or controlling person in connection with
investigating or defending or preparing to defend against any such loss, claim,
damage, liability or action as such expenses are incurred; provided, however,
that the Principal Stockholders shall not be liable in any such case to the
extent that any such loss, claim, damage, liability or action arises out of, or
is based upon, any untrue statement or alleged untrue statement or omission or
alleged omission made in any Preliminary Prospectus, the Registration Statement
or the Prospectus or in any such amendment or supplement in reliance upon and in
conformity with written information concerning such Underwriter furnished to the
Company through the Representatives by or on behalf of any Underwriter
specifically for inclusion therein which information consists solely of the
information specified in Section 9(g). The foregoing indemnity agreement is in
addition to any liability which the Principal Stockholders may otherwise have to
any Underwriter or any officer, employee or controlling person of that
Underwriter.
(c) Each Underwriter, severally and not jointly, shall
indemnify and hold harmless the Company, its officers and employees, each of its
directors (including any person who, with his or her consent, is named in the
Registration Statement as about to become a director of the Company), each
Principal Stockholder, and each person, if any, who controls the Company within
the meaning of the Securities Act, from and against any loss, claim, damage or
liability, joint or several, or any action in respect thereof, to which the
Company or any such director, officer, Principal
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Stockholder or controlling person may become subject, under the Securities Act
or otherwise, insofar as such loss, claim, damage, liability or action arises
out of, or is based upon, (i) any untrue statement or alleged untrue statement
of a material fact contained (A) in any Preliminary Prospectus, the Registration
Statement or the Prospectus or in any amendment or supplement thereto, or (B) in
any Blue Sky Application or (ii) the omission or alleged omission to state in
any Preliminary Prospectus, the Registration Statement or the Prospectus, or in
any amendment or supplement thereto, or in any Blue Sky Application any material
fact required to be stated therein or necessary to make the statements therein
not misleading, but in each case only to the extent that the untrue statement or
alleged untrue statement or omission or alleged omission was made in reliance
upon and in conformity with written information concerning such Underwriter
furnished to the Company through the Representatives by or on behalf of that
Underwriter specifically for inclusion therein, and shall reimburse the Company
and any such director, officer, Principal Stockholder or controlling person for
any legal or other expenses reasonably incurred by the Company or any such
director, officer, Principal Stockholder or controlling person in connection
with investigating or defending or preparing to defend against any such loss,
claim, damage, liability or action as such expenses are incurred. The foregoing
indemnity agreement is in addition to any liability which any Underwriter may
otherwise have to the Company or any such director, officer, employee, Principal
Stockholder or controlling person.
(d) Promptly after receipt by an indemnified party under this
Section 10 of notice of any claim or the commencement of any action, the
indemnified party shall, if a claim in respect thereof is to be made against the
indemnifying party under this Section 10, notify the indemnifying party in
writing of the claim or the commencement of that action; provided, however, that
the failure to notify the indemnifying party shall not relieve it from any
liability which it may have under this Section 10 except to the extent it has
been materially prejudiced by such failure and, provided further, that the
failure to notify the indemnifying party shall not relieve it from any liability
which it may have to an indemnified party otherwise than under this Section 10.
If any such claim or action shall be brought against an indemnified party, and
it shall notify the indemnifying party thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it wishes, jointly with
any other similarly notified indemnifying party, to assume the defense thereof
with counsel reasonably satisfactory to the indemnified party. After notice from
the indemnifying party to the indemnified party of its election to assume the
defense of such claim or action, the indemnifying party shall not be liable to
the indemnified party under this Section 10 for any legal or other expenses
subsequently incurred by the indemnified party in connection with the defense
thereof other than reasonable costs of investigation; provided, however, that
the Representatives shall have the right to employ counsel to represent jointly
the Representatives and those other Underwriters and their respective officers,
employees and controlling persons who may be subject to liability arising out of
any claim in respect of which indemnity may be sought by the Underwriters
against the Company or any Principal Stockholder under this Section 10 if, in
the reasonable judgment of the Representatives, it is advisable for the
Representatives and those Underwriters, officers, employees and controlling
persons to be jointly represented by separate counsel, and in that event the
fees and expenses of such separate counsel shall be paid by the Company.
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No indemnifying party shall (i) without the prior written consent of the
indemnified parties (which consent shall not be unreasonably withheld), settle
or compromise or consent to the entry of any judgment with respect to any
pending or threatened claim, action, suit or proceeding in respect of which
indemnification or contribution may be sought hereunder (whether or not the
indemnified parties are actual or potential parties to such claim or action)
unless such settlement, compromise or consent includes an unconditional release
of each indemnified party from all liability arising out of such claim, action,
suit or proceeding, or (ii) be liable for any settlement of any such action
effected without its written consent (which consent shall not be unreasonably
withheld), but if settled with the consent of the indemnifying party or if there
be a final judgment of the plaintiff in any such action, the indemnifying party
agrees to indemnify and hold harmless any indemnified party from and against any
loss or liability by reason of such settlement or judgment.
(e) If the indemnification provided for in this Section 10
shall for any reason be unavailable to or insufficient to hold harmless an
indemnified party under Section 10(a), 10(b) or 10(c) in respect of any loss,
claim, damage or liability, or any action in respect thereof, referred to
therein, then each indemnifying party shall, in lieu of indemnifying such
indemnified party, contribute to the amount paid or payable by such indemnified
party as a result of such loss, claim, damage or liability, or action in respect
thereof, (i) in such proportion as shall be appropriate to reflect the relative
benefits received by the Company and the Principal Stockholders on the one hand
and the Underwriters on the other from the offering of the Stock 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 and
the Principal Stockholders on the one hand and the Underwriters on the other
with respect to the statements or omissions which resulted in such loss, claim,
damage or liability, or action in respect thereof, as well as any other relevant
equitable considerations. The relative benefits received by the Company and the
Principal Stockholders on the one hand and the Underwriters on the other with
respect to such offering shall be deemed to be in the same proportion as the
total net proceeds from the offering of the Stock purchased under this Agreement
(before deducting expenses) received by the Company and the Principal
Stockholders on the one hand and the total underwriting discounts and
commissions received by the Underwriters with respect to the shares of the Stock
purchased under this Agreement on the other hand bear to the total gross
proceeds from the offering of the shares of the Stock under this Agreement, in
each case as set forth in the table on the cover page of the Prospectus. The
relative fault shall be determined by reference to whether the untrue or alleged
untrue statement of a material fact or omission or alleged omission to state a
material fact relates to information supplied by the Company, the Principal
Stockholders or the Underwriters, the intent of the parties and their relative
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The Company, the Principal Stockholders and the
Underwriters agree that it would not be just and equitable if contributions
pursuant to this Section were to be determined by pro rata allocation (even if
the Underwriters were treated as one entity for such purpose) or by any other
method of allocation which does not take into account the equitable
considerations referred to herein. The amount paid or payable by an indemnified
party as a result of the loss, claim, damage or liability, or
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action in respect thereof, referred to above in this Section shall be deemed to
include, for purposes of this Section 10(e), any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any such action or claim. Notwithstanding the provisions of this
Section 10(e), no Underwriter shall be required to contribute any amount in
excess of the amount by which the total price at which the Stock underwritten by
it and distributed to the public was offered to the public exceeds the amount of
any damages which such Underwriter has otherwise paid or become liable to pay by
reason of any untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the meaning
of Section 9(f) of the Securities Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. The
Underwriters' obligations to contribute as provided in this Section 10(e) are
several in proportion to their respective underwriting obligations and not
joint.
(f) Without limiting the Company's agreements under this
Section 10 in any manner, no Principal Stockholder shall be liable in any such
case in respect of any such losses, claims, damages, liabilities or expenses
unless the Underwriter who has the right to indemnification or contribution
hereunder and is seeking indemnification or contribution from such Principal
Stockholder shall have previously sought indemnification or contribution from
the Company in respect thereof and the Company shall have failed to honor and
pay such Underwriter's claim for indemnification or contribution within 30
calendar days of the date such indemnification or contribution is first sought
against the Company (except that the foregoing condition precedent requiring an
Underwriter to so seek indemnification or contribution from the Company (i)
shall not be applicable if an Underwriter has previously sought indemnification
or contribution from the Company with respect to such matters or if such
Underwriter is prohibited from being indemnified by or receiving contribution
from the Company (or from seeking such indemnification or contribution) by the
effect of any order, decree, stay, injunction, statute, legal process or other
matter of law and (ii) shall not limit the right of an Underwriter at any time
to notify a Principal Stockholder of a claim for indemnification or contribution
or otherwise initiate a claim or proceeding against a Principal Stockholder for
indemnification or contribution prior to the expiration of such 30 calendar
days, but only and solely to the extent necessary to prevent any applicable
statute of limitations from expiring).
(g) The Underwriters severally confirm and the Company
acknowledges that the statements with respect to the public offering of the
Stock by the Underwriters set forth on the cover page of, and the concession and
reallowance figures appearing under the caption "Underwriting" in, the
Prospectus are correct and constitute the only information concerning such
Underwriters furnished in writing to the Company by or on behalf of the
Underwriters specifically for inclusion in the Registration Statement and the
Prospectus.
Section 11. Defaulting Underwriters.
If, on either Delivery Date, any Underwriter defaults in the
performance of its obligations under this Agreement, the remaining
non-defaulting Underwriters shall be
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obligated to purchase the Stock which the defaulting Underwriter agreed but
failed to purchase on such Delivery Date in the respective proportions which the
number of shares of the Firm Stock set opposite the name of each remaining
non-defaulting Underwriter in Schedule 1 hereto bears to the total number of
shares of the Firm Stock set opposite the names of all the remaining
non-defaulting Underwriters in Schedule 1 hereto; provided, however, that the
remaining non-defaulting Underwriters shall not be obligated to purchase any of
the Stock on such Delivery Date if the total number of shares of the Stock which
the defaulting Underwriter or Underwriters agreed but failed to purchase on such
date exceeds 9.09% of the total number of shares of the Stock to be purchased on
such Delivery Date, and any remaining non-defaulting Underwriter shall not be
obligated to purchase more than 110% of the number of shares of the Stock which
it agreed to purchase on such Delivery Date pursuant to the terms of Section 3.
If the foregoing maximums are exceeded, the remaining non-defaulting
Underwriters, or those other underwriters satisfactory to the Representatives
who so agree, shall have the right, but shall not be obligated, to purchase, in
such proportion as may be agreed upon among them, all the Stock to be purchased
on such Delivery Date. If the remaining Underwriters or other underwriters
satisfactory to the Representatives do not elect to purchase the shares which
the defaulting Underwriter or Underwriters agreed but failed to purchase on such
Delivery Date, this Agreement (or, with respect to the Second Delivery Date, the
obligation of the Underwriters to purchase, and of the Company to sell, the
Option Stock), shall terminate without liability on the part of any
non-defaulting Underwriter, the Company or the Principal Stockholders, except
that the Company will continue to be liable for the payment of expenses to the
extent set forth in Sections 8 and 13. As used in this Agreement, the term
"UNDERWRITER" includes, for all purposes of this Agreement unless the context
requires otherwise, any party not listed in Schedule 1 hereto who, pursuant to
this Section 11, purchases Firm Stock which a defaulting Underwriter agreed but
failed to purchase.
Nothing contained herein shall relieve a defaulting
Underwriter of any liability it may have to the Company and the Principal
Stockholders for damages caused by its default. If other underwriters are
obligated or agree to purchase the Stock of a defaulting or withdrawing
Underwriter, either the Representatives or the Company may postpone the Delivery
Date for up to seven full business days in order to effect any changes that in
the opinion of counsel for the Company or counsel for the Underwriters may be
necessary in the Registration Statement, the Prospectus or in any other document
or arrangement.
Section 12. Termination. The obligations of the Underwriters
hereunder may be terminated by the Representatives by notice given to and
received by the Company and the Principal Stockholders prior to delivery of and
payment for the Firm Stock if, prior to that time, any of the events described
in Sections 9(k) or 9(l) shall have occurred or if the Underwriters shall
decline to purchase the Stock for any reason permitted under this Agreement.
Section 13. Reimbursement of Underwriters' Expenses. If (a)
the Company shall fail to tender the Stock for delivery to the Underwriters by
reason of any
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failure, refusal or inability on the part of the Company or any of the Principal
Stockholders to perform any agreement on its part to be performed, or because
any other condition of the Underwriters' obligations hereunder required to be
fulfilled by the Company or any of the Principal Stockholders is not fulfilled,
the Company and the Principal Stockholders will reimburse the Underwriters for
all reasonable out-of-pocket expenses (including fees and disbursements of
counsel) incurred by the Underwriters in connection with this Agreement and the
proposed purchase of the Stock, and upon demand the Company and the Principal
Stockholders shall pay the full amount thereof to the Representatives. If this
Agreement is terminated pursuant to Section 12 by reason of the default of one
or more Underwriters, neither the Company nor any Principal Stockholder shall be
obligated to reimburse any defaulting Underwriter on account of those expenses.
Section 14. Notices, etc. All statements, requests, notices
and agreements hereunder shall be in writing, and:
(a) if to the Underwriters, shall be delivered or sent by
mail, telex or facsimile transmission to Xxxxxx Brothers Inc., Three World
Financial Center, New York, New York 10285, Attention: Syndicate Department
(Fax: 000-000-0000), with a copy, in the case of any notice pursuant to Section
10(d), to the Director of Litigation, Office of the General Counsel, Xxxxxx
Brothers Inc., Three World Financial Xxxxxx, 00xx Xxxxx, Xxx Xxxx, XX 00000;
(b) if to the Company shall be delivered or sent by mail,
telex or facsimile transmission to the address of the Company set forth in the
Registration Statement, Attention: Xxxxxxx X. Xxxx, Executive Vice President and
Chief Financial Officer.
(c) if to any Principal Stockholders, shall be delivered or
sent by mail, telex or facsimile transmission to such Principal Stockholder at
the address set forth on Schedule 2 hereto;
provided, however, that any notice to an Underwriter pursuant to Section 10(d)
shall be delivered or sent by mail, telex or facsimile transmission to such
Underwriter at its address set forth in its acceptance telex to the
Representatives, which address will be supplied to any other party hereto by the
Representatives upon request. Any such statements, requests, notices or
agreements shall take effect at the time of receipt thereof. The Company and the
Principal Stockholders shall be entitled to act and rely upon any request,
consent, notice or agreement given or made on behalf of the Underwriters by
Xxxxxx Brothers Inc. and the Company and the Underwriters shall be entitled to
act and rely upon any request, consent, notice or agreement given or made on
behalf of the Principal Stockholders by Xxxxx Xxxxxxxx.
Section 15. Persons Entitled to Benefit of Agreement. This
Agreement shall inure to the benefit of and be binding upon the Underwriters,
the Company, the Principal Stockholders and their respective personal
representatives and successors. This Agreement and the terms and provisions
hereof are for the sole benefit of only those
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persons, except that (A) the representations, warranties, indemnities and
agreements of the Company and the Principal Stockholders contained in this
Agreement shall also be deemed to be for the benefit of the person or persons,
if any, who control any Underwriter within the meaning of Section 15 of the
Securities Act and (B) the indemnity agreement of the Underwriters contained in
Section 10(c) of this Agreement shall be deemed to be for the benefit of
directors of the Company, officers of the Company who have signed the
Registration Statement and any person controlling the Company within the meaning
of Section 15 of the Securities Act. Nothing in this Agreement is intended or
shall be construed to give any person, other than the persons referred to in
this Section 15, any legal or equitable right, remedy or claim under or in
respect of this Agreement or any provision contained herein.
Section 16. Survival. The respective indemnities,
representations, warranties and agreements of the Company, the Principal
Stockholders and the Underwriters contained in this Agreement or made by or on
behalf of them, respectively, pursuant to this Agreement, shall survive the
delivery of and payment for the Stock and shall remain in full force and effect,
regardless of any investigation made by or on behalf of any of them or any
person controlling any of them.
Section 17. Definition of the Terms "Business Day" and
"Subsidiary." For purposes of this Agreement, (a) "BUSINESS DAY" means each
Monday, Tuesday, Wednesday, Thursday or Friday which is not a day on which
banking institutions in New York are generally authorized or obligated by law or
executive order to close and (b) "subsidiary" has the meaning set forth in Rule
405 of the Rules and Regulations.
Section 18. Governing Law. This Agreement shall be governed by
and construed in accordance with the laws of New York.
Each party irrevocably agrees that any legal suit, action or
proceeding arising out of or based upon this Agreement or the transactions
contemplated hereby ("RELATED PROCEEDINGS") may be instituted in the federal
courts of the United States of America located in the City of New York or the
courts of the State of New York in each case located in the Borough of Manhattan
in the City of New York (collectively, the "SPECIFIED COURTS"), and irrevocably
submits to the exclusive jurisdiction (except for proceedings instituted in
regard to the enforcement of a judgment of any such court (a "RELATED
JUDGMENT"), as to which such jurisdiction is non-exclusive) of such courts in
any such suit, action or proceeding. The parties further agree that service of
any process, summons, notice or document by mail to such party's address set
forth above shall be effective service of process for any lawsuit, action or
other proceeding brought in any such court. The parties hereby irrevocably and
unconditionally waive any objection to the laying of venue of any lawsuit,
action or other proceeding in the Specified Courts, and hereby further
irrevocably and unconditionally waive and agree not to plead or claim in any
such court that any such lawsuit, action or other proceeding brought in any such
court has been brought in an inconvenient forum.
Section 19. Counterparts. This Agreement may be executed in
one or more counterparts and, if executed in more than one counterpart, the
executed
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counterparts shall each be deemed to be an original but all such counterparts
shall together constitute one and the same instrument.
Section 20. Headings. The headings herein are inserted for
convenience of reference only and are not intended to be part of, or to affect
the meaning or interpretation of, this Agreement.
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If the foregoing correctly sets forth the agreement among the
Company, the Principal Stockholders and the Underwriters, please indicate your
acceptance in the space provided for that purpose below.
Very truly yours,
QK HEALTHCARE, INC.
By _____________________________
Name:
Title:
The Principal Stockholders listed on Schedule 2:
By:________________________________
Xxxxx Xxxxxxxx, as Trustee
under (i) the Indenture
dated November 1, 1998
creating the Xxxxxxx
Xxxxxxxx November 1, 1998
trust (the "Xxxxxxx
Xxxxxxxx November 1, 1998
Trust Indenture"), (ii) the
Indenture dated November 2,
1998 creating the Xxxxxxx
Xxxxxxxx November 2, 1998
trust (the "Xxxxxxx
Xxxxxxxx November 2, 1998
Trust Indenture"), (iii)
the Indenture dated
November 1,1998 creating
the Xxxxxx Xxxxxxxx
November 1, 1998 trust (the
"Xxxxxx Xxxxxxxx November
1, 1998 Trust Indenture"),
and (iv) the Indenture
dated November 2, 1998
creating the Xxxxxx
Xxxxxxxx November 2, 1998
trust (the "Xxxxxx Xxxxxxxx
November 2, 1998 Trust
Indenture")
By:________________________________
Xxxxxxx Xxxxxxxx, as
Trustee under (i) the
Indenture dated November 1,
1998 creating the Xxxxx
Xxxxxxxx November 1, 1998
trust (the "Xxxxx Xxxxxxxx
November 1, 1998 Trust
Indenture"), (ii) the
Indenture dated November 2,
1998 creating the Xxxxx
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Nussdorf November 2, 1998
trust (the "Xxxxx Xxxxxxxx
November 2, 1998 Trust
Indenture"), (iii) the
Xxxxxx Xxxxxxxx November 1,
1998 Trust Indenture, and
(iv) the Xxxxxx Xxxxxxxx
November 2, 1998 Trust
Indenture
By:________________________________
Xxxxxx Xxxxxxxx, as Trustee
under (i) the Xxxxx
Xxxxxxxx November 1, 1998
Trust Indenture, (ii) the
Xxxxx Xxxxxxxx November 2,
1998 Trust Indenture, (iii)
the Xxxxxxx Xxxxxxxx
November 1, 1998 Trust
Indenture, and (iv) the
Xxxxxxx Xxxxxxxx November
2, 1998 Trust Indenture
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Accepted:
XXXXXX BROTHERS INC.
X.X. XXXXXX SECURITIES INC.
FIRST UNION SECURITIES, INC.
FIDELITY CAPITAL MARKETS,
A DIVISION OF NATIONAL FINANCIAL SERVICES LLC
By: Xxxxxx Brothers Inc.
By
_______________________________
Authorized Representative
For themselves and as Representatives
of the several Underwriters named
in Schedule 1 hereto
36
36
SCHEDULE 1
Number of Underwriters Shares:
Xxxxxx Brothers Inc............................................................
X.X. Xxxxxx Securities Inc.....................................................
First Union Securities, Inc....................................................
Fidelity Capital Markets, a division of National Financial Services
LLC............................................................................
Total..................................................... 11,000,000
37
37
SCHEDULE 2
Principal Stockholders:
1. Xxxxxxx Xxxxxxxx and Xxxxxx Xxxxxxxx, as Trustees under the Indenture
dated November 1, 1998 creating the Xxxxx Xxxxxxxx November 1, 1998
trust (the "Xxxxx Xxxxxxxx November 1, 1998 Trust Indenture").
2. Xxxxxxx Xxxxxxxx and Xxxxxx Xxxxxxxx, as Trustees under the Indenture
dated November 2, 1998 creating the Xxxxx Xxxxxxxx November 2, 1998
trust (the "Xxxxx Xxxxxxxx November 2, 1998 Trust Indenture").
3. Xxxxx Xxxxxxxx and Xxxxxx Xxxxxxxx, as Trustees under the Indenture
dated November 1, 1998 creating the Xxxxxxx Xxxxxxxx November 1, 1998
trust (the "Xxxxxxx Xxxxxxxx November 1, 1998 Trust Indenture").
4. Xxxxx Xxxxxxxx and Xxxxxx Xxxxxxxx, as Trustees under the Indenture
dated November 2, 1998 creating the Xxxxxxx Xxxxxxxx November 2, 1998
trust (the "Xxxxxxx Xxxxxxxx November 2, 1998 Trust Indenture").
5. Xxxxx Xxxxxxxx and Xxxxxxx Xxxxxxxx, as Trustees under the Indenture
dated November 1, 1998 creating the Xxxxxx Xxxxxxxx November 1, 1998
trust (the "Xxxxxx Xxxxxxxx November 1, 1998 Trust Indenture").
6. Xxxxx Xxxxxxxx and Xxxxxxx Xxxxxxxx, as Trustees under the Indenture
dated November 2, 1998 creating the Xxxxxx Xxxxxxxx November 2, 1998
trust (the "Xxxxxx Xxxxxxxx November 2, 1998 Trust Indenture").
Address of all the Principal Stockholders:
0000 Xxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
