GRAND COURT LIFESTYLES, INC.
3,000,000 Shares of Common Stock
AGREEMENT AMONG UNDERWRITERS
_____________, 1998
ROYCE INVESTMENT GROUP, INC.
As Representatives of the
several Underwriters named
in Schedule A to Exhibit A
annexed hereto
000 Xxxxxxxxx Xxxx Xxxxx
Xxxxxxxx, Xxx Xxxx 00000
Dear Sirs:
We understand that Grand Court Lifestyles, Inc., a Delaware corporation (the
"Company"), desires to enter into an agreement, substantially in the form of
Exhibit A hereto (the "Underwriting Agreement"), with you and the other
prospective Underwriters named in Schedule A to the Underwriting Agreement for
the sale by the Company of an aggregate of 3,000,000 shares (the "Shares") of
common stock, $.01 par value (the "Common Stock"), of the Company. The Shares
shall be referred to collectively as the "Firm Securities." In addition, the
Selling Stockholders (as defined in the Underwriting Agreement) have agreed to
grant to the Underwriters an option to purchase an additional 450,000 shares of
Common Stock (the "Option Shares"), for the purpose of covering over-allotments,
if any, in connection with the sale of the Firm Securities. The Option Shares
are hereinafter referred to as the "Option Securities." The Firm Securities and
any Option Securities purchased pursuant to the Underwriting Agreement are
herein called the "Securities."
We understand that changes may be made in those who are to be Underwriters and
in the respective number of Securities to be purchased by them, but that the
number of Securities to be purchased by us as set forth in said Schedule A will
not be changed without our consent except as provided herein or in the
Underwriting Agreement. The parties on whose behalf you execute the Underwriting
Agreement are herein called the "Underwriters."
We desire to confirm the agreement among you, the undersigned and the other
Underwriters with respect to the purchase of the Securities by the Underwriters,
severally
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and not jointly, from the Company. The aggregate number of Securities which any
Underwriter will be obligated to purchase pursuant to the terms of the
Underwriting Agreement is herein called the "Underwriting Obligation" of that
Underwriter.
1 Authority and Compensation of the Representative. We hereby
authorize you, as our representative (the "Representative") and on our
behalf, (a) to enter into an agreement with the Company, in
substantially the form attached hereto as Exhibit A, but with such
changes therein as in your judgment will not be materially adverse to
the Underwriters, providing for the purchase by us, severally and not
jointly, from the Company, at the purchase price per share determined
as set forth in said Exhibit A, of the number of Firm Securities set
forth opposite our name in Schedule A to said Exhibit A, and our
proportionate share of the Option Shares which you determine to be
purchased, (b) to exercise all the authority and discretion vested in
the Underwriting and in you by the provisions of the Underwriting
Agreement, (c) to take all such action as you in your discretion may
deem necessary or advisable in order to carry out the provisions of the
Underwriting Agreement and of this Agreement, and the sale and
distribution of the Securities, and (d) to determine all matters
relating to the public advertisement of the Securities.
As our share of the compensation for your services hereunder, we will
pay to you, and we authorize you to charge to our account on the
Closing Date and on the Option Closing Date referred to in the
Underwriting Agreement, $______ per Share in respect of the aggregate
number of Firm Securities and Option Securities, respectively, which we
shall agree to purchase pursuant to the Underwriting Agreement.
It is understood that you shall receive from the Company, as the
representative and designee of the several Underwriters, warrants (the
"Representative's Warrants") to purchase up to an additional 300,000
shares of Common Stock, exercisable at not less than 165% of the
Initial Public Offering Price, as defined hereunder. As the
representative and designee of the several Underwriters, you shall
retain one hundred percent (100%) of such Representative's Warrants.
2. Public Offering of Securities. The sale of the Securities to the public
is to be made, as herein provided, as soon after the Registration
Statement relating to the Securities becomes effective as you deem
advisable. The purchase price to be paid by the Underwriters for the
Securities and the initial public offering price are to be determined
by agreement between you and the Company. The Securities shall be first
offered to the public at the initial public offering price as so
determined (the "Initial Public Offering Price"). You will advise us by
fax, graphic scanning, telegraph or telephone when the Securities shall
be released for offering, when the Registration Statement relating to
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the Securities shall become effective and the price at which the
Securities are initially to be offered. We agree not to sell any of the
Securities until you have released them for that purpose. We authorize
you, after the initial public offering, to change the public offering
price, the concession and the reallowance if, in your sole discretion,
such action becomes desirable by reason of changes in general market
conditions or otherwise. As used herein, the terms "Registration
Statement", "Preliminary Prospectus" and "Prospectus" shall have the
meanings ascribed thereto in the Underwriting Agreement. The public
offering price at the time in effect is herein called the "Offering
Price". After notice from you that the Securities are released for
public sale, we will offer to the public in conformity with the
provisions hereof and with the terms of offering set forth in the
Prospectus such Securities as you advise us are not reserved. Unless
otherwise permitted, we will not sell any of the Securities to any
account over which we have discretionary authority.
3. Offering to Selected Dealers. We authorize you to reserve for offering
and sale, and on our behalf to sell to dealers selected by you (such
dealers, among whom any Underwriter may be included, being herein
called "Selected Dealers") all or any part of our Securities as you, in
your sole discretion, shall determine. Such sales, if any, shall be
made to Selected Dealers, at the Offering Price less such concession or
concessions as you, in your sole discretion, shall determine. Any sales
to Selected Dealers made for our account shall be as nearly as
practicable in the ratio that the Securities reserved for our account
for offering to Selected Dealers bears to the aggregate of all
Securities of all Underwriters so reserved.
You agree to notify us promptly on the date of the public offering as
to the number of Securities, if any, which we may retain for direct
sale by us. Prior to the termination of the provisions referred to in
Section 12 hereof, you may reserve for offering and sale as
hereinbefore provided any Securities theretofore retained by us
remaining unsold and we may, with your consent, retain any Securities
therefore reserved by you remaining unsold.
We agree that, from time to time prior to the termination of the
provisions referred to in Section 12 hereof, we shall furnish to you
such information as you may request in order to determine the number of
Securities purchased by us under the Underwriting Agreement which then
remain unsold, and we shall upon your request sell to you for the
account of any Underwriter as many of such unsold Securities as you may
designate at the Offering Price, less all or any part of the concession
to Selected Dealers as you, in your sole discretion, shall determine.
The provisions of Section 4 hereof shall not be applicable in respect
of any such sale.
We authorize you to determine the form and manner of any communications
or agreements with Selected Dealers. In the event that there shall be
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any agreements with Selected Dealers, you are authorized to act as
manager thereunder and we agree, in such event, to be governed by the
terms and conditions of such agreements. The form of Selected Dealer
Agreement attached hereto as Exhibit B is satisfactory to us.
It is understood that any Selected Dealer to whom an offer may be made
as hereinbefore provided shall be actually engaged in the investment
banking or securities business and shall be either (i) a member in good
standing of the National Association of Securities Dealers, Inc. (the
"NASD") or (ii) a dealer with its principal place of business located
outside the United States, its territories and its possessions and not
registered as a broker or dealer under the Securities Exchange Act of
1934, as amended (the "1934 Act"), who agrees not to make any sales
within the United States, its territories or its possessions or to
persons who are nationals thereof or residents therein. Each Selected
Dealer shall agree to comply with the provisions of Section 24 of
Article III of the Rules of Fair Practice of the NASD, and each foreign
Selected Dealer who is not a member of the NASD also shall agree to
comply with the NASD's interpretation with respect to free-riding and
withholding, to comply, as though it were a member of the NASD, with
the provisions of Sections 8 and 36 of Article III of such Rules of
Fair Practice, and to comply with Section 25 of Article III thereof as
that Section applies to a non-member foreign dealer. The several
Underwriters may allow, and the Selected Dealers, if any, may re-allow,
such concession or concessions as you may determine from time to time
on sales of Securities to any qualified dealer, all subject to the
Rules of Fair Practice of the NASD.
You hereby represent and warrant that neither you nor any of your
affiliates (as such term is defined in Rule 405 promulgated under the
Securities Act of 1933, as amended (the "1933 Act")) have received
compensation of any nature from the Company pursuant to any agreement,
arrangement or understanding with the Company or otherwise during the
twelve (12) month period prior to and including the date hereof and
neither you nor any such affiliate will enter into any agreement,
arrangement or understanding with the Company for or otherwise receive
compensation of any nature from the Company during the twelve (12)
month period following the date hereof.
You, and any of the several Underwriters with your prior consent, may
make purchases or sales of the Securities from or to any of the other
Underwriters, at the Offering Price less all or any part of the gross
spread, and from or to any of the Selected Dealers at the Offering
Price less all or any part of the concession to Selected Dealers.
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Upon your request, we will advise you of the identity of any dealer to
whom we allow such a discount and any Underwriter or Selected Dealer
from whom we receive such a discount.
4. Repurchases in the Open Market. In recognition of the importance of
distributing the Securities to bona fide investors, we agree to
repurchase on demand any Securities sold by us (otherwise than through
you) which shall be contracted for or purchased in the open market by
you on behalf of any Underwriter or Underwriters, at a price equal to
the cost of such purchase plus commissions and taxes on redelivery. Any
Securities delivered on such repurchase need not be the identical
Securities originally sold by us. In lieu of delivery of such
Securities to us, you may sell such Securities in any manner for our
account and charge us with the amount of any loss or expense or credit
us with the amount of any profit, less any expense, resulting from such
sale, or charge our account with an amount not in excess of the
concession to Selected Dealers.
5. Stabilization and Over-Allotment. In order to facilitate the sale of
the Securities, we authorize you on our behalf and for our account,
during the term of this Agreement, in your discretion, and without
obligating you to do so, to buy and sell Securities and any other
securities of the Company in the open market or otherwise for either
long or short account, on such terms and at such prices as you may
determine and, in arranging for sales to Selected Dealers and others,
to over-allot and cover such over-allotments, provided that at no time
shall the net commitment of any Underwriter under authority of this
Section 5, either for long or short account, exceed an amount
equivalent to 15% of the maximum number of Securities to be purchased
by such Underwriter under the Underwriting Agreement. During or after
the term of this Agreement you may cover any short position incurred
under the preceding sentence by purchase of Option Securities under the
terms of the Underwriting Agreement, pursuant to the option contained
in Section 3 of the Underwriting Agreement or otherwise. All purchases,
sales and over-allotments under authority of this Section shall be for
the accounts of each of the several Underwriters as nearly as
practicable in proportion to their respective Underwriting Obligations.
We agree to take up at cost on demand any Securities so purchased for
our account and to deliver on demand any Securities so sold or
over-allotted for our account. We also authorize you to deliver our
Securities and any other Securities purchased by you for our account
pursuant to this Section 5, against sales made by you for our account
pursuant to any provisions of this Agreement. Notwithstanding the
foregoing limitations, in the event of default by one or more
Underwriters in respect of their obligations under this Section, each
non-defaulting Underwriter shall assume its proportionate share of the
obligations of such defaulting Underwriter without relieving such
defaulting Underwriter of its liability hereunder.
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In the event that you effect any stabilizing purchases pursuant to this
Section 5, you will notify each Underwriter promptly of the date and
time when the first stabilizing purchase is effected and the date and
time when stabilizing is terminated. Each Underwriter agrees that if it
effects any stabilizing purchases, it will, not later than three
business days following the day on which any such stabilizing purchase
is effected, notify you of the price, date and time at which any such
stabilizing purchase was effected and will promptly notify you of the
date and time when stabilizing was terminated by such Underwriter. Each
Underwriter authorizes you to file with the Securities and Exchange
Commission (the "Commission") all notices, records and reports which
may be required as a result of any transactions made pursuant to this
Section 5.
We agree to advise you, from time to time upon your request during the
term of this Agreement, of the number of Securities retained by us or
purchased by us from other Underwriters and Selected Dealers remaining
unsold, and will, upon your request, release to you for the accounts of
one or more of the several Underwriters, such number of Securities as
you may designate at such price, not less than the net price to
Selected Dealers nor more than the Initial Public Offering Price, as
you may determine.
If, pursuant to the provisions of the first paragraph of this Section 5
and prior to the termination of this Agreement (or such earlier date as
you may have determined on notice to the Underwriters), you purchase or
contract to purchase any Securities which were retained by or released
to us for direct sale, which Securities were theretofore not
effectively placed for investment by us, we authorize you in your
discretion either to charge our account with an amount equal to the
concession to Selected Dealers with respect thereto or to require us to
repurchase such Securities at a price equal to the total cost of such
purchase, including commissions, if any, and transfer tax on the
redelivery. Securities delivered on such repurchase need not be the
identical Securities originally purchased by and delivered to us.
Upon the termination of this Agreement, you are authorized in your
discretion, in lieu of delivering to the several Underwriters any
Securities then held for their respective accounts pursuant to this
Section 5, to sell such Securities for the accounts of each of the
Underwriters at such price or prices as you may determine and debit or
credit our account for the loss or profit resulting from such sale.
6. Authority to Borrow. We authorize you to advance your own funds for our
account (charging current interest rates) and to arrange loans for our
account or the account of the Underwriters, as you may deem necessary
or advisable for the purchase, carrying, sale and distribution of the
Securities or otherwise for the purpose of carrying out this Agreement.
You may execute and deliver any notes or other instruments in
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connection therewith and may hold or pledge as security therefor all or
any part of our Securities and Securities purchased hereunder for our
account. Any lender is hereby authorized to accept your instructions in
all matters relating to such loans. Any part of our Securities and
Securities so held by you may be delivered to us for carrying purposes
and, if so delivered, will be redelivered to you upon demand. The
obligations of the Underwriters under loans arranged under this Section
6 shall be several in proportion to their respective Underwriting
Obligations. Any lender is authorized to accept your instructions as to
the disposition of the proceeds of any such loans.
7. Allocation of Expenses and Liability. We authorize you to charge our
account with and we agree to pay (a) all transfer taxes on sales made
by you for our account, except as herein otherwise provided, and (b)
our proportionate share (based on our Underwriting Obligation) of all
other expenses incurred by you in connection with the purchase,
carrying, sale and distribution of the Securities and all other
expenses arising under the terms of the Underwriting Agreement or this
Agreement. Your determination of all such expenses and your allocation
thereof shall be final and conclusive. You may at any time make partial
distributions of credit balances or call for payment of debit balances.
Funds for our account at any time in your hands may be held in your
general funds without accountability for interest. As soon as
practicable after the termination of this Agreement, the net credit or
debit balance in our account, after proper charge and credit for all
interim payments and receipts, shall be paid to or paid by us, provided
that you may establish such reserves as you, in your sole discretion,
shall deem advisable to cover possible additional expenses chargeable
to the several Underwriters. Notwithstanding any settlement, we will
remain liable for any taxes on transfers for our account and for our
proportionate share (based on our Underwriting Obligation) of all
expenses and liabilities that may be incurred by or for the accounts of
the Underwriters.
8. Liability for Future Claims. Neither any statement by you of any credit
or debit balance in our account nor any reservation from distribution
to cover possible additional expenses relating to the Securities shall
constitute any representation by you as to the existence or
non-existence of possible unforeseen expenses or liabilities of or
charges against the several Underwriters. Notwithstanding the
distribution of any net credit balance to us or the termination of this
Agreement or both, we shall be and remain liable for, and will pay on
demand, (a) our proportionate share (based on our Underwriting
Obligation) of all expenses and liabilities which may be incurred by or
for the accounts of the Underwriters, or any of them, based on the
claim the Underwriters constitute an association, unincorporated
business, partnership or any separate entity, and (b) any transfer
taxes paid after such settlement on account of any sale or transfer for
our account.
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9. Open Market Transactions. We represent and agree that we will not make
bids or offers, or make or induce purchases or sales for our own
account or the accounts of customers, in the open market or otherwise,
either before or after the purchase of the Securities and for either
long or short account, of any Securities or any security of the same
class or series, or any right to purchase any such security except (i)
as provided in this Agreement, the Underwriting Agreement and the
Selected Dealer Agreements or otherwise approved by you, (ii) in
brokerage transactions not involving solicitation of the customer's
order and (iii) in connection with option and option-related
transactions that are consistent with the "no-action" position of the
Commission under the 1934 Act. We further agree that we will not lend,
either before or after the purchase of the Securities, to any customer,
Underwriter, Selected Dealer or to any other securities broker or
dealer any Securities. Prior to the completion (as defined in
Regulation M promulgated under the 0000 Xxx) of our participation in
the distribution, we will otherwise comply with Regulation M.
10. Delivery and Payment. Upon your request, we shall deliver to you
payment for the Securities to be purchased by us under the Underwriting
Agreement in an amount equal to the Initial Public Offering Price for
such Securities less the concession to Selected Dealers. Such payment
shall be made in such form and at such time and place as may be
specified in such request, and we authorize you to make payment for
such Securities against delivery thereof for our account hereunder. If
we are a member of or clear through a member of The Depository Trust
Company ("DTC"), you may, in your discretion, deliver our Securities
through the facilities of DTC.
You shall remit to us, as promptly as practicable, the amounts received
by you from Selected Dealers as payment in respect of Securities sold
by you for our account pursuant to Section 3 hereof for which payment
has been received. Securities purchased by us under the Underwriting
Agreement and not reserved or sold by you for our account pursuant to
Section 3 hereof shall be delivered to us as promptly as practicable
after receipt by you. Any Securities purchased by us and so reserved
which remain unsold at any time prior to the settlement of accounts
hereunder may, in your discretion, and shall, upon your request, be
delivered to us, but, until termination of the Selected Dealer
Agreements pursuant to their terms, such delivery shall be for carrying
purposes only. In case any Securities reserved for sale to Selected
Dealers shall not be purchased and paid for in due course as
contemplated hereby, we agree (a) to accept delivery when tendered by
you of any Securities so reserved for our account and not so purchased
and paid for, and (b) in case we shall have not received payment from
you in respect of any such Securities, to reimburse you on demand for
the full amount which you shall have paid us in respect of such
Securities.
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In the event of our failure to tender payment for Securities as
provided in the Underwriting Agreement, you shall have the right under
the provisions thereof to arrange for other persons, who may include
you and any other Underwriter, to purchase such Securities which we had
agreed to purchase, but without relieving us from liability for our
default.
11. Blue Sky. Prior to the initial offering by the Underwriters, you will
inform us as to the states and other jurisdictions under the respective
securities or blue sky laws of which it is believed that the Securities
have been qualified for sale or are exempt from such qualification, but
you do not assume any responsibility or obligation as to the accuracy
of such information or as to the right of any Underwriter or dealer to
offer or sell the Securities in any state or other jurisdiction. You
agree to file or cause to be filed, on behalf of the Underwriters, a
Further State Notice in respect of the Securities pursuant to Article
23-A of the General Business Law of the State of New York, if
necessary. If we prepare to offer Securities outside of the United
States, its territories or possessions, we will take, at our expense,
all such action, if any, as may be necessary to comply with the laws of
each foreign jurisdiction in which we propose to offer the Securities.
12. Termination. The provisions set forth in Section 2, the second
paragraph and the first sentence of the third paragraph of Section 3,
Section 4, the first sentence of Section 5 and Section 9 hereof will
terminate at the close of business on the 45th calendar day after the
effective date of the Registration Statement, unless extended or sooner
terminated as hereinafter provided. You may extend such provisions, or
any of them, for a period or periods not to exceed the aggregate of 45
additional calendar days by notice to us to such effect. You may
terminate any of such provisions at any time by notice to us, and you
may terminate all such provisions at any time by notice to us to the
effect that the offering provisions of this Agreement are terminated.
13. Acknowledgment of Receipt of Registration Statement, etc. We hereby
confirm that we have examined the Registration Statement relating to
the Securities as heretofore filed by the Company with the Commission
and each amendment thereto, if any, filed through the date hereof,
including any documents filed under the 1934 Act through the date
hereof and incorporated by reference into the Prospectus, that we are
willing to be named as an underwriter therein and to accept the
responsibilities of an underwriter thereunder, and that we are willing
to proceed as therein contemplated. We confirm that we have authorized
you to advise the Company on our behalf (a) as to the statements to be
included in any Preliminary Prospectus and in the Prospectus under the
heading "Underwriting" insofar as they relate to us, and (b) that there
is no other information about us required to be stated in the
Registration Statement or Prospectus. We understand that the
aforementioned documents are subject to further change and that we will
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be supplied with copies of any further amendments or supplements to the
Registration Statement, of any document filed under the 1934 Act after
the effective date of the Registration Statement and before termination
of the offering of the Securities by the Underwriters if such document
is deemed to be incorporated by reference into the Prospectus and of
any amended or supplemented Prospectus promptly, if and when received
by you, but the making of such changes, amendments and supplements
shall not release us or affect our obligations hereunder or under the
Underwriting Agreement.
14.
(a) Indemnification. We agree to indemnify and hold harmless each
other Underwriter and any person who controls any such
Underwriter within the meaning of Section 15 of the 1933 Act,
to the extent that, and upon the terms upon which, we agree to
indemnify and hold harmless the Company and other specified
persons as set forth in the Underwriting Agreement. Our
indemnity agreement contained in this Section 14 shall remain
in full force and effect regardless of any investigation made
by or on behalf of such other Underwriter or controlling
person and shall survive the delivery of and payment for the
Securities and the termination of this Agreement and the
similar agreements entered into with the other Underwriters.
(b) Claims Against Underwriters. Each Underwriter (including you)
will pay, upon your request, as contribution, its
proportionate share, based upon its Underwriting Obligation,
of any loss, claim, damage or liability, joint or several,
paid or incurred by any Underwriter (including you) to any
person other than an Underwriter, arising out of or based upon
any untrue statement or alleged untrue statement of a material
fact contained in the Registration Statement, the Prospectus,
any amendment or supplement thereto or any Preliminary
Prospectus or any other selling or advertising material
approved by you for use by the Underwriters in connection with
the sale of the Securities, or the omission or alleged
omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not
misleading (other than an untrue statement or alleged untrue
statement or omission or alleged omission made in conformity
with written information furnished to the Company through you
by or on behalf of an Underwriter expressly for use therein)
or relating to any transaction contemplated by this Agreement;
and will pay such proportionate share of any legal or other
expense reasonably incurred by you or with your consent in
connection with investigating or defending against any such
loss, claim, damage or liability, or any action in respect
thereof. In determining the amount of our obligation under
this paragraph, appropriate adjustment may be made by you to
reflect any amounts received by any one or more Underwriters
in respect of such claim from the Company pursuant to Section
9 of the Underwriting Agreement or otherwise. There
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shall be credited against any amount paid or payable by us
pursuant to this paragraph any loss, claim, damage, liability
or expense which is incurred by us as a result of any such
claim asserted against us, and if such loss, claim, damage,
liability or expense is incurred by us subsequent to any
payment by us pursuant to this paragraph, appropriate
provision shall be made to effect such credit, by refund or
otherwise. If any such claim is asserted, you may take such
action in connection therewith as you deem necessary or
desirable, including retention of counsel for the
Underwriters, and in your discretion separate counsel for any
particular Underwriter or group of Underwriters, and the fees
and disbursements of any counsel so retained by you shall be
included in the amounts payable pursuant to this paragraph. In
determining amounts payable pursuant to this paragraph, any
loss, claim, damage, liability or expense incurred by any
person who controls any Underwriter within the meaning of
Section 15 of the 1933 Act which has been incurred by reason
of such control relationship shall be deemed to have been
incurred by such Underwriter. Any Underwriter may elect to
retain, at its own expense, separate counsel. You may settle
or consent to the settlement of any such claim on advice of
counsel retained by you. A claim against or liability incurred
by a person who controls an Underwriter shall be deemed to
have been made against or incurred by such Underwriter.
Whenever you receive notice of the assertion of any claim to
which the provisions of this paragraph would be applicable,
you will give prompt notice thereof to each Underwriter. If
any Underwriter or Underwriters defaults in its or their
obligation to make any payments under this paragraph, each
nondefaulting Underwriter shall be obligated to pay its
proportionate share of all defaulted payments, based upon the
proportion such non-defaulting Underwriter's Underwriting
Obligation be as to the Underwriting Obligations of all
non-defaulting Underwriters. Nothing herein shall relieve a
defaulting Underwriter from liability for its default.
15. Default by Underwriters. Default by any Underwriter in respect of its
obligations under the Underwriting Agreement shall not release us from
any of our obligations or in any way affect the liability of such
defaulting Underwriter to the other Underwriters for damages resulting
from such default. In the event of such default by one or more
Underwriters, you are authorized to increase, pro rata with the other
non-defaulting Underwriters, the amount of Securities which we shall be
obligated to purchase from the Company; provided, however, that the
aggregate amount of all such increases for all non-defaulting
Underwriters shall not exceed 10% of the Securities and, if the
aggregate amount of the Securities not taken up by such defaulting
Underwriters exceeds such 10%, you are further authorized, but shall
not be obligated to arrange for the purchase by other persons, who may
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include you and other non-defaulting Underwriters, of all or a portion
of the Securities not taken up by such Underwriters. In the event any
such increases or arrangements are made, the respective amounts of the
Securities to be purchased by the non-defaulting Underwriters and by
any such other person or persons shall be taken as the basis for the
Underwriters' obligations under this Agreement, but this shall not in
any way affect the liability of any defaulting Underwriter to the other
Underwriters for damages resulting from such default.
In the event of default by one or more Underwriters in respect of their
obligations under this Agreement to take up and pay for any Securities
purchased, or to deliver any such Securities sold or over-allotted by
you for the respective accounts of the Underwriters or to bear their
proportion of expenses or liability pursuant to the Agreement, and to
the extent that arrangements shall not have been made by you for other
persons to assume the obligations of such defaulting Underwriter or
Underwriters, each non-defaulting Underwriter agrees to assume
proportionate share of the aforesaid obligations of each such
defaulting Underwriter without relieving any such defaulting
Underwriter of its liability therefor.
16. Capital Requirements. We confirm that the incurrence by us of our
obligations under this Agreement and under the Underwriting Agreement
will not place us in violation of the net capital requirements of Rule
15c3-1 under the 1934 Act or of any applicable rules relating to
capital requirements of any securities exchange to which we are
subject.
17. Undertaking to Mail Prospectuses. As contemplated by Rule l5c2-8 under
the 1934 Act, you agree to mail a copy of the Prospectus mentioned in
the Underwriting Agreement to any person making a written request
therefor during the period referred to in said Rule, the mailing to be
made to the address given in the request. We confirm that we have
delivered all Preliminary Prospectuses and revised Preliminary
Prospectuses, if any, required to be delivered under the provisions of
Rule 15c2-8 and agree to deliver all Prospectus required to be
delivered thereunder. We acknowledge that the copies of the Preliminary
Prospectus furnished to us have been distributed to dealers who have
been notified of the foregoing requirements pertaining to the delivery
of Preliminary Prospectuses and Prospectuses. You have heretofore
delivered to us such number of copies of Preliminary Prospectuses as
have been reasonably requested by us, receipt of which is hereby
acknowledged, and will deliver such number of copies of Prospectuses as
will be reasonably requested by us.
18. General Position of the Representative. Your authority shall include
the taking of such action as you may deem advisable in respect of all
matters pertaining to any and all offers and sales of the Securities,
including the right to make any modifications which you consider
necessary or desirable in the arrangements with Selected Dealers or
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others. You shall be under no liability for or in respect of the value
of the Securities or the validity or the form thereof, the Registration
Statement, the Prospectus or agreements or other instruments executed
by the Company or others; or for or in respect of the delivery of the
Securities; or for the performance by the Company or others of any
agreement on its or their part; nor shall you as the Representative or
otherwise be liable under any of the provisions hereof or for any
matters connected herewith, except for want of good faith, and except
for any liability arising under the Act; and only obligations expressly
assumed by you as the Representative herein shall be implied from this
Agreement. In representing the Underwriters hereunder, you shall act as
the Representative of each of them respectively. Nothing herein
contained shall constitute the several Underwriters partners with you
or with each other, or render any Underwriter liable for the
commitments of any other Underwriter, except as otherwise provided in
Section 15 hereof and in Section 13 of the Underwriting Agreement. If
the Underwriters shall be deemed to constitute a partnership for
Federal income tax purposes, it is the intent of each Underwriter to be
excluded from the application of Subchapter K, Chapter 1, Subtitle A,
of the Internal Revenue Code of 1986, as amended. Each Underwriter
elects to be so excluded and agrees not to take any position
inconsistent with such election. Each Underwriter authorizes you, in
your discretion, to execute and file on behalf of the Underwriters such
evidence of election as may be required by the Internal Revenue
Service. The commitments and liabilities of each of the several
Underwriters are several in accordance with their respective
Underwriting Obligations and are not joint.
19. Miscellaneous. Any notice hereunder from you to us or from us to you
shall be deemed to have been duly given if sent by registered mail,
telegram, facsimile or teletype, to us at our address as set forth in
our Underwriter's Questionnaire previously delivered to you, or to you
Royce Investment Group, Inc., 000 Xxxxxxxxx Xxxx Xxxxx, Xxxxxxxx, Xxx
Xxxx, Attention: Syndicate Department.
We understand that you are a member in good standing of the NASD. We hereby
confirm that we are actually engaged in the investment banking or securities
business and are either (i) a member in good standing of the NASD or (ii) a
dealer with its principal place of business located outside the United States,
its territories and its possessions and not registered as a broker or dealer
under the 1934 Act who agrees not to make any sales within the United States,
its territories or its possessions or to persons who are nationals thereof or
residents therein (except that we may participate in sales to Selected Dealers
and others under Section 3 of this Agreement). We hereby agree to comply with
the provisions of Rule 2740 of the NASD Conduct Rules, and, if we are a foreign
dealer and not a member the NASD, we also hereby agree to comply with the NASD's
interpretation with respect to free-riding and withholding and to comply, as
though we were a member of the NASD, with the provisions of Rules 2730 and 2750
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of the NASD Conduct Rules, and to comply with Rule 2420 of the NASD Conduct
Rules as that Rule applies to a non-member foreign dealer. In connection with
sales and offers to sell Securities made by us outside the United States, its
territories and possessions (i) we will either furnish to each person to whom
any such sale or offer is made a copy of the then current Preliminary Prospectus
or the Prospectus, as the case may be, or inform such person that such
Preliminary Prospectus or Prospectus will be available upon request, and (ii) we
will furnish to each person to whom any such sale or offer is made such
prospectus, advertisement or other offering document containing information
relating to the Securities or the Company as may be required under the law of
the jurisdiction in which such sale or offer is made. Any prospectus,
advertisement or other offering document furnished by us to any person in
accordance with the preceding sentence and any such additional offering material
as we may furnish to any person (x) shall comply in all respects with the law of
the jurisdiction in which it is so furnished, (y) shall be prepared and so
furnished at our sole risk and expense and (z) shall not contain information
relating to the Securities or the Company which is inconsistent in any respect
with the information contained in the then current Preliminary Prospectus or in
the Prospectus, as the case may be.
This instrument may be signed by or on behalf of the Underwriters in one or more
counterparts each of which shall constitute an original and all of which
together shall constitute one and the same agreement among all the Underwriters
and shall become effective at such time as all the Underwriters shall have
signed or have had signed on their behalf such counterparts and you shall have
confirmed all such counterparts. You may confirm such counterparts by facsimile
signature.
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO THE CHOICE OF LAW OR CONFLICTS OF
LAWS PRINCIPLES THEREOF.
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Please confirm that the foregoing correctly states the understanding between us
by signing and returning to us a counterpart hereof.
Very truly yours,
________________________________________
Name: [ ]
As Attorney-in-Fact for each of the several
Underwriters named in Schedule A to the
Underwriting Agreement.
Confirmed as of the date
first above written:
ROYCE INVESTMENT GROUP, INC.
As Representative of
the several Underwriters
By: ______________________________________
Name: [ ]
Title: [ ]
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