1,250,000 Shares of Common Stock
PMCC FINANCIAL CORP.
UNDERWRITING AGREEMENT
_____________, 1997
Xxxxxxx and Company Securities, Inc.
As Representative of the several
Underwriters named in Schedule I
attached hereto
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Gentlemen:
The undersigned, PMCC Financial Corp., a Delaware corporation (the
"Company"), hereby confirms its agreement with Xxxxxxx and Company Securities,
Inc. (individually, "Xxxxxxx," and, as representative (the "Representative") of
the several underwriters named in Schedule I hereto (the "Underwriters")), and
the Underwriters as follows:
1. Introduction.
(a) The Company proposes to issue and sell to the Underwriters an
aggregate of 1,250,000 shares of common stock, par value $.01 per share, of the
Company (the "Common Stock"). Such shares of Common Stock are hereinafter
referred to as the "Firm Stock".
(b) Solely for the purpose of covering over-allotments, if any, the
Company proposes to grant to Xxxxxxx, individually and not as Representative, an
option (the "Company Over-allotment Option") to purchase from it, in the
aggregate, up to an additional 187,500 shares of Common Stock. Such shares of
Common Stock are hereinafter referred to as the "Additional Stock." The Firm
Stock and the Additional Stock are hereinafter referred to as the "Stock."
(c) The Company proposes to sell to Xxxxxxx, individually and not as
Representative, warrants (the "Representative's Warrants") to purchase up to an
aggregate of 125,000 shares of Common Stock (the "Warrant Shares") for an
aggregate purchase price of $_________. The Representative's Warrants shall be
substantially in the form filed as an exhibit to the Registration Statement (as
hereinafter defined). The Representative's Warrants and the Warrant Shares are
hereinafter referred to collectively as the "Representative's Securities." The
Stock and the Representative's Securities are hereinafter referred to
collectively as the "Securities."
2. Representations and Warranties. The Company represents and warrants
to, and agrees with, the several Underwriters that:
(a) The Company has filed with the Securities and Exchange
Commission (the "Commission") a registration statement on Form S-1 (Registration
No. 333-_______), and may have filed one or more amendments thereto and a Rule
462(b) Registration Statement (as hereinafter defined) in accordance with Rule
462(b) under the Securities Act, including in such registration statement and
each such amendment a related preliminary prospectus, for the registration of
the Securities under the Securities Act of 1933, as amended (the "Securities
Act"). As used in this Agreement, the term "Registration Statement" shall refer
to such registration statement referred to in the first sentence of this Section
2(a), as amended, on file with the Commission at the time such registration
statement is declared by the Commission to be effective under the Securities Act
(including the prospectus, financial statements, and exhibits filed as a part
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thereof, provided, however, that such registration statement, at the time it is
declared by the Commission to be effective under the Securities Act, may omit
such information as is permitted to be omitted from such registration statement
when it becomes effective under the Securities Act pursuant to Rule 430A of the
General Rules and Regulations of the Commission under the Securities Act (the
"Regulations"), which information (the "Rule 430A Information") shall be deemed
to be included in such registration statement when a final prospectus is filed
with the Commission in accordance with Rules 430A and 424(b)(1) or (4) of the
Regulations and includes any Rule 462(b) Registration Statement); the term
"Preliminary Prospectus" shall refer to each prospectus included in the
Registration Statement, or any amendments thereto, before the Registration
Statement is declared by the Commission to be effective under the Securities
Act, the form of prospectus omitting Rule 430A Information included in the
Registration Statement when the Registration Statement becomes effective under
the Securities Act, if applicable (the "Rule 430A Prospectus"), and any
prospectus filed by the Company with the consent of the Representative pursuant
to Rule 424(a) of the Regulations; and the term "Prospectus" shall refer to the
final prospectus forming a part of the Registration Statement in the form first
filed with the Commission pursuant to Rule 424(b)(1) or (4) of the Regulations
or, if no such filing is required, the form of final prospectus forming a part
of the Registration Statement. As used in this Agreement, the term "Rule 462(b)
Registration Statement" means the registration statement and any amendments
thereto filed pursuant to Rule 462(b) of the Regulations relating to the
offering covered by the Initial Registration Statement.
(b) When the Registration Statement becomes effective under
the Securities Act, and at all times subsequent thereto up to and including
the Closing Date (as defined in Section 3(a)
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hereof) and each Additional Closing Date (as defined in Section 3(b) hereof),
and during such longer period as the Prospectus may be required to be delivered
in connection with sales by the Underwriters or a dealer, and during such longer
period until any post-effective amendment thereto shall become effective under
the Securities Act, the Registration Statement (and any post-effective amendment
thereto) and the Prospectus (as amended or as supplemented if the Company shall
have filed with the Commission any amendment or supplement to the Registration
Statement or the Prospectus) will contain all statements which are required to
be stated therein in accordance with the Securities Act and the Regulations,
will comply with the Securities Act and the Regulations, and will not contain
any untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements therein not
misleading, and no event will have occurred which should have been set forth in
an amendment or supplement to the Registration Statement or the Prospectus which
has not then been set forth in such an amendment or supplement; if a Rule 430A
Prospectus is included in the Registration Statement at the time it is declared
by the Commission to be effective under the Securities Act, the Prospectus filed
pursuant to Rules 430A and 424(b)(1) or (4) of the Regulations will contain all
Rule 430A Information and all statements which are required to be stated therein
in accordance with the Securities Act or the Regulations, will comply with the
Securities Act and the Regulations, and will not contain any untrue statement of
a material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein not misleading; and each Preliminary
Prospectus, as of the date filed with the Commission, contained all statements
required to be stated therein in accordance with the Securities Act and the
Regulations, complied with the Securities Act and the Regulations, and did not
contain any untrue statement of a material fact or omit to state any
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material fact required to be stated therein or necessary to make the statements
therein not misleading; except that no representation or warranty is made in
this Section 2(a)(2) with respect to statements or omissions made in reliance
upon, and in conformity with, written information furnished to the Company as
stated in Section 8(b) with respect to any Underwriter by, or on behalf of, such
Underwriter through the Representative expressly for inclusion in the
Registration Statement, any Preliminary Prospectus, or the Prospectus, or any
amendment or supplement thereto.
(c) Neither the Commission nor the "blue sky" or securities
authority of any jurisdiction has issued an order (a "Stop Order") suspending
the effectiveness of, or preventing or suspending the use of, the Registration
Statement, any Preliminary Prospectus, the Prospectus, or any amendment or
supplement thereto, refusing to permit the effectiveness of the Registration
Statement, or suspending the registration or qualification of the Securities nor
has any of such authorities instituted or threatened to institute any
proceedings with respect to a Stop Order.
(d) Any contract, agreement, instrument, lease, or license required
to be described in the Registration Statement or the Prospectus has been
properly described therein. Any contract, agreement, instrument, lease, or
license required to be filed as an exhibit to the Registration Statement has
been filed with the Commission as an exhibit to the Registration Statement.
(e) The following corporations are the only subsidiaries (as defined
in the Regulations) of the Company: Premier Mortgage Co., a New York
corporation, ______________ (collectively, the "Subsidiaries"). The Company and
each of the Subsidiaries is a corporation duly organized, validly existing, and
in good standing under the laws of its respective jurisdiction of incorporation,
with full power and authority, and all necessary consents, authorizations,
approvals,
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orders, licenses, certificates, and permits of and from, and declarations and
filings with, all federal, state, local, and other governmental authorities and
all courts and other tribunals, to own, lease, license, and use its properties
and assets and to conduct its business in the manner described in the
Prospectus. The Company and each Subsidiary is duly qualified to do business as
a foreign corporation and is in good standing as such in every jurisdiction in
which its ownership, leasing, licensing, or use of property and assets or the
conduct of its business makes such qualification necessary, except where the
failure to so qualify will not have a material adverse effect on the Company's
business, properties, or financial condition on a consolidated basis.
(f) The authorized capital stock of the Company consists of
20,000,000 shares of Common Stock, of which 2,500,000 shares are outstanding,
and 1,000,000 shares of preferred stock, par value $.01 per share, of which none
are outstanding. Each outstanding share of Common Stock is validly authorized
and issued, fully paid, and nonassessable, without any personal liability
attaching to the ownership thereof, has not been issued and is not owned or held
in violation of any preemptive or similar rights of shareholders. Each share of
capital stock of each Subsidiary is owned of record and beneficially by the
Company. There is no commitment, plan, or arrangement to issue, and no
outstanding option, warrant, or other right calling for the issuance of, any
share of capital stock of the Company or any Subsidiary or any security or other
instrument which by its terms is convertible into, or exercisable or
exchangeable for, capital stock of the Company, except as may be properly
described in the Prospectus. There is outstanding no security or other
instrument which by its terms is convertible into, or exercisable or
exchangeable for, capital stock of the Company or any Subsidiary, except as may
be properly described in the Prospectus. The certificates evidencing the Common
Stock are in due and proper form.
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(g) The consolidated financial statements of the Company included in
the Registration Statement and the Prospectus fairly present, with respect to
the Company, the financial position, the results of operations, the cash flows,
and the other information purported to be shown therein at the respective dates
and for the respective periods to which they apply. Such consolidated financial
statements have been prepared in accordance with generally accepted accounting
principles (except to the extent that certain footnote disclosures regarding any
stub period may have been omitted in accordance with the applicable rules of the
Commission under the Securities Exchange Act of 1934, as amended (the "Exchange
Act")) consistently applied throughout the periods involved, are correct and
complete in all material respects, and are in accordance with the books and
records of the Company. KPMG Peat Marwick, the accountants whose report on the
audited consolidated financial statements for the years ended and at December
31, 1995 and 1996, is filed with the Commission as a part of the Registration
Statement, Xxxxxxxx & Xxxxxxxx, the accountants whose report on the audited
consolidated financial statements for the years ended and at December 31, 1993
and 1994 is filed with the Commission as a part of the Registration Statement,
and Fein & Fein, the accountants whose report on the audited consolidated
financial statements for the year ended and at December 31, 1992 and 1996, is
filed with the Commission as a part of the Registration Statement, each are, and
during the periods covered by their reports included in the Registration
Statement and the Prospectus were, independent certified public accountants with
respect to the Company within the meaning of the Securities Act and the
Regulations. No other financial statements are required by Form S-1 or otherwise
to be included in the Registration Statement or the Prospectus. There has at no
time been a material adverse change in the financial condition, results of
operations, business, properties, assets, liabilities, or
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future prospects of the Company on a consolidated basis from the latest
information set forth in the Registration Statement or the Prospectus, except as
may be properly described in the Prospectus.
(h) There is no litigation, arbitration, claim, governmental or
other proceeding (formal or informal), or investigation pending, threatened, or,
to the best knowledge of the Company, in prospect (or any basis therefor) with
respect to the Company, any Subsidiary, or any of their respective operations,
businesses, properties, or assets, except as may be properly described in the
Prospectus or such as individually or in the aggregate do not now have, and will
not in the future have, a material adverse effect upon the financial condition,
results of operations, business, properties, assets, liabilities, or future
prospects of the Company and the Subsidiaries taken as a whole. To the best
knowledge of the Company, neither the Company nor any Subsidiary is in violation
of, or in default with respect to, any law, rule, regulation, order, judgment,
or decree, except as may be properly described in the Prospectus or such as in
the aggregate do not now have, and will not in the future have, a material
adverse effect upon the operations, business, properties, or assets of the
Company and the Subsidiaries taken as a whole; nor is the Company or any
Subsidiary currently required to take any action in order to avoid any such
violation or default.
(i) The Company and each Subsidiary has good and marketable title to
all properties and assets which the Prospectus indicates are owned by it, free
and clear of all liens, security interests, pledges, charges, encumbrances, and
mortgages, except as may be properly described in the Prospectus or as are not
material to the Company and the Subsidiaries taken as a whole. No real property
owned, leased, licensed, or used by the Company or any Subsidiary lies in an
area which is, or to the knowledge of the Company will be, subject to zoning,
use, or building code restrictions which would prohibit, and no state of facts
relating to the actions or inaction of
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another person or entity or his or its ownership, leasing, licensing, or use of
any real or personal property exists or will exist which would prevent, the
continued effective ownership, leasing, licensing, or use of such real property
in the business of the Company and the Subsidiaries, each as presently conducted
or as the Prospectus indicates it contemplates conducting, except as may be
properly described in the Prospectus.
(j) Neither the Company or any Subsidiary nor, to the knowledge of
the Company, any other party, is now, or is expected by the Company to be, in
violation or breach of, or in default with respect to, any provision of any
contract, agreement, instrument, lease, license, arrangement, or understanding
which is material to the Company and the Subsidiaries taken as a whole, and each
such contract, agreement, instrument, lease, license, arrangement, and
understanding is in full force and effect and is the legal, valid, and binding
obligation of the parties thereto and is enforceable as to them in accordance
with its respective terms. The Company and each Subsidiary enjoys peaceful and
undisturbed possession under all leases and licenses under which it is
operating. Except as described in the Prospectus, neither the Company nor any
Subsidiary is a party to, or bound by, any contract, agreement, instrument,
lease, license, arrangement, or understanding, or subject to any charter or
other restriction, which has had, or may in the future have, a material adverse
effect on the financial condition, results of operations, business, properties,
assets, liabilities, or future prospects of the Company and the Subsidiaries
taken as a whole. Neither the Company nor any Subsidiary is in violation or
breach of, or in default with respect to, any term of its respective certificate
of incorporation (or other charter document) or by-laws.
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(k) The Company and each Subsidiary owns or possesses adequate
rights to use all patents, patent rights, inventions, trade secrets, licenses,
know-how, proprietary techniques, including processes and substances,
trademarks, service marks, trade names, and copyrights described or referred to
in the Prospectus as owned or used by it or which are necessary for the conduct
of its business as currently conducted as described in the Prospectus and, to
the best knowledge of the Company, its business as contemplated as described in
the Prospectus. To the best knowledge of the Company, all such patents, patent
rights, licenses, trademarks, service marks, and copyrights are (i) valid and
enforceable, (ii) not being infringed by any third parties which infringement
could, singly or in the aggregate, materially and adversely affect the business,
properties, operations, condition (financial or otherwise), results of
operations, income, or business prospects of the Company and the Subsidiaries
taken as a whole, as presently being conducted or as proposed to be conducted as
described in the Prospectus, and (iii) are uncontested by any third party. The
Company has no knowledge of, nor has it received any notice of, infringement of,
or conflict with, asserted rights of others with respect to any patents, patent
rights, inventions, trade secrets, licenses, know-how, proprietary techniques,
including processes and substances, trademarks, service marks, trade names, or
copyrights which, singly or in the aggregate, if the subject of an unfavorable
decision, ruling, or finding could materially and adversely affect the business,
properties, operations, condition (financial or otherwise), results of
operations, income, or business prospects of the Company and the Subsidiaries
taken as a whole, as presently being conducted or as proposed to be conducted as
described in the Prospectus.
(l) Neither the Company or any Subsidiary, nor, to the best
knowledge of the Company, any director, officer, agent, employee, or other
person associated with, or acting on
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behalf of, the Company or any Subsidiary, has, directly or indirectly: used any
corporate funds for unlawful contributions, gifts, entertainment, or other
unlawful expenses relating to political activity; made any unlawful payment to
foreign or domestic government officials or employees or to foreign or domestic
political parties or campaigns from corporate funds; violated any provision of
the Foreign Corrupt Practices Act of 1977, as amended; or made any bribe,
rebate, payoff, influence payment, kickback, or other unlawful payment. The
Company's internal accounting controls and procedures are sufficient to cause
the Company and each of the Subsidiaries to comply in all respects with the
Foreign Corrupt Practices Act of 1977, as amended.
(m) The Company has all requisite power and authority to execute,
deliver, and perform each of this Agreement and the Representative's Warrants.
All necessary corporate proceedings of the Company have been duly taken to
authorize the execution, delivery, and performance by the Company of this
Agreement and the Representative's Warrants. This Agreement has been duly
authorized, executed, and delivered by the Company, is the legal, valid, and
binding obligation of the Company. The Representative's Warrants have been duly
authorized by the Company and, when executed and delivered by the Company, will
be legal, valid, and binding obligations of the Company, each enforceable as to
the Company in accordance with its terms. No consent, authorization, approval,
order, license, certificate, or permit of or from, or declaration or filing
with, any federal, state, local, or other governmental authority or any court or
other tribunal is required by the Company or any Subsidiary for the execution,
delivery, or performance by the Company of this Agreement or the
Representative's Warrants, except filings under the Securities Act which have
been or will be made before the Closing Date, and consents consisting only of
consents under "blue sky" or securities laws which have been obtained at or
prior
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to the date of this Agreement. No consent of any party to any contract,
agreement, instrument, lease, license, arrangement, or understanding to which
the Company or any Subsidiary is a party, or to which any of their respective
properties or assets are subject, is required for the execution, delivery, or
performance of this Agreement and the Representative's Warrants; and the
execution, delivery, and performance of this Agreement and the Representative's
Warrants will not violate, result in a breach of, conflict with, result in the
creation or imposition of any lien, charge, or encumbrance upon any properties
or assets of the Company or any Subsidiary pursuant to the terms of, or, with or
without the giving of notice or the passage of time or both, entitle any party
to terminate or call a default under, any such contract, agreement, instrument,
lease, license, arrangement, or understanding, or violate, result in a breach
of, or conflict with any term of the certificate of incorporation (or other
charter document) or by-laws of the Company, or violate, result in a breach of,
or conflict with, any law, rule, regulation, order, judgment, or decree binding
on the Company or any Subsidiary or to which any of their respective operations,
businesses, properties, or assets are subject.
(n) The Firm Stock is validly authorized and, when issued and
delivered in accordance with this Agreement, will be validly issued, fully paid,
and nonassessable, without any personal liability attaching to the ownership
thereof, and will not be issued in violation of any preemptive or similar rights
of shareholders, and the Underwriters will receive good title to the shares of
Firm Stock purchased by them, respectively, free and clear of all liens,
security interests, pledges, charges, encumbrances, shareholders' agreements,
and voting trusts. The Additional Stock is validly authorized and, when issued
in accordance with the terms hereof, will validly issued, fully paid, and
nonassessable, without any personal liability attaching to the ownership
thereof, and will
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not issued in violation of any preemptive or similar rights of shareholders. The
Company Additional Stock has been duly and validly reserved for issuance. The
Stock conforms to all statements relating thereto contained in the Registration
Statement and the Prospectus.
(o) The Warrant Stock is validly authorized and has been duly and
validly reserved for issuance and, when issued and delivered upon exercise of
the Representative's Warrants in accordance with the terms thereof, will be
validly issued, fully paid, and nonassessable, without any personal liability
attaching to the ownership thereof, and will not be issued in violation of any
preemptive or similar rights of shareholders; and the holders of the
Representative's Warrants will receive good title to the securities purchased by
them upon the exercise of the Representative's Warrants, free and clear of all
liens, security interests, pledges, charges, encumbrances, shareholders'
agreements, and voting trusts. The Representative's Securities conform to all
statements relating thereto contained in the Registration Statement and the
Prospectus.
(p) Subsequent to the respective dates as of which information is
given in the Registration Statement and the Prospectus, and except as may
otherwise be properly described in the Prospectus, neither the Company nor any
Subsidiary has (i) issued any securities or incurred any material liability or
material obligation, primary or contingent, for borrowed money, (ii) entered
into any material transaction not in the ordinary course of business, (iii)
declared or paid any dividend on its capital stock, except dividends by a
Subsidiary to the Company or another Subsidiary, or (iv) experienced any adverse
changes or any development which may materially adversely effect the condition
(financial or otherwise), net assets or shareholders' equity, results of
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operations, business, key personnel, assets, or properties of the Company and
the Subsidiaries taken as a whole.
(q) Neither the Company or any Subsidiary nor any of their
respective officers, directors, or affiliates (as defined in the Regulations),
has taken or will take, directly or indirectly, prior to the termination of the
offering contemplated by this Agreement, any action designed to stabilize or
manipulate the price of any security of the Company, or which has 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, to facilitate the sale or resale of any of the Firm Stock or the
Additional Stock.
(r) The Company has obtained from each of its directors, officers,
and shareholders a written agreement, in form and substance satisfactory to
counsel for the Underwriters, that, for a period of _____ months from the date
on which the Registration Statement is declared by the Commission to be
effective under the Securities Act, he, she, or it will not, without the prior
written consent of the Representative, publicly offer, pledge, sell, contract to
sell, grant any option for the sale of, or otherwise dispose of, directly or
indirectly, any shares of Common Stock or any security or other instrument which
by its terms is convertible into, or exercisable or exchangeable for, shares of
Common Stock or other securities of the Company, including, without limitation,
any shares of Common Stock issuable pursuant to the terms of any employee stock
options; provided, however, that such persons may offer, sell, contract to sell,
grant an option for the sale of, or otherwise dispose of all or any part of his,
her, or its shares of Common Stock or other such security or instrument of the
Company during such period if such transaction is private in nature and the
transferee of such shares of Common Stock or other securities or
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instruments agrees, prior to such transaction, to be bound by all of the
provisions of such agreement.
(s) The Company is not, and does not intend to conduct its business
in a manner in which it would be required to register as, an "investment
company" as defined in the Investment Company Act of 1940, as amended (the
"Investment Company Act"), and the rules and regulations promulgated thereunder.
(t) No person or entity has the right to require registration of
shares of Common Stock or other securities of the Company because of the filing
or effectiveness of the Registration Statement, which right has not been waived.
(u) Except as may be set forth in the Prospectus, the Company has
not incurred any liability for a fee, commission, or other compensation on
account of the employment of a broker or finder in connection with the
transactions contemplated by this Agreement.
(v) Neither the Company or any Subsidiary, nor any of their
respective affiliates, is presently doing business with the government of Cuba
or with any person or affiliate located in Cuba. If, at any time after the date
on which the Registration Statement is declared by the Commission to be
effective under the Securities Act or with the Florida Department of Banking and
Finance (the "Florida Department"), whichever is later, and prior to the end of
the period referred to in the first clause of Section 2(b) hereof, the Company
and any Subsidiary commences engaging in business with the government of Cuba or
with any person or affiliate located in Cuba, the Company will so inform the
Florida Department within 90 days after such commencement of business in Cuba,
and, during the period referred to in Section 2(2) hereof, will inform the
Florida Department within 90 days after any change occurs with respect to
previously reported information.
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(w) No officer, director, or shareholder of the Company has any
affiliation or association with the National Association of Securities Dealers,
Inc. (the "NASD") or any member thereof.
(x) Except as disclosed in the Prospectus, the Company and each of
the Subsidiaries has filed all necessary federal, state, local, and foreign
income and franchise tax returns and other reports required to be filed and has
paid all taxes shown as due thereon; and there is no tax deficiency which has
been, or, to the knowledge of the Company, might be, asserted against the
Company or any Subsidiary.
(y) To the best knowledge of the Company, none of the activities or
business of the Company or any Subsidiary is in violation of, or will cause the
Company or any Subsidiary to violate, any law, rule, regulation, or order of the
United States, any state, county, or locality, or of any agency or body of the
United States or of any state, county, or locality, the violation of which would
have a material adverse effect upon the financial condition, results of
operations, business, properties, assets, liabilities, or future prospects of
the Company and the Subsidiaries taken as a whole.
(z) The Common Stock has been approved for quotation on the American
Stock Exchange (the "AMEX").
3. Purchase, Sale, and Delivery of the Stock and the Representative's
Warrants.
(a) On the basis of the representations, warranties, covenants, and
agreements of the Company herein contained, but subject to the terms and
conditions herein set forth, the Company agrees to issue and sell to the several
Underwriters, and, the Underwriters, severally and
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not jointly, agree to purchase from the Company, the numbers of shares of Firm
Stock set forth opposite the respective names of the Underwriters in Schedule I
hereto.
The purchase price per share of the Firm Stock to be paid by the
several Underwriters shall be $__________. The initial public offering price per
share of the Firm Stock shall be $_________.
Payment for the Firm Stock by the Underwriters shall be made by
certified or official bank check in New York Clearing House (next day) funds or
by electronic wire transfer of next day funds, payable to the order of the
Company, at the offices of Xxxxxxx and Company Securities, Inc., 000 Xxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, or at such other place in the New York City
metropolitan area as the Representative shall determine and advise the Company
by at least two full days' notice in writing, upon delivery of the Firm Stock to
the Representative for the respective accounts of the Underwriters. Such
delivery and payment shall be made at 9:00 a.m., New York City local time, on
the third business day following the time of the initial public offering, as
defined in Section 11(a) hereof (unless such time and date is postponed in
accordance with the provisions of Section 9(c) hereof), or at such other time as
shall be agreed upon between the Representative and the Company. The time and
date of such delivery and payment are hereinafter referred to as the "Closing
Date."
Certificates representing the Firm Stock shall be registered in such
name or names and in such authorized denominations as the Representative may
request in writing at least two full business days prior to the Closing Date.
The Company shall permit the Representative to examine and package such
certificates for delivery at least one full business day prior to the Closing
Date.
(b) The Company hereby grants to the Underwriters' the
Over-allotment Option to purchase up to 187,500 shares of Common Stock, as may
be necessary to cover over-allotments,
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at the same purchase price per share to be paid by the several Underwriters to
the Company for the Firm Stock as provided for in this Section 3 hereof. The
Over-allotment Options may be exercised only to cover over-allotments in the
sale of shares by Underwriters' and shall be exercised pro rata to the numbers
of shares of Common Stock set forth opposite the names of such Underwriters in
Schedule I hereto. The Over-allotment Option may be exercised by the
Underwriters on the basis of the representations, warranties, covenants, and
agreements of the Company herein contained, but subject to the terms and
conditions herein set forth, at any time and from time to time on or before the
forty-fifth day following the date on which the Registration Statement becomes
effective under the Securities Act, by written notice by the Representative to
the Company. Such notice shall set forth the aggregate number of shares of
Additional Stock as to which the Over-allotment Option is being exercised, the
name or names in which the certificates representing the Additional Stock are to
be registered, the authorized denominations in which the Additional Stock is to
be registered, and the time and date, as determined by the Representative, when
such shares of Additional Stock are to be delivered (each such time and date are
hereinafter referred to as an "Additional Closing Date"); provided, however,
that no Additional Closing Date shall be earlier than the Closing Date nor
earlier than the second business day after the date on which the notice of the
exercise of the Over-allotment Option shall have been given nor later than the
eighth business day after the date on which such notice shall have been given.
In the event the Company declares or pays a dividend or a
distribution on the Common Stock, whether in the form of cash, shares of Common
Stock, or other consideration, prior to the Additional Closing Date, such
dividend or distribution shall also be paid on the Additional Stock
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on the later of the Additional Closing Date and the date on which such dividend
or distribution is payable.
Payment for the shares of Additional Stock by the Underwriters shall be
made by certified or official bank check in New York Clearing House (next day)
funds or by electronic wire transfer of next day funds payable to the order of
the Company at the offices of Xxxxxxx and Company Securities, Inc., 000 Xxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, or at such other place in the New York City
metropolitan area as the Representative shall determine and advise the Company
by at least two full days' notice in writing, upon delivery of the shares of
Additional Stock to the Underwriters= for their respective accounts.
Certificates for the shares of Additional Stock shall be registered in
such name or names and in such authorized denominations as the Representative
may request in writing at least two full business days prior to the Additional
Closing Date with respect thereto. The Company shall permit the Representative
to examine and package such certificates for delivery at least one full business
day prior to the Additional Closing Date with respect thereto.
(c) The Company hereby agrees to issue and sell to the
Representative (individually and not as representative of the several
Underwriters) and/or its designees on the Closing Date the Representative's
Warrants to purchase the Warrant Shares for an aggregate purchase price of
$100.00.
Delivery and payment for the Representative's Warrants shall be made on
the Closing Date. The Company shall deliver to the Representative upon payment
therefor, certificates representing the Representative's Warrants in the name or
names and in such authorized denominations as Hampshire may request. The
Representative's Warrants shall be exercisable for a period of four
-19-
years commencing one year from the date on which the Registration Statement was
declared effective under the Securities Act at an initial exercise price per
Warrant Share equal to $_____________.
(d) It is understood that the the Representative may (but shall not
be obligated to) make any and all the payments required pursuant to this Section
3 on behalf of any Underwriters whose check or checks shall not have been
received by the Representative at the time of delivery of the Stock to be
purchased by such Underwriter or Underwriters. Any such payment by the
Representative shall not relieve any such Underwriter or Underwriters of any of
its or their obligations hereunder.
4. Offering. The Underwriters are to make a public offering of the Firm
Stock as soon, on or after the date on which the Registration Statement becomes
effective under the Securities Act, as the Representative deems it advisable so
to do. The Firm Stock is to be initially offered to the public at the initial
public offering price as provided for in Section 3(a) (such price being
hereinafter referred to as the "public offering price"). After the initial
public offering, the Representative may from time to time increase or decrease
the public offering price, in the sole discretion of the Representative, by
reason of changes in general market conditions or otherwise.
5. Covenants. The Company covenants that it will:
(a) Use its best efforts to cause the Registration Statement to
become effective under the Securities Act as promptly as possible and notify the
Representative and counsel to the Underwriters immediately, and confirm such
notice in writing, (i) when the Registration Statement and any post-effective
amendment thereto become effective under the Securities Act, (ii) of the receipt
of any comments from the Commission or the "blue sky" or securities authority of
any
-20-
jurisdiction regarding the Registration Statement, any post-effective amendment
thereto, the Prospectus, or any amendment or supplement thereto, (iii) of the
filing with the Commission of any supplement to the Prospectus, and (iv) of the
receipt of any notification with respect to a Stop Order or the initiation or
threatening of any proceeding with respect to a Stop Order. The Company will use
its best efforts to prevent the issuance of any Stop Order and, if any Stop
Order is issued, to obtain the lifting thereof as promptly as possible. If the
Registration Statement has become or becomes effective under the Securities Act
with a form of prospectus omitting Rule 430A Information, or filing of the
Prospectus with the Commission is otherwise required under Rule 424(b) of the
Regulations, the Company will file with the Commission the Prospectus, properly
completed, pursuant to Rule 424(b) of the Regulations within the time period
prescribed and will provide evidence satisfactory to the Representative of such
timely filing.
(b) During the time when a prospectus relating to the Firm Stock or
the Additional Stock is required to be delivered hereunder or under the
Securities Act or the Regulations, comply with all requirements imposed upon it
by the Securities Act, as now existing and as hereafter amended, and by the
Regulations, as from time to time in force, so far as necessary to permit the
continuance of sales of, or dealings in, the Stock in accordance with the
provisions hereof and the Prospectus. If, at any time when a prospectus relating
to the Firm Stock or the Additional Stock is required to be delivered hereunder
or under the Securities Act or the Regulations, any event shall have occurred as
a result of which, in the reasonable opinion of counsel for the Company or
counsel for the Underwriters, the Registration Statement or the Prospectus as
then amended or supplemented contains any untrue statement of a material fact or
omits to state any material fact required to be stated therein or necessary to
make the statements
-21-
therein not misleading, or if, in the opinion of either of such counsel, it is
necessary at any time to amend or supplement the Registration Statement or the
Prospectus to comply with the Securities Act or the Regulations, the Company
will immediately notify the Representative and promptly prepare and file with
the Commission an appropriate amendment or supplement (in form and substance
satisfactory to the Representative and counsel to the Underwriters) which will
correct such statement or omission or which will effect such compliance and will
use its best efforts to have any such amendment declared effective under the
Securities Act as soon as possible.
(c) Deliver without charge to each of the several Underwriters such
number of copies of each Preliminary Prospectus as may reasonably be requested
by the Underwriters and, as soon as the Registration Statement, or any amendment
thereto, becomes effective under the Securities Act or a supplement is filed
with the Commission, deliver without charge to the Representative two signed
copies of the Registration Statement, including exhibits, or such amendment
thereto, as the case may be, and two copies of any supplement thereto, and
deliver without charge to each of the several Underwriters such number of copies
of the Prospectus, the Registration Statement, and amendments and supplements
thereto, if any, without exhibits, as the Representative may reasonably request
for the purposes contemplated by the Securities Act.
(d) Endeavor in good faith, in cooperation with the Representative,
at or prior to the time the Registration Statement becomes effective under the
Securities Act, to qualify the Securities for offering and sale under the "blue
sky" or securities laws of such jurisdictions as may be designated by the
Representative; provided, however, that no such qualification shall be required
in any jurisdiction where, as a result thereof, the Company would be subject to
service of general process or to taxation as a foreign corporation doing
business in such jurisdiction to which it is not
-22-
then subject. In each jurisdiction where such qualification shall be effected,
the Company will, unless the Representative agrees in writing that such action
is not at the time necessary or advisable, file and make such statements or
reports at such times as are or may be required by the laws of such
jurisdiction.
(e) Make generally available, within the meaning of Section 11(a) of
the Securities Act and the Regulations, to its security holders as soon as
practicable, but not later than March 31, 1999, an earnings statement, which
need not be certified by independent certified public accountants unless
required by the Securities Act or the Regulations, but which shall satisfy the
provisions of Section 11(a) of the Securities Act and the Regulations, covering
a period of at least 12 months beginning after the date on which the
Registration Statement was declared effective under the Securities Act.
(f) For a period of 18 months after the date of the Prospectus, not,
without the prior written consent of the Representative, offer, issue, sell,
contract to sell, grant any option for the sale of, or otherwise dispose of,
directly or indirectly, any shares of Common Stock or other securities of the
Company, or any security or other instrument which by its terms is convertible
into, or exercisable or exchangeable for, shares of Common Stock, except as
contemplated by Section 3 hereof and except for (i) the issuance of stock
options, or shares of Common Stock issuable upon the exercise thereof, which
have been or may be granted pursuant to the Company's 1997 Long-Term Incentive
Plan, up to an aggregate of _______ shares of Common Stock, all as properly
described in the Prospectus, (ii) upon the exercise of warrants outstanding on
the date hereof, as properly described in the Prospectus, (iii) the issuance of
shares of Warrant Stock
-23-
issuable upon exercise of the Representative's Warrants, and (iv) the issuance
of shares of Common Stock in connection with an acquisition by the Company.
(g) For a period of five years after the date on which the
Registration Statement was declared effective under the Securities Act furnish
you, without charge, the following:
(1) within 90 days after the end of each fiscal year, one copy
of financial statements certified by independent certified public accountants,
including a balance sheet, statement of income, and statement of changes in cash
flows of the Company and its then existing subsidiaries, if any, with supporting
schedules, prepared in accordance with generally accepted accounting principles,
as at the end of such fiscal year and for the 12 months then ended, which may be
on a consolidated basis;
(2) as soon as practicable after they have been sent to
shareholders of the Company or filed with, or furnished to, the Commission or
the NASD, one copy of each annual and interim financial and other report or
communication sent by the Company to its shareholders or filed with, or
furnished to, the Commission or the NASD;
(3) as soon as practicable, one copy of every press release and
every material news item and article in respect of the Company, any Subsidiary,
or their respective affairs which was released by the Company or any such
Subsidiary; and
(4) such additional documents and information with respect to
the Company, any Subsidiary, and their respective affairs, as the Representative
may from time to time reasonably request; provided, however, that such
additional documents and information shall be received by the Representative on
a confidential basis, unless otherwise disclosed to the public, and shall not be
used in violation of the federal securities laws and the rules and regulations
promulgated thereunder.
-24-
(h) Apply the net proceeds received by the Company from the offering
contemplated by this Agreement in the manner set forth under the heading "Use of
Proceeds" in the Prospectus.
(i) Furnish to the Representative as early as practicable prior to
the Closing Date and each Additional Closing Date, if any, as the case may be,
but not less than two full business days prior thereto, a copy of the latest
available unaudited interim financial statements of the Company which have been
read by the Company's independent certified public accountants, as stated in
their letters to be furnished pursuant to Section 7(f) hereof.
(j) File no amendment or supplement to the Registration Statement or
Prospectus at any time, whether before or after the date on which the
Registration Statement was declared effective under the Securities Act, unless
such filing shall comply with the Securities Act and the Regulations and unless
the Representative shall previously have been advised of such filing and
furnished with a copy thereof, and the Representative shall have approved such
filing in writing. Until the later of (i) the completion by the Underwriters of
the distribution of the Stock (but in no event more than nine months after the
date on which the Registration Statement shall have been declared effective
under the Securities Act) and (ii) 25 days after the date on which the
Registration Statement shall have been declared effective under the Securities
Act, the Company will prepare and file with the Commission, promptly upon the
Representative's request, any amendments or supplements to the Registration
Statement or the Prospectus which, in the sole opinion of the Representative,
may be necessary or advisable in connection with the distribution of the Stock.
-25-
(k) File timely with the Commission an appropriate form to register
the Common Stock, including the Stock, pursuant to Section 12(b) of the Exchange
Act and comply with all registration, filing, and reporting requirements of the
Exchange Act, which may from time to time be applicable to the Company.
(l) Comply with all provisions of all undertakings contained in the
Registration Statement.
(m) Prior to the later of (A) the date referred to in the second
sentence of clause (j) of this Section 5, and (B) any Additional Closing Date,
issue no press release or other communication, directly or indirectly, and hold
no press conference with respect to the Company, the financial condition,
results of operations, business, properties, assets, liabilities of any the
Company or any Subsidiary, or this offering, without the prior written consent
of the Representative.
(n) Make all filings required to maintain the inclusion of the
Common Stock on the American Stock Exchange for a least four years from the date
of this Agreement.
(o) On the Closing Date, sell to the Representative, individually
and not as Representative of the several Underwriters, at the price of $.001 per
warrant, warrants to purchase the Warrant Stock, which Representative's Warrants
shall be substantially in the form set forth as an exhibit to the Registration
Statement.
(p) Until expiration of the Representative's Warrants, keep reserved
sufficient shares of Common Stock for issuance upon exercise of the
Representative's Warrants.
-26-
(q) Deliver to the Representative, without charge, within a
reasonable period after the last Additional Closing Date or the expiration of
the period during which the Representative may exercise the Over-allotment
Options, five sets of leather bound volumes of the Registration Statement and
all related materials to the individuals designated by the Representative or
counsel to the Underwriters.
(r) For a period of three years after the effective date on which
the Registration Statement is declared effective under the Securities Act,
provide, at its sole expense, to the Representative copies of the Company's
daily transfer sheets, if so requested by the Representative.
(s) Maintain key-person life insurance payable to the Company on the
life of Mr. Xxxxxx Xxxxxxxx, the President, Chief Executive Officer, and a
Director of the Company, and Xxxxxx Xxxxxxxx, the Chairman of the Board of
Directors, Chief Financial Officer, and a Director of the Company, in the amount
of at least $3,000,000 and $750,000, respectively, for the period of time equal
to the longer of three years from the date on which the Registration Statement
becomes effective under the Securities Act and the term of the employment
agreement between the Company and such officer.
(t) For a period of three years from the date on which the
Registration Statement becomes effective under the Securities Act, the
Representative shall have the right to designate a director or appoint a
designee as an observer of the Company's Board of Directors. Such director or
observer will have the right to attend all meetings of the Board of Directors.
Such director or observer shall be entitled to receive reimbursement for all
out-of-pocket expenses incurred in attending such meetings, including, but not
limited to, food, lodging, transportation, and any fees paid to directors for
attending meetings. The Representative shall be given notice of such meetings
-27-
at the same time and in the same manner as directors of the Company are
informed. The Representative and such director or observer shall be indemnified
to the same extent as the other directors. The Company will purchase directors
and officers insurance in an amount of not less than $_________, provided,
however, that the Company shall not be required to pay more than $_______ per
year in order to maintain such insurance, and if insurance in such amount is not
available at such cost, the Company shall purchase that amount of such insurance
which is available at a cost of $__________ per year.
6. Payment of Expenses. The Company hereby agrees to pay all expenses
(other than fees of counsel for the Underwriters, except as provided in Section
6(c)) in connection with (a) the preparation, printing, filing, distribution,
and mailing of the Registration Statement and the Prospectus and the printing,
filing, distribution, and mailing of this Agreement and the Agreement Among
Underwriters, any Selected Dealer Agreement and related documents, including the
cost of all copies thereof and of the Preliminary Prospectuses and of the
Prospectus and any amendments or supplements thereto supplied to the
Underwriters in quantities as hereinabove stated, (b) the issuance, sale,
transfer, and delivery (as applicable) of the Securities, including any transfer
or other taxes payable thereon, (c) the qualification of the Securities under
state or foreign "blue sky" or securities laws, including the costs of printing
and mailing the preliminary and final "Blue Sky Survey" and the fees of counsel
for the Underwriters ($_________) and the disbursements in connection therewith,
(d) the filing fees payable to the Commission, the NASD, and the jurisdictions
in which such qualification is sought, (e) any fees relating to the listing of
the Common Stock on the American Stock Exchange and any other stock market or
exchange, (f) the cost of printing certificates representing the shares of
Common Stock, (g) the fees of the transfer
-28-
agent for the Common Stock, (h) the cost of publication of "tombstone"
advertisements with respect to offerings, not to exceed $30,000, and (i) a
non-accountable expense allowance equal to three percent of the gross proceeds
of the sale of the Firm Stock and the Additional Stock (less amounts, if any,
previously paid to the Representative by the Company in respect of such
non-accountable expense allowance) to the Representative on the Closing Date.
Notwithstanding the foregoing, if the offering contemplated hereby should be
terminated, the Company agrees to pay the Representative only the out-of-pocket
expenses incurred by the Underwriters in connection with this Agreement or the
proposed offer, sale, and delivery of the Securities.
7. Conditions of Underwriters' Obligations. The obligations of the
several Underwriters to purchase and pay for the Firm Stock and the Additional
Stock, as provided herein, and the obligation of the Representative,
individually and not as representative of the several Underwriters, to purchase
and pay for the Representative's Warrants, each as provided herein, shall be
subject, in the discretion of the Representative, to the continuing accuracy of
the representations and warranties of the Company contained herein and in each
certificate and document contemplated under this Agreement to be delivered to
the Underwriters, as of the date hereof and as of the Closing Date (or any
Additional Closing Date, as the case may be), to the performance by the Company
of its obligations hereunder, and to the following conditions:
(a) The Registration Statement shall have become effective under the
Securities Act not later than 6:00 P.M., New York City local time, on the date
of this Agreement or such later date and time as shall be consented to in
writing by the Representative; on or prior to the Closing Date, or any
Additional Closing Date, as the case may be, no Stop Order shall have been
issued and no proceeding shall have been initiated or threatened with respect to
a Stop Order; and any request by the Commission for additional information shall
have been complied with by the Company to the reasonable satisfaction of counsel
for the Underwriters. If required, the Prospectus shall have been filed with the
Commission in the manner and within the time period required by Rule 424(b)
under the Securities Act.
-29-
(b) At the Closing Date and any Additional Closing Date, as
the case may be, you shall have received the opinion of Messrs. Ruskin,
Moscou, Xxxxx & Faltischek, P.C., counsel for the Company, dated the date of
delivery, addressed to the Underwriters, and in form and scope satisfactory to
counsel for the Underwriters, with reproduced copies or signed counterparts
thereof for each of the Underwriters, to the effect that:
(1) the only subsidiaries (as defined in the Regulations) of the
Company are the Subsidiaries. Each of the Company and each of the Subsidiaries
is a corporation duly organized, validly existing, and in good standing under
the laws of its respective jurisdiction of incorporation, with full power and
authority, and all necessary consents, authorizations, approvals, orders,
licenses, certificates, and permits of and from, and declarations and filings
with, all federal, state, local, and other governmental authorities and all
courts and other tribunals, to own, lease, license, and use its respective
properties and assets and to conduct its respective business in the manner
described in the Prospectus. Each of the Company and each of the Subsidiaries is
duly qualified to do business as a foreign corporation and is in good standing
as such in every jurisdiction in which its respective ownership, leasing,
licensing, or use of property and assets or the conduct of its business makes
such qualification necessary;
(2) the authorized capital stock of the Company consists of
20,000,000 shares of Common Stock, of which 2,500,000 shares are outstanding,
and 1,000,000 shares
-30-
of preferred stock, par value $.01 per share, of which none is outstanding.
Except as otherwise disclosed in the Prospectus, each outstanding share of
capital stock of each Subsidiary is owned of record and beneficially by the
Company, free and clear of all liens, security interests, pledges, charges,
encumbrances, stockholders' agreements, and voting trusts. Except as disclosed
in the Prospectus, each outstanding share of Common Stock and each share of
capital stock of each Subsidiary is validly authorized and issued, fully paid,
and nonassessable, without any personal liability attaching to the ownership
thereof, has not been issued and is not owned or held in violation of any
preemptive or similar rights of shareholders. To the knowledge of such counsel,
there is no commitment, plan, or arrangement to issue, and no outstanding
option, warrant, or other right calling for the issuance of, any share of
capital stock of the Company or any Subsidiary or any security or other
instrument which by its terms is convertible into, or exercisable or
exchangeable for, capital stock of the Company or any Subsidiary, except as may
be properly described in the Prospectus. Except as otherwise described in the
Prospectus, there is outstanding no security or other instrument which by its
terms is convertible into, or exercisable or exchangeable for, capital stock of
the Company or any Subsidiary. The certificates evidencing the Common Stock are
in due and proper form;
(3) to the knowledge of such counsel, there is no litigation,
arbitration, claim, governmental or other proceeding (formal or informal), or
investigation pending, threatened, or in prospect (or any basis therefor) with
respect to the Company or any Subsidiary or any of their respective operations,
businesses, properties, or assets, except as may be properly described in the
Prospectus or such as individually or in the aggregate do not now have, and will
not in the future have, a material adverse effect upon the operations, business,
properties, or assets of the Company or any Subsidiary. To the knowledge of such
counsel, neither the Company nor any Subsidiary is in violation of, or in
default with respect to, any law, rule, regulation, order, judgment, or decree,
except as may be properly described in the Prospectus or such as in the
aggregate do not now have and will not in the future have a material adverse
effect upon the operations, business, properties, or assets of the Company; nor
is the Company or any Subsidiary required to take any action in order to avoid
any such violation or default;
-31-
(4) to the knowledge of such counsel, neither the Company or any
Subsidiary, nor any other party is now, or is expected by the Company to be, in
violation or breach of, or in default with respect to, any provision of any
contract, agreement, instrument, lease, license, arrangement, or understanding
which is material to the Company, and, to the knowledge of such counsel, each
such contract, agreement, instrument, lease, license, arrangement, or
understanding is in full force and effect and is the valid, legal, and binding
obligation of the parties thereto and is enforceable in accordance with its
terms;
(5) neither the Company nor any Subsidiary is in violation or
breach of, or in default with respect to, any term of its respective certificate
of incorporation (or other charter document) or by-laws;
(6) the Company has all requisite power and authority to
execute, deliver, and perform this Agreement and the Representative's Warrants.
All necessary corporate proceedings of the Company have been taken to authorize
the execution, delivery, and performance by the Company of this Agreement and
the Representative's Warrants. This Agreement has been duly authorized,
executed, and delivered by the Company, is the legal, valid, and binding
obligation of the Company, and, subject to applicable bankruptcy, insolvency,
and other laws affecting the
-32-
enforceability of creditors' rights generally, is enforceable as to the Company
in accordance with its terms. The Representative's Warrants have been duly
authorized by the Company and, when executed and delivered by the Company, will
be legal, valid, and binding obligations of the Company, each enforceable as to
the Company in accordance with its terms. No consent, authorization, approval,
order, license, certificate, or permit of or from, or declaration or filing
with, any federal, state, local, or other governmental authority or any court or
other tribunal is required by the Company or any Subsidiary for the execution,
delivery, or performance by the Company of this Agreement or the
Representative's Warrants, except filings under the Securities Act which have
been made prior to the Closing Date or Additional Closing Date, as the case may
be, and consents consisting only of consents under "blue sky" or securities
laws, which have been obtained. No consent of any party to any contract,
agreement, instrument, lease, license, arrangement, or understanding known to
such counsel to which the Company or any Subsidiary is a party, or to which any
of their respective properties or assets are subject, is required for the
execution, delivery, or performance of this Agreement and the Representative's
Warrants; and the execution, delivery, and performance of this Agreement and the
Representative's Warrants will not violate, result in a breach of, conflict
with, result in the creation or imposition of any lien, charge, or encumbrance
upon any properties or assets of the Company or any Subsidiary pursuant to the
terms of, or, with or without the giving of notice or the passage of time or
both, entitle any party to terminate or call a default under, any such contract,
agreement, instrument, lease, license, arrangement, or understanding known to
such counsel, violate or result in a breach of, or conflict with any term of the
certificate of incorporation (or other charter document) or by-laws of the
Company or such Subsidiary, respectively, or violate, result in a breach of, or
conflict with any law, rule, regulation, order, judgment, or decree binding on
the Company or any Subsidiary to which any of their respective operations,
businesses, properties, or assets are subject;
(7) each share of Firm Stock to be delivered on the Closing Date
is validly authorized and, when issued and delivered in accordance with the
terms hereof, will be validly issued, fully paid, and nonassessable, without any
personal liability attaching to the ownership thereof, and will not issued in
violation of any preemptive or similar rights of shareholders. Each share of
Additional Stock to be delivered on the Closing Date or any Additional Closing
Date, as applicable, is validly authorized and, when issued and delivered in
accordance with the terms hereof, will be validly issued, fully paid, and
nonassessable, without any personal liability attaching to the ownership
thereof, and will not issued in violation of any preemptive or similar rights of
shareholders. The Underwriters will receive good title to the shares of Firm
Stock and Additional Stock purchased by them, respectively, free and clear of
all liens, security interests, pledges, charges, encumbrances, shareholders'
agreements, and voting trusts. The Additional Stock has been duly and validly
reserved for issuance. The Stock conforms to all statements relating thereto
contained in the Registration Statement or the Prospectus;
(8) the Warrant Stock is validly authorized and has been duly
and validly reserved for issuance pursuant to the terms of the Representative's
Warrants. The Representative's Warrants have been duly and validly issued and
delivered. The Warrant Stock, when issued and delivered in accordance with the
Representative's Warrants, will be validly issued, fully paid, and
nonassessable, without any personal liability attaching to the ownership
thereof, and will not have been issued in violation of any preemptive rights of
shareholders. The Representative, and any other holders of the Representative's
Warrants, will receive good title to the securities purchased by them upon
exercise of the Representative's Warrants, free and clear of all liens, security
interests, pledges, charges, encumbrances, shareholders' agreements, and voting
trusts. The Representative's Securities conform to all statements relating
thereto contained in the Registration Statement or the Prospectus;
-33-
(9) to the knowledge of such counsel, each contract, agreement,
instrument, lease, or license required to be described in the Registration
Statement or the Prospectus has been properly described therein, and each
contract, agreement, instrument, lease, or license required to be filed as an
exhibit to the Registration Statement has been filed with the Commission as an
exhibit to the Registration Statement;
(10) insofar as statements in the Prospectus purport to
summarize the status of litigation or the provisions of laws, rules,
regulations, orders, judgments, decrees, contracts, agreements, instruments,
leases, or licenses, such statements have been prepared or reviewed by such
counsel and accurately reflect the status of such litigation and provisions
purported to be summarized and are correct in all respects;
(11) the Company is not an "investment company" as defined in
the Investment Company Act and the rules and regulations thereunder and, if the
Company conducts its business as set forth in the Prospectus, will not become an
"investment company", and will not be required to be registered under the
Investment Company Act;
(12) to the knowledge of such counsel, no person or entity has
the right to require registration of shares of Common Stock or other securities
of the Company because of the filing or effectiveness of the Registration
Statement, except by entities which have waived such rights as described in the
Registration Statement and the Prospectus;
-34-
(13) there is no stamp duty, value-added tax, or any similar tax
or duty payable by, or on behalf of, the Underwriters, the Company or any
Subsidiary in connection with the authorization, issuance, sale and delivery of
the Securities to the Underwriters in the manner contemplated by this Agreement;
and
(14) the Registration Statement has become effective under the
Securities Act, the Prospectus has been filed in accordance with Rule 424(b) of
the Regulations, including the applicable time periods set forth therein, or
such filing is not required. To the knowledge of such counsel, no Stop Order has
been issued and no proceeding for that purpose has been instituted or
threatened. On the basis of the participation of such counsel in conferences at
which the contents of the Registration Statement and the Prospectus and related
matters were discussed, but without independent verification by such counsel of
the accuracy, completeness, or fairness of the statements contained in the
Registration Statement, the Prospectus, or any amendment or supplement thereto,
such counsel have no knowledge that (other than financial statements and other
financial data and schedules which are or should be contained therein, as to
which such counsel need express no opinion): (A) the Registration Statement, any
Rule 430A Prospectus, and the Prospectus, and any amendment or supplement
thereto, does not appear on its face to comply as to form in all material
respects with the requirements of the Securities Act and the Regulations; (B)
any of the Registration Statement, any Rule 430A Prospectus, or the Prospectus,
or any amendment or supplement thereto, contains any untrue statement of a
material fact or omits to state a material fact required to be stated therein or
necessary to make the statements therein not misleading; or (C) since the date
of effectiveness under the Securities Act of the Registration Statement, any
event has occurred which should have been set forth in an amendment or
supplement to the Registration Statement or the Prospectus which has not been
set forth in such an amendment or supplement.
-35-
In rendering such opinion, counsel for the Company may rely (A) as to
matters involving the application of laws other than the laws of the United
States and the laws of the State of Delaware, New Jersey, and New York, to the
extent counsel for the Company deems proper and to the extent specified in such
opinion, upon an opinion or opinions (in form and substance satisfactory to
counsel for the Underwriters) of other counsel, acceptable to counsel for the
Underwriters, familiar with the applicable laws, in which case the opinion of
counsel for the Company shall state that the opinion or opinions of such other
counsel are satisfactory in scope, form, and substance to counsel for the
Company and that reliance thereon by counsel for the Company and the
Underwriters is reasonable; (B) as to matters of fact, to the extent they deem
proper, on certificates of responsible officers of the Company; and (C) to the
extent they deem proper, upon written statements or certificates of officers of
departments of various jurisdictions having custody of documents respecting the
corporate existence or good standing of the Company; provided that copies of any
such opinions, certificates, or statements shall be annexed as exhibits to the
opinion of counsel for the Company.
(c) On or prior to the Closing Date and any Additional Closing Date,
as the case may be, the Underwriters shall have been furnished such information,
documents, certificates, and opinions as they may reasonably require for the
purpose of enabling them to review the matters referred to in Section 7(b), and
in order to evidence the accuracy, completeness, or satisfaction of any of the
representations, warranties, covenants, agreements, or conditions herein
contained, or as the Representative may reasonably request.
-36-
(d) At the Closing Date or any Additional Closing Date, as the case
may be, (i) the Registration Statement and the Prospectus and any amendments or
supplements thereto shall contain all statements which are required to be stated
therein in accordance with the Securities Act and the Regulations, and in all
material respects conform to the requirements thereof, and neither the
Registration Statement nor the Prospectus nor any amendment or supplement
thereto shall contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary to make the
statements therein not misleading, (ii) there shall have been, since the
respective dates as of which information is given in the Registration Statement
and the Prospectus, no material adverse change, or any development involving a
prospective material adverse change, in the business, properties, or condition
(financial or otherwise), results of operations, capital stock, long-term or
short-term debt, or general affairs of the Company or any Subsidiary from that
set forth in the Registration Statement and the Prospectus, except changes which
the Registration Statement and Prospectus indicate might occur after the date on
which the Registration Statement becomes effective under the Securities Act, and
neither the Company nor any Subsidiary shall have incurred any material
liabilities or entered into any agreements not in the ordinary course of
business other than as referred to in the Registration Statement and Prospectus,
(iii) except as set forth in the Prospectus, no litigation, arbitration, claim,
governmental or other proceeding (formal or informal), or investigation shall be
pending, threatened, or in prospect (or any basis therefor) with respect to the
Company or any Subsidiary or any of their respective operations, businesses,
properties, or assets which would be required to be set forth in the
Registration Statement, wherein an unfavorable decision, ruling, or finding
would materially adversely affect the business, property, condition (financial
or otherwise), results of operations, or general affairs of the Company or such
Subsidiary, and (iv) the Stock be listed upon the American Stock Exchange.
-37-
(e) At the Closing Date and any Additional Closing Date, as the case
may be, you shall have received a certificate of the chief executive officer,
the chief financial officer, and the chief accounting officer of the Company,
dated the Closing Date or such Additional Closing Date, as the case may be, to
the effect, among other things, that (i) the conditions set forth in Sections
7(a) and 7(d) have been satisfied, (ii) as of the date of this Agreement and as
of the Closing Date or such Additional Closing Date, as the case may be, the
representations and warranties of the Company contained herein were and are
accurate and correct in all materials respects, and (iii) as of the Closing Date
or such Additional Closing Date, as the case may be, the obligations to be
performed by the Company hereunder on or prior to such time have been fully
performed.
(f) (1) At the time this Agreement is executed and at the Closing
Date and any Additional Closing Date, as the case may be, you shall have
received a letter, addressed to the Underwriters, and in form and substance
satisfactory to the Representative, with reproduced copies or signed
counterparts thereof for each of the Underwriters, from each of KPMG Peat
Marwick LLP, Xxxxxxxx & Xxxxxxxx, and Xxxx & Xxxx, each independent certified
public accountants for the Company, dated the date of delivery, in form and
substance satisfactory to the Representative and counsel to the Underwriters.
(g) All proceedings taken in connection with the issuance, sale,
transfer, and delivery of the Securities shall be satisfactory in form and
substance to the Representative and to counsel for the Underwriters, and the
Underwriters shall have received from such counsel for the Underwriters the
opinion, dated as of the Closing Date and the Additional Closing Date, as the
case may be, with respect to such of the matters set forth under Section 7(b),
and with respect to such other related matters, as the Representative may
reasonably request.
-38-
(h) The NASD, upon review of the terms of the public offering of the
Stock shall not have objected to the Underwriters' participation in such
offering.
(i) Prior to or on the Closing Date, the Company shall have entered
into the Representative's Warrants with the Representative.
(j) Prior to or on the Closing Date, the Company shall have provided
to you copies of the agreements referred to in Section 2(r).
Any certificate or other document signed by any officer of the Company
and delivered to the Representative or to counsel for the Underwriters shall be
deemed a representation and warranty by the Company hereunder to the
Underwriters as to the statements made therein. If any condition to the
Underwriters' obligations hereunder to be fulfilled prior to or at the Closing
Date or any Additional Closing Date, as the case may be, is not so fulfilled,
the Representative may, on behalf of the several Underwriters, terminate this
Agreement or, if the Representative so elects, in writing waive any such
conditions which have not been fulfilled or extend the time for their
fulfillment.
8. Indemnification and Contribution.
(a) Subject to the conditions set forth below, the Company agrees to
indemnify and hold harmless each Underwriter, its officers, directors, partners,
employees, agents, and counsel, and each person, if any, who controls any
Underwriter within the meaning of Section 15 of the Securities Act or Section
20(a) of the Exchange Act, against any and all loss, liability, claim, damage,
and expense whatsoever (which shall include, for all purposes of this Section 8,
but not
-39-
be limited to, attorneys' fees and any and all expense whatsoever incurred in
investigating, preparing, or defending against any litigation, commenced or
threatened, or any claim whatsoever and any and all amounts paid in settlement
of any claim or litigation) as and when incurred arising out of, based upon, or
in connection with, (i) any untrue statement or alleged untrue statement of a
material fact contained in (A) the Registration Statement, any Preliminary
Prospectus, or the Prospectus (as from time to time amended and supplemented),
or any amendment or supplement thereto or (B) any application or other document
or communication (for purposes of this Section 8, collectively referred to as an
"application") executed by, or on behalf of, the Company or based upon written
information furnished by, or on behalf of, the Company filed in any jurisdiction
in order to qualify the Securities under the "blue sky" or securities laws
thereof or filed with the Commission or any securities exchange; or any omission
or alleged omission to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, unless such statement
or omission was made in reliance upon, and in conformity with, written
information furnished to the Company as stated in Section 8(b) with respect to
any Underwriter by, or on behalf of, such Underwriter through the Representative
expressly for inclusion in the Registration Statement, any Preliminary
Prospectus, or the Prospectus, or any amendment or supplement thereto, or in any
application, as the case may be, or (ii) any breach of any representation,
warranty, covenant, or agreement of the Company contained in this Agreement. The
foregoing agreement to indemnify shall be in addition to any liability the
Company may otherwise have, including liabilities arising under this Agreement.
If any action is brought against an Underwriter or any of its
respective officers, directors, partners, employees, agents, or counsel, or any
controlling persons of an Underwriter (an
-40-
"indemnified party") in respect of which indemnity may be sought against the
Company pursuant to the foregoing paragraph, such indemnified party or parties
shall promptly notify the Company in writing of the institution of such action
(but the failure so to notify shall not relieve the Company from any liability
it may have other than pursuant to this Section 8(a)) and the Company shall
promptly assume the defense of such action, including, without limitation, the
employment of counsel satisfactory to such indemnified party or parties and
payment of expenses. Such indemnified party or parties 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 indemnified party or parties unless
the employment of such counsel shall have been authorized in writing by the
Company in connection with the defense of such action or the Company shall not
have promptly employed counsel satisfactory to such indemnified party or parties
to have charge of the defense of such action or such indemnified party or
parties shall have concluded that there may be one or more legal defenses
available to it or them or to other indemnified parties which are different
from, or in addition to, those available to the Company, in any of which events
such fees and expenses shall be borne by the Company, and the Company shall not
have the right to direct the defense of such action on behalf of the indemnified
party or parties. Anything in this paragraph to the contrary notwithstanding,
the Company shall not be liable for any settlement of any such claim or action
effected without its written consent, which consent shall not be unreasonably
withheld. The Company shall not, without the prior written consent of each
indemnified party that is not released as described in this sentence, settle or
compromise any action, or permit a default or consent to the entry of judgment
or otherwise seek to terminate any pending or threatened action, in respect of
which indemnity may be sought hereunder (whether or not any indemnified party is
a party thereto), unless such settlement, compromise, consent, or termination
includes an unconditional release of each indemnified party from all liability
in respect of such action. The Company agrees promptly to notify the
Underwriters of the commencement of any litigation or proceedings against the
Company or any of its officers or directors in connection with the sale of the
Securities, the Registration Statement, any Preliminary Prospectus, or the
Prospectus, or any amendment or supplement thereto, or any application.
-41-
(b) Each Underwriter severally agrees to indemnify and hold harmless
the Company, each director of the Company, each officer of the Company who shall
have signed the Registration Statement, and each other person, if any, who
controls the Company within the meaning of Section 15 of the Securities Act or
Section 20(a) of the Exchange Act, to the same extent as the foregoing indemnity
from the Company to the several Underwriters in Section 8(a), but only with
respect to statements or omissions, if any, made in the Registration Statement,
any Preliminary Prospectus, or the Prospectus (as from time to time amended and
supplemented), or any amendment or supplement thereto, or in any application, in
reliance upon, and in conformity with, written information furnished to the
Company as stated in this Section 8(b) with respect to any Underwriter by, or on
behalf of, such Underwriter through the Representative expressly for inclusion
in the Registration Statement, any Preliminary Prospectus, or the Prospectus, or
any amendment or supplement thereto, or on any application, as the case may be;
provided, however, that the obligation of each Underwriter to provide indemnity
under the provisions of this Section 8(b) shall be limited to the amount which
represents the product of (i) the number of shares of Stock underwritten by such
Underwriter hereunder and the (ii) the underwriting discount per share of Common
Stock set forth on the cover page of the Prospectus. For all purposes of this
Agreement, the amounts of the selling concession and reallowance and the name of
each of the Underwriters, and the number of shares of Firm Stock purchased by
each of the Underwriters set forth in the Prospectus constitute the only
information furnished in writing by, or on behalf of, such Underwriter expressly
for inclusion in the Registration Statement, any Preliminary Prospectus, or the
Prospectus (as from time to time amended or supplemented), or any amendment or
supplement thereto, or in any application, as the case may be. If any action
shall be brought against the Company or any other person so indemnified based on
the Registration Statement, any Preliminary Prospectus, or the Prospectus, or
any amendment or supplement thereto, or in any application, and in respect of
which indemnity may be sought against any Underwriter pursuant to this Section
8(b), such Underwriter shall have the rights and duties given to the Company,
and the Company and each other person so indemnified shall have the rights and
duties given to the indemnified parties, by the provisions of Section 8(a).
-42-
(c) To provide for just and equitable contribution, if (i) an
indemnified party makes a claim for indemnification pursuant to Section 8(a) or
8(b) (subject to the limitations thereof), but it is found in a final judicial
determination, not subject to further appeal, that such indemnification may not
be enforced in such case, even though this Agreement expressly provides for
indemnification in such case or (ii) any indemnified or indemnifying party seeks
contribution under the Securities Act, the Exchange Act, or otherwise, then the
Company (including for this purpose any contribution made by, or on behalf of,
any director of the Company, any officer of the Company who signed the
Registration Statement, and any controlling person of the Company), as one
entity, and the Underwriters (including for this purpose any contribution by, or
on behalf of, an indemnified party) as a second entity, shall contribute to the
losses, liabilities, claims, damages, and expenses whatsoever to which any of
them may be subject, so that the Underwriters, in the aggregate, are responsible
for the proportion thereof equal to the percentage which the underwriting
discount per share of Common Stock set forth on the cover page of the Prospectus
represents of the initial public offering price per share of Common Stock set
forth on the cover page of the Prospectus and the Company is responsible for the
remaining portion; provided, however, that if applicable law does not permit
such allocation, then other relevant equitable considerations such as the
relative fault of the Company and the Underwriters in connection with the facts
which resulted in such losses, liabilities, claims, damages, and expenses shall
also be considered. The relative fault, in the case of an untrue statement,
alleged untrue statement, omission, or alleged omission, shall be determined by,
among other things, whether such statement, alleged statement, 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, alleged
statement, omission, or alleged omission. The Company and the Underwriters agree
that it would be unjust and inequitable if the respective obligations of the
Company and the Underwriters for contribution were determined by pro rata or per
capita allocation of the aggregate losses, liabilities, claims, damages, and
expenses (even if the Underwriters and the other indemnified parties were
treated as one entity for such purpose) or by any other method of allocation
that does not reflect the equitable considerations referred to in this Section
8(c). No person guilty of a fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) shall be entitled to contribution from any
person who is not guilty of such fraudulent misrepresentation. For purposes of
this Section 8(c), each person, if any, who controls any Underwriter within the
meaning of Section 15 of the Securities Act or Section 20(a) of the Exchange Act
and each officer, director, partner, employee, agent, and counsel of any
Underwriter shall have the same rights to contribution as such Underwriter, and
each person, if any, who controls the Company within the meaning of Section 15
of the Securities Act or Section 20(a) of the Exchange Act, each officer of the
Company who shall have signed the Registration Statement and each director of
the Company shall have the same rights to contribution as the Company, subject
in each case to the provisions of this Section 8(c). Anything in this Section
8(c) to the contrary notwithstanding, no party shall be liable for contribution
with respect to the settlement of any claim or action effected without its
written consent. This Section 8(c) is intended to supersede any right to
contribution under the Securities Act, the Exchange Act, or otherwise.
-43-
9. Default by an Underwriter.
(a) If any Underwriter or Underwriters shall default in its or their
obligation to purchase Firm Stock or Additional Stock hereunder, and if the
number of shares of Firm Stock or Additional Stock to which the defaults of all
Underwriters in the aggregate relate does not exceed 10% of the number of shares
of Firm Stock or Additional Stock, as the case may be, which all Underwriters
have agreed to purchase hereunder, then such shares of Firm Stock or Additional
Stock to which such defaults relate shall be purchased by the non-defaulting
Underwriters in proportion to their respective commitments hereunder.
(b) If such defaults exceed in the aggregate 10% of the number of
shares of Firm Stock or Additional Stock, as the case may be, which all
Underwriters have agreed to purchase hereunder, the Representative may, in its
discretion, arrange to purchase itself or for another party or parties to
purchase such shares of Firm Stock or Additional Stock, as the case may be, to
which such default relates on the terms contained herein. If the Representative
does not arrange for the purchase of such shares of Firm Stock or Additional
Stock, as the case may be, within one business day after the occurrence of
defaults relating to in excess of 10% of the Firm Stock or the Additional Stock,
as the case may be, then the Company shall be entitled to a further period of
one business day within which to procure another party or parties satisfactory
to the Representative to purchase such shares of Firm Stock or Additional Stock,
as the case may be, on such terms. If the Representative or the Company does not
arrange for the purchase of the shares of Firm Stock or Additional Stock, as the
case may be, to which such defaults relate as provided in this Section 9(b),
this Agreement may be terminated by the Representative or by the Company without
liability on the part of the Company (except that the provisions of Sections
5(a)(1), 6, 8, 10, and 13 shall survive such termination) or the several
Underwriters, but nothing in this Agreement shall relieve a defaulting
Underwriter of its liability, if any, to the other several Underwriters and to
the Company for any damages occasioned by its default hereunder.
-44-
(c) If the shares of Firm Stock or Additional Stock to which such
defaults relate are to be purchased by the non-defaulting Underwriters, or are
to be purchased by another party or parties as aforesaid, the Representative or
the Company shall have the right to postpone the Closing Date or the Additional
Closing Date, as the case may be, for a reasonable period but not in any event
more than seven business days in order to effect whatever changes may thereby be
made necessary in the Registration Statement or the Prospectus or in any other
documents and arrangements with respect to the Firm Stock or the Additional
Stock, and the Company agrees to prepare and file promptly any amendment or
supplement to the Registration Statement or the Prospectus which in the opinion
of counsel for the Underwriters may thereby be made necessary. The term
"Underwriter" as used in this Agreement shall include any party substituted
under this Section 9 as if such party had originally been a party to this
Agreement and had been allocated the number of shares of Firm Stock and
Additional Stock actually purchased by it as a result of its original commitment
to purchase Firm Stock and Additional Stock and its purchase of shares of Firm
Stock or Additional Stock pursuant to this Section 9.
10. Representations and Agreements to Survive Delivery. All
representations, warranties, covenants, and agreements contained in this
Agreement shall be deemed to be representations, warranties, covenants, and
agreements at the Closing Date and any Additional Closing Date, and such
representations, warranties, covenants, and agreements of the Underwriters and
the Company, including the indemnity and contribution agreements contained in
Section 8, shall remain operative and in full force and effect regardless of any
investigation made by, or on behalf of, any Underwriter or any indemnified
person, or by, or on behalf of, the Company or any person or entity which is
entitled to be indemnified under Section 8(b), and shall survive termination of
this Agreement or the delivery of the Firm Stock and the Additional Stock, if
any, to the several Underwriters. In addition, the provisions of Sections
5(a)(1), 6, 8, 10, 11, and 13 shall survive termination of this Agreement,
whether such termination occurs before or after the Closing Date or any
Additional Closing Date. Notwithstanding anything in the second sentence of
Section 6 hereof to the contrary, and in addition to the obligations assumed by
the Company pursuant to the first sentence of Section 6 hereof, if the offering
should be terminated, the Company shall be liable to the Underwriters only for
out-of-pocket expenses incurred by the Underwriters in connection with this
Agreement or the proposed, offer, sale, and delivery of the Securities.
-45-
11. Effective Date of This Agreement and Termination Thereof.
(a) This Agreement shall become effective at 9:30 A.M., New York
City local time, on the first full business day following the day on which the
Registration Statement becomes effective under the Securities Act or at the time
of the initial public offering by the Underwriters of the Firm Stock, whichever
is earlier. The time of the initial public offering shall mean the time, after
the Registration Statement becomes effective under the Securities Act, of the
release by the Representative for publication of the first newspaper
advertisement which is subsequently published relating to the Firm Stock or the
time, after the Registration Statement becomes effective under the Securities
Act, when the Firm Stock is first released by the Representative for offering by
the Underwriters or dealers by letter or telegram, whichever shall first occur.
The Representative or the Company may prevent this Agreement from becoming
effective without liability of any party to any other party, except as noted
below in this Section 11, by giving the notice indicated in Section 11(d) before
the time this Agreement becomes effective under the Securities Act.
(b) If the purchase price of the Firm Stock has not been determined
as provided for in Section 3 prior to 4:30 p.m., New York City local time, on
the fifth full business day after the date on which the Registration Statement
becomes was declared effective under the Securities Act, this Agreement may be
terminated at any time thereafter either by the Representative or by the Company
by giving notice to the other unless before such termination the purchase price
for the Firm Stock has been so determined. If the purchase price of the Firm
Stock has not been so determined prior to 4:30 p.m., New York City local time,
on the tenth full business day after the date on which the Registration
Statement was declared effective under the Securities Act, this Agreement shall
automatically terminate forthwith.
-46-
(c) In addition to the right to terminate this Agreement pursuant
to Sections 7 and 9 hereof, the Representative shall have the right to terminate
this Agreement at any time prior to the Closing Date or any Additional Closing
Date, as the case may be, by giving notice to the Company, and, if exercised,
the Over-allotment Option, at any time prior to any Additional Closing Date, by
giving notice to the Company, (i) if any domestic or international event, act,
or occurrence has materially and adversely disrupted, or, in the opinion of the
Representative, will in the immediate future materially and adversely disrupt,
the securities markets; or (ii) if there shall have been a general suspension
of, or a general limitation on prices for, trading in securities on the New York
Stock Exchange or the American Stock Exchange or in the over-the-counter market;
or (iii) if there shall have been an outbreak or increase in the level of major
hostilities or other national or international calamity; or (iv) if a banking
moratorium has been declared by a state or federal authority; or (v) if a
moratorium in foreign exchange trading by major international banks or persons
has been declared; or (vi) if there shall have been a material interruption in
the mail service or other means of communication within the United States; or
(vii) if the Company shall have sustained a material or substantial loss by
fire, flood, accident, hurricane, earthquake, theft, sabotage, or other calamity
or malicious act, whether or not such loss shall have been insured, or from any
labor dispute or court or government action, order, or decree, which will, in
the opinion of the Representative, make it inadvisable to proceed with the
offering, sale, or delivery of the Firm Stock or the Additional Stock, as the
case may be; or (viii) if any material governmental restrictions shall have been
imposed on trading in securities in general, which restrictions are not in
effect on the date hereof; or (ix) if there shall be passed by the Congress of
the United States or by any state legislature any act or measure, or adopted by
any governmental body or authoritative accounting institute or board, or any
governmental executive, any orders, rules, or regulations, which the
Representative believes likely to have a material adverse effect on the
business, financial condition, or financial statements of the Company or the
market for the Common Stock; or (x) if there shall have been such material and
adverse change in the market for the Company's securities or securities in
general or in political, financial, or economic conditions as in the judgment of
the Representative makes it inadvisable to proceed with the offering, sale, and
delivery of the Firm Stock or the Additional Stock, as the case may be, on the
terms contemplated by the Prospectus.
-47-
(d) If the Representative elects to prevent this Agreement from
becoming effective, as provided in this Section 11, or to terminate this
Agreement pursuant to Section 7 of this Agreement or this Section 10, the
Representative shall notify the Company promptly by telephone, telex, or
telegram, confirmed by letter. If, as so provided, the Company elects to prevent
this Agreement from becoming effective or to terminate this Agreement, the
Company shall notify the Representative promptly by telephone, telex, or
telegram, confirmed by letter.
(e) Anything in this Agreement to the contrary notwithstanding
other than Section 11(f), if this Agreement shall not become effective by reason
of an election pursuant to this Section 11 or if this Agreement shall terminate
or shall otherwise not be carried out within the time specified herein by reason
of any failure on the part of the Company to perform any covenant or agreement
or satisfy any condition of this Agreement by it to be performed or satisfied,
the sole liability of the Company to the several Underwriters, in addition to
the obligations the Company assumed pursuant to the first sentence of Section 6,
will be to reimburse the several Underwriters for such out-of-pocket expenses
(including the fees and disbursements of their counsel) as shall have been
incurred by them in connection with this Agreement or the proposed offer, sale,
and delivery of the Securities, and, upon demand, the Company agrees to pay
promptly the full amount thereof to the Representative for the respective
accounts of the Underwriters. Anything in this Agreement to the contrary
notwithstanding other than Section 11(f), if this Agreement shall not be carried
out within the time specified herein for any reason other than the failure on
the part of the Company to perform any covenant or agreement or satisfy any
condition of this Agreement by it to be performed or satisfied, the Company
shall have no liability to the several Underwriters other than for obligations
assumed by the Company pursuant to Section 6.
-48-
(f) Notwithstanding any election hereunder or any termination of
this Agreement, and whether or not this Agreement is otherwise carried out, the
provisions of Sections 5(a)(1), 6, 8, 10, and 13 shall not be in any way
affected by such election or termination or failure to carry out the terms of
this Agreement or any part hereof. Notwithstanding anything in the second
sentence of Section 6 hereof to the contrary, and in addition to the obligations
assumed by the Company pursuant to the first sentence of Section 6 hereof, if
the offering should be terminated, the Company shall be liable to the several
Underwriters only for out-of-pocket expenses incurred by the several
Underwriters in connection with this Agreement or the proposed, offer, sale, and
delivery of the Securities.
12. Notices. All communications hereunder, except as may be otherwise
specifically provided herein, shall be in writing and, if sent to any
Underwriter, shall be mailed, delivered, or telexed or telegraphed and confirmed
by letter, to such Underwriter, c/x Xxxxxxx and Company Securities, Inc., 000
Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xx. Xxxx X. Gold, Managing
Director, with a copy to Xxxxx Xxxxxxxxxxxx Xxxxxxxxxxx & XxXxxxxxx LLC, Xxx
Xxxxxxxx Xxxxxx, 00xx Xxxxx, Xxxx, Xxx Xxxx 00000, Attention: Xxxxxx Xxxxxx
Xxxxx, Esq.; or if sent to the Company, shall be mailed, delivered, or telexed
or telegraphed and confirmed by letter, to the Company, PMCC Financial Corp., 00
Xxxxxxxxxx Xxxx, Xxxxxx Xxxxxxx, Xxx Xxxx 00000, with a copy to Ruskin, Moscou,
Xxxxx & Faltischek, P.C., 000 Xxx Xxxxxxx Xxxx, Xxxxxxx, Xxx Xxxx 00000,
Attention: Xxxxxx X. Xxxxxxxxx, Esq. All notices hereunder shall be effective
upon receipt by the party to which it is addressed.
13. Parties. The Representative, individually and not as representative
of the several Underwriters, represents that it is authorized to act as
Representative on behalf of the several Underwriters named in Schedule I hereto,
and the Company shall be entitled to act and rely on any request, notice,
consent, waiver, or agreement purportedly given on behalf of the Underwriters
when the same shall have been given by the Representative on such behalf. This
Agreement shall inure solely to the benefit of, and shall be binding upon, the
several Underwriters, the Company, and the persons and entities referred to in
Section 8 who are entitled to indemnification or contribution, and their
respective successors, legal representatives, and assigns (which shall not
include any buyer, as such, of the Firm Stock or the Additional Stock), and no
other person shall have, or be construed to have, any legal or equitable right,
remedy, or claim under, in respect of, or by virtue of this Agreement or any
provision herein contained. Notwithstanding anything contained in this Agreement
to the contrary, all of the obligations of the Underwriters hereunder are
several and not joint.
-49-
14. Construction. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of New York, without giving effect to
conflict of laws. Time is of the essence in this Agreement.
15. Consent to Jurisdiction. The Company irrevocably consents to the
jurisdiction of the courts of the State of New York and of any federal court
located in such State in connection with any action or proceeding arising out
of, or relating to, this Agreement, any document or instrument delivered
pursuant to, in connection with, or simultaneously with this Agreement, or a
breach of this Agreement or any such document or instrument. In any such action
or proceeding, the Company waives personal service of any summons, complaint, or
other process and agrees that service thereof may be made in accordance with
Section 12. Within 30 days after such service, or such other time as may be
mutually agreed upon in writing by the attorneys for the parties to such action
or proceeding, the Company shall appear or answer such summons, complaint, or
other process. Should the Company fail to appear or answer within such 30-day
period or such extended period, as the case may be, the Company shall be deemed
in default and judgment may be entered against the Company for the amount as
demanded in any summons, complaint, or other process so served.
-50-
If the foregoing correctly sets forth the understandings among the
Representative, the Company, and the Selling Shareholder, please so indicate in
the space provided below for that purpose, whereupon this letter shall
constitute a binding agreement between us.
Very truly yours,
PMCC FINANCIAL CORP.
By:_________________
Name:
Title:
Accepted as of the date first above
written in New York, New York
XXXXXXX AND COMPANY SECURITIES, INC.*
By: ____________________________________
Xxxx X. Gold, Managing Director
*On behalf of itself and the other several
Underwriters named in Schedule I hereto.
-51-
SCHEDULE I
Total
Number
of Shares
to be
Underwriter Purchased
----------- ---------
Xxxxxxx and Company Securities, Inc.............................................
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Total........................................................1,250,000
-52-
