EXHIBIT 2H
UNDERWRITING AGREEMENT - EQUITY
(PRIMARY OFFERING)
3,000,000 Shares
Common Stock
($.01 Par Value)
UNDERWRITING AGREEMENT
May , 2001
UNDERWRITING AGREEMENT
May , 2001
UBS WARBURG LLC
U.S. BANCORP XXXXX XXXXXXX INC.,
as Representatives of the Several Underwriters
named in Schedule A hereto
c/o UBS Warburg
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Ladies and Gentlemen:
Medallion Financial Corp., a Delaware corporation (the "Company"),
proposes to issue and sell to the underwriters named in Schedule A annexed
hereto (the "Underwriters"), for whom you are acting as representatives (the
"Representatives"), with UBS Warburg LLC acting as the managing representative
(the "Managing Representative"), an aggregate of 3,000,000 shares (the "Firm
Shares") of Common Stock, $.01 par value (the "Common Stock"), of the Company.
In addition, solely for the purpose of covering over-allotments, the Company
proposes to grant to the Underwriters the option to purchase from the Company up
to an additional 450,000 shares of Common Stock (the "Additional Shares"). The
Firm Shares and the Additional Shares are hereinafter collectively sometimes
referred to as the "Shares." The Shares are described in the Prospectus which
is referred to below.
The Company has filed, in accordance with the provisions of the
Securities Act of 1933, as amended, and the rules and regulations thereunder
(collectively called the "Securities Act"), and the Investment Company Act of
1940, as amended, and the rules and regulations thereunder (collectively called
the "Investment Company Act"), with the Securities and Exchange Commission (the
"Commission") a registration statement on Form N-2, (File No. 333-60080)
including a prospectus, relating to the Shares, which incorporates by reference
documents which the Company has filed in accordance with the provisions of the
Securities Exchange Act of 1934, as amended, and the rules and regulations
thereunder (collectively called the "Exchange Act"). The Company has furnished
to you, for use by the Underwriters and by dealers, copies of one or more
preliminary prospectuses and the documents incorporated by reference therein
(each of these, including the documents incorporated therein by reference, being
herein called a "Preliminary Prospectus") relating to the Shares. Except where
the context otherwise requires, the registration statement, as
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amended when it becomes effective, including all documents filed as a part
thereof or incorporated by reference therein, and including any information
contained in a prospectus subsequently filed with the Commission pursuant to
Rule 424(b) under the Securities Act and deemed to be part of the registration
statement at the time of effectiveness pursuant to Rule 430(A) under the
Securities Act and also including any registration statement filed pursuant to
Rule 462(b) under the Securities Act, is herein called the "Registration
Statement", and the prospectus, including all documents incorporated therein by
reference, in the form filed by the Company with the Commission pursuant to Rule
424(b) under the Securities Act on or before the second business day after the
date hereof (or such earlier time as may be required under the Securities Act)
or, if no such filing is required, the form of final prospectus included in the
Registration Statement at the time it became effective, is herein called the
"Prospectus".
The Company and the Underwriters agree as follows:
1. Sale and Purchase. Upon the basis of the warranties and
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representations and subject to the terms and conditions herein set forth, the
Company agrees to sell to the respective Underwriters and each of the
Underwriters, severally and not jointly, agrees to purchase from the Company the
respective number of Firm Shares (subject to such adjustment as you may
determine to avoid fractional shares) which bears the same proportion to the
number of Firm Shares to be sold by the Company as the number of Firm Shares set
forth opposite the name of such Underwriter in Schedule A annexed hereto bears
to the total number of Firm Shares to be sold by the Company, in each case at a
purchase price of $ per Share. The Company is advised by you that the
Underwriters intend (i) to make a public offering of their respective portions
of the Firm Shares as soon after the effective date of the Registration
Statement as in your judgment is advisable and (ii) initially to offer the Firm
Shares upon the terms set forth in the Prospectus. You may from time to time
increase or decrease the public offering price after the initial public offering
to such extent as you may determine.
In addition, the Company hereby grants to the several Underwriters the
option to purchase, and upon the basis of the warranties and representations and
subject to the terms and conditions herein set forth, the Underwriters shall
have the right to purchase, severally and not jointly, from the Company ratably
in accordance with the number of Firm Shares to be purchased by each of them
(subject to such adjustment as you shall determine to avoid fractional shares),
all or a portion of the Additional Shares as may be necessary to cover over-
allotments made in connection with the offering of the Firm Shares, at the same
purchase price per share to be paid by the Underwriters to the Company for the
Firm Shares. This option may be exercised by you on behalf of the several
Underwriters at any time (but not more than once) on or before the thirtieth day
following the date hereof, by written notice to the Company. Such notice shall
set forth the aggregate number of
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Additional Shares as to which the option is being exercised, and the date and
time when the Additional Shares are to be delivered (such date and time being
herein referred to as the additional time of purchase); provided, however, that
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the additional time of purchase shall not be earlier than the time of purchase
(as defined below) nor earlier than the second business day/1/ after the date on
which the option shall have been exercised nor later than the tenth business day
after the date on which the option shall have been exercised. The number of
Additional Shares to be sold to each Underwriter shall be the number which bears
the same proportion to the aggregate number of Additional Shares being purchased
as the number of Firm Shares set forth opposite the name of such Underwriter on
Schedule A hereto bears to the total number of Firm Shares (subject, in each
case, to such adjustment as you may determine to eliminate fractional shares).
2. Payment and Delivery. Payment of the purchase price for the Firm
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Shares shall be made to the Company by Federal Funds wire transfer, against
delivery of the certificates for the Firm Shares to you through the facilities
of the Depository Trust Company ("DTC") for the respective accounts of the
Underwriters. Such payment and delivery shall be made at 10:00 A.M., New York
City time, on , 2001 (unless another time shall be agreed to by you and
the Company or unless postponed in accordance with the provisions of Section 9
hereof). The time at which such payment and delivery are actually made is
hereinafter sometimes called the "time of purchase". Certificates for the Firm
Shares shall be delivered to you in definitive form in such names and in such
denominations as you shall specify no later than the second business day
preceding the time of purchase. For the purpose of expediting the checking of
the certificates for the Firm Shares by you, the Company agrees to make such
certificates available to you for such purpose at least one full business day
preceding the time of purchase.
Payment of the purchase price for the Additional Shares shall be made
at the additional time of purchase in the same manner and at the same office as
the payment for the Firm Shares. Certificates for the Additional Shares shall
be delivered to you in definitive form in such names and in such denominations
as you shall specify no later than the second business day preceding the
additional time of purchase. For the purpose of expediting the checking of the
certificates for the Additional Shares by you, the Company agrees to make such
certificates available to you for such purpose at least one full business day
preceding the additional time of purchase.
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/1/ As used herein "business day" shall mean a day on which the New York Stock
Exchange is open for trading.
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3. Representations and Warranties of the Company. The Company
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represents and warrants to each of the Underwriters that:
(a) the Company has not received, and has no notice of, any order of
the Commission preventing or suspending the use of any Preliminary
Prospectus, or instituting proceedings for that purpose, and each
Preliminary Prospectus, at the time of filing thereof, conformed in all
material respects to the requirements of the Securities Act when the
Registration Statement became effective, the Registration Statement and the
Prospectus will fully comply in all material respects with the provisions
of the Securities Act, and the Registration Statement will not 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, and the Prospectus will not 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, in light of the
circumstances under which they were made, not misleading; any statutes,
regulations, contracts or other documents that are required to be described
in the Registration Statement or the Prospectus or to be filed as exhibits
to the Registration Statement have been so described or filed; provided,
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however, that the Company makes no warranty or representation with respect
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to any statement contained in the Registration Statement or the Prospectus
in reliance upon and in conformity with information concerning the
Underwriters and furnished in writing by or on behalf of any Underwriter
through you to the Company expressly for use in the Registration Statement
or the Prospectus; the documents incorporated by reference in the
Prospectus, at the time they were filed with the Commission, complied in
all material respects with the requirements of the Exchange Act, and do not
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, in light of the circumstances under which they were made, not
misleading and the Company has not distributed any offering material in
connection with the offering or sale of the Shares other than the
Registration Statement, the Preliminary Prospectus, the Prospectus or any
other materials, if any, permitted by the Securities Act;
(b) as of the date of this Agreement, the Company's capitalization
conforms to the description thereof in the Prospectus and has been duly
authorized and all of the issued and outstanding shares of capital stock
including Common Stock of the Company have been duly and validly issued and
are fully paid and nonassessable and have been issued in compliance with
all federal and state securities laws and were not issued in violation of
or subject to any preemptive rights or similar rights to subscribe for or
purchase securities.
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Except as disclosed in or contemplated by the Prospectus and the financial
statements of the Company and related notes thereto included in the
Prospectus, neither the Company nor the Subsidiaries (as hereinafter
defined) has outstanding any options or warrants to purchase, or any
preemptive rights or other rights to subscribe for or to purchase any
securities or obligations convertible into, or any contracts or commitments
to issue or sell, shares of their respective capital stock or any such
options, rights, convertible securities or obligations. The description of
the Company's stock option and other stock plans or arrangements, and the
options or other rights granted thereunder, as set forth in the Prospectus,
accurately and fairly presents in all material respects the information
required to be shown with respect to such plans, arrangements, options and
rights. All shares of capital stock of each Subsidiary (as hereinafter
defined) are owned, directly or indirectly, by the Company free and clear
of any liens, encumbrances, equities or claims;
(c) the Company has been duly incorporated and is validly existing as
a corporation in good standing under the laws of the State of Delaware,
with full power and authority to own, lease and operate its properties and
conduct its business as described in the Registration Statement;
(d) the Company is duly qualified to do business as a foreign
corporation in good standing in each jurisdiction where the ownership or
leasing of its properties or the conduct of its business requires such
qualification, except where the failure to so qualify would not have a
material adverse effect on the on the operations, business, condition,
prospects or property of the Company and its Subsidiaries (as hereinafter
defined) taken as a whole (a "Material Adverse Effect"). The Company has no
subsidiaries (as defined in the Rules and Regulations) other than Medallion
Funding Corp., Medallion Taxi Media, Inc., Business Lenders LLC, Medallion
Capital, Inc., Medallion Business Credit LLC and Freshstart Venture Capital
Corp. (collectively, the "Subsidiaries"); other than the Subsidiaries, the
Company does not own, directly or indirectly, any shares of stock or any
other equity or long-term debt securities of any corporation or have any
equity interest in any firm, partnership, joint venture, association or
other entity; complete and correct copies of the certificates of
incorporation and of the bylaws of the Company and the Subsidiaries and all
amendments thereto have been delivered to you, and except as set forth in
the exhibits to the Registration Statement no changes therein will be made
subsequent to the date hereof and prior to the time of purchase or, if
later, the additional time of purchase; each Subsidiary has been duly
incorporated and is validly existing as a corporation in good standing
under the laws of the jurisdiction of its incorporation, with full
corporate power and authority to own, lease and
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operate its properties and to conduct its business as described in the
Registration Statement; each Subsidiary is duly qualified to do business as
a foreign corporation in good standing in each jurisdiction where the
ownership or leasing of the properties or the conduct of its business
requires such qualification, except where the failure to so qualify would
not have a Material Adverse Effect; all of the outstanding shares of
capital stock of each of the Subsidiaries have been duly authorized and
validly issued, are fully paid and non-assessable and (except as otherwise
described in this Section 3(d)) are owned by the Company subject to no
security interest, other encumbrance or adverse claims; no options,
warrants or other rights to purchase, agreements or other obligations to
issue or other rights to convert any obligation into shares of capital
stock or ownership interests in the Subsidiaries are outstanding.
(e) the Company and each of its Subsidiaries are duly qualified or
licensed by and are in good standing in each jurisdiction in which they
conduct their respective businesses and in which the failure, individually
or in the aggregate, to be so licensed or qualified could have a Material
Adverse Effect and the Company and each of its Subsidiaries are in
compliance in all material respects with the laws, orders, rules,
regulations and directives issued or administered by such jurisdictions;
(f) neither the Company nor any of its Subsidiaries is in breach of,
or in default under (nor has any event occurred which with notice, lapse of
time, or both would result in any breach of, or constitute a default
under), its respective charter or by-laws or in the performance or
observance of any obligation, agreement, covenant or condition contained in
any indenture, mortgage, deed of trust, bank loan or credit agreement or
other evidence of indebtedness, or any lease, contract or other agreement
or instrument to which the Company or any of its Subsidiaries is a party or
by which any of them or any of their properties is bound, and the
execution, delivery and performance of this Agreement, the issuance and
sale of the Shares and the consummation of the transactions contemplated
hereby will not conflict with, or result in any breach of or constitute a
default under (nor constitute any event which with notice, lapse of time,
or both would result in any breach of, or constitute a default under), any
provisions of the charter or by-laws, of the Company or any of its
Subsidiaries or under any provision of any license, indenture, mortgage,
deed of trust, bank loan or credit agreement or other evidence of
indebtedness, or any lease, contract or other agreement or instrument to
which the Company or any of its Subsidiaries is a party or by which any of
them or their respective properties may be bound or affected, or under any
federal, state, local or for-
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eign law, regulation or rule or any decree, judgment or order applicable to
the Company or any of its Subsidiaries;
(g) this Agreement has been duly authorized, executed and delivered
by the Company and is a legal, valid and binding agreement of the Company
enforceable in accordance with its terms;
(h) the capital stock of the Company, including the Shares, conforms,
or will conform, in all material respects to the description thereof
contained in the Registration Statement and Prospectus and the certificates
for the Shares are, or will be, in due and proper form and the holders of
the Shares will not be subject to personal liability by reason of being
such holders;
(i) the Shares have been duly and validly authorized and, when issued
and delivered against payment therefor as provided herein, will be duly and
validly issued and fully paid and non-assessable;
(j) no approval, authorization, consent or order of or filing with
any national, state or local governmental or regulatory commission, board,
body, authority or agency is required in connection with the issuance and
sale of the Shares or the consummation by the Company of the transaction as
contemplated hereby other than registration of the Shares under the
Securities Act and any necessary qualification under the securities or blue
sky laws of the various jurisdictions in which the Shares are being offered
by the Underwriters or under the rules and regulations of the National
Association of Securities Dealers, Inc. (NASD);
(k) the Company has duly elected to be treated by the Commission
under the Investment Company Act as a business development company and all
required action has been taken by the Company under Section 54 of the
Investment Company Act to qualify the Company as a business development
company and under the Securities Act and the Investment Company Act to make
the public offering and consummate the sale of the Shares as provided in
this Agreement;
(l) the Company intends to direct the investment of the proceeds of
the Offering (as defined in the Prospectus) in such a manner as to comply
with the requirements of Subchapter M of the Internal Revenue Code of 1986,
as amended (the "Code"), and, immediately after the time of purchase, the
Company and the regulated investment company ("RIC") Subsidiaries will each
be eligible to qualify as a RIC under Subchapter M of the Code;
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(m) no person has the right, contractual or otherwise, to cause the
Company to issue to it, or register pursuant to the Securities Act, any
shares of capital stock of the Company upon the issue and sale of the
Shares to the Underwriters hereunder, nor does any person have preemptive
rights, co-sale rights, rights of first refusal or other rights to purchase
any of the Shares other than those that have been expressly waived prior to
the dates hereof;
(n) neither the Company nor the Subsidiaries nor any of their
respective officers, directors or any of their affiliated persons has taken
or will take, directly or indirectly, any action designed or intended to
stabilize or manipulate the price of any security of the Company, or which
caused or resulted in, or which might in the future reasonably be expected
to cause or result in, stabilization or manipulation of the price of any
security of the Company;
(o) Xxxxxx Xxxxxxxx LLP, whose report on the consolidated financial
statements of the Company and its Subsidiaries is filed with the Commission
as part of the Registration Statement and Prospectus, are independent
public accountants as required by the Securities Act and the Investment
Company Act;
(p) each of the Company and its Subsidiaries has all necessary
licenses, authorizations, consents and approvals and has made all necessary
filings required under any federal, state, local or foreign law, regulation
or rule, and has obtained all necessary authorizations, consents and
approvals from other persons, in order to conduct its respective business;
neither the Company nor any of its Subsidiaries is in violation of, or in
default under, any such license, authorization, consent or approval or any
federal, state, local or foreign law, regulation or rule or any decree,
order or judgment applicable to the Company or any of its Subsidiaries the
effect of which could have a Material Adverse Effect;
(q) the Company and the Subsidiaries own or possess all patents,
trademarks, trademark registrations, service marks, service xxxx
registrations, tradenames, copyrights, licenses, inventions, trade secrets
and rights described in the Prospectus as being owned by them or any of
them or necessary for the conduct of their respective businesses, and the
Company is not aware of any claim to the contrary or any challenge by any
other person to the rights of the Company and the Subsidiaries with respect
to the foregoing. The Company's and the Subsidiaries' businesses as now
conducted and as proposed to be conducted do not and will not infringe or
conflict with in any material respect any patents, trademarks, service
marks, tradenames, copyrights, trade secrets, licenses or any other
intellectual property or franchise right of any person. No
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claim has been made against the Company or any Subsidiary alleging the
infringement by the Company or any Subsidiary of any patent, trademark,
servicemark, tradename, copyright, trade secret, license in or other
intellectual property right or franchise right of any person;
(r) all legal or governmental proceedings, contracts, leases or
documents of a character required to be described in the Registration
Statement or the Prospectus or to be filed as an exhibit to the
Registration Statement have been so described or filed as required;
(s) there are no legal or governmental actions, suits, claims,
investigations or proceedings, foreign or domestic, now pending, or, to the
knowledge of the Company, threatened or contemplated, to which the Company
or any of its Subsidiaries or any of their affiliated persons, as defined
under the Investment Company Act, is a party or of which any property of
the Company or any Subsidiary or any of their affiliated persons is
subject, which, if determined adversely to the Company or any Subsidiary or
any of their affiliated persons, might individually or in the aggregate (i)
suspend the effectiveness of the Registration Statement, (iii) prevent or
suspend the use of the Preliminary Prospectus in any jurisdiction or (iv)
result in a Material Adverse Effect. Except as disclosed in the Prospectus,
the Company is not a party nor subject to the provisions of any material
injunction, judgment, decree or order of any court, regulatory body or
other governmental agency or body;
(t) the Company and each of its subsidiaries has filed all Federal,
State, local and foreign tax returns which have been required to be filed
and have paid all taxes indicated by said returns and all assessments
received by them or any of them to the extent that such taxes have become
due. All tax liabilities have been adequately provided for in the financial
statements of the Company, and the Company does not know of any actual or
proposed additional material tax assessments;
(u) the audited financial statements included in the Registration
Statement and the Prospectus present fairly the consolidated financial
position of the Company and its Subsidiaries as of the dates indicated and
the consolidated results of operations and cash flows of the Company and
its Subsidiaries for the periods specified; such financial statements have
been prepared in conformity with generally accepted accounting principles
applied on a consistent basis during the periods involved;
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(v) subsequent to the respective dates as of which information is
given in the Registration Statement and the Prospectus, there has not been
(i) any material adverse change, or any development which, in the Company's
reasonable judgment, is likely to cause a material adverse change, in the
business, properties or assets described or referred to in the Registration
Statement, or the results of operations, condition (financial or
otherwise), business or operations of the Company and its Subsidiaries
taken as a whole, (ii) any transaction which is material to the Company or
its Subsidiaries, except transactions in the ordinary course of business,
(iii) any obligation, direct or contingent, which is material to the
Company and its Subsidiaries taken as a whole, incurred by the Company or
its Subsidiaries, except obligations incurred in the ordinary course of
business, (iv) any change in the capital stock or outstanding indebtedness
of the Company or its Subsidiaries or (v) any dividend or distribution of
any kind declared, paid or made on the capital stock of the Company.
Neither the Company nor its Subsidiaries has any material contingent
obligation which is not disclosed in the Registration Statement.
(w) the Company has obtained the agreement of each of its directors
and officers and certain of its other stockholders not to sell, offer to
sell, contract to sell, hypothecate grant any option to sell or otherwise
dispose of, directly or indirectly, any shares of Common Stock or
securities convertible into or exchangeable for Common Stock or warrants or
other rights to purchase Common Stock for a period of 180 days after the
date of the Prospectus;
(x) neither the Company or any of the Subsidiaries is involved in any
labor dispute which would result in a Material Adverse Effect nor, to the
Company's knowledge, is any such dispute threatened. Neither the Company
nor any of the Subsidiaries is aware that (i) any executive, key employee
or significant group of employees of the Company or any of the Subsidiaries
plans to terminate employment with the Company or any of the Subsidiaries
or (ii) any such executive or key employee is subject to any noncompete,
nondisclosure, confidentiality, employment, consulting or similar agreement
that would be violated by the present or proposed business activities of
the Company or the Subsidiaries. Neither the Company nor any Subsidiary has
or expects to have any liability for any prohibited transaction or funding
deficiency or any complete or partial withdrawal liability with respect to
any pension, profit sharing or other plan which is subject to the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), to which the
Company or any Subsidiary makes or ever has made a contribution and in
which any employee of the Company or any Subsidiary is or has ever been a
participant. With respect to such plans,
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the Company and each Subsidiary are in compliance in all material respects
with all applicable provisions of ERISA
(y) the Company and the Subsidiaries are insured by insurers of
recognized financial responsibility against such losses and risks and in
such amounts as are customary in the businesses in which they are engaged
or propose to engage after giving effect to the transactions described in
the Prospectus; and neither the Company nor any Subsidiary has any reason
to believe that it will not be able to renew such insurance coverage as and
when such coverage expires or to obtain similar coverage from similar
insurers as may be necessary to continue their business at a cost that
would not have a Material Adverse Effect;
(z) neither the Company or any of the Subsidiaries, nor any director,
officer, agent or employee acting on behalf of the Company or the
Subsidiaries has (i) used any corporate funds for any unlawful
contribution, gift, entertainment or other unlawful expense relating to
political activity, (ii) made any direct or indirect unlawful payment to
any foreign or domestic government official or employee from corporate
funds, (iii) violated or is in violation of any provision of the Foreign
Corrupt Practices Act of 1977 or (iv) made any bribe, rebate, payoff,
influence payment, kickback or other unlawful payment;
(aa) the Company maintains a system of internal accounting controls
sufficient to provide reasonable assurances that (i) transactions are
executed in accordance with management's general or specific authorization,
(ii) transactions are recorded as necessary to permit preparation of
financial statements in conformity with generally accepted accounting
principles and to maintain accountability for assets, (iii) access to
assets is permitted only in accordance with management's general or
specific authorization and (iv) the recorded accountability for assets is
compared with existing assets at reasonable intervals and appropriate
action is taken with respect to any differences;
(bb) to the Company's knowledge, neither the Company, any of the
Subsidiaries nor any employee or agent of the Company or any of the
Subsidiaries has made any payment of funds of the Company or any of the
Subsidiaries or received or retained any funds in violation of any law,
rule or regulation, which payment, receipt or retention of funds is of a
character required to be disclosed in the Prospectus;
(cc) each certificate signed by any officer of the Company and
delivered to the Underwriters or counsel for the Underwriters in connection
with this
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Agreement or the transactions contemplated hereby shall be deemed to be a
representation and warranty by the Company as to the matters covered
thereby; and
(dd) to the Company's knowledge, there are no affiliations or
associations between any member of the NASD and any of the Company's
officers, directors or 5% or greater securityholders, except as set forth
in the Registration Statement.
4. Certain Covenants of the Company. The Company hereby agrees:
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(a) to furnish such information as may be required and otherwise to
cooperate in qualifying the Shares for offering and sale under the
securities or blue sky laws of such states as you may designate and to
maintain such qualifications in effect so long as required for the
distribution of the Shares; provided that the Company shall not be required
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to qualify as a foreign corporation or to consent to the service of process
under the laws of any such state (except service of process with respect to
the offering and sale of the Shares); and to promptly advise you of the
receipt by the Company of any notification with respect to the suspension
of the qualification of the Shares for sale in any jurisdiction or the
initiation or threatening of any proceeding for such purpose;
(b) to make available to the Underwriters in New York City, as soon
as practicable after the Registration Statement becomes effective, and
thereafter from time to time to furnish to the Underwriters, as many copies
of the Prospectus (or of the Prospectus as amended or supplemented if the
Company shall have made any amendments or supplements thereto after the
effective date of the Registration Statement) as the Underwriters may
request for the purposes contemplated by the Securities Act; in case any
Underwriter is required to deliver a prospectus within the nine-month
period referred to in Section 10(a)(3) of the Securities Act in connection
with the sale of the Shares, the Company will prepare promptly upon
request, but at the expense of such Underwriter, such amendment or
amendments to the Registration Statement and such prospectuses as may be
necessary to permit compliance with the requirements of Section 10(a)(3) of
the Securities Act;
(c) to advise you promptly and (if requested by you) to confirm such
advice in writing, (i) when the Registration Statement has become effective
and when any post-effective amendment thereto becomes effective and (ii) if
Rule 430A under the Securities Act is used, when the Prospectus is filed
with the
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Commission pursuant to Rule 424(b) under the Securities Act (which the
Company agrees to file in a timely manner under such Rules);
(d) to advise you promptly, confirming such advice in writing, of any
request by the Commission for amendments or supplements to the Registration
Statement or Prospectus or for additional information with respect thereto,
or of notice of institution of proceedings for, or the entry of a stop
order suspending the effectiveness of the Registration Statement and, if
the Commission should enter a stop order suspending the effectiveness of
the Registration Statement, to make every reasonable effort to obtain the
lifting or removal of such order as soon as possible; to advise you
promptly of any proposal to amend or supplement the Registration Statement
or Prospectus including by filing any documents that would be incorporated
therein by reference and to file no such amendment or supplement to which
you shall object in writing;
(e) to file promptly all reports and any definitive proxy or
information statement required to be filed by the Company with the
Commission in order to comply with the Exchange Act subsequent to the date
of the Prospectus and for so long as the delivery of a prospectus is
required in connection with the offering or sale of the shares, and to
promptly notify you of such filing;
(f) if necessary or appropriate, to file a registration statement
pursuant to Rule 462(b) under the Securities Act;
(g) to furnish to you and, upon request, to each of the other
Underwriters for a period of five years from the date of this Agreement (i)
copies of any reports or other communications which the Company shall send
to its stockholders or shall from time to time publish or publicly
disseminate, (ii) copies of all annual, quarterly and current reports filed
with the Commission on Forms 10-K, 10-Q and 8-K, or such other similar form
as may be designated by the Commission, (iii) copies of documents or
reports filed with any national securities exchange on which any class of
securities of the Company is listed, and (iv) such other information as you
may reasonably request regarding the Company or its Subsidiaries;
(h) to advise the Underwriters promptly of the happening of any event
known to the Company within the time during which a Prospectus relating to
the Shares is required to be delivered under the Securities Act which, in
the judgment of the Company, would require the making of any change in the
Prospectus then being used, or in the information incorporated therein by
reference, so that the Prospectus would not include an untrue statement of
mate-
-14-
rial fact or omit to state a material fact necessary to make the statements
therein, in the light of the circumstances under which they are made, not
misleading, and, during such time, to prepare and furnish, at the Company's
expense, to the Underwriters promptly such amendments or supplements to
such Prospectus as may be necessary to reflect any such change and to
furnish you a copy of such proposed amendment or supplement before filing
any such amendment or supplement with the Commission;
(i) to make generally available to holders of the Company's
securities, and to deliver to you, as soon as practicable but in no event
later than the last day of the 18th full calendar month following the
calendar quarter in which the purchase date falls, an earnings statement,
if applicable, satisfying the provisions of Section 11(a) of the Securities
Act and, at the option of the Fund, Rule 158 of the Securities Act Rules;
(j) to furnish to its shareholders as soon as practicable after the
end of each fiscal year an annual report (including a balance sheet and
statements of income, shareholders' equity and of cash flow of the Company
for such fiscal year, accompanied by a copy of the certificate or report
thereon of nationally recognized independent certified public accountants;
(k) to furnish to you 3 signed copies of the Registration Statement,
as initially filed with the Commission, and of all amendments thereto
(including all exhibits thereto and documents incorporated by reference
therein) and sufficient conformed copies of the foregoing (other than
exhibits) for distribution of a copy to each of the other Underwriters;
(l) to furnish to you as early as practicable prior to the time of
purchase and the additional time of purchase, as the case may be, but not
later than two business days prior thereto, a copy of the latest available
unaudited interim consolidated financial statements, if any, of the Company
and its Subsidiaries which have been read by the Company's independent
certified public accountants, as stated in their letter to be furnished
pursuant to Section 7(b) hereof;
(m) to apply the net proceeds from the sale of the Shares in the
manner set forth under the caption "Use of Proceeds" in the Prospectus;
(n) to furnish to you, before filing with the Commission subsequent
to the effective date of the Registration Statement and during the period
re-
-15-
ferred to in paragraph (f) above, a copy of any document proposed to be
filed pursuant to Section 13, 14 or 15(d) of the Exchange Act;
(o) not to sell, offer or agree to sell, contract to sell, grant any
option to sell or otherwise dispose of, directly or indirectly, any shares
of Common Stock or securities convertible into or exchangeable or
exercisable for Common Stock or warrants or other rights to purchase Common
Stock or any other Securities of the Company that are substantially similar
to Common Stock or permit the registration under the Securities Act of any
shares of Common Stock, except for the registration of the Shares and the
sales to the Underwriters pursuant to this Agreement and except for
issuances of Common Stock upon the exercise of outstanding options,
warrants and debentures, for a period of 180 days after the date hereof,
without the prior written consent of the Managing Representative; and
(p) to use its best efforts to cause the Common Stock to be listed
for quotation on the National Association of Securities Dealers Automated
Quotation National Market System ("NASDAQ").
(q) to pay all expenses, fees and taxes (other than any transfer
taxes and fees and disbursements of counsel for the Underwriters except as
set forth under Section 5 hereof or (iii) or (iv) below) in connection with
(i) the preparation and filing of the Registration Statement, each
Preliminary Prospectus, the Prospectus, and any amendments or supplements
thereto, and the printing and furnishing of copies of each thereof to the
Underwriters and to dealers (including costs of mailing and shipment), (ii)
the issuance, sale and delivery of the Shares by the Company, (iii) the
word processing and/or printing of this Agreement, any Agreement Among
Underwriters, any dealer agreements, any Statements of Information, the
Custody Agreement and the Powers of Attorney and the reproduction and/or
printing and furnishing of copies of each thereof to the Underwriters and
to dealers (including costs of mailing and shipment), (iv) the
qualification of the Shares for offering and sale under state laws and the
determination of their eligibility for investment under state law as
aforesaid (including the legal fees and filing fees and other disbursements
of counsel to the Underwriters) and the printing and furnishing of copies
of any blue sky surveys or legal investment surveys to the Underwriters and
to dealers, (v) any listing of the Shares on any securities exchange or
qualification of the Shares for quotation on NASDAQ and any registration
thereof under the Exchange Act, (vi) the filing for review of the public
offering of the Shares by the National Association of Securities Dealers,
Inc. (the "NASD"), and (vii) the performance of the Company's other
obligations hereunder; and
-16-
(r) not to issue, sell, grant any option to sell or otherwise dispose
of, directly or indirectly, any shares of Common Stock or securities
convertible into or exchangeable for Common Stock or warrants or other
rights to purchase Common Stock or permit the registration under the
Securities Act of any shares of Common Stock, except for the registration
of the Shares and the sales to the Underwriters pursuant to this Agreement
and except for issuances of Common Stock upon the exercise of outstanding
options, warrants and debentures, for a period of 180 days after the date
of the Prospectus, without the prior written consent of the Managing
Representative.
5. Reimbursement of Underwriters' Expenses. If the Shares are not
---------------------------------------
delivered for any reason other than the termination of this Agreement pursuant
to the first two paragraphs of Section 9 hereof or the default by one or more of
the Underwriters in its or their respective obligations hereunder, the Company
shall, in addition to paying the amounts described in Section 5(a) hereof,
reimburse the Underwriters for all of their out-of-pocket expenses, including
the fees and disbursements of their counsel.
6. Conditions of Underwriters' Obligations. The several obligations
---------------------------------------
of the Underwriters hereunder are subject to the accuracy of the representations
and warranties on the part of the Company on the date hereof and at the time of
purchase (and the several obligations of the Underwriters at the additional time
of purchase are subject to the accuracy of the representations and warranties on
the part of the Company on the date hereof and at the time of purchase (unless
previously waived) and at the additional time of purchase, as the case may be),
the performance by the Company of its obligations hereunder and to the following
additional conditions precedent:
(a) The Company shall furnish to you at the time of purchase and at
the additional time of purchase, as the case may be, an opinion of Xxxxxxx
Xxxx & Xxxxxxxxx, counsel for the Company, addressed to the Underwriters,
and dated the time of purchase or the additional time of purchase, as the
case may be, with reproduced copies for each of the other Underwriters and
in form satisfactory to Cadwalader, Xxxxxxxxxx & Xxxx, counsel for the
Underwriters, stating that:
(i) the Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State
of Delaware, with full corporate power and authority to own, lease and
operate its properties and conduct its business as described in the
Registration Statement and the Prospectus, to execute and deliver this
Agreement and to issue, sell and deliver the Shares as herein
contemplated;
-17-
(ii) each of the Subsidiaries has been duly incorporated and
is validly existing as a corporation in good standing under the laws
of its respective jurisdiction of incorporation with full corporate
power and authority to own, lease and operate its respective
properties and to conduct its respective business;
(iii) the Company and its Subsidiaries are duly qualified or
licensed by each jurisdiction in which they conduct their respective
businesses and in which the failure, individually or in the aggregate,
to be so licensed or qualified could have a Material Adverse Effect
and the Company and its Subsidiaries are duly qualified, and are in
good standing, in each jurisdiction in which they own or lease real
property or maintain an office and in which such qualification is
necessary;
(iv) this Agreement has been duly authorized, executed and
delivered by the Company;
(v) the Shares have been duly authorized and, when issued and
delivered to and paid for by the Underwriters, will be duly and
validly and issued and will be fully paid and non-assessable;
(vi) the Company has an authorized capitalization as set forth
in the Registration Statement and the Prospectus; the outstanding
shares of capital stock of the Company have been duly and validly
authorized and issued, and are fully paid, nonassessable and free of
statutory and contractual preemptive rights; the Shares when issued
will be free of statutory and contractual preemptive rights, resale
rights, rights of first refusal and similar rights; the certificates
for the Shares are in due and proper form and the holders of the
Shares will not be subject to personal liability by reason of being
such holders;
(vii) other than the Subsidiaries, the Company does not own or
control, directly or indirectly, any corporation, association or other
entity; all of the outstanding shares of capital stock of each of the
Subsidiaries have been duly authorized and validly issued, are fully
paid and non-assessable and, except as otherwise stated in the
Registration Statement, are owned by the Company, in each case subject
to no security interest, other encumbrance or adverse claim; to the
best of such counsel's knowledge, no options, warrants or other rights
to purchase, agreements or other obligations to issue or other rights
to convert any obligation into shares of capital stock or ownership
interests in the Subsidiaries are outstanding;
-18-
(viii) the Company has duly elected to be treated under the
Investment Company Act as a business development company and all
required action has been taken by the Company under the Securities Act
and Investment Company Act to make the public offering and consummate
the sale of the Shares as provided in this Agreement; the provisions
of the corporate charter and by-laws of the Company and the
Subsidiaries and the investment policies and restrictions described in
the Prospectus comply with the requirements of the Investment Company
Act;
(ix) the capital stock of the Company, including the Shares,
conforms to the description thereof contained in the Registration
Statement and Prospectus;
(x) the Registration Statement and the Prospectus (except as
to the financial statements and schedules and other financial and
statistical data contained or incorporated by reference 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
Investment Company Act;
(xi) the Registration Statement has become effective under the
Securities Act and, to the best of such counsel's knowledge, no stop
order proceedings with respect thereto are pending or threatened under
the Securities Act and any required filing of the Prospectus and any
supplement thereto pursuant to Rule 424 under the Securities Act has
been made in the manner and within the time period required by such
Rule 424;
(xii) no approval, authorization, consent or order of or filing
with any national, state or local governmental or regulatory
commission, board, body, authority or agency is required in connection
with the issuance and sale of the Shares and consummation by the
Company of the transaction as contemplated hereby other than
registration of the Shares under the Securities Act (except such
counsel need express no opinion as to any necessary qualification
under the state securities or blue sky laws of the various
jurisdictions in which the Shares are being offered by the
Underwriters);
(xiii) the execution, delivery and performance of this Agreement
by the Company and the consummation by the Company of the transactions
contemplated hereby do not and will not conflict with, or result in
any breach of, or constitute a default under (nor constitute any event
which with notice, lapse of time, or both, would result in any breach
of or constitute a default under), any provisions of the charter or
by-laws of the Company or
-19-
any of its Subsidiaries or under any provision of any license,
indenture, mortgage, deed of trust, bank loan, credit agreement or
other evidence of indebtedness, or any lease, contract or other
agreement or instrument to which the Company or any of its
Subsidiaries is a party or by which any of them or their respective
properties may be bound or affected, or under any federal, state,
local or foreign law, regulation or rule or any decree, judgment or
order applicable to the Company or any of its Subsidiaries;
(xiv) to the best of such counsel's knowledge, neither the
Company nor any of its Subsidiaries is in violation of its charter or
by-laws or is in breach of, or in default under (nor has any event
occurred which with notice, lapse of time, or both would result in any
breach of, or constitute a default under), any license, indenture,
mortgage, deed of trust, bank loan or any other agreement or
instrument to which the Company or any of its Subsidiaries is a party
or by which any of them or their respective properties may be bound or
affected or under any federal, state, local or foreign law, regulation
or rule or any decree, judgment or order applicable to the Company or
any of its Subsidiaries;
(xv) to the best of such counsel's knowledge, there are no
contracts, licenses, agreements, leases or documents of a character
which are required to be filed as exhibits to the Registration
Statement or to be summarized or described in the Prospectus which
have not been so filed, summarized or described;
(xvi) to the best of such counsel's knowledge, there are no
actions, suits, claims, investigations or proceedings pending,
threatened or contemplated to which the Company or any of its
Subsidiaries is subject or of which any of their respective
properties, is subject at law or in equity or before or by any
federal, state, local or foreign governmental or regulatory
commission, board, body, authority or agency which are required to be
described in the Prospectus but are not so described;
(xvii) the documents incorporated by reference in the
Registration Statement and Prospectus, when they were filed (or, if an
amendment with respect to any such document was filed when such
amendment was filed) with the Commission, complied as to form in all
material respects with the Exchange Act (except as to the financial
statements and schedules and other financial and statistical data
contained or incorporated by reference therein as to which such
counsel need express no opinion);
-20-
(xviii) such counsel have participated in conferences with
officers and other representatives of the Company, representatives of
the independent public accountants of the Company and representatives
of the Underwriters at which the contents of the Registration
Statement and Prospectus were discussed and, although such counsel is
not passing upon and does not assume responsibility for the accuracy,
completeness or fairness of the statements contained in the
Registration Statement or Prospectus (except as and to the extent
stated in subparagraphs (vi) and (viii) above), on the basis of the
foregoing nothing has come to the attention of such counsel that
causes them to believe that the Registration Statement or any
amendment thereto at the time such Registration Statement or amendment
became effective contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, or that the
Prospectus or any supplement thereto at the date of such Prospectus or
such supplement, and at all times up to and including the time of
purchase or additional time of purchase, as the case may be, contained
an untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading (it being understood that such counsel need express no
opinion with respect to the financial statements and schedules and
other financial and statistical data included in the Registration
Statement or Prospectus).
(b) You shall have received from Xxxxxx Xxxxxxxx LLP, letters dated,
respectively, the date of this Agreement and the time of purchase and
additional time of purchase, as the case may be, and addressed to the
Underwriters (with reproduced copies for each of the Underwriters) in the
forms heretofore approved by the Managing Representative.
(c) You shall have received at the time of purchase and at the
additional time of purchase, as the case may be, the favorable opinion of
Cadwalader, Xxxxxxxxxx & Xxxx, counsel for the Underwriters, dated the time
of purchase or the additional time of purchase, as the case may be, as to
the matters referred to in subparagraphs (iv), (v), (viii) (with respect to
the Shares only), (ix) and (x) of paragraph (a) of this Section 6.
In addition, such counsel shall state that they have participated in
conferences with officers and other representatives of the Company, counsel
for the Company, representatives of the independent public accountants of
the Company
-21-
and representatives of the Underwriters at which the contents of the
Registration Statement and Prospectus and related matters were discussed
and, although such counsel is not passing upon and does not assume any
responsibility for the accuracy, completeness or fairness of the statements
contained in the Registration Statement and Prospectus (except as to
matters referred to with respect to the Shares under subparagraph (viii) of
paragraph (a) of this Section 6), on the basis of the foregoing (relying as
to materiality to a large extent upon the opinions of officers and other
representatives of the Company), no facts have come to the attention of
such counsel which lead them to believe that the Registration Statement or
any amendment thereto at the time such Registration Statement or amendment
became effective contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary
to make the statements therein not misleading or that the Prospectus as of
its date or any supplement thereto as of its date contained an untrue
statement of a material fact or omitted to state a material fact required
to be stated therein or necessary to make the statements therein, in light
of the circumstances under which they were made, not misleading (it being
understood that such counsel need express no comment with respect to the
financial statements and schedules and other financial and statistical data
included in the Registration Statement or Prospectus).
(d) No amendment or supplement to the Registration Statement or
Prospectus, including documents deemed to be incorporated by reference
therein, shall be filed prior to the time the Registration Statement
becomes effective to which you object in writing.
(e) The Registration Statement shall become effective, or if Rule
430A under the Securities Act is used, the Prospectus shall have been filed
with the Commission pursuant to Rule 424(b) under the Securities Act, at or
before 5:00 P.M., New York City time, on the date of this Agreement, unless
a later time (but not later than 5:00 P.M., New York City time, on the
second full business day after the date of this Agreement) shall be agreed
to by the Company and you in writing or by telephone, confirmed in writing;
provided, however, that the Company and you and any group of Underwriters,
-------- -------
including you, who have agreed hereunder to purchase in the aggregate at
least 50% of the Firm Shares may from time to time agree on a later date.
(f) Prior to the time of purchase or the additional time of purchase,
as the case may be, (i) no stop order with respect to the effectiveness of
the Registration Statement shall have been issued under the Securities Act
or proceedings initiated under Section 8(d) or 8(e) of the Securities Act;
(ii) the Registration Statement and all amendments thereto, or
modifications thereof, if any,
-22-
shall not 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; and (iii) the Prospectus and all
amendments or supplements thereto, or modifications thereof, if any, shall
not 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, in the light of the circumstances under which they are
made, not misleading.
(g) Between the time of execution of this Agreement and the time of
purchase or the additional time of purchase, as the case may be, (i) no
material and unfavorable change, financial or otherwise (other than as
referred to in the Registration Statement and Prospectus), in the business,
condition or prospects of the Company and its Subsidiaries taken as a whole
shall occur or become known and (ii) no transaction which is material and
unfavorable to the Company shall have been entered into by the Company or
any of its Subsidiaries.
(h) The Company will, at the time of purchase or additional time of
purchase, as the case may be, deliver to you a certificate of two of its
executive officers to the effect that the representations and warranties of
the Company as set forth in this Agreement are true and correct as of each
such date, that the Company shall perform such of its obligations under
this Agreement as are to be performed at or before the time of purchase and
at or before the additional time of purchase, as the case may be and the
conditions set forth in paragraphs (f) and (g) of this Section 6 have been
met.
(i) You shall have received signed letters, dated the date of this
Agreement and each of the directors and officers of the Company and certain
of its other stockholders to the effect that such persons shall not sell,
offer or agree to sell, contract to sell, grant any option to sell or
otherwise dispose of, directly or indirectly, any shares of Common Stock of
the Company or securities convertible into or exchangeable or exercisable
for Common Stock or warrants or other rights to purchase Common Stock or
any other securities of the Company that are substantially similar to the
Common Stock for a period of 180 days after the date of the Prospectus
without the Managing Representative 's prior written consent.
(j) The Company shall have furnished to you such other documents and
certificates as to the accuracy and completeness of any statement in the
Registration Statement and the Prospectus as of the time of purchase and
the
-23-
additional time of purchase, as the case may be, as you may reasonably
request.
(k) The Shares shall have been approved for quotation on NASDAQ,
subject only to notice of issuance at or prior to the time of purchase or
the additional time of purchase, as the case may be.
(l) Between the time of execution of this Agreement and the time of
purchase or additional time of purchase, as the case may be, there shall
not have occurred any downgrading, nor shall any notice or announcement
have been given or made of (i) any intended or potential downgrading or
(ii) any review or possible change that does not indicate an improvement,
in the rating accorded any securities of or guaranteed by the Company or
any Subsidiary by any "nationally recognized statistical rating
organization", as that term is defined in Rule 436(g)(2) under the
Securities Act.
7. Effective Date of Agreement; Termination. This Agreement shall
----------------------------------------
become effective (i) if Rule 430A under the Securities Act is not used, when you
shall have received notification of the effectiveness of the Registration
Statement, or (ii) if Rule 430A under the Securities Act is used, when the
parties hereto have executed and delivered this Agreement.
The obligations of the several Underwriters hereunder shall be subject
to termination in the absolute discretion of you or any group of Underwriters
(which may include you) which has agreed to purchase in the aggregate at least
50% of the Firm Shares, if, since the time of execution of this Agreement or the
respective dates as of which information is given in the Registration Statement
and Prospectus, (y) there has been any material adverse and unfavorable change,
financial or otherwise (other than as referred to in the Registration Statement
and Prospectus), in the operations, business, condition or prospects of the
Company and its Subsidiaries taken as a whole, which would, in your judgment or
in the judgment of such group of Underwriters, make it impracticable to market
the Shares, or (z) there shall have occurred any downgrading, or any notice
shall have been given of (i) any intended or potential downgrading or (ii) any
review or possible change that does not indicate an improvement, in the rating
accorded any securities of or guaranteed by the Company or any Subsidiary by any
"nationally recognized statistical rating organization", as that term is defined
in Rule 436(g)(2) under the Securities Act or, if, at any time prior to the time
of purchase or, with respect to the purchase of any Additional Shares, the
additional time of purchase, as the case may be, trading in securities on the
New York Stock Exchange, the American Stock Exchange or the NASDAQ National
Market shall have been suspended or limitations or minimum prices shall have
been established on the New York Stock Exchange, the American Stock Exchange or
the NASDAQ National
-24-
Market or if a banking moratorium shall have been declared either by the United
States or New York State authorities, or if the United States shall have
declared war in accordance with its constitutional processes or there shall have
occurred any material outbreak or escalation of hostilities or other national or
international calamity or crisis of such magnitude in its effect on the
financial markets of the United States as, in your judgment or in the judgment
of such group of Underwriters, to make it impracticable to market the Shares.
If you or any group of Underwriters elects to terminate this Agreement
as provided in this Section 7, the Company and each other Underwriter shall be
notified promptly by letter or telegram.
If the sale to the Underwriters of the Shares, as contemplated by this
Agreement, is not carried out by the Underwriters for any reason permitted under
this Agreement or if such sale is not carried out because the Company shall be
unable to comply with any of the terms of this Agreement, the Company shall not
be under any obligation or liability under this Agreement (except to the extent
provided in Sections 4(q), 5 and 9 hereof), and the Underwriters shall be under
no obligation or liability to the Company under this Agreement (except to the
extent provided in Section 9 hereof) or to one another hereunder.
8. Increase in Underwriters' Commitments. Subject to Sections 6 and
-------------------------------------
7, if any Underwriter shall default in its obligation to take up and pay for the
Firm Shares to be purchased by it hereunder (otherwise than for reasons
sufficient to justify the termination of this Agreement under the provisions of
Section 8 hereof) and if the number of Firm Shares which all Underwriters so
defaulting shall have agreed but failed to take up and pay for does not exceed
10% of the total number of Firm Shares, the non-defaulting Underwriters shall
take up and pay for (in addition to the number of Firm Shares they are obligated
to purchase pursuant to Section 1 hereof) the number of Firm Shares agreed to be
purchased by all such defaulting Underwriters, as hereinafter provided. Such
Shares shall be taken up and paid for by such non-defaulting Underwriter or
Underwriters in such amount or amounts as you may designate with the consent of
each Underwriter so designated or, in the event no such designation is made,
such Shares shall be taken up and paid for by all non-defaulting Underwriters
pro rata in proportion to the aggregate number of Firm Shares set opposite the
names of such non-defaulting Underwriters in Schedule A.
Without relieving any defaulting Underwriter from its obligations
hereunder, the Company agrees with the non-defaulting Underwriters that they
will not sell any Firm Shares hereunder unless ail of the Firm Shares are
purchased by the Underwriters (or by substituted Underwriters selected by you
with the approval of the Company or selected by the Company with your approval).
-25-
If a new Underwriter or Underwriters are substituted by the
Underwriters or by the Company for a defaulting Underwriter or Underwriters in
accordance with the foregoing provision, the Company or you shall have the right
to postpone the time of purchase for a period not exceeding five business days
in order that any necessary changes in the Registration Statement and Prospectus
and other documents may be effected.
The term Underwriter as used in this Agreement shall refer to and
include any Underwriter substituted under this Section 8 with like effect as if
such substituted Underwriter had originally been named in Schedule A.
If the aggregate number of Shares which the defaulting Underwriter or
Underwriters agreed to purchase exceeds 10% of the total number of Shares which
all Underwriters agreed to purchase hereunder, and if neither the non-defaulting
Underwriters nor the Company shall make arrangements within the five business
day period stated above for the purchase of all the Shares which the defaulting
Underwriter or Underwriters agreed to purchase hereunder, this Agreement shall
be terminated without further act or deed and without any liability on the part
of the Company to any non-defaulting Underwriter and without any liability on
the part of any non-defaulting Underwriter to the Company. Nothing in this
paragraph, and no action taken hereunder, shall relieve any defaulting
Underwriter from liability in respect of any default of such Underwriter under
this Agreement.
9. Indemnity and Contribution.
--------------------------
(a) The Company agrees to indemnify, defend and hold harmless each
Underwriter, its partners, directors and officers, and any person who controls
any Underwriter within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act, and the successors and assigns of all of the
foregoing persons from and against any loss, damage, expense, liability or claim
(including the reasonable cost of investigation) which, jointly or severally,
any such Underwriter or any such person may incur under the Securities Act, the
Investment Company Act, the Exchange Act, the Common Law or otherwise, insofar
as such loss, damage, expense, liability or claim arises out of or is based upon
any untrue statement or alleged untrue statement of a material fact contained in
the Registration Statement (or in the Registration Statement as amended by any
post-effective amendment thereof by the Company) or in a Prospectus (the term
Prospectus for the purpose of this Section 9 being deemed to include any
Preliminary Prospectus, the Prospectus and the Prospectus as amended or
supplemented by the Company), or arises out of or is based upon any omission or
alleged omission to state a material fact required to be stated in either such
Registration Statement or Prospectus or necessary to make the statements made
therein not misleading, except insofar as any such loss, damage, expense,
liability or claim arises out
-26-
of or is based upon any untrue statement or alleged untrue statement of a
material fact contained in and in conformity with information furnished in
writing by or on behalf of any Underwriter through you to the Company expressly
for use with reference to such Underwriter in such Registration Statement or
such Prospectus or arises out of or is based upon any omission or alleged
omission to state a material fact in connection with such information required
to be stated in such Registration Statement or Prospectus or necessary to make
such information not misleading.
If any action, suit or proceeding (together, a "Proceeding") is
brought against an Underwriter or any such person in respect of which indemnity
may be sought against the Company pursuant to the foregoing paragraph, such
Underwriter or such person shall promptly notify the Company in writing of the
institution of such Proceeding and the Company shall assume the defense of such
Proceeding, including the employment of counsel reasonably satisfactory to such
indemnified party and payment of all fees and expenses; provided, however, that
-------- -------
the omission to so notify the Company shall not relieve the Company from any
liability which the Company may have to any Underwriter or any such person or
otherwise. Such Underwriter or such controlling person shall have the right to
employ its or their own counsel in any such case, but the fees and expenses of
such counsel shall be at the expense of such Underwriter or of such person
unless the employment of such counsel shall have been authorized in writing by
the Company in connection with the defense of such Proceeding or the Company
shall not have, within a reasonable period of time in light of the circumstances
employed counsel to have charge of the defense of such Proceeding or such
indemnified party or parties shall have reasonably concluded that there may be
defenses available to it or them which are different from, additional to or in
conflict with those available to the Company (in which case the Company shall
not have the right to direct the defense of such Proceeding on behalf of the
indemnified party or parties), in any of which events such fees and expenses
shall be borne by the Company, as the case may be, and paid as incurred (it
being understood, however, that the Company shall not be liable for the expenses
of more than one separate counsel (in addition to any local counsel) in any one
Proceeding or series of related Proceedings in the same jurisdiction
representing the indemnified parties who are parties to such Proceeding). The
Company shall not be liable for any settlement of any such Proceeding effected
without its written consent but if settled with the written consent of the
Company, the Company agrees to indemnify and hold harmless any Underwriter and
any such person from and against any loss or liability by reason of such
settlement. Notwithstanding the foregoing sentence, if at any time an
indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel as contemplated by the second
sentence of this paragraph, then the indemnifying party agrees that it shall be
liable for any settlement of any Proceeding effected without its written consent
if (i) such settlement is entered into more than 60 business days after receipt
by such indemnifying party of the
-27-
aforesaid request, (ii) such indemnifying party shall not have reimbursed the
indemnified party in accordance with such request prior to the date of such
settlement and (iii) such indemnified party shall have given the indemnifying
party at least 30 days' prior notice of its intention to settle. No indemnifying
party shall, without the prior written consent of the indemnified party, effect
any settlement of any pending or threatened Proceeding in respect of which any
indemnified party is or could have been a party and indemnity could have been
sought hereunder by such indemnified party, unless such settlement includes an
unconditional release of such indemnified party from all liability on claims
that are the subject matter of such Proceeding and does not include an admission
of fault, culpability or a failure to act, by or on behalf of such indemnified
party.
(b) Each Underwriter severally agrees to indemnify, defend and hold
harmless the Company, its directors and officers and any person who controls the
Company within the meaning of Section 15 of the Securities Act, or Section 20 of
the Exchange Act, from and against any loss, damage, expense, liability or claim
(including the reasonable cost of investigation) which, jointly or severally,
the Company or any such person may incur under the Securities Act, the Exchange
Act, or Common Law or otherwise, insofar as such loss, damage, expense,
liability or claim arises out of or is based upon any untrue statement or
alleged untrue statement of a material fact contained in and in conformity with
information furnished in writing by or on behalf of such Underwriter through you
to the Company expressly for use with reference to such Underwriter in the
Registration Statement (or in the Registration Statement as amended by or on
behalf of any post-effective amendment thereof by the Company) or in a
Prospectus, or arises out of or is based upon any omission or alleged omission
to state a material fact in connection with such information required to be
stated in such Registration Statement or Prospectus or necessary to make such
information not misleading.
If any Proceeding is brought against the Company or any such person in
respect of which indemnity may be sought against any Underwriter pursuant to the
foregoing paragraph, the Company or such person shall promptly notify such
Underwriter in writing of the institution of such Proceeding and such
Underwriter shall assume the defense of such Proceeding, including the
employment of counsel reasonably satisfactory to such indemnified party and
payment of all fees and expenses, provided, however, that the omission to so
-------- -------
notify such Underwriter shall not relieve such Underwriter, from any liability
which such Underwriter may have to the Company or any such person or otherwise.
The Company or such person shall have the right to employ its own counsel in any
such case, but the fees and expenses of such counsel shall be at the expense of
the Company or such person unless the employment of such counsel shall have been
authorized in writing by such Underwriter in connection with the defense of such
Proceeding or such Underwriter shall not have employed counsel to have charge of
the defense of such Proceeding or
-28-
such indemnified party or parties shall have reasonably concluded that there may
be defenses available to it or them which are different from or additional to or
in conflict with those available to such Underwriter (in which case such
Underwriter shall not have the right to direct the defense of such Proceeding on
behalf of the indemnified party or parties, but such Underwriter may employ
counsel and participate in the defense thereof but the fees and expenses of such
counsel shall be at the expense of such Underwriter), in any of which events
such fees and expenses shall be borne by such Underwriter and paid as incurred
(it being understood, however, that such Underwriter shall not be liable for the
expenses of more than one separate counsel (in addition to any local counsel) in
any one Proceeding or series of related Proceedings in the same jurisdiction
representing the indemnified parties who are parties to such Proceeding). No
Underwriter shall be liable for any settlement of any such Proceeding effected
without the written consent of such Underwriter but if settled with the written
consent of such Underwriter, such Underwriter agrees to indemnify and hold
harmless the Company and any such person from and against any loss or liability
by reason of such settlement. Notwithstanding the foregoing sentence, if at any
time an indemnified party shall have requested an indemnifying party to
reimburse the indemnified party for fees and expenses of counsel as contemplated
by the second sentence of this paragraph, then the indemnifying party agrees
that it shall be liable for any settlement of any Proceeding effected without
its written consent if (i) such settlement is entered into more than 60 business
days after receipt by such indemnifying party of the aforesaid request, (ii)
such indemnifying party shall not have reimbursed the indemnified party in
accordance with such request prior to the date of such settlement and (iii) such
indemnified party shall have given the indemnifying party at least 30 days'
prior notice of its intention to settle. No indemnifying party shall, without
the prior written consent of the indemnified party, effect any settlement of any
pending or threatened Proceeding in respect of which any indemnified party is or
could have been a party and indemnity could have been sought hereunder by such
indemnified party, unless such settlement includes an unconditional release of
such indemnified party from all liability on claims that are the subject matter
of such Proceeding.
(c) If the indemnification provided for in this Section 9 is
unavailable to an indemnified party under subsections (a) and (b) of this
Section 9 in respect of any losses, damage, expenses, liabilities or claims
referred to therein, then each applicable indemnifying party, in lieu of
indemnifying such indemnified party, shall contribute to the amount paid or
payable by such indemnified party as a result of such losses, damages, expenses,
liabilities or claims (i) in such proportion as is appropriate to reflect the
relative benefits received by the Company on the one hand and the Underwriters
on the other hand from the offering of the Shares or (ii) if the allocation
provided by clause (i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred
to in clause (i) above but
-29-
also the relative fault of the Company on the one hand and of the Underwriters
on the other in connection with the statements or omissions which resulted in
such losses, damages, expenses, liabilities or claims, as well as any other
relevant equitable considerations. The relative benefits received by the Company
on the one hand and the Underwriters on the other shall be deemed to be in the
same respective proportion as the total proceeds from the offering (net of
underwriting discounts and commissions but before deducting expenses) received
by the Company and the total underwriting discounts and commissions received by
the Underwriters, bear to the aggregate public offering price is the shares. The
relative fault of the Company on the one hand and of the Underwriters on the
other shall be determined by reference to, among other things, whether the
untrue statement or alleged untrue statement of a material fact or omission or
alleged omission relates to information supplied by the Company or by the
Underwriters and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission. The amount
paid or payable by a party as a result of the losses, damages, expenses,
liabilities and claims referred to in this subsection shall be deemed to include
any legal or other fees or expenses reasonably incurred by such party in
connection with investigating, preparing to defend or defending any claim or
Proceeding.
(d) The Company and the Underwriters agree that it would not be just
and equitable if contribution pursuant to this Section 9 were determined by pro
rata allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation that does not take account of the
equitable considerations referred to in subsection (c) above. Notwithstanding
the provisions of this Section 9, no Underwriter shall be required to contribute
any amount in excess of the amount by which the total price at which the Shares
underwritten by such Underwriter and distributed to the public were offered to
the public exceeds the amount of any damage which such Underwriter has otherwise
been required to pay by reason of such untrue statement or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(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
pursuant to this Section 9 are several in proportion to their respective
underwriting commitments and not joint.
(e) The indemnity and contribution agreements contained in this
Section 9 and the covenants, warranties and representations of the Company
contained in this Agreement shall remain in full force and effect regardless of
any partners, investigation made by or on behalf of any Underwriter, its
directors and officers or any person (including each partner, officer or
director of such person) who controls any Underwriter within the meaning of
Section 15 of the Securities Act or Section 20
-30-
of the Exchange Act, or by or on behalf of the Company, its directors or
officers or any person who controls the Company within the meaning of Section 15
of the Securities Act or Section 20 of the Exchange Act, and shall survive any
termination of this Agreement or the issuance and delivery of the Shares. The
Company and each Underwriter agree promptly to notify each other commencement of
any Proceeding against it and, in the case of the Company, against any of the
Company's officers or directors in connection with the issuance and sale of the
Shares, or in connection with the Registration Statement or Prospectus.
10. Notices. Except as otherwise herein provided, all statements,
-------
requests, notices and agreements shall be in writing or by telegram and, (i) if
to the Underwriters, shall be sufficient in all respects if delivered or sent to
UBS Warburg LLC, 000 Xxxx Xxxxxx, Xxx Xxxx, X.X. 00000-0000, Attention:
Syndicate Department, and (ii) if to the Company, shall be sufficient in all
respects if delivered or sent to the Company at the offices of the Company at
000 Xxxxxxx Xxxxxx, Xxx Xxxx, XX 00000, Attention: Xxxxx Xxxxxxxx.
11. Governing Law; Construction. This Agreement and any claim,
---------------------------
counterclaim or dispute of any kind or nature whatsoever arising out of or in
any way relating to this Agreement ("Claim"), directly or indirectly, shall be
governed by, and construed in accordance with, the laws of the State of New
York. The Section headings in this Agreement have been inserted as a matter of
convenience of reference and are not a part of this Agreement.
12. Submission to Jurisdiction. Except as set forth below, no Claim
--------------------------
may be commenced, prosecuted or continued in any court other than the courts of
the State of New York located in the City and County of New York or in the
United States District Court for the Southern District of New York, which courts
shall have jurisdiction over the adjudication of such matters, and the Company
consents to the jurisdiction of such courts and personal service with respect
thereto. The Company hereby consents to personal jurisdiction, service and venue
in any court in which any Claim arising out of or in any way relating to this
Agreement is brought by any third party against the Representatives or any
indemnified party. Each of the Representatives and the Company (on its behalf
and, to the extent permitted by applicable law, on behalf of its stockholders
and affiliates) waives all right to trial by jury in any action, proceeding or
counterclaim (whether based upon contract, tort or otherwise) in any way arising
out of or relating to this Agreement. The Company agrees that a final judgment
in any such action, proceeding or counterclaim brought in any such court shall
be conclusive and binding upon the Company and may be enforced in any other
courts in the jurisdiction of which the Company is or may be subject, by suit
upon such judgment.
-31-
13. Parties at Interest. The Agreement herein set forth has been and
-------------------
is made solely for the benefit of the Underwriters, the Company and to the
extent provided in Section 9 hereof the controlling persons, directors and
officers referred to in such Section, and their respective successors, assigns,
heirs, pursuant representatives and executors and administrators. No other
person, partnership, association or corporation (including a purchaser, as such
purchaser, from any of the Underwriters) shall acquire or have any right under
or by virtue of this Agreement.
14. Counterparts. This Agreement may be signed by the parties in one
------------
or more counterparts which together shall constitute one and the same agreement
among the parties.
15. Successors and Assigns. This Agreement shall be binding upon the
----------------------
Underwriters and the Company and their successors and assigns and any successor
or assign of any substantial portion of the Company's and any of the
Underwriters' respective businesses and/or assets.
16. Miscellaneous. UBS Warburg LLC, an indirect, wholly owned
-------------
subsidiary of UBS AG, is not a bank and is separate from any affiliated bank,
including any U.S. branch or agency of UBS Warburg LLC. Because UBS Warburg LLC
is a separately incorporated entity, it is solely responsible for its own
contractual obligations and commitments, including obligations with respect to
sales and purchases of securities. Securities sold, offered or recommended by
UBS Warburg LLC are not deposits, are not insured by the Federal Deposit
Insurance Corporation, are not guaranteed by a branch or agency, and are not
otherwise an obligation or responsibility of a branch or agency.
A lending affiliate of UBS Warburg LLC may have lending relationships
with issuers of securities underwritten or privately placed by UBS Warburg LLC.
To the extent required under the securities laws, prospectuses and other
disclosure documents for securities underwritten or privately placed by UBS
Warburg LLC will disclose the existence of any such lending relationships and
whether the proceeds of the issue will be used to repay debts owed to affiliates
of UBS Warburg LLC.
-32-
If the foregoing correctly sets forth the understanding among the
Company and the Underwriters, please so indicate in the space provided below for
the purpose, whereupon this letter and your acceptance shall constitute a
binding agreement among the Company and the Underwriters, severally.
Very truly yours,
Medallion Financial Corp.
By:
----------------------------
Name:
Title:
Accepted and agreed to as of the date
first above written, on behalf of them-
selves and the other several Underwrit-
ers named in Schedule A
UBS WARBURG LLC
U.S. BANCORP XXXXX XXXXXXX INC.
As Representatives of the Underwriters
c/o UBS Warburg
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
By: UBS WARBURG LLC
By:
-------------------------
Name:
Title:
By: U.S. BANCORP XXXXX XXXXXXX INC.
By:
-------------------------
Name:
Title:
SCHEDULE A
Number of
Underwriter Firm Shares
----------- -----------
UBS WARBURG LLC
U.S. BANCORP XXXXX XXXXXXX INC.
--------------------
Total....................
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