1
KDW DRAFT 4/17/97
$65,000,000
[ %] CONVERTIBLE SUBORDINATED NOTES DUE 2007
WESTBRIDGE CAPITAL CORP.
UNDERWRITING AGREEMENT
EXECUTION COPY
New York, New York
April [ ], 1997
FORUM CAPITAL MARKETS X.X.
XXXXXXX XXXXX & ASSOCIATES, INC.
c/o Forum Capital Markets L.P.
00 Xxxxxx Xxxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxxx 00000
Ladies and Gentlemen:
Westbridge Capital Corp., a Delaware corporation (the "Company"),
confirms its agreement with Forum Capital Markets L.P. and Xxxxxxx Xxxxx &
Associates, Inc. (the "Underwriters," which term shall also include any
underwriter substituted as hereinafter provided in Section 11 hereof), with
respect to the sale by the Company and the purchase by the Underwriters, acting
severally and not jointly, of $65,000,000 aggregate principal amount of the
Company's [ %] Convertible Subordinated Notes due 2007 (the "Notes") to be
issued pursuant to the provisions of an indenture dated as of the date hereof
(the "Indenture") between the Company and First Union National Bank, as trustee
(the "Trustee") in substantially the form filed as an exhibit to the
Registration Statement (as defined below). Such $65,000,000 aggregate
principal amount of Notes are hereafter referred to as the "Firm Notes." Upon
the request of the Underwriters, as provided in Section 2(b) hereof, the
Company shall also issue and sell to the Underwriters, acting severally and not
jointly, up to an additional $9,750,000 aggregate principal amount of Notes for
the purpose of covering over-allotments, if any. Such $9,750,000 aggregate
principal amount of Notes are hereinafter referred to as the "Option Notes,"
and together with the Firm Notes are hereinafter referred to as the "Notes."
The shares of the Company's common stock, par value $.10 per share (the "Common
Stock"), issuable upon conversion of the Notes are hereinafter referred to as
the "Underlying Stock."
The Company also proposes to sell to the Underwriters, for nominal
consideration, warrants (the "Warrants") pursuant to a warrant agreement (the
"Warrant Agreement") for the purchase, during a period commencing one year
after the date hereof and expiring on the fifth anniversary of the date hereof,
of an aggregate of up to _____ shares of Common Stock (the "Warrant Shares") at
an exercise price per share of $______, subject to adjustment as provided in
the Warrant Agreement. The Notes, the Underlying Stock, the Warrants and the
Warrant Shares are collectively referred to herein as the "Securities." The
Company hereby confirms its agreement with the Underwriters with respect to the
sale by the Company and the purchase by the Underwriters of the Notes and
Warrants, as set forth herein.
1. Representations and Warranties of the Company. The Company
represents and warrants to, and agrees with, the Underwriters as of the date
hereof, and as of the Closing Date (as defined in Section 2(c) hereof) and each
Option Closing Date (as defined in Section 2(b) hereof), if any, as follows:
(a) The Company has prepared and filed with the Securities and
Exchange Commission (the "Commission") a registration statement, and an
amendment or amendments thereto, on Form S-1, No. 333-24137, including the
related preliminary prospectus dated April 7, 1997 and any subsequent
preliminary prospectus
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("Preliminary Prospectus"), for the registration of the Securities under the
Securities Act of 1933, as amended (the "Securities Act"), which registration
statement and amendment or amendments have been prepared by the Company in
conformity with the requirements of the Securities Act, the Trust Indenture Act
of 1939, as amended (the "Trust Indenture Act") and the rules and regulations
of the Commission under the Securities Act (the "Regulations") and the rules
and regulations under the Trust Indenture Act. The Company has complied with
the conditions for the use of Form S-1. Except as the context may otherwise
require, said registration statement, as amended, on file with the Commission
at the time said registration statement becomes effective (including the
prospectus, financial statements, schedules, exhibits and all other documents
filed as a part thereof or incorporated therein (including, but not limited to
those documents or information incorporated by reference therein) and all
information deemed to be a part thereof as of such time pursuant to paragraph
(b) of Rule 430(A) of the Regulations) is hereinafter called the "Registration
Statement," and the form of prospectus in the form first filed with the
Commission pursuant to Rule 424(b) of the Regulations or, if no filing pursuant
to Rule 424(b) is made, such form of prospectus included in the Registration
Statement, together with any documents thereafter incorporated by reference
therein, is hereinafter called the "Prospectus." If the Company files an
abbreviated registration statement to register additional Securities and relies
upon Rule 462(b) under the Securities Act for such registration statement to
become effective upon filing with the Commission (the "Rule 462 Registration
Statement"), then any reference herein to the term "Registration Statement"
shall be deemed to refer to both the registration statement referred to above
and the Rule 462 Registration Statement. For purposes hereof, "Rules and
Regulations" means the rules and regulations adopted by the Commission under
the Securities Act, the Securities Exchange Act of 1934, as amended (the
"Exchange Act") or the Trust Indenture Act, as applicable.
(b) Neither the Commission nor any state regulatory authority has
issued any order preventing or suspending the use of any Preliminary
Prospectus, the Registration Statement or the Prospectus or any part of any
thereof or the qualification of the Trustee, and no proceedings for a stop
order suspending the effectiveness of the Registration Statement, any of the
Company's securities or the qualification of the Trustee have been instituted
or are pending or, to the knowledge of the Company, threatened. Each of any
Preliminary Prospectus, the Registration Statement and the Prospectus at the
time of filing thereof with the Commission, conformed with the requirements of
the Securities Act, the Trust Indenture Act and the Rules and Regulations in
all material respects, none of any Preliminary Prospectus (provided, that, (i)
with respect to any Preliminary Prospectus, the Company's responsibility under
this Section 1(b) shall be limited to indemnification pursuant to Section 7(a)
hereof and (ii) no representation or warranty is made with respect to any
statement or omission in the Preliminary Prospectus included in the
Registration Statement as originally filed), the Registration Statement or the
Prospectus at the time of filing thereof contained an untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading, except that this representation and
warranty does not apply to statements made in reliance upon and in conformity
with written information furnished to the Company by or on behalf of the
Underwriters expressly for use in the Preliminary Prospectus, Registration
Statement or Prospectus (the "Underwriters Information"). When the
Registration Statement or any amendment thereto was or is declared effective,
the Closing Date and each Option Closing Date, if any, the Registration
Statement and the Prospectus will conform to the requirements of the Securities
Act, the Trust Indenture Act and the Rules and Regulations. At all times
subsequent to the effective date of the Registration Statement through the last
to occur of the Closing Date, the last Option Closing Date, if any, or the last
date the Prospectus may be required to be delivered in connection with sales by
the Underwriters or a dealer, the Registration Statement and the Prospectus
will conform to the requirements of the Securities Act, the Trust Indenture Act
and the Rules and Regulations. Neither the Registration Statement nor the
Prospectus, nor any amendment or supplement thereto, as of such respective
dates, with respect to the Registration Statement, or during such respective
periods, with respect to the Prospectus, will 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 (with respect to the Prospectus, in
light of the circumstances under which they were made) not misleading;
provided, however, that this representation and warranty does not apply to
statements made in reliance upon and in conformity with the Underwriters
Information. The Company acknowledges that the Underwriters Information shall
be only such written information that is contained under the caption
"Underwriting" in Preliminary Prospectus, the Prospectus and the Registration
Statement and the stabilization legend set forth in the forepart of the
Preliminary Prospectus, Prospectus and the Registration Statement.
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(c) The Company is subject to Section 13 or 15(d) of the Exchange Act.
All documents filed with the Commission by the Company since January 1, 1994,
when they were filed with the Commission (or, if any amendment with respect to
any such document was filed, when such amendment was filed), complied, and all
document or amendments thereto hereafter filed with the Commission will at the
time of such filing comply, in all material respects with the requirements of
the Exchange Act and the Rules and Regulations, as applicable. Any documents
filed with the Commission subsequent to the date of the Prospectus shall, when
filed with the Commission, conform in all material respects to the requirements
of the Exchange Act and the Rules and Regulations, as applicable.
(d) All the Company's subsidiaries (collectively, the "Subsidiaries")
are listed on Annex A hereto. The Company and each of the Subsidiaries has
been duly incorporated and is validly existing as a corporation in good
standing under the laws of the jurisdiction of its incorporation. The Company
and each of the Subsidiaries is duly qualified and licensed and in good
standing as a foreign corporation in each jurisdiction in which its ownership
or leasing of any properties or the character of its operations require such
qualification or licensing which jurisdictions are identified on Annex A
hereto, and except where the failure to be so qualified or licensed would not
have a material adverse effect on the condition, financial or otherwise,
results of operations, business or prospects of the Company and the
Subsidiaries, taken as a whole (a "Material Adverse Effect"). The Company does
not control, directly or indirectly, or own in excess of 10% of the issued and
outstanding capital stock or other equity interests or securities convertible
or exchangeable for in excess of 10% of the capital stock or other equity
interests, of any corporation, partnership, limited liability company,
association or other entity other than the Subsidiaries. Except as set forth
on Annex A, none of the Subsidiaries controls, directly or indirectly, or owns
in excess of 10% of the issued and outstanding capital stock or other equity
interests or securities convertible or exchangeable for in excess of 10% of the
capital stock or other equity interests, of any corporation, partnership,
limited liability company, association or other entity. The Company owns,
either directly or through other Subsidiaries, the percentage of the
outstanding capital stock of each Subsidiary set forth on Annex A attached
hereto free and clear of all liens, charges, claims, encumbrances, pledges,
security interests, defects or other restrictions or equities of any kind
whatsoever (collectively, the "Liens") except for the pledge by the Company of
all of the issued and outstanding shares of capital stock of each of National
Foundation Life Insurance Company ("NFLIC"), Freedom Life Insurance Company of
America ("FLICA"), National Financial Insurance Company ("NFIC") and Westbridge
Funding Corporation ("WFC") to secure the obligations of the Company arising
pursuant to a Guaranty Agreement dated as of December 28, 1995 by the Company
in favor of Fleet National Bank (formerly, Fleet National Bank of Connecticut).
Each of the Company and the Subsidiaries has all requisite power and authority
(corporate and other), and has obtained any and all necessary authorizations,
approvals, orders, licenses, certificates, franchises and permits (collectively
"Approvals") of and from all governmental or regulatory officials and bodies
(including, without limitation, insurance regulatory officials), to own or
lease its properties and conduct its business as described in the Prospectus
except for Approvals which if not so obtained would not have a Material Adverse
Effect; each of the Company and the Subsidiaries is and has been doing business
in compliance with all such Approvals and all federal, foreign, state and local
laws, rules and regulations, except for such failures to comply as would not
have a Material Adverse Effect; and neither the Company nor any of the
Subsidiaries has received any notice of proceedings relating to the revocation
or modification of any such Approval.
(e) The Company has an authorized, issued and outstanding
capitalization as set forth in the Prospectus under the caption
"Capitalization," and will have the adjusted capitalization set forth therein
on the Closing Date and each Option Closing Date, if any, based upon the
assumptions set forth therein (except as a result of the issuance of shares of
Common Stock identified in the footnotes to such table as reserved for issuance
upon the conversion of the Company's Series A Cumulative Convertible Redeemable
Exchangeable Preferred Stock (the "Series A Preferred Stock") and pursuant to
the plans, options or warrants described therein). Neither the Company nor any
of the Subsidiaries is a party to or bound by any instrument, agreement or
other arrangement, including, but not limited to, any voting trust agreement,
stockholders' agreement or other agreement or instrument, affecting the
securities or rights or obligations of securityholders of the Company or any of
the Subsidiaries or providing for any of them to issue, sell, transfer or
acquire any capital stock, rights, warrants, options or other securities of the
Company or any of the Subsidiaries, except for this Agreement, the Indenture
and the Warrant Agreement and as set forth in the Registration Statement. The
Securities and all other securities issued or issuable pursuant to existing
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plans, agreements or arrangements relating to the issuance of securities or
pursuant or currently outstanding options, warrants, rights or other securities
by the Company and the Subsidiaries conform, or, when issued and paid for, will
conform in all material respects to all statements with respect thereto
contained in the Prospectus. All issued and outstanding securities of the
Company and the Subsidiaries have been duly authorized and validly issued and
are fully paid and non-assessable; the holders thereof have no rights of
rescission with respect thereto and are not subject to personal liability by
reason of being such holders; and none of such securities were issued in
violation of the preemptive rights of any securityholder of the Company or any
of the Subsidiaries or similar contractual rights granted by the Company or any
of the Subsidiaries. The Notes will be issued pursuant to the terms and
conditions of the Indenture, and the Indenture will conform in all material
respects to the description thereof contained in the Registration Statement.
At the Closing Date, the Indenture will conform to the requirements of the
Trust Indenture Act and the Rules and Regulations applicable to an indenture
which is qualified thereunder. The Notes have been duly authorized and, when
validly authenticated, issued, delivered and paid for in the manner
contemplated by the Indenture, will be duly authorized, validly issued and
outstanding obligations of the Company entitled to the benefits of the
Indenture. The Warrants have been duly authorized and when validly issued,
delivered and paid for in the manner contemplated by the Warrant Agreement,
will be duly authorized, validly issued and outstanding obligations of the
Company entitled to the benefits of the Warrant Agreement. The Underlying
Stock issuable upon conversion of the Notes and the Warrant Shares issuable
upon exercise of the Warrants will, assuming in the case of the Warrant Shares,
payment therefor as set forth in the Warrant Agreement, upon such issuance, be
duly authorized, validly issued, fully paid and non-assessable, and the Company
has duly authorized and reserved for issuance the Underlying Stock issuable
upon such conversion of the Notes and the Warrant Shares issuable upon exercise
of the Warrants. The Securities are not and will not be subject to any
preemptive or other similar rights of any securityholder of the Company or any
of the Subsidiaries; all corporate action required to be taken for the
authorization, issue and sale of the Securities has been duly and validly
taken; and the certificates representing the Securities will be in due and
proper form. Except for current holders of certain warrants issued to
Xxxxxxxxxxx & Co., Inc. in connection with the private placement of the Series
A Preferred Stock and certain warrants issued to Xxxxxx X. Xxxxxx in December
1995, no holder of any securities of the Company has any right to require
registration of shares of Common Stock or other securities of the Company
because of the filing of the Registration Statement or the consummation of the
transactions contemplated hereby. Upon the issuance and delivery pursuant to
the terms of this Agreement, the Indenture and the Warrant Agreement, of the
Notes and the Warrants to be sold by the Company hereunder and thereunder, the
Underwriters will acquire good and valid title thereto free and clear of any
Liens, except for Liens created or permitted to exist by the Underwriters.
(f) The consolidated financial statements of the Company and the
Subsidiaries together with the related notes thereto set forth in the
Registration Statement, the Preliminary Prospectus and the Prospectus fairly
present in accordance with generally accepted accounting principles the
financial position, changes in stockholders' equity, cash flow and results of
operations of the Company and the Subsidiaries at the respective dates and for
the respective periods to which they apply, and such historical financial
statements have been prepared in conformity with generally accepted accounting
principles and the Rules and Regulations, consistently applied throughout the
periods involved; there has been no material adverse change or development
involving a material prospective change in the condition, financial or
otherwise, or in the earnings, business, prospects or results of operations of
the Company and the Subsidiaries taken as a whole, whether or not arising in
the ordinary course of business, since the date of the consolidated financial
statements included in the Registration Statement, the Preliminary Prospectus
and the Prospectus, and the outstanding debt, the property, both tangible and
intangible, and the businesses of each of the Company and the Subsidiaries
conform in all material respects to the descriptions thereof contained in the
Registration Statement, the Preliminary Prospectus and the Prospectus.
Financial information set forth in the Preliminary Prospectus and the
Prospectus under the headings "Summary Financial and Operating Data," "Selected
Financial and Operating Data," "Capitalization" and "Management's Discussion
and Analysis of Financial Condition and Results of Operations" fairly presents,
in all respects, on the basis stated in the Preliminary Prospectus and the
Prospectus, the information set forth therein and has been derived from or
compiled on a basis consistent with that of the audited financial statements
included in the Preliminary Prospectus and the Prospectus.
(g) Each of the Company and the Subsidiaries has filed all material
tax returns required to be filed by it in any jurisdiction, other than those
filings being contested in good faith, and has paid all federal, state, local
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and foreign taxes shown to be due on such returns or claimed to be due from
such entities, other than those (i) currently payable without penalty or
interest or (ii) being contested in good faith; and the Company has established
adequate reserves in its financial statements (in accordance with generally
accepted accounting principles) for such taxes which are not due and payable
and (iii) does not have any tax deficiency or claims outstanding, proposed or
assessed against it.
(h) No transfer tax, stamp duty or other similar tax is payable by or
on behalf of the Underwriters in connection with (i) the issuance by the
Company of the Securities, (ii) the purchase by the Underwriters of the Notes
or the Warrants from the Company or (iii) the consummation by the Company of
any of its obligations under this Agreement, the Indenture or the Warrant
Agreement.
(i) The Company and each Subsidiary which constitutes a "significant
subsidiary" under Rule 405 promulgated under the Securities Act maintains
liability, casualty and other insurance (subject to customary deductions and
retentions) with responsible insurance companies against such risks generally
insured against by companies engaged in similar businesses as the Company and
the Subsidiaries. Neither the Company nor any of the Subsidiaries (A) has
failed to give notice or present any material insurance claim with respect to
any matter, including, but not limited to, the Company's or any of the
Subsidiaries' businesses, property or professional staff, under any insurance
policy or surety bond in a due and timely manner, (B) has any disputes or
claims against any underwriter of such insurance policies or surety bonds or
has failed to pay any premiums due and payable thereunder or (C) has failed to
comply with all conditions contained in such insurance policy and surety bonds
wherein such failure would have a Material Adverse Effect. There are no facts
or circumstances known to the Company which would have the effect under any
such insurance policy or surety bond of relieving any insurer of its obligation
to satisfy in all material respects any valid claim of the Company or any of
the Subsidiaries.
(j) There is no action, suit, proceeding, arbitration, litigation or
governmental proceeding pending or, to the knowledge of the Company, threatened
against (or circumstances that are reasonably likely to give rise to the same),
or involving the properties or businesses of, the Company or any of the
Subsidiaries which (i) questions the validity of the capital stock of the
Company or any of the Subsidiaries or this Agreement or the Indenture or of any
action taken or to be taken by the Company or any of the Subsidiaries pursuant
to or in connection with this Agreement or the Indenture, or (ii) could
reasonably be expected to have a Material Adverse Effect which is not disclosed
in the Registration Statement or the Prospectus.
(k) The Company has full corporate right, power and authority to
authorize, issue, deliver and sell the Securities, to enter into this
Agreement, the Indenture and the Warrant Agreement and to consummate the
transactions provided for in such agreements. This Agreement has been duly and
properly authorized, executed and delivered by the Company. This Agreement
constitutes, and when the Company has duly executed and delivered the Indenture
and the Warrant Agreement, the Indenture (assuming the due execution and
delivery thereof by the Trustee) and the Warrant Agreement (assuming the due
execution and delivery thereof by the Underwriters) will constitute, a legal,
valid and binding agreement of the Company enforceable against the Company in
accordance with its terms, except to the extent that enforcement thereof may be
limited by (i) bankruptcy, insolvency, reorganization, moratorium or similar
laws now or hereafter in effect relating to creditors' rights generally and
(ii) general principles of equity (regardless of whether enforceability is
considered in a proceeding at law or in equity) and except to the extent that
rights to indemnification and contribution may be limited by federal or state
securities laws or public policy relating thereto. None of the Company's issue
and sale of the Securities, the execution or delivery of this Agreement, the
Indenture or the Warrant Agreement, its performance hereunder and thereunder,
its consummation of the transactions contemplated herein and therein or the
conduct by it and the Subsidiaries of their businesses as described in the
Registration Statement or any amendments or supplements thereto conflicts or
will conflict with or results or will result in any breach or violation of any
of the terms or provisions of, or constitutes or will constitute a default
under, or results or will result in the creation or imposition of any Lien upon
any property or assets of the Company or any of the Subsidiaries pursuant to
the terms of, (i) the certificate of incorporation or by-laws of the Company or
any of the Subsidiaries, (ii) any license, contract, indenture, mortgage, deed
of trust, voting trust agreement, stockholders' agreement, note, loan or credit
agreement or other agreement or instrument to which the Company or any of the
Subsidiaries is a party or by which it is or may be bound or to
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which its properties or assets is or may be subject, or any indebtedness, or
(iii) any statute, judgment, decree, order, rule or regulation applicable to
the Company or any of the Subsidiaries of any arbitrator, court, regulatory
body or administrative agency or other governmental agency or body, having
jurisdiction over the Company or any of the Subsidiaries or any of their
respective activities or properties except, in the case of clauses (ii) and
(iii), such conflict, breaches, defaults, creations, impositions and violations
that would not have a Material Adverse Effect.
(l) No consent, approval, authorization or order of, and no filing
with, any court, arbitrator, regulatory body, government agency or other body,
domestic or foreign, is required for the execution, delivery or performance by
the Company of this Agreement, the Indenture or the Warrant Agreement or the
transactions contemplated hereby or thereby, except such as have been or may be
obtained under the Securities Act or the Exchange Act or may be required under
state securities or Blue Sky laws or the rules of the National Association of
Securities Dealers, Inc. (the "NASD") or with respect to the listing of the
Notes on the New York Stock Exchange in connection with the Underwriters'
purchase and distribution of the Notes or state insurance laws.
(m) Subsequent to the respective dates as of which information is set
forth in the Prospectus and except as may otherwise be indicated or
contemplated herein or therein, unless the Company has notified the
Underwriters in writing otherwise, neither the Company nor any of the
Subsidiaries has (i) issued any securities or incurred any material liability
or obligation, direct or contingent, for borrowed money not in the ordinary
course of business, (ii) entered into any material transaction other than in
the ordinary course of business or (iii) declared or paid any dividend or made
any other distribution on or in respect of its capital stock of any class other
than regular quarterly cash dividends paid on the issued and outstanding shares
of the Series A Preferred Stock, and there has not been any material adverse
change in or affecting the general affairs, management, financial operations,
stockholders' equity or results of operation of the Company or any Subsidiary
which constitutes a "significant subsidiary" under Rule 405 promulgated under
the Securities Act taken as a whole.
(n) Neither the Company nor any of its Subsidiaries (i) is in
violation of its certificate of incorporation or by-laws, as applicable, (ii)
is in default in the performance of any obligation, agreement or condition
contained in any license, contract, indenture, mortgage, lease, deed of trust,
voting trust agreement, stockholders' agreement, note, loan or credit
agreement, agreement or instrument evidencing an obligation for borrowed money
or other material agreement or instrument to which the Company or any of the
Subsidiaries is a party or by which the Company or any of the Subsidiaries may
be bound or to which the property or assets of the Company or any of the
Subsidiaries is subject or affected or (iii) is in violation in any respect of
any law, ordinance, governmental rule, regulation or court decree to which it
or its property or assets may be subject, except any violation or default under
the foregoing clause (ii) or (iii) as would not have a Material Adverse Effect.
(o) The Company is in compliance with all federal, state, local and
foreign laws and regulations respecting employment and employment practices,
terms and conditions of employment and wages and hours, except for such
failures to comply as would not have a Material Adverse Effect. The Company
has no knowledge of any pending investigations involving the Company or any of
the Subsidiaries by the U.S. Department of Labor or any such investigations by
any other governmental agency responsible for the enforcement of such federal,
state, local or foreign laws and regulations. There is no unfair labor
practice charge or complaint against the Company or any of the Subsidiaries
pending before the National Labor Relations Board or any strike, picketing,
boycott, dispute, slowdown or stoppage pending or threatened against or
involving the Company or any of the Subsidiaries. No representation question
exists respecting the employees of the Company or any of the Subsidiaries, and
no collective bargaining agreement or modification thereof is currently being
negotiated by the Company or any of the Subsidiaries. No grievance or
arbitration proceeding is pending or threatened under any expired or existing
collective bargaining agreements of the Company or any of the Subsidiaries. No
material labor dispute with the employees of the Company or any of the
Subsidiaries exists or, to the best of the Company's knowledge, is imminent.
(p) No "employee pension benefit plan," "employee welfare benefit
plan" or "multi-employer plan" ("ERISA Plans") as such terms are defined in
Sections 3(2), 3(1) and 3(37), respectively, of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), maintained or sponsored by the
Company or any
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of the Subsidiaries (or any trust created thereunder) has engaged in a
"prohibited transaction" within the meaning of Section 406 of ERISA or Section
4975 of the Internal Revenue Code of 1986, as amended (the "Code"), which could
subject the Company or any of the Subsidiaries to any tax penalty or civil
penalty on prohibited transactions which has not been adequately corrected. No
"accumulated funding deficiency" (as defined in Section 302 of ERISA) or any of
the events set forth in Section 4043(b) of ERISA (other than events with
respect to which the 30-day notice under Section 4043 of ERISA has been waived)
has occurred with respect to any employee benefit plan which might reasonably
be expected to have a Material Adverse Effect. Each ERISA Plan is in
compliance in all material respects with all reporting, disclosure and other
requirements of the Code and ERISA as they relate to such ERISA Plan.
Determination letters have been received from the Internal Revenue Service with
respect to each ERISA Plan which is intended to comply with Code Section 401(a)
stating that such ERISA Plan and the attendant trust are qualified thereunder.
Neither the Company nor any of the Subsidiaries has ever completely or
partially withdrawn from a "multi-employer plan" as so defined.
(q) Neither the Company or any of the Subsidiaries, nor any affiliates
of the Company has taken or will take, directly or indirectly, any action
designed to or which has constituted or which might reasonably be expected to
cause or result in, under the Exchange Act or otherwise, stabilization or
manipulation of the price of any security of the Company to facilitate the sale
or resale of the Securities or otherwise.
(r) Each of the Company and the Subsidiaries owns or has the right to
use, free and clear of all Liens (other than Liens permitted to exist by the
Underwriters), all patents, trademarks, service marks, trade names, copyrights,
technology, and all licenses and rights with respect to the foregoing, used in
the conduct of its business as now conducted or proposed to be conducted
without. The Company is not aware of any infringement of or conflict with
asserted rights of others with respect to any of the foregoing which, singly or
in the aggregate, if the subject of an unfavorable decision, ruling or finding,
would have a Material Adverse Effect.
(s) Each of the Company and the Subsidiaries has good and marketable
title to, or valid and enforceable leasehold estates in, all items of real and
personal property which are material to its business, in each case, except as
disclosed in the Prospectus, free and clear of all Liens that would have a
Material Adverse Effect.
(t) Price Waterhouse LLP are independent certified public accountants
of the Company as required by the Securities Act and the Rules and Regulations.
(u) The Notes have been approved for listing on the New York Stock
Exchange, subject to official notice of issuance. The Common Stock is listed
on the New York Stock Exchange.
(v) Neither the Company or any of the Subsidiaries nor any of their
respective officers, directors, stockholders, employees or agents nor any other
person acting on behalf of the Company or any of the Subsidiaries has, directly
or indirectly, since June 1, 1991 given or agreed to give any money, gift or
similar benefit (other than legal price concessions to customers in the
ordinary course of business) to any customer, supplier, employee or agent of a
customer or supplier, or any official or employee of any governmental agency
(domestic or foreign), or any instrumentality of any government (domestic or
foreign), or any political party or candidate for office (domestic or foreign),
or any other person who was, is or may be in a position to help or hinder the
businesses of the Company or any of the Subsidiaries (or assist the Company or
any of the Subsidiaries in connection with any actual or proposed transaction)
which would be reasonably likely to subject the Company or any of the
Subsidiaries, or any of such others to any damage or penalty in any civil,
criminal or governmental litigation or proceeding (domestic or foreign). Each
of the Company's and the Subsidiaries' internal accounting controls are
sufficient to cause the Company and the Subsidiaries to comply with the Foreign
Corrupt Practices Securities Act of 1977, as amended.
(w) The minute books of the Company and each of the Subsidiaries have
been made available to the Underwriters, contain a complete summary of all
meetings and actions of the directors and stockholders of each of the Company
and the Subsidiaries since the time of their respective incorporation and
reflect all transactions referred to in such minutes accurately in all material
respects.
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(x) Neither the Company nor any of the Subsidiaries has been notified
or is otherwise aware that it is potentially liable, or is considered
potentially liable, under the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended, or any similar law
("Environmental Laws"). To the Company's knowledge, the Company and the
Subsidiaries are in compliance with all applicable existing Environmental Laws,
except for such instances of non-compliance which would not have a Material
Adverse Effect. The term "Hazardous Material" means (i) any "hazardous
substance" as defined by the Comprehensive Environmental Response, Compensation
and Liability Act of 1980, as amended, (ii) any "hazardous waste" as defined by
the Resource Conservation and Recovery Act, as amended, (iii) any petroleum or
petroleum product, (iv) any polychlorinated biphenyl and (v) any pollutant or
contaminant or hazardous, dangerous or toxic chemical, material, waste or
substance regulation under or within the meaning of any other Environmental
Law. To the Company's knowledge, no disposal, release or discharge of
Hazardous Material has occurred on, in, at or about any of the facilities or
properties of the Company or any of the Subsidiaries, except for those
instances which are in compliance with Environmental Laws or in the aggregate
would not have a Material Adverse Effect. Except as described in the
Prospectus, to the Company's knowledge: (i) there has been no storage,
disposal, generation, transportation, handling or treatment of Hazardous
Material by the Company or any of the Subsidiaries (or to the knowledge of the
Company, any of its predecessors in interest) at, upon or from any of the
property now or previously owned or leased by the Company or any of the
Subsidiaries in violation of any applicable law, ordinance, rule, regulation,
order, judgment, decree or permit or which would require remedial action which
has not been taken, under any applicable law, ordinance, rule, regulation,
order, judgment, decree or permit, except for such violations and failures to
take remedial action which would not result in, singularly or in the aggregate,
a Material Adverse Effect; and (ii) there has been no material spill,
discharge, leak, emission, injection, escape, dumping or release of any kind
onto such property or into the environment surrounding such property by the
Company or any of the Subsidiaries of any Hazardous Materials, except for such
spills, discharges, leaks, emissions, injections, escapes, dumping or releases
which are in compliance with Environmental Laws or would not result in,
singularly or in the aggregate, a Material Adverse Effect.
(y) The Company is not an "investment company," a company controlled
by an "investment company" or an "affiliated person" of, or "promoter" or
"principal underwriter" for, an "investment company" as such terms are defined
in the Investment Company Act of 1940, as amended.
(z) None of the proceeds of the sale of the Notes or Warrants will be
used, directly or indirectly, for the purpose of purchasing or carrying any
margin security, for the purpose of reducing or retiring any indebtedness which
was originally incurred to purchase or carry any margin security or for any
other purpose which might cause any of the Notes or Warrants to be considered a
"purpose credit" within the meanings of Regulation G, T, U or X of the Board of
Governors of the Federal Reserve Board.
(aa) The Company and the Subsidiaries have complied and will comply
with all the provisions of Florida H.B. 1771, codified as Section 517.075 of
the Florida Statutes, and all regulations promulgated thereunder relating to
issuers doing business with Cuba.
(bb) Except as set forth in this Agreement and the Warrant Agreement,
there are no claims, payouts, issuances, arrangements or understandings,
whether oral or written, for services in the nature of a finder's or
origination fee with respect to the sale of the Notes hereunder or any other
arrangement, agreement, understanding, payment or issuance with respect to the
Company, any of the Subsidiaries or any of their respective officers, directors
or affiliates that would constitute underwriters' compensation as determined by
the NASD. For these purposes, underwriters' compensation means total expenses
payable by the Company to or on behalf of the Underwriters which normally would
be paid by the Underwriters, fees and expenses of Underwriters' Counsel (as
defined herein), finders fees, financial consulting and advisory fees or other
items of value accruing to the Underwriters and related persons, which items of
value include, but are not necessarily limited to, stock, options, warrants and
convertible and other debt securities if the same are deemed to have been
received in connection with or in relation to the offering contemplated by this
Agreement and when given by or acquired from the Company or related parties of
the Company or persons in control of or under common control with the Company
or related parties of the Company.
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(cc) The Indenture has been duly qualified under the Trust Indenture
Act, and all fees required to be paid with respect to the execution of the
Indenture and the issuance of the Notes have been paid or will be paid when
due.
(dd) Except as disclosed in the Prospectus, the authority of each
Subsidiary engaged in the insurance business to write the classes and lines of
insurance authorized by such licenses, certificates, permits and other
authorizations which are material to the Company and the Subsidiaries taken as
a whole is unrestricted and except as described in the Prospectus, neither the
Company nor any of the Subsidiaries is a party to any agreement, formal or
informal, with any regulatory official or other person limiting the ability of
any Subsidiary engaged in the insurance business from making full use of the
licenses, certificates, permits and other authorizations issued to it or
requiring the Company or any of the Subsidiaries to comply with regulatory
standards or procedures or requirements different from those applicable to
companies with comparable or similar licenses, certificates, permits and other
authorizations, expect where such restriction, limitation or requirement would
not have a Material Adverse Effect.
2. Purchase by the Underwriters; Delivery and Payment.
(a) On the basis of the representations, warranties and agreements
contained herein, and subject to the terms and conditions set forth herein, the
Company agrees to issue and sell to the Underwriters, and the Underwriters
agree, severally and not jointly, to purchase from the Company, the aggregate
principal amount of Firm Notes set forth opposite the name of such Underwriter
in Schedule I attached hereto at a purchase price equal to _____% of the
principal amount thereof, plus any additional amount of Firm Notes which each
underwriter may become obligated to purchase pursuant to Section 11 hereof.
(b) In addition, on the basis of the representations, warranties and
agreements contained herein, and subject to the terms and conditions set forth
herein, the Company hereby grants an option to the Underwriters to purchase,
severally and not jointly, any or all of the Option Notes at a price equal to
_____% of the principal amount thereof plus accrued interest from the Closing
Date to the applicable Option Closing Date. Such option will expire at 5:00
p.m. New York time 45 days after the date hereof, and may be exercised in
whole or in part from time to time only for the purpose of covering
over-allotments which may be made in connection with the offering and
distribution of the Firm Notes upon notice by the Underwriters to the Company
setting forth the aggregate principal amount of Option Notes as to which the
Underwriters are then exercising the option and the time and date of delivery
and payment therefor. Any such time and date of delivery and payment (an
"Option Closing Date") shall be determined by the Underwriters, but shall not
be later than five full business days after the exercise of such option unless
otherwise agreed by the Company and the Underwriters.
(c) Delivery of, and payment for, the Firm Notes shall be made at
10:00 a.m., New York City time, on April __, 1997, or at such other date or
time as shall be agreed by the Underwriters and the Company (such date and time
being referred to herein as the "Closing Date"). Delivery of, and payment for,
the Firm Notes and the Option Notes shall be made at the offices of Xxxxxx Xxxx
& Xxxxxx LLP ("Underwriters' Counsel"), New York, New York, or any such other
place as shall be agreed by the Underwriters and the Company. On the Closing
Date, the Company shall deliver or cause to be delivered to the Underwriters
certificates for the Firm Notes against payment to or upon the order of the
Company of the purchase price by certified or official bank check, or if the
Company so elects, by wire or book-entry transfer, in each case in immediately
available funds. On each Option Closing Date, the Company shall deliver or
cause to be delivered to the Underwriters certificates for the Option Notes
purchased thereat against payment to or upon the order of the Company of the
purchase price by certified or official bank check, or if the Company so
elects, by wire or book-entry transfer, in each case in immediately available
funds. Upon delivery, the Notes shall be in such denominations and registered
in such names as the Underwriters shall have requested in writing not less than
one full business day prior to the Closing Date. The Company shall make the
certificates for the Notes available for inspection by the Underwriters in New
York, New York, not later than one full business day prior to the Closing Date.
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(d) On the Closing Date, the Company shall in consideration of the
payment to it by the Underwriters of $.0001 per Warrant, issue to the
Underwriters the Warrants pursuant to the Warrant Agreement.
3. Public Offering of the Notes. As soon after the Registration
Statement becomes effective as the Underwriters deem advisable, the
Underwriters shall make a public offering of the Notes (other than to residents
of any jurisdiction in which the qualification of the Notes is required and has
not become effective) at the price and upon the other terms set forth in the
Prospectus. The Underwriters may from time to time increase or decrease the
public offering price after the distribution of the Notes has been completed to
such extent as the Underwriters in their sole discretion deem advisable. The
Underwriters may enter into one or more agreements as the Underwriters, in each
of their sole discretion, deem advisable with one or more broker-dealers who
shall act as dealers in connection with such public offering.
4. Covenants and Agreements of the Company. The Company
covenants and agrees with the Underwriters as follows:
(a) The Company shall use its best efforts to cause the Registration
Statement and any amendments thereto to become effective as promptly as
practicable and will not at any time, whether before or after the effective
date of the Registration Statement, file any amendment to the Registration
Statement or supplement to the Prospectus or file any document under the
Securities Act or Exchange Act during any time that a prospectus relating to
the Securities is required to be delivered under the Securities Act of which
the Underwriters and Underwriters' Counsel shall not previously have been
advised and furnished with a copy, or to which the Underwriters or
Underwriters' Counsel shall have reasonably objected, or which is not in
compliance with the Securities Act, the Exchange Act, the Trust Indenture Act
or the Rules and Regulations.
(b) As soon as the Company is advised or obtains knowledge thereof,
the Company will advise the Underwriters and if requested confirm in writing,
(i) when the Registration Statement, as amended, becomes effective and, if the
provisions of Rule 430A promulgated under the Securities Act will be relied
upon, when the Prospectus has been filed in accordance with said Rule 430A and
when any post-effective amendment to the Registration Statement becomes
effective, (ii) of the issuance by the Commission of any stop order or of the
initiation, or the threatening, of any proceeding suspending the effectiveness
of the Registration Statement or the qualification of the Trustee or any order
preventing or suspending the use of the Preliminary Prospectus or the
Prospectus, or any amendment or supplement thereto, or the institution of
proceedings for that purpose, (iii) of the issuance by the Commission or by any
state securities commission of any proceedings for the suspension of the
qualification of any of the Securities for offering or sale in any jurisdiction
or of the initiation, or the threatening, of any proceeding for that purpose,
(iv) of the receipt of any comments from the Commission; and (v) of any request
by the Commission for any amendment to the Registration Statement or any
amendment or supplement to the Prospectus or for additional information. If
the Commission or any state securities commission shall enter a stop order or
suspend such qualification at any time, the Company will make every reasonable
effort to obtain promptly the lifting of such order or suspension at the
earliest possible time.
(c) The Company shall file the Prospectus or transmit the Prospectus
by a means reasonably calculated to result in filing with the Commission
pursuant to Rule 424(b)(1) (or, if applicable and if consented to by the
Underwriters, pursuant to Rule 424(b)(4)) on or before the date it is required
to be filed under the Securities Act and the Rules and Regulations.
(d) The Company will give the Underwriters notice of its intention to
file or prepare any amendment to the Registration Statement (including any
post-effective amendment) or any amendment or supplement to the Prospectus
(including any revised prospectus which the Company proposes for use by the
Underwriters in connection with the offering of the Securities which differs
from the corresponding prospectus on file at the Commission at the time the
Registration Statement becomes effective, whether or not such revised
prospectus is required to be filed pursuant to Rule 424(b) of the Rules and
Regulations), and will furnish the Underwriters with copies of any such
amendment or supplement a reasonable amount of time prior to such proposed
filing or use, as
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the case may be, and will not file any such prospectus to which the
Underwriters or Underwriters' Counsel shall reasonably object.
(e) The Company will furnish to the Underwriters and Underwriters'
Counsel, without charge, one photocopy of the manually executed Registration
Statement (including exhibits thereto) and, so long as delivery of a prospectus
by an Underwriter or dealer may be required by the Securities Act, as many
copies of each Preliminary Prospectus and Prospectus and any supplement thereto
as the Underwriters may reasonably request.
(f) The Company shall endeavor in good faith, in cooperation with the
Underwriters at or prior to the time the Registration Statement becomes
effective, to qualify the Securities for offering and sale under the securities
laws of such jurisdictions as the Underwriters may designate to permit the
continuance of sales and dealings therein for as long as may be necessary to
complete the distribution contemplated hereby but in any event not longer than
90 days from the date hereof, and shall make such applications, file such
documents and furnish such information as may be required for such purpose;
provided, however, the Company shall not be required to qualify as a foreign
corporation, subject itself to taxation or file a general consent to service of
process in any such jurisdiction. In each jurisdiction where such
qualification shall be effected, the Company will, unless the Underwriters
agree that such action is not at the time necessary or advisable, use all
reasonable efforts to file and make such statements or reports at such times as
are or may reasonably be required by the laws of such jurisdiction to continue
such qualification for so long as may be necessary to complete the distribution
contemplated hereby but in any event not longer than 90 days from the date
hereof.
(g) During the time when a prospectus is required to be delivered
under the Securities Act, the Company shall comply with all requirements
imposed upon it by the Securities Act and the Exchange Act, as now and
hereafter amended and by the Rules and Regulations, as from time to time in
force, so far as necessary to permit the continuance of sales of or dealings in
the Securities in accordance with the provisions hereof and the Prospectus, or
any amendments or supplements thereto. If at any time when a prospectus
relating to the Securities is required to be delivered under the Securities
Act, any event shall have occurred as a result of which, in the opinion of
counsel for the Company or Underwriters' Counsel, the Prospectus, as then
amended or supplemented, includes an untrue statement of a material fact or
omits to state any material fact required to be stated therein or necessary to
make the statements therein not misleading, or if it is necessary at any time
to amend the Prospectus to comply with the Securities Act, the Company will
notify the Underwriters promptly and prepare and file with the Commission an
appropriate amendment or supplement in accordance with Section 10 of the
Securities Act, each such amendment or supplement to be reasonably satisfactory
to Underwriters' Counsel, and the Company will furnish to the Underwriters
copies of such amendment or supplement as soon as available and in such
quantities as the Underwriters may reasonably request.
(h) As soon as practicable, but in any event not later than 45 days
after the end of the 12-month period beginning on the day after the end of the
fiscal quarter of the Company during which the effective date of the
Registration Statement occurs (90 days in the event that the end of such fiscal
quarter is the end of the Company's fiscal year), the Company shall make
generally available to its securityholders, in the manner specified in Rule
158(b) of the Rules and Regulations, and to the Underwriters an earnings
statement which will be in the detail required by, and will otherwise comply
with, the provisions of Section 11(a) of the Securities Act and Rule 158(a) of
the Rules and Regulations, which statement need not be audited unless required
by the Securities Act, covering a period of at least 12 consecutive months
after the effective date of the Registration Statement.
(i) For so long as the Company is a reporting company under either
Section 13 or 15(d) of the Exchange Act, the Company will deliver to the
Underwriters during the period ending at the earlier of the fifth anniversary
of the date hereof or the date no Notes remain outstanding:
i) concurrently with furnishing such annual reports to its
securityholders, a balance sheet of the Company as at the end of the
preceding fiscal year, together with statements of operations,
stockholders' equity and cash flows of the Company for such fiscal
year, accompanied by a copy of the report thereon of independent
certified public accountants;
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ii) copies of the Quarterly Report on Form 10-Q;
iii) as soon as they are available, copies of all reports
(financial or other) mailed to stockholders generally;
iv) as soon as they are available, copies of all reports and
financial statements filed with the Commission, any state securities
commission, the NASD, the New York Stock Exchange or any other
securities exchange;
v) every press release containing a material news item which
was released by or on behalf of the Company or any of the
Subsidiaries; and
vi) any additional information of a public nature concerning
the Company or any of the Subsidiaries (and any future subsidiaries)
or their respective businesses which the Underwriters may reasonably
request.
The foregoing financial statements will be on a consolidated basis to the
extent that the accounts of the Company and its Subsidiaries are consolidated,
and will be accompanied by similar financial statements for any Subsidiary
which is not so consolidated.
(j) For a period of four years after the Closing Date, the Company
shall timely file all such reports, forms or other documents as may be required
(including, but not limited to, a Form SR as may be required pursuant to Rule
463 under the Securities Act) from time to time under the Securities Act, the
Exchange Act and the Rules and Regulations, and all such reports, forms and
documents filed will comply as to form and substance with the applicable
requirements under the Securities Act, the Exchange Act and the Rules and
Regulations.
(k) The Company shall furnish to the Underwriters as early as
practicable prior to each of the date hereof, the Closing Date and each Option
Closing Date, if any, but no later than two full business days prior thereto, a
copy of the latest available unaudited interim consolidated statements of
operations and balance sheets of the Company and the Subsidiaries (which in no
event shall be as of a date more than 30 days prior to the date of the
Registration Statement) which have been read by the Company's independent
public accountants as stated in their letters to be furnished pursuant to
Section 7(j) hereof.
(l) The Company shall for a period of not less than seven years after
the date hereof, use its best efforts to maintain the New York Stock Exchange
listing of the Notes, to the extent outstanding, and shares of the Common
Stock.
(m) Until the earlier of the completion of the distribution of the
Notes or 90 days from the date hereof, neither the Company nor any of the
Subsidiaries shall, without the prior written consent of the Underwriters and
Underwriters' Counsel (which consent shall not be unreasonably withheld),
issue, directly or indirectly, any press release or other communication or hold
any press conference with respect to the Company, any of the Subsidiaries,
their respective activities or the offering contemplated hereby, other than
trade releases issued in the ordinary course of the Company's business
consistent with past practices with respect to the Company's operations and
except as required by applicable law.
(n) For a period ending on the earlier of (i) four years from the
date hereof and (ii) the issuance of all of the Underlying Stock, the Company
will not take any action or actions which may cause the exemption from
registration provided by Section 3(a)(9) of the Securities Act (or any
successor provision) to be unavailable for the conversion into Common Stock.
(o) For a period of four years after the effective date of the
Registration Statement, the Company shall use reasonable efforts to provide to
the Underwriters, at the Underwriters' request and at the Company's sole
expense, with a report on Blue Sky qualifications relating to secondary sales
of the Company's securities prepared
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by counsel to the Company; provided, however that the Underwriters shall not
make any such request unless the Common Stock or the Notes are not listed on
Nasdaq, the Nasdaq Stock Market or a national securities exchange at the time
of such request.
(p) To use the proceeds from the sale of the Notes in the manner
described in the Prospectus under the caption "Use of Proceeds."
(q) To use its reasonable efforts to do and perform all things
required to be done and performed under this Agreement by it that are within
its control prior to or after the Closing Date and to use reasonable efforts to
satisfy all conditions precedent on its part to the delivery of the Notes.
(r) To not, so long as the Notes are outstanding, be or become, or be
or become owned by, an open-end investment company, unit investment trust or
face-amount certificate company that is or is required to be registered under
Section 8 of the Investment Company Act, and will not be or become, or be or
become owned by, a closed-end investment company required to be registered, but
not registered thereunder.
(s) In connection with the offering, until the Underwriters shall
have notified the Company of the completion of the resale of the Notes, to not,
and to use its reasonable best efforts to not permit any affiliated purchasers
(as defined in Regulation M under the Exchange Act), either alone or with one
or more other persons to, bid for or purchase, for any account in which it or
any of its affiliated purchasers has a beneficial interest, any Notes, or
attempt to induce any person to purchase any Notes; and to not, and to use its
reasonable best efforts to not permit any of its affiliated purchasers to, make
bids or purchases for the purpose of creating actual, or apparent, active
trading in or of raising the price of the Notes.
(t) To not take any action prior to the execution and delivery of the
Indenture which, if taken after such execution and delivery, would have
violated any of the covenants contained in the Indenture.
5. Payment of Expenses.
(a) The Company will pay all expenses incident to the performance of
the obligations of the Company under this Agreement and the Indenture,
including, without limitation: (i) the fees and expenses of accountants and
counsel for the Company, (ii) all costs and expenses incurred in connection
with the preparation, duplication, printing (including mailing and handling
charges), filing, delivery and mailing (including the payment of postage with
respect thereto) of each Preliminary Prospectus and the Prospectus and any
amendments and supplements thereto, in quantities as hereinabove stated, (iii)
the printing and filing of the Registration Statement and each amendment
thereto and any registration under the Securities Act; (iv) the printing,
engraving, issuance and delivery of the Notes, (v) the qualification of the
Notes and the Underlying Stock under state or foreign securities or "Blue Sky"
laws and determination of the status of such securities under legal investment
laws, including the costs of printing and mailing the "Preliminary Blue Sky
Memorandum" and, the "Supplemental Blue Sky Memorandum," and reasonable
disbursements and fees of counsel for the Underwriters in connection therewith,
(vi) costs and expenses of travel, food and lodging of Company personnel in
connection with the "road show," information meetings and presentations, (vii)
fees and expenses of the transfer agent and registrar, (viii) fees and expenses
of the Trustee, including the Trustee's counsel, in connection with the
Indenture and the Notes, (ix) fees incurred in connection with the rating, if
any, of the Notes, (x) any transfer tax, stamp duty or similar tax payable by
the Underwriters in connection with the purchase by the Underwriters of the
Notes or Warrants, (xi) the fees payable to the NASD incurred in connection
with its review of the underwriting terms of the offering of the Securities,
(xii) the fees payable to the New York Stock Exchange incurred in connection
with the listing of the Notes and the Underlying Stock for trading on the New
York Stock Exchange, (xiii) all costs of placing tombstone advertisements in
The New York Times, The Wall Street Journal and the Investment Dealers Digest
not to exceed an aggregate of $75,000 and (xiv) all other costs and expenses
incident to the performance of its obligations hereunder which are not
specifically otherwise provided for in this Section.
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(b) If this Agreement is terminated for any reason other than as a
result of a breach of this Agreement by the Underwriters or in accordance with
Section 10(a) hereof, the Company shall reimburse and indemnify the
Underwriters for all of their reasonable out-of-pocket expenses, including the
reasonable fees and expenses of Underwriters' Counsel. In addition, the
Company shall remain liable for all Blue Sky counsel fees and expenses and Blue
Sky filing fees as described above.
6. Conditions of the Underwriters' Obligations. The obligations
of the Underwriters hereunder shall be subject to the continuing accuracy of
the representations and warranties of the Company herein as of the date hereof
and as of the Closing Date and each Option Closing Date, if any, as if they had
been made on and as of the Closing Date or each Option Closing Date, as the
case may be; and the performance by the Company on and as of the Closing Date
and each Option Closing Date, if any, of its covenants and obligations
hereunder and to the following further conditions:
(a) The Registration Statement (including the Statement of
Eligibility and Qualification of the Trustee on Form T-1 (the "Form T-1")),
shall have become effective not later than 5:30 p.m. New York City time on the
date hereof or at such later time and date as may have been approved by the
Underwriters and no stop order suspending the effectiveness of the Registration
Statement (including the Form T-1) shall have been issued and no proceedings
for that purpose shall have been instituted or shall be pending or, to the
knowledge of the Company or the Underwriters, threatened by the Commission, and
any request on the part of the Commission for additional information shall have
been complied with to the reasonable satisfaction of Underwriters' Counsel. If
the Company has elected to rely upon Rule 430A of the Rules and Regulations,
the price of the Securities and any price-related information previously
omitted from the effective Registration Statement pursuant to such Rule 430A
shall have been transmitted to the Commission for filing pursuant to Rule
424(b) of the Rules and Regulations within the prescribed time period, and
prior to the Closing Date the Company shall have provided evidence satisfactory
to the Underwriters of such timely filing, or a post-effective amendment
providing such information shall have been promptly filed and declared
effective in accordance with the requirements of Rule 430A of the Rules and
Regulations.
(b) The Underwriters shall not have advised the Company that the
Registration Statement, or any supplement or amendment thereto, contains an
untrue statement of fact which, in the Underwriters' reasonable opinion after
consultation with the Company, is material or omits to state a fact which, in
the Underwriters' reasonable opinion after consultation with the Company, is
material and is required to be stated therein or is necessary to make the
statements therein not misleading, or that the Prospectus or any supplement
thereto, contains an untrue statement of fact which, in the Underwriters'
reasonable opinion after consultation with Company, is material or omits to
state a fact which, in the Underwriters' reasonable opinion after consultation
with the Company is material and is required to be stated therein or is
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading. No order suspending the sale of the
Securities in any jurisdiction shall have been issued on either the Closing
Date or the relevant Option Closing Date, if any, and no proceedings for that
purpose shall have been instituted or shall, to the knowledge of the
Underwriters, be threatened.
(c) On or prior to the Closing Date and each Option Closing Date, if
any, the Underwriters shall have received from Underwriters' Counsel such
opinion or opinions with respect to the organization of the Company, the
validity of the Notes, the Underlying Stock, the Warrants, the Warrant Shares,
the Registration Statement and other related matters as the Underwriters may
request and Underwriters' Counsel shall have received such papers and
information as they request to enable it to pass upon such matters.
(d) On the Closing Date, the Underwriters shall have received the
opinion of Xxxxxxx, Tweed, Xxxxxx & XxXxxx, special counsel to the Company,
dated the Closing Date, addressed to the Underwriters and in form and substance
reasonably satisfactory to the Underwriters and Underwriters' Counsel to the
effect that:
i) the Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State
of Delaware. The Company is registered and qualified
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to do business as a foreign corporation and is in good standing in
each of the states listed on Annex A attached to such opinion;
ii) the Company has all requisite corporate power and
authority and all necessary governmental authorizations, approvals,
orders, licenses, certificates, franchises and permits of and from all
governmental regulatory officials and bodies (except where the failure
to so have any such authorizations, approvals, orders, licenses,
certificates, franchises or permits, individually or in the aggregate,
would not have a Material Adverse Effect) to own or lease its
properties and to conduct its businesses, as to the knowledge of such
counsel, it is now being conducted;
iii) the Company has a duly authorized and outstanding
capitalization as set forth in the Prospectus under the caption
"Capitalization" in the Prospectus. The Company owns directly or
through one or more of the Subsidiaries, the percentage of the
outstanding capital stock of each Subsidiary as described in Annex B
to such opinion in each case, to such counsel's knowledge, free and
clear of any Liens, except for the issued and outstanding shares of
capital stock of each of NFLIC, FLICA, NFIC and WFC which have been
pledged by the Company to secure its obligations arising pursuant to a
Guaranty Agreement dated as of December 28, 1995 by the Company in
favor of Fleet National Bank;
iv) except for the Indenture, the Warrant Agreement and this
Agreement and as disclosed in the Registration Statement, such counsel
does not know of: (a) any outstanding option, warrant or other right
calling for the issuance of, and such counsel does not know of any
instrument, agreement, commitment, plan or arrangement to issue, any
share of capital stock of the Company or any security convertible into
or exchangeable or exercisable for capital stock of the Company; and
(b) except for current holders of certain warrants issued to
Xxxxxxxxxxx & Co., Inc. in connection with the private placement of
the Series A Preferred Stock and certain warrants issued to Xxxxxx X.
Xxxxxx in December 1995, any holder of any securities of the Company
or any other person who has the right, contractual or otherwise, to
cause the Company to sell or otherwise issue to them, or to permit
them to underwrite the sale of, any of the Notes or the right to have
any Common Stock or other securities of the Company included in the
Registration Statement or the right, as a result of the filing of the
Registration Statement, to require registration under the Securities
Act of any shares of Common Stock or other securities of the Company;
v) the Securities and all other securities issued or issuable
by the Company pursuant to existing plans, agreement or arrangements
relating to the issuance of securities or pursuant to currently
outstanding options, warrants, rights or other securities of the
Company conform, or when issued and paid for, will conform in all
material respects to all statements with respect thereto contained in
the Registration Statement and the Prospectus; the Warrant Agreement
and the Indenture conform in all material respects to the description
thereof set forth in the Registration Statement and the Prospectus;
the statements under the captions "Description of the Notes" and
"Description of Capital Stock" contained in the Prospectus, insofar as
such statements constitute a summary of documents referred to therein
or matters of law, are accurate summaries and fairly and accurately
present, in all material respects, the information called for with
respect to such documents and matters; all issued and outstanding
equity securities (including capital stock and options and rights with
respect thereto) of the Company have been duly authorized and validly
issued and are fully paid and non-assessable; the holders thereof are
not subject to personal liability by reason of being such holders
(except as they may be liable by reason of their own conduct or acts);
to such counsel's knowledge, none of such securities were issued in
violation of the preemptive rights of any securityholder of the
Company or similar contractual rights granted by the Company or
applicable securities laws; the Notes have been duly authorized and,
when validly authenticated, issued, delivered and paid for in the
manner contemplated by the Indenture and this Agreement, will be duly
authorized, validly issued and outstanding obligations of the Company
entitled to the benefits of the Indenture (except as such benefits may
be limited by
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applicable bankruptcy, insolvency, reorganization, moratorium or other
laws of general application relating to or effecting creditors' rights
and the application of equitable principles in any action, legal or
equitable); the Warrants have been duly authorized and when validly
issued, delivered and paid for in the manner contemplated by the
Warrant Agreement, will be validly issued and outstanding obligations
of the Company entitled to the benefits of the Warrant Agreement; the
Underlying Shares will, upon issuance in accordance with the
Indenture, be duly authorized, validly issued, fully paid and
non-assessable; the Warrant Shares will, upon exercise and payment
therefor in accordance with the Warrant Agreement, be duly authorized
validly issued, fully paid and non-assessable; the Company has duly
authorized and reserved for issuance upon conversion of the Notes and
exercise of the Warrants the Underlying Shares and Warrant Shares,
respectively; to such counsel's knowledge, the Securities to be sold
by the Company hereunder and under the Indenture and Warrant Agreement
are not and will not be subject to any preemptive or other similar
rights of any securityholder of the Company or any of the
Subsidiaries; the holders thereof will not be subject to any liability
solely as such holders (except as they may be liable by reason of
their own conduct or acts); all corporate action required to be taken
for the authorization, issue and sale of the Securities has been duly
and validly taken; the certificates representing the Securities are in
due and proper form; and upon the issuance and delivery pursuant to
this Agreement, the Indenture and the Warrant Agreement of the Notes
and Warrants to be sold by the Company hereunder, and when the
Underwriters take delivery of the certificates representing the Notes
and Warrants, and assuming the Underwriters are acquiring the Notes
and Warrants in good faith without notice of any adverse claim (within
the meaning of the Uniform Commercial Code as in effect in the State
of New York) the Underwriters will acquire good and valid title
thereto free and clear of any Liens (except for Liens created or
permitted to exist by the Underwriters).
vi) the Registration Statement (including the Form T-1) is
effective under the Securities Act; a Prospectus containing the
information permitted to be omitted under Rule 430A has been filed in
accordance with Rule 424(b); and to such counsel's knowledge after due
inquiry, no stop order suspending the effectiveness of the
Registration Statement or the qualification of the Trustee is in
effect and no proceedings for that purpose have been instituted or are
threatened by the Commission (in rendering the opinion required by
this paragraph (vii), such counsel may rely solely on the oral advice
of the staff of the Commission to the extent written confirmation from
the Commission has not been received);
vii) the Registration Statement and the Prospectus, and any
amendments or supplements thereto (other than the financial statements
and notes thereto and other financial, statistical and accounting data
included therein or omitted therefrom and the Form T-1, as to which no
opinion need be rendered) comply as to form in all material respects
with the requirements of the Securities Act, the Trust Indenture Act
and the Rules and Regulations; and each of the Incorporated Documents
(except for the financial statements and the notes thereto and the
schedules and other financial and statistical data included therein,
as to which such counsel need not express any opinion) complies as to
form in all material respects with the Exchange Act and the rules and
regulations of the Commission thereunder;
viii) the Indenture has been qualified under the Trust
Indenture Act;
ix) the descriptions in the Registration Statement and the
Prospectus of agreements and documents to which the Company or any of
the Subsidiaries is a party or by which any of them or their
respective properties are bound, including any agreement or document
incorporated by reference into the Registration Statement and the
Prospectus or of any statutes, are accurate in all material respects
and fairly present the subject matter thereof; to such counsel's
knowledge there is no action, arbitration, suit or other proceeding
against the Company or any of the Subsidiaries, or involving the
properties or business of the Company or any of the Subsidiaries,
which (x)
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questions the validity of the capital stock of the Company or any of
the Subsidiaries or of this Agreement, the Indenture, the Warrant
Agreement or of any action taken or to be taken by the Company or any
of the Subsidiaries pursuant to or in connection with any of the
foregoing or (y) except as disclosed in the Prospectus, could
reasonably be expected to have a Material Adverse Effect;
x) the Company has full legal right, corporate power and
authority to execute, deliver and perform each of this Agreement, the
Indenture and the Warrant Agreement and to consummate the transactions
provided for herein and therein; the execution, delivery and
performance of each of this Agreement, the Indenture and the Warrant
Agreement has been duly authorized by all necessary corporate action
on the part of the Company, each of this Agreement, the Indenture and
the Warrant Agreement has been duly executed and delivered by the
Company, and, assuming due authorization, execution and delivery by
each other party thereto, constitutes a legal, valid and binding
agreement of the Company enforceable against the Company in accordance
with its terms (except as such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other
laws of general application relating to or affecting enforcement of
creditors' rights and the application of equitable principles in any
action, legal or equitable, and except as rights to indemnity or
contribution may be limited by applicable law);
xi) the execution or delivery by the Company of this
Agreement, the Indenture and the Warrant Agreement, its performance
hereunder or thereunder, its consummation of the transactions
contemplated herein or therein, each in accordance with its terms, do
not and will not conflict with or result in any breach or violation
of, constitute a default under or result in the creation or imposition
of any Lien upon any property or assets of the Company pursuant to the
terms of (A) the certificate of incorporation or by-laws of the
Company, or (B) any license, contract, indenture, mortgage, deed of
trust, voting trust agreement, stockholders' agreement, note, loan or
credit agreement or other agreement or instrument known to such
counsel to which the Company is a party or by which it is or may be
bound or to which its respective properties or assets is or may be
subject, except for such conflicts, breaches, violations, defaults and
creations or impositions which in the aggregate would not have a
Material Adverse Effect;
xii) the Company is not in violation of its certificate of
incorporation or by-laws; and to the knowledge of such counsel, the
Company is not in breach or, or in default with respect to, any
provisions of any license, contract, indenture, mortgage, deed of
trust, voting trust agreement, stockholders' agreement, note, loan or
credit agreement or other agreement or instrument known to such
counsel to which the Company is a party or by which it is or may be
bound or to which its properties or assets is or may be subject,
except for such breaches or defaults as would not have a Material
Adverse Effect;
xiii) neither the issuance of the Securities nor the
performance by the Company of this Agreement, the Indenture and the
Notes and the transactions contemplated hereby and thereby requires
any consent, approval, authorization or other order of or registration
or filing with, any court, regulatory body or government agency or
body, other than such as already has been made or obtained and such as
may be required under state securities or Blue Sky laws or the rules
of the NASD or state insurance laws, as to which no opinion need be
rendered;
xiv) the statements in the Prospectus under the captions
"Business-Legal Proceedings," and "Certain United States Federal
Income Tax Considerations" insofar as such statements constitute
matters of law, summaries of legal matters, documents or proceedings
referred to therein, or legal conclusions, have been reviewed by such
firm and are correct in all material respects;
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xv) the Notes have been approved for listing on the New York
Stock Exchange, subject only to official notice of issuance;
xvi) neither the execution and delivery by the Company of,
nor the performance of its obligations under, this Agreement, the
Indenture and the Warrants, nor the sale, issuance, execution or
delivery by the Company of the Notes or the Warrants will violate
Regulations G, T, U or X of the Federal Reserve Board; and
xvii) the Company is not an "investment company," a company
controlled by, under common control with, or controlling an
"investment company" or a "promoter" or "principal underwriter" for,
an "investment company" as such terms are defined in the Investment
Company Act of 1940, as amended.
In rendering such opinion, such counsel may: (A) limit its opinion to matters
involving the federal laws of the United States of America, the General
Corporation Law of the State of Delaware and the laws (other than insurance
laws) of the State of New York; and (B) as to matters of fact, to the extent
they deem proper, on certificates and written statements of responsible
officers of the Company and certificates or other written statements 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 statements or certificates shall be delivered to
Underwriters' Counsel if requested. The opinion of such counsel for the
Company shall state that the opinion of any such other counsel is in form
satisfactory to such counsel and that the Underwriters and they are justified
in relying thereon. At each Option Closing Date, if any, the Underwriters
shall have received the favorable opinion of Xxxxxxx, Xxxxx, Xxxxxx & XxXxxx,
dated such Option Closing Date, addressed to the Underwriters and in form and
substance satisfactory to the Underwriters and Underwriters' Counsel confirming
as of such Option Closing Date the statements made by such counsel in their
opinion delivered on the Closing Date.
(e) Milbank, Tweed, Xxxxxx & XxXxxx shall state in the opinion
letters contemplated by Section 6(d) that such counsel has participated in
conferences with officers and other representatives of the Company,
representatives of the independent public accountants for the Company and the
Subsidiaries and the Underwriters, at which conferences the contents of the
Registration Statement and related matters were discussed, and, although such
counsel is not passing upon, and does not assume any responsibility for, the
accuracy, completeness or fairness of the statements contained in the
Registration Statement, on the basis of the foregoing, no facts have come to
the attention of such counsel which has lead them to believe that the
Registration Statement as of its effective date contained an untrue statement
of a material fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein not misleading, except that
such counsel need express no opinion or belief with respect to the financial
statements and related notes and other financial, statistical or accounting
data included in the Registration Statement or excluded therefrom.
(f) On the Closing Date, the Underwriters shall have received the
opinion of Xxxxxxx X. Xxxxxx, Vice President, Secretary and General Counsel of
the Company, dated the Closing Date, addressed to the Underwriters and in form
and substance satisfactory to the Underwriters and Underwriters' Counsel to the
effect that:
i) the Company and each of the Subsidiaries has been duly
organized and is validly existing as a corporation in good standing
under the laws of the jurisdiction of its organization. Each of the
Company and the Subsidiaries are registered and qualified to do
business as foreign corporations and are in good standing in each of
the states listed on Annex A attached to such opinion;
ii) the Company and each of the Subsidiaries has all
requisite corporate power and authority and all necessary governmental
authorizations, approvals, orders, licenses, certificates, franchises
and permits of and from all governmental regulatory officials and
bodies (except where the failure to so have any such authorizations,
approvals, orders, licenses, certificates, franchises
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or permits, individually or in the aggregate, would not have a
Material Adverse Effect) to own or lease their respective properties
and to conduct their respective businesses, as to the knowledge of
such counsel, it is now being conducted;
iii) the Company has a duly authorized and outstanding
capitalization as set forth in the Prospectus under the caption
"Capitalization" in the Prospectus. The Company owns directly or
through one or more of the Subsidiaries, the percentage of the
outstanding capital stock of each Subsidiary as described in Annex B
to such opinion in each case free and clear of any Liens except for
the issued and outstanding shares of capital stock of each of NFLIC,
FLICA, NFIC and WFC which have been pledged by the Company to secure
its obligations arising pursuant to a Guaranty Agreement dated as of
December 28, 1995 by the Company in favor of Fleet National Bank;
iv) the Securities and all other securities issued by each of
the Company and each Subsidiary or issuable by each of the Company or
any Subsidiary pursuant to existing plans, agreements or arrangements
relating to the issuance of securities or pursuant to currently
outstanding options, warrants, rights or other securities of the
Company or Subsidiary, respectively, conform, or when issued and paid
for, will conform in all material respects to all statements with
respect thereto contained in the Registration Statement and the
Prospectus; the Warrant Agreement and the Indenture conform in all
material respects to the description thereof set forth in the
Registration Statement and the Prospectus; all issued and outstanding
equity securities (including capital stock and options and rights with
respect thereto) of the Company or any of the Subsidiaries have been
duly authorized and validly issued and are fully paid and
non-assessable; the holders thereof are not subject to personal
liability by reason of being such holders (except as they may be
liable by reason of their own conduct or acts); to such counsel's
knowledge, none of such securities were issued in violation of the
preemptive rights of any securityholder of the Company or any of the
Subsidiaries or similar contractual rights granted by the Company or
any of the Subsidiaries or applicable securities laws; the Notes have
been duly authorized and, when validly authenticated, issued,
delivered and paid for in the manner contemplated by the Indenture and
this Agreement, will be duly authorized, validly issued and
outstanding obligations of the Company entitled to the benefits of the
Indenture (except as such benefits may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other laws of
general application relating to or effecting creditors' rights and the
application of equitable principles in any action, legal or
equitable); the Warrants have been duly authorized and when validly
issued, delivered and paid for in the manner contemplated by the
Warrant Agreement, will be duly authorized, validly issued and
outstanding obligations of the Company entitled to the benefits of the
Warrant Agreement; the Underlying Shares will, upon issuance in
accordance with the Indenture, be duly authorized, validly issued,
fully paid and non-assessable; the Warrant Shares will, upon exercise
and payment therefor in accordance with the Warrant Agreement, be duly
authorized validly issued, fully paid and non-assessable; the Company
has duly authorized and reserved for issuance upon conversion of the
Notes and exercise of the Warrants the Underlying Shares and Warrant
Shares, respectively; to such counsel's knowledge, the Securities to
be sold by the Company hereunder and under the Indenture and Warrant
Agreement are not and will not be subject to any preemptive or other
similar rights of any securityholder of the Company or any of the
Subsidiaries; the holders thereof will not be subject to any liability
solely as such holders (except as they may be liable by reason of
their own conduct or acts); all corporate action required to be taken
for the authorization, issue and sale of the Securities has been duly
and validly taken; the certificates representing the Securities are in
due and proper form; and upon the issuance and delivery pursuant to
this Agreement, the Indenture and the Warrant Agreement of the Notes
and Warrants to be sold by the Company hereunder, and when the
Underwriters take delivery of the certificates representing the Notes
and Warrants, and assuming the Underwriters are acquiring the Notes
and Warrants in good faith without notice of any adverse claim (within
the meaning of the Uniform Commercial Code as in effect in the State
of New York) the
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Underwriters will acquire good and valid title thereto free and clear
of any pledge, lien, charge, claim, encumbrance, pledge, security
interest or other encumbrance;
v) the descriptions in the Registration Statement and the
Prospectus of agreements and documents to which the Company or any of
the Subsidiaries is a party or by which any of them or their
respective properties are bound, including any agreement or document
incorporated by reference into the Registration Statement and the
Prospectus or of any statutes, are accurate in all material respects
and fairly present the subject matter thereof; to such counsel's
knowledge there is no action, arbitration, suit or other proceeding
against the Company or any of the Subsidiaries, or involving the
properties or business of the Company or any of the Subsidiaries,
which (x) questions the validity of the capital stock of the Company
or any of the Subsidiaries or of this Agreement, the Indenture, the
Warrant Agreement or of any action taken or to be taken by the Company
or any of the Subsidiaries pursuant to or in connection with any of
the foregoing or (y) except as disclosed in the Prospectus, could have
a Material Adverse Effect;
vi) the Company has full legal right, corporate power and
authority to execute, deliver and perform each of this Agreement, the
Indenture and the Warrant Agreement and to consummate the transactions
provided for herein and therein; the execution, delivery and
performance of each of this Agreement, the Indenture and the Warrant
Agreement has been duly authorized by all necessary corporate action
on the part of the Company; each of this Agreement, the Indenture and
the Warrant Agreement has been duly executed and delivered by the
Company, and, assuming due authorization, execution and delivery by
each other party thereto, constitutes a legal, valid and binding
agreement of the Company enforceable against the Company in accordance
with its terms (except as such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other
laws of general application relating to or affecting enforcement of
creditors' rights and the application of equitable principles in any
action, legal or equitable, and except as rights to indemnity or
contribution may be limited by applicable law);
vii) the execution or delivery by the Company of this
Agreement, the Indenture and the Warrant Agreement, its performance
hereunder or thereunder, its consummation of the transactions
contemplated herein or therein, each in accordance with its terms, do
not and will not conflict with or result in any breach or violation
of, constitutes a default under or result in the creation or
imposition of any lien, charge, claim, encumbrance, pledge, security
interest or other encumbrance upon any property or assets of the
Company or any of the Subsidiaries pursuant to the terms of (A) the
certificate of incorporation or by-laws of the Company or any of the
Subsidiaries, (B) any license, contract, indenture, mortgage, deed of
trust, voting trust agreement, stockholders' agreement, note, loan or
credit agreement or other agreement or instrument known to such
counsel to which the Company or any of the Subsidiaries is a party or
by which any of them is or may be bound or to which any of their
respective properties or assets is or may be subject, except for such
conflicts, breaches, violations, defaults and creations or impositions
which in the aggregate would not have a Material Adverse Effect, or
(C) any statute, rule or regulation (other than federal or state
securities laws) or, to the best of such counsel's knowledge, any
judgment, decree or order applicable to the Company or any of the
Subsidiaries of any arbitrator, court, regulatory body or
administrative agency or other governmental agency or body having
jurisdiction over the Company or any of the Subsidiaries or any of
their respective activities or properties, except with respect to this
clause (C) for such conflicts, breaches, violations, defaults and
creations or impositions which in the aggregate would not have a
Material Adverse Effect;
viii) to the knowledge of such counsel, the Company and the
Subsidiaries are not in violation of their respective charters or
by-laws; neither the Company nor any of the Subsidiaries is in breach
or, or in default with respect to, any provisions of any license,
contract, indenture, mortgage, deed of trust, voting trust agreement,
stockholders' agreement, note, loan or credit agreement or other
agreement or instrument known to such counsel to which the Company or
any
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of the Subsidiaries is a party or by which any of them is or may be
bound or to which any of their respective properties or assets is or
may be subject, except for such breaches or defaults as would not have
a Material Adverse Effect, and to the knowledge of such counsel, the
Company and the Subsidiaries are in material compliance with all laws,
rules and regulations and all judgments, decrees and orders of any
judicial or governmental authority to which the Company or any of the
Subsidiaries or by which any of them is or may be bound or to which
any of their respective properties or assets is or may be subject,
except for such noncompliance as would not have a Material Adverse
Effect;
ix) the statements in the Prospectus under the captions
"Business-Regulation," "Business-Legal Proceedings," "Description of
the Notes," and "Certain United States Federal Income Tax
Considerations" insofar as such statements constitute matters of law,
summaries of legal matters, documents or proceedings referred to
therein, or legal conclusions, have been reviewed by such firm and are
correct in all material respects;
In rendering such opinion, such counsel may rely: (A) as to matters involving
the application of laws other than the laws of the United States and
jurisdictions in which they are admitted, to the extent such counsel deems
proper and to the extent specified in such opinion, if at all, upon an opinion
or opinions (in form and substance reasonably satisfactory to Underwriters'
Counsel) of other counsel acceptable to Underwriters' Counsel, familiar with
the applicable laws; and (B) as to matters of fact, to the extent they deem
proper, on certificates and written statements of responsible officers of the
Company and certificates or other written statements of officers of departments
of various jurisdictions having custody of documents respecting the corporate
existence or good standing of the Company and the Subsidiaries, provided, that
copies of any such statements or certificates shall be delivered to
Underwriters' Counsel if requested. The opinion of such counsel for the
Company shall state that the opinion of any such other counsel is in form
satisfactory to such counsel and that the Underwriters and they are justified
in relying thereon. At each Option Closing Date, if any, the Underwriters
shall have received the favorable opinion of Xxxxxxx X. Xxxxxx dated such
Option Closing Date, addressed to the Underwriters and in form and substance
satisfactory to the Underwriters and Underwriters' Counsel confirming as of
such Option Closing Date the statements made by such counsel in their opinion
delivered on the Closing Date.
(g) On the Closing Date and each Option Closing Date, if any,
Underwriters' Counsel shall have been furnished such documents, certificates
and opinions as they may reasonably require and have requested reasonably in
advance for the purpose of enabling them to review or pass upon the matters
referred to in Section 6(c) hereof or in order to evidence the accuracy,
completeness or satisfaction of any of the representations, warranties or
conditions of the Company herein contained.
(h) On and as of the Closing Date and each Option Closing Date, if
any: (i) there shall have been no material adverse change and no development
involving a prospective material adverse change in the condition, financial or
otherwise, prospects, stockholders' equity or the business activities of the
Company and the Subsidiaries taken as a whole, whether or not in the ordinary
course of business, from the latest dates as of which such condition is set
forth in the Registration Statement and Prospectus; (ii) there shall have been
no transaction, not in the ordinary course of business, entered into by the
Company or any of the Subsidiaries, from the latest date as of which the
financial condition of the Company and the Subsidiaries is set forth in the
Registration Statement and Prospectus which is materially adverse to the
Company and the Subsidiaries taken as a whole; (iii) neither the Company nor
any of the Subsidiaries shall be in default under any provision of any
instrument relating to any outstanding indebtedness material to the Company and
the Subsidiaries taken as a whole; (iv) no material amount of the assets of the
Company or any of the Subsidiaries shall have been pledged or mortgaged, except
as set forth in the Prospectus; (v) no action, suit or proceeding, at law or in
equity, shall have been pending or threatened (or circumstances which could
reasonably be expected to give rise to same shall have arisen) against the
Company or any of the Subsidiaries, or affecting any of their respective
properties or businesses, before or by any court or federal, state or foreign
commission, board or other administrative agency wherein an unfavorable
decision, ruling or finding which could reasonably be expected to have a
Material Adverse Effect, except as set forth in the
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Prospectus; and (vi) no stop order shall have been issued under the Securities
Act and no proceedings therefor shall have been initiated or threatened by the
Commission or any state regulatory authority.
(i) On the Closing Date and each Option Closing Date, if any, the
Underwriters shall have received a certificate of the Company signed by the
president or chairman and by the chief financial officer of the Company, in
their capacities as such, dated the Closing Date or such Option Closing Date,
as the case may be, to the effect that each of such persons has carefully
examined the Registration Statement, the Prospectus, this Agreement and the
Indenture and that:
i) the representations and warranties of the Company in this
Agreement that are qualified as to materiality are true and correct,
and such representations and warranties of the Company that are not so
qualified are true in all material respects as if made on and as of
the Closing Date or such Option Closing Date, as the case may be, and
the Company has complied with all agreements and covenants and
satisfied all conditions contained in this Agreement and the Indenture
on its part to be performed or satisfied at or prior to the Closing
Date or such Option Closing Date, as the case may be;
ii) no stop order suspending the effectiveness of the
Registration Statement or any part thereof or the qualification of the
Trustee is in effect and no proceedings for that purpose are pending
or, to such officer's knowledge, threatened;
iii) since the date of the most recent financial statements
included in the Prospectus, there has been no material adverse change
in the condition, financial or otherwise business, prospects or
results of operation of the Company and the Subsidiaries, taken as a
whole, except as set forth in the Prospectus;
iv) the Registration Statement and the Prospectus and, if any,
each amendment and each supplement thereto, contain all statements and
information required to be included therein, and none of the
Registration Statement or any amendment or supplement thereto includes
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
therein not misleading and none of the Prospectus or any amendment or
supplement thereto includes 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 therein, in light of the
circumstances under which they were made, not misleading; and
v) subsequent to the respective dates as of which information
is given in the Registration Statement and the Prospectus: (a)
neither the Company nor any of the Subsidiaries has incurred up to and
including the Closing Date or the Option Closing Date, as the case may
be, other than in the ordinary course of its business, any material
liabilities or obligations, direct or contingent, except as disclosed
in the Prospectus; (b) neither the Company nor any of the Subsidiaries
has paid or declared any dividends or other distributions, other than
regular cash dividends, on its capital stock except as disclosed in
the Prospectus; (c) neither the Company nor any of the Subsidiaries
has entered into any material transactions not in the ordinary course
of business, except as disclosed in the Prospectus; (d) there has not
been any material change in the capital stock of the Company from the
description thereof in the Registration Statement; (e) neither the
Company nor any of the Subsidiaries has sustained any material loss or
damage to its property or assets, whether or not insured; and (f)
there is no litigation which is pending or to the best of the
Company's knowledge threatened against the Company, any of the
Subsidiaries or any affiliated party of any of the foregoing which
could reasonably be expected to have a Material Adverse Effect and
which is required to be set forth in an amended or supplemented
Prospectus which has not been set forth.
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(j) On or prior to the Closing Date and each Option Closing Date, if
any, the Underwriters shall have received a certificate signed by the secretary
of the Company, in his capacity as such, dated the Closing Date or such Option
Closing Date, as the case may be, as to:
i) the absence of any contemplated proceeding for the merger,
consolidation, liquidation or dissolution of the Company or any
Subsidiary, as the case may be, or the sale of all or substantially
all of its assets;
ii) the due adoption and full force and effect of the By-laws
of the Company (with a copy of the By- laws attached);
iii) resolutions adopted by the Board of Directors of the
Company and/or a committee thereof authorizing the offering of the
Notes and Warrants and the consummation of the transactions
contemplated by this Agreement, the Indenture and the Warrant
Agreement (with copies of such resolutions attached); and
iv) the incumbency, authorization and signatures of certain
officers and directors of the Company, including all those signing
this Agreement, the Indenture, the Warrant Agreement and/or any
certificate delivered at such closing.
(k) By no later than 5:00 p.m. New York City time on the date hereof
the Underwriters shall have received a letter, dated such date, addressed to
the Underwriters in form and substance satisfactory in all respects (including
the non-material nature of the changes or decreases, if any, referred to in
clause (iii) below) to the Underwriters and Underwriters' Counsel, relating to
the Company's fiscal year ended December 31, 1996 and subsequent thereto, from
Price Waterhouse LLP:
i) confirming that they are independent certified public
accountants with respect to the Company within the meaning of the
Securities Act and the Exchange Act and the applicable Rules and
Regulations;
ii) stating that it is their opinion that the consolidated
financial statements and supporting schedules of the Company included
in the Registration Statement comply as to form in all material
respects with the applicable accounting requirements of the Securities
Act and the applicable Rules and Regulations;
iii) stating that, on the basis of procedures which included a
reading of [the latest available [monthly management financial reports
of the Company (with an indication of the date of such reports),] a
reading of] the latest available minutes of the stockholders and board
of directors and the various committees of the board of directors of
each of the Company and the Subsidiaries, consultations with officers
and other employees of each of the Company and the Subsidiaries
responsible for financial and accounting matters and other procedures
specified by the American Institute of Certified Public Accountants
for a review of interim financial information, nothing has come to
their attention which would lead them to believe that:
(A) at the date [of the latest available [monthly management
reports] read by Price Waterhouse LLP, and at a subsequent
date] not more than five business days prior to the date of
delivery of such letter, there has been any increase in
consolidated short-term indebtedness or long-term indebtedness
of the Company and the Subsidiaries, or any decrease in the
stockholders' equity or net current assets or net assets of
the Company, as compared with amounts shown in the latest
balance sheet included in the Registration Statement, other
than as set forth in or contemplated by the Registration
Statement, or, if there was any change or decrease, setting
forth the amount of such change or decrease; or
-23-
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(B) the period from the date of the latest income statement
included in the Registration Statement to [the date of the
latest available income statement read by Price Waterhouse
LLP, and at] a subsequent date not more than five business
days prior to the date of delivery of such letter, there was
any decrease in consolidated net revenues or net income, or
net income per common share of the Company, in each case as
compared with the corresponding period of the previous year,
other than as set forth in or contemplated by the Registration
Statement, or, if there was any such decrease, setting forth
the amount of such decrease; and
iv) stating that they have compared specific dollar amounts,
numbers of shares, percentages of revenues and earnings, statements
and/or other financial information pertaining to the Company and the
Subsidiaries contained in the Registration Statement (in each case to
the extent that such amounts, numbers, percentages, statements and
information may be derived from the general accounting records,
including work sheets, of the Company and the Subsidiaries and
excluding any questions requiring an interpretation by legal counsel),
with the results obtained from the application of specified readings,
inquiries and other appropriate procedures set forth in the letter and
found them to be in agreement with such results.
(l) At the Closing Date and each Option Closing Date, if any, the
Underwriters shall have received from Price Waterhouse LLP a letter, dated as
of the Closing Date or such Option Closing Date, as the case may be, to the
effect that they reaffirm that statements made in the letter furnished pursuant
to Section 6(j) hereof, except that the specified date referred to shall be a
date not more than five days prior to the Closing Date or such Option Closing
Date, as the case may be, and, if the Company has elected to rely on Rule 430A
of the Rules and Regulations, to the further effect that they have carried out
procedures as specified in clause (iv) of Section 6(j) hereof with respect to
certain amounts, percentages and financial information as specified by the
Underwriters and deemed to be a part of the Registration Statement pursuant to
Rule 430A(b) and have found such amounts, percentages and financial information
to be in agreement with the records specified in such clause (iv).
(m) The Company shall have delivered to the Underwriters a letter
from Price Waterhouse LLP addressed to the Company stating that they have not
with respect to the Company's fiscal year ended December 31, 1995 brought to
the attention of any of the Company's or the Subsidiaries management any
`weakness' as defined in Statement of Auditing Standard No. 60 "Communication
of Internal Control Structure Related Matters Noted in an Audit" in any of
Company's or the Subsidiaries' internal controls.
(n) On each of the Closing Date and each Option Closing Date, if any,
there shall have been duly tendered to the Underwriters the appropriate
principal amount of Notes.
(o) The Securities shall have been approved for trading on the New
York Stock Exchange.
(p) Trading in the Common Stock shall not have been suspended by the
New York Stock Exchange at any time after the date hereof.
(q) Subsequent to the execution and delivery of this Agreement there
shall not have occurred any of the following: (i) trading in securities
generally on the New York Stock Exchange, the American Stock Exchange or the
over- the-counter market shall have been suspended or limited, or minimum
prices shall have been established on either of such exchanges or such market
by the Commission, by such exchange or by any other regulatory body or
governmental authority having jurisdiction, or trading in securities of the
Company on any exchange or in the over-the-counter market shall have been
suspended or (ii) any moratorium on commercial banking activities shall have
been declared by Federal or New York State authorities or (iii) an outbreak or
escalation of hostilities or a declaration by the United States of a national
emergency or war or such a material adverse change in general economic,
political or financial conditions (or the effect of international conditions on
the financial markets in the United States shall be such) as to make it, in the
judgment of the Underwriters, impracticable or inadvisable to
-24-
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proceed with the offering or the delivery of the Notes on the terms and in the
manner contemplated in the Registration Statement.
(r) The Indenture shall have been duly executed and delivered by the
Company and the Trustee and the Notes shall have been duly executed and
delivered by the Company and duly authenticated by the Trustee.
(s) On or prior to the date hereof, the Underwriters shall have
received clearance from the NASD as to the amount of compensation allowable or
payable to the Underwriters, as described in the Registration Statement.
All opinions, letters, evidence and certificates mentioned above or
elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if they are in form and substance reasonably
satisfactory to the Underwriters.
If any condition to the Underwriters' obligations hereunder to be
fulfilled prior to or at the Closing Date or the relevant Option Closing Date,
as the case may be, is not so fulfilled, the Underwriters may terminate this
Agreement or, if the Underwriters so elect, they may waive any such conditions
which have not been fulfilled or extend the time for their fulfillment.
7. Indemnification.
(a) The Company agrees to indemnify and hold harmless each of the
Underwriters (for purposes of this Section 7, "Underwriters" shall include the
officers, directors, partners, employees and agents of each of the
Underwriters, including specifically each person who may be substituted for an
Underwriter as provided in Section 11 hereof), and each person, if any, who
controls an Underwriter ("controlling person") within the meaning of Section 15
of the Securities Act or Section 20(a) of the Exchange Act, from and against
any and all losses, claims, damages, expenses or liabilities, joint or several
(and actions, proceedings, suits and litigation in respect thereof), whatsoever
(including but not limited to any and all reasonable expenses whatsoever
incurred in investigating, preparing or defending against any action, suit,
proceeding or litigation, commenced or threatened, or claim whatsoever), as the
same are incurred, to which any of the Underwriters or any such controlling
person may become subject, under the Securities Act, the Exchange Act or any
other statute or at common law or otherwise insofar as such losses, claims,
damages, expenses or liabilities arise out of or are based upon any untrue
statement or alleged untrue statement of a material fact contained in (i) any
Preliminary Prospectus, the Registration Statement or the Prospectus (as from
time to time amended and supplemented), (ii) any post-effective amendment or
amendments or any new registration statement and prospectus in which are
included securities of the Company for use in the same offering or (iii) any
blue sky application or other document executed by the Company specifically for
that purpose or based upon written information furnished by the Company filed
in any state or other jurisdiction in order to qualify any or all of the
Securities under the securities laws thereof (any such application, document or
information being hereinafter called a "Blue Sky Application), or arise out of
or are based upon the omission or alleged omission therefrom of a material fact
required to be stated therein or necessary to make the statements therein not
misleading (in the case of the Preliminary Prospectus and the Prospectus, in
the light of the circumstances under which they were made), provided, however,
that the Company shall not be liable in any such case to the extent, but only
to the extent, that any such loss, claim, damage, expense or liability arises
out of or is based upon any untrue statement or alleged untrue statement or
omission or alleged omission made in reliance upon and in conformity with the
Underwriters Information and provided, further, that with respect to any untrue
statement or omission or alleged untrue statement or omission made in any
Preliminary Prospectus or the Prospectus, the indemnification provided for
herein shall not apply to any loss, liability, claim, damage or expense to the
extent the same results from the sale of Notes to a person to whom there was
not sent or given, at or prior to the written confirmation of such sale, a copy
of the Prospectus, or in the case of an untrue statement or omission or alleged
untrue statement or omission in the Prospectus, a copy of the amended
Prospectus or supplement thereto, if the Company has previously furnished
sufficient copies thereof, based upon the number of copies requested by the
Underwriters, to the Underwriters a reasonable time in advance and the claim,
damage or expense of such person results from an untrue statement or alleged
untrue statement or omission or alleged omission of a material
-25-
26
fact contained in a Preliminary Prospectus or Prospectus that was corrected in
the Prospectus or amendment or supplement thereto. The indemnity agreement in
this Section 7(a) shall be in addition to any liability which the Company may
have at common law or otherwise.
(b) The Underwriters agree severally and not jointly to indemnify and
hold harmless the Company, each of its directors, each of its officers who 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 of the Exchange Act, to the same extent as the foregoing indemnity from the
Company to the Underwriters, but only with respect to statements or omissions
made in conformity with the Underwriters Information in any Preliminary
Prospectus, the Registration Statement or the Prospectus or any amendment
thereof or supplement thereto.
(c) Promptly after receipt by an indemnified party under this Section
7 of notice of the commencement of any action, suit or proceeding, such
indemnified party shall, if a claim in respect thereof is to be made against
one or more indemnifying parties under this Section 7, notify each party
against whom indemnification is to be sought in writing of the commencement
thereof (but the failure to notify an indemnifying party shall not relieve it
from any liability which it may have under Section 7 (a) or (b) unless and to
the extent that it has been prejudiced in a material respect by such failure or
from the forfeiture of substantial rights and defenses). In case any such
action, suit or proceeding is brought against any indemnified party, and it
notifies an indemnifying party or parties of the commencement thereof, the
indemnifying party or parties will be entitled to participate therein, and to
the extent it may elect by written notice delivered to the indemnified party
promptly after receiving the aforesaid notice from such indemnified party, to
assume the defense thereof with counsel reasonably satisfactory to such
indemnified party, which may be the same counsel as counsel to the indemnifying
party. Notwithstanding the foregoing, the 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 (i) the employment of such counsel shall have been authorized
in writing by the indemnifying parties in connection with the defense of such
action at the expense of the indemnifying party, (ii) the indemnifying parties
shall not have employed counsel reasonably satisfactory to such indemnified
party to take charge of the defense of such action within a reasonable time
after notice of commencement of the action or (iii) representation of both the
indemnified and indemnifying parties by the same counsel would be inappropriate
to actual or potential differing interests between them (in which case, if such
indemnified party notifies the indemnifying party, the indemnifying party shall
not have the right to assume the defense of such action on behalf of such
indemnified party, it being understood, however, that the indemnifying party
shall, in connection with any one such action or separate but substantially
similar or related actions in the same jurisdiction arising out of the same
general allegations or circumstances, be liable for the reasonable fees and
expenses of not more than one separate firm of attorneys for all such
indemnified parties). In no event shall the indemnifying parties be liable for
fees and expenses of more than one counsel (in addition to any local counsel)
separate from their own counsel for all indemnified parties in connection with
any one action or separate but similar or related actions in the same
jurisdiction arising out of the same general allegations or circumstances.
Anything in this Section 7 to the contrary notwithstanding, an indemnifying
party shall not be liable for any settlement of any claim or action effected
without its written consent.
(d) In order to provide for just and equitable contribution in any
case in which (i) an indemnified party makes claim for indemnification pursuant
to this Section 7, but it is judicially determined (by the entry of a final
judgment or decree by a court of competent jurisdiction and the expiration of
time to appeal or the denial of the last right of appeal) that such
indemnification may not be enforced in such case notwithstanding the fact that
the express provisions of this Section 7 provide for indemnification in such
case, or (ii) contribution under the Securities Act may be required, then each
indemnifying party, in lieu of indemnifying such indemnified party, shall
contribute to the amount paid as a result of such losses, claims, damages,
expenses or liabilities (or actions, suits, proceedings or litigation in
respect thereof) (A) in such proportion as is appropriate to reflect the
relative benefits received by each of the contributing parties, on the one
hand, and the party to be indemnified on the other hand, from the offering of
the Securities or (B) if the allocation provided by clause (A) above is not
permitted by applicable law, in such proportion as is appropriate to reflect
not only the relative benefits referred to in clause (i) above but also the
relative fault of each of the contributing parties, on the one hand, and the
party to be indemnified, on the other hand, in connection with the statements
or omissions that resulted in such losses, claims, damages, expenses or
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27
liabilities, as well as any other relevant equitable considerations. The
relative benefits received by the Company, on the one hand, and the
Underwriters, on the other, shall be deemed to be in the same proportion as the
total net proceeds from the offering of the Notes (before deducting expenses)
bear to the total discounts received by the Underwriters hereunder, in each
case as set forth in the table on the cover page of the Prospectus. Relative
fault shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact 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
untrue statement or omission. The amount paid or payable by an indemnified
party as a result of the losses, claims, damages, expenses or liabilities (or
actions, suits, proceedings or litigation in respect thereof) referred to above
in this Section 7(d) shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating,
preparing or defending any such action, claim, suit, proceeding or litigation.
Notwithstanding the provisions of this Section 7(d), no Underwriter shall be
required to contribute any amount in excess of the underwriting discount
applicable to the Notes purchased by the Underwriters hereunder. No person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation. For purposes of this Section
7, each person, if any, who controls the Company within the meaning of the
Securities Act, each officer of the Company who 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 this Section 7(d). Any
party entitled to contribution will, promptly after receipt of notice of
commencement of any action, suit, proceeding or litigation against such party
in respect to which a claim for contribution may be made against another party
or parties under this Section 7(d), notify such party or parties from whom
contribution may be sought, but the omission so to notify such party or parties
shall not relieve the party or parties from whom contribution may be sought
from any obligation it or they may have hereunder or otherwise than under this
Section 7(d), or to the extent that such party or parties were not adversely
affected by such omission. The contribution agreement set forth above shall be
in addition to any liabilities which any indemnifying party may have at common
law or otherwise.
8. Representations and Agreements to Survive Delivery. All
representations, warranties and agreements contained in this Agreement or
contained in certificates of officers of the Company submitted pursuant hereto
shall be deemed to be representations, warranties and agreements at the Closing
Date and each Option Closing Date, as the case may be, and the agreements of
the Company and the provisions with respect to the payment of expenses
contained in Sections 5 and 10 and the respective indemnity agreements
contained in Section 7 hereof shall remain operative and in full force and
effect regardless of any investigation made by or on behalf of any Underwriter,
the Company, any of the Subsidiaries or any controlling person, and shall
survive termination of this Agreement or the issuance and delivery of the
Securities to the Underwriters.
9. Effective Date. This Agreement shall become effective at
10:00 a.m., New York City time, on the next full business day following the
date hereof, or at such earlier time after the Registration Statement becomes
effective as the Underwriters, in their discretion, shall release the Notes for
the sale to the public; provided, however, that the provisions of this Section
9 and Sections 5, 7 and 10 of this Agreement shall at all times be effective.
For purposes of this Section 9, the Notes to be purchased hereunder shall be
deemed to have been so released upon the earlier of dispatch by the
Underwriters of telegrams to securities dealers releasing the Notes for
offering or the release by the Underwriters for publication of the first
newspaper advertisement which is subsequently published relating to the Notes.
10. Termination.
(a) Subject to Section 10(b), the Underwriters shall have the right
to terminate this Agreement (i) if trading on the New York Stock Exchange, the
American Stock Exchange, the Nasdaq Stock Market or in the over-the-counter
market shall have been suspended, or minimum or maximum prices for trading
shall have been fixed, or maximum ranges for prices for securities shall have
been required in the over-the-counter market by the NASD or by order of the
Commission or any other government authority having jurisdiction; (ii) if the
United States shall have become involved in a war or major hostilities, or
there shall have been an escalation in an existing war or major hostilities, or
a national emergency shall have been declared in the United States; (iii) if a
moratorium in
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foreign exchange trading has been declared; (iv) if the Company or any of the
Subsidiaries shall have sustained a loss material or substantial to the Company
or any of the Subsidiaries by fire, flood, accident, hurricane, earthquake,
theft, sabotage or other calamity or malicious act which, whether or not such
loss shall have been insured, will, in the Underwriters' opinion, make it
inadvisable to proceed with the delivery of the Securities; (v) if there shall
have been such a material adverse change in the conditions or prospects of the
Company or any of the Subsidiaries as in the Underwriters' judgment would make
it inadvisable to proceed with the offering, sale and/or delivery of the
Securities; or (vi) if there shall have been such a material adverse change in
the general market, political or economic conditions in the United States or
elsewhere, as in the Underwriters' judgment would make it inadvisable to
proceed with the offering, sale and/or delivery of the Securities.
(b) If this Agreement is terminated by the Underwriters in accordance
with the provisions of Section 10(a) or Section 12 or if this Agreement shall
not be carried out within the time specified herein, or any extension thereof
granted to the Underwriters, by reason of any failure on the part of the
Company to perform any undertaking or satisfy any condition of this Agreement
by it to be performed or satisfied (including, without limitation, pursuant to
Section 6, Section 10(a) or Section 12), then the Company shall promptly
reimburse and indemnify the Underwriters for all of their reasonable
out-of-pocket expenses, including the fees and disbursements of Underwriters'
Counsel. In addition, the Company shall remain liable for all Blue Sky counsel
fees and expenses and Blue Sky filing fees. Notwithstanding any contrary
provision contained in this Agreement, any election hereunder or any
termination of this Agreement (including, without limitation, pursuant to
Sections 6, 10, 11 and 12 hereof), and whether or not this Agreement is
otherwise carried out, the provisions of Section 5 and Section 7 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.
11. Substitution of the Underwriters. If one or more of the
Underwriters shall fail (otherwise than for a reason sufficient to justify the
termination of this Agreement under the provisions of Section 6, Section 10 or
Section 12 hereof) to purchase the Securities which it or they are obligated to
purchase on such date under this Agreement (the "Defaulted Securities"), the
Underwriters shall have the right after consultation with the Company, within
48 hours thereafter, to make arrangement for one or more of the non-defaulting
Underwriters, or any other underwriters, to purchase all, but not less than
all, of the Defaulted Securities in such amounts as may be agreed upon and upon
the terms herein set forth; if, however, the Underwriters shall not have
completed such arrangements within such 48 hour period, then:
i) if the principal amount of Defaulted Securities does not
exceed 10% of the aggregate principal amount of Firm Notes to be
purchased on such date, the non-defaulting Underwriters shall be
obligated to purchase the full amount thereof in the proportions that
their respective underwriting obligations hereunder bear to the
underwriting obligations of all non-defaulting Underwriters; or
ii) if the principal amount of Defaulted Securities exceeds
10% of the aggregate principal amount of Firm Notes, this Agreement
shall terminate without liability on the part of any non-defaulting
Underwriters.
No action taken pursuant to this Section 11 shall relieve any
defaulting Underwriter from liability in respect of any default by such
Underwriter under this Agreement.
In the event of any such default which does not result in a
termination of this Agreement, the Underwriters shall have the right to
postpone the Closing Date for a period not exceeding seven days in order to
effect any required changes in the Registration Statement or Prospectus or in
any other documents or arrangements.
12. Default by the Company. If the Company shall fail at the
Closing Date or any Option Closing Date, as applicable, to sell and deliver the
amount of Notes and the number of Warrants which it is obligated to sell
hereunder on such date, then this Agreement shall terminate (or, if such
default shall occur with respect to any Option Notes or Warrants to be
purchased on an Option Closing Date, the Underwriters may, at their
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29
option, by notice from the Underwriters to the Company, terminate the
Underwriters' obligation to purchase Option Notes or Warrants from the Company
on such date) without any liability on the part of any non-defaulting party
other than pursuant to Sections 5, 7 and 10 hereof. No action taken pursuant
to this Section 12 shall relieve the Company from liability, if any, in respect
of such default.
13. Notices. All notices and communications hereunder, except as
herein otherwise specifically provided, shall be given in writing and shall be
deemed to have been duly given if mailed or transmitted by any standard form of
telecommunication. Notices to the Underwriters shall be directed to them at
Forum Capital Markets L.P., 00 Xxxxxx Xxxxxx, Xxx Xxxxxxxxx, Xxxxxxxxxxx 00000,
Attention: Mr. X. Xxxxx Xxxxxxx, with a copy to Xxxxxx Xxxx & Xxxxxx LLP, Two
Stamford Plaza, 000 Xxxxxxx Xxxxxxxxx, Xxxxxxxx, Xxxxxxxxxxx 00000, Attention:
Xxx X. Xxxxxxxxxx, Esq. Notices to the Company shall be directed to the
Company at Westbridge Capital Corp., 000 Xxxx Xxxxxx, Xxxx Xxxxx, Xxxxx 00000,
Attention: Chief Financial Officer, with a copy to Milbank, Tweed, Xxxxxx &
XxXxxx, 0 Xxxxx Xxxxxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxxxx
X. Xxxxx, Esq.
14. Parties. This Agreement shall inure solely to the benefit of
and shall be binding upon the Underwriters, the Company and the controlling
persons, directors and officers referred to in Section 7 hereof, and their
respective successors, legal representatives and assigns, and no other person
shall have or be construed to have any legal or equitable right, remedy or
claim under or in respect of or by virtue of this Agreement or any provisions
herein contained. No purchaser of Notes from the Underwriters shall be deemed
to be a successor by reason merely of such purchase.
15. CONSTRUCTION. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK
WITHOUT GIVING EFFECT TO CHOICE OF LAW OR CONFLICT OF LAWS PRINCIPLES.
16. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, and all of which
taken together shall be deemed to be one and the same instrument.
17. Entire Agreement; Amendments. This Agreement constitutes the
entire agreement of the parties hereto and supersedes all prior written or oral
agreements, understandings and negotiations with respect to the subject matter
hereof. This Agreement may not be amended except in a writing signed by the
Underwriters and the Company.
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30
If the foregoing correctly sets forth the understanding between the
Underwriters and the Company, please so indicate in the space provided below
for that purpose, whereupon this letter shall constitute a binding agreement
among us.
Very truly yours,
WESTBRIDGE CAPITAL CORP.
By:
------------------------------------
Name:
Title:
Confirmed and accepted as of
the date first above written.
FORUM CAPITAL MARKETS X.X.
XXXXXXX XXXXX & ASSOCIATES, INC.
By: FORUM CAPITAL MARKETS L.P.
By:
----------------------------------
Name:
Title:
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31
SCHEDULE I
Principal amount of
Name of Underwriter Notes to be Purchased
------------------- ---------------------
Forum Capital Markets L.P. . . . . . . . . . . . . . . $32,500,000
Xxxxxxx Xxxxx & Associates, Inc. . . . . . . . . . . . $32,500,000
-----------
Total $65,000,000
===========
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32
ANNEX A
Jurisdictions in
State of Percentage which Qualified to
Name Incorporation Ownership Conduct Business
---- ------------- ---------- ------------------
National Foundation Life Insurance Company Delaware 100% (1)
American Insurance Company of Texas Texas 100% (2)
National Financial Insurance Company Texas 100% (3)
Freedom Life Insurance Company of America Mississippi 100% (4)
Freedom Holding Company Kentucky 100% Kentucky
Freedom Marketing, Inc. Texas 100% Texas
Westbridge Funding Corporation Delaware 100% Delaware, Texas
Foundation Financial Services, Inc. Nevada 100% Kansas, Nevada, Texas
Westbridge Marketing Corporation Delaware 100% Delaware, Texas
Westbridge Printing Services, Inc. Delaware 100% Delaware, Texas
Flex-Plan Systems, Inc. Delaware 100% Delaware
Westbridge Financial Corp. Delaware 100% Delaware
Precision Dialing Services, Inc. Delaware 100% Delaware, Texas
Westbridge National Life Insurance Company Arizona 100% Arizona, Oklahoma
LifeStyles Marketing Group, Inc. Delaware 100% (5)
LSMG, Inc. Texas 100% Texas
Senior Benefits, LLC Arizona 100% Arizona, Missouri, California, Kansas
Senior Benefits of Texas, Inc. Texas 100% Texas
American Senior Security Plans, LLC Delaware 100% Delaware, Texas
American Senior Security Plans of Texas, Inc. Texas 100% Texas
Health Care-One Insurance Agency, Inc. California 50% California
Health Care-One Marketing Group, Inc. Texas 80% Texas
---------------
(1) Alabama, Alaska, Arizona, Arkansas, California, Colorado, Delaware,
District of Columbia, Florida, Georgia, Idaho, Illinois, Indiana, Iowa, Kansas,
Kentucky, Louisiana, Mississippi, Missouri, Montana, Nebraska, Nevada, New
Mexico, North Carolina, Ohio, Oklahoma, Oregon, South Carolina, South Dakota,
Tennessee, Texas, Utah, Washington, Wyoming
(2) Alabama, Arizona, Arkansas, Colorado, Florida, Georgia, Illinois,
Iowa, Louisiana, Mississippi, Missouri, Nebraska, Nevada, New Mexico, Oklahoma,
Oregon, South Carolina, Tennessee, Texas, Utah, West Virginia
(3) Alabama, Arizona, Arkansas, California, Colorado, Florida,
Georgia, Illinois, Indiana, Iowa, Kentucky, Louisiana, Mississippi, Missouri,
Montana, Nebraska, Nevada, New Mexico, North Carolina, North Dakota,
Oklahoma, South Carolina, Tennessee, Texas, Utah, Washington
(4) Alabama, Arizona, Arkansas, Colorado, Delaware, Florida, Georgia,
Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maryland, Michigan,
Minnesota, Mississippi, Missouri, Nebraska, Nevada, New Mexico,
North Carolina, Ohio, Oklahoma, Oregon, South Carolina, South Dakota,
Tennessee, Texas, Utah, Virginia, Washington, West Virginia, Wyoming
(5) Alabama, Colorado, Delaware, Kansas, Kentucky, Louisiana,
Mississippi, Missouri, Nebraska, North Carolina, Oklahoma, South Carolina,
Tennessee, Texas, Washington
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