Exhibit 1.3
1,500,000 SHARES OF COMMON STOCK
1,500,000 SHARES OF PREFERRED STOCK
GRAND COURT LIFESTYLES, INC.
AGREEMENT AMONG UNDERWRITERS
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February __, 1997
NATIONAL SECURITIES CORPORATION
As Representatives of the
several Underwritten named
in Schedule A to Exhibit A
annexed hereto
0000 Xxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxxxx 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 1,200,000 shares (the "Shares") of
common stock, $.01 par value (the "Common Stock"), of the
Company, the sale by certain Selling Stockholders (as defined in
the Underwriting Agreement) of 300,000 shares of Common Stock
(the "Stockholder Shares"), and the sale by the Company of
1,500,000 shares of __ % Senior Convertible Redeemable Preferred
Stock (the "Preferred Shares"), $.0001 par value (the "Preferred
Stock"), of the Company. The Shares, Stockholder Shares, and
Preferred Shares shall be referred to collectively as the "Firm
Securities." In addition, the Company has agreed to grant to the
Underwriters an option to purchase up to an additional 180,000
shares of Common Stock and 225,000 shares of the Preferred Stock
and the Selling Stockholders have agreed to grant to the
Underwriters an option to purchase an additional 45,000 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 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
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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 an
additional 150,000 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
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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 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 and Retail Sales. We
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authorize you to reserve for offering and sale, and on our behalf
to sell, to retail purchasers (such sales being herein called
"Retail Sales") and 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 (a) in the case of Retail Sales, at the Offering Price,
and (b) in the case of sales to Selected Dealers, at the Offering
Price less such concession or concessions as you, in your sole
discretion, shall determine. Except for such sales as are
designated by a purchaser to be for the account of a particular
Underwriter or Selected Dealer, 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
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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
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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
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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 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.
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
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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 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
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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
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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 from the Company, pursuant to the option
contained in Section 3 the Underwriting Agreement or otherwise.
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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
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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,
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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.
In the event that you effect any stabilizing purchases
pursuant to this Section 5, you will notify each Underwriter
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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 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.
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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
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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
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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
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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 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
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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
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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
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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.
9. Open Market Transactions. We represent and agree that
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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 Rule 10b-6 under the 0000 Xxx) of our
participation in the distribution, we will otherwise comply with
Rule 10b-6.
10. Delivery and Payment. Upon your request, we shall
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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 and retail
purchasers as payment in respect of Securities sold by you for
our account pursuant to Section 3 hereof for which payment has
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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
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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 in Retail Sales or 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 yet
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.
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
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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,
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the second paragraph and the first sentence of the third
paragraph of Section 3, Section 4, the first sentence of Section
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5 and Section 9 hereof will terminate at the close of business on
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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 not to exceed 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,
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etc.
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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 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
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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 on 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
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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
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(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
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of the Underwriting Agreement or otherwise. There 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
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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 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
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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
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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 Prospectus. 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
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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 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
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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
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from us to you shall be deemed to have been duly given if sent by
registered mail, telegram or teletype, to us at our address as
set forth in our Underwriter's Questionnaire previously delivered
to you, or to you National Securities Corporation, West 000
Xxxxxxxxx Xxxxxx, Xxxxx 000, Xxxxxxx, Xxxxxxxxxx 00000,
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
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agree to comply with the provisions of Section 24 of Article III
the Rules of Fair Practice of the NASD, 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 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. 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.
Please confirm that the foregoing correctly states the
understanding between us by signing and returning to us a
counterpart hereof.
Very truly yours,
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Name: Xxxxxx X. Xxxxxxxxx
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:
NATIONAL SECURITIES CORPORATION
As Representative of
the several Underwriters
By:
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Name: Xxxxxx X. Xxxxxxxxx
Title: Chairman
